The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
and formed for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with
one or more businesses ("Business Combination"). We have reviewed, and continue
to review, a number of opportunities to enter into a Business Combination with
an operating business, but we are not able to determine at this time whether we
will complete a Business Combination with any of the target businesses that we
have reviewed or with any other target business.
We intend to consummate a Business Combination using cash from the proceeds of
our initial public offering (the "Public Offering") that closed on April 16,
2021 (the "Close Date") and the private placement of our Class A ordinary shares
("Private Placement Shares") that occurred at the Close Date, and from
additional issuances of, if any, our capital stock and our debt, or a
combination of cash, stock and debt.
At December 31, 2022, we held cash of $515,678 and current liabilities of
$16,032,107. Further, we expect to continue to incur significant costs in the
pursuit of our acquisition plans. We cannot assure you that our plans to
complete a Business Combination will be successful.
Going Concern
If we do not complete an initial Business Combination within 24 months from the
Close Date, we will (i) cease all operations except for the purposes of winding
up, (ii) as promptly as reasonably possible, but not more than ten business days
thereafter, redeem all of the Class A ordinary shares issued in the Public
Offering at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account with Continental Stock Transfer and Trust
Company acting as trustee (the "Trust Account"), including interest, net of
taxes (less up to $100,000 of such net interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will
completely extinguish the shareholder rights of owners of Class A ordinary
shares (including the right to receive further liquidation distributions, if
any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining shareholders
and the board of directors, dissolve and liquidate, subject in each case to our
obligations under Cayman Islands law to provide for claims of creditors and the
requirements of other applicable law. In the event of such distribution, it is
possible that the per share value of the residual assets remaining available for
distribution, including Trust Account assets, will be less than the initial
public offering price in the Public Offering. If a Business Combination is not
completed within 24 months from the Close Date, the Company does not have
sufficient cash flows to satisfy obligations to creditors upon liquidation and
therefore, substantial doubt exists about the Company's ability to continue as a
going concern.
The financial statements presented in this Annual Report on Form 10-K have been
prepared on a going concern basis and do not include any adjustments that might
arise as a result of uncertainties about our ability to continue as a going
concern.
Results of Operations
For the year ended December 31, 2022, we incurred a net loss of $1,635,709. Our
business activities for the year ended December 31, 2022 have consisted solely
of identifying and evaluating prospective acquisition targets for a Business
Combination.
For the period from January 4, 2021 ("Inception") to December 31, 2021, we
incurred a net loss of $1,005,179. Our business activities from Inception to the
Close Date consisted primarily of costs associated with our formation. Our
business activities since our Public Offering have consisted solely of
identifying and evaluating prospective acquisition targets for a Business
Combination.
Liquidity and Capital Resources
Prior to the closing of the Public Offering, our only sources of liquidity were
an initial sale of Class F ordinary shares (the "Founder Shares"), par value
$0.0001 per share, to our sponsor, TPG Pace Beneficial II Sponsor, Series LLC, a
Delaware series limited liability company (the "Sponsor"), and the proceeds of
an unsecured non-interest bearing promissory note from our Sponsor, in the
amount of $750,000, which was repaid on the Close Date.
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The registration statement for our Public Offering was declared effective by the
United States Securities and Exchange Commission (the "SEC") on April 13, 2021.
In our Public Offering, we sold 40,000,000 Class A ordinary shares at a price of
$10.00 per share, generating proceeds of $400,000,000, including the issuance of
5,000,000 Class A ordinary shares as a result of the underwriters' partial
exercise of their over-allotment option. Simultaneously with the effectiveness
of our Public Offering, we closed the private placement of an aggregate of
1,000,000 Class A ordinary shares (the "Private Placement Shares"), at a price
of $10.00 per share, to the Sponsor, generating proceeds of $10,000,000.
On December 8, 2021, our Sponsor loaned us $2,000,000 under an unsecured
non-interest bearing promissory note to fund ongoing operational needs.
At December 31, 2022, we had cash of $515,678 and negative working capital of
$15,415,817, including $2,000,000 owed to the Sponsor.
Starting January 2022, the funds in the Trust Account may be invested only in
specified U.S. government treasury bills with a maturity of 180 days or less and
in money market funds meeting certain conditions under Rule 2a-7 under the
Investment Company Act which invest only in direct U.S. government treasury
obligations (collectively "Permitted Investments").
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business prior to our Business
Combination aside from temporary loans from our Sponsor. However, if our
estimates of the costs of identifying a target business, undertaking in-depth
due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate
our business prior to our Business Combination. Moreover, we may need to obtain
additional financing either to complete our Business Combination or because we
become obligated to redeem a significant number of our Class A ordinary shares
at the completion of our Initial Business Combination, in which case we may
issue additional securities or incur debt in connection with such Business
Combination (including from our affiliates or affiliates of our Sponsor).
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements. We do not participate in transactions that
create relationships with unconsolidated entities or financial partnerships,
often referred to as variable interest entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or entered into any non-financial agreements involving assets.
Contractual Obligations
At December 31, 2022, we did not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities. On the Close
Date, we entered into an administrative support agreement pursuant to which we
have agreed to pay an affiliate of the Sponsor a total of $50,000 per month for
office space, administrative and support services. Upon the earlier of the
completion of the Initial Business Combination and the Company's liquidation, we
will cease paying these monthly fees.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires our
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the condensed financial statements, and income and expenses during the
periods reported. Actual results could materially differ from those estimates.
We have identified the following as our critical accounting policies:
Redeemable Ordinary Shares
All of the 40,000,000 Class A ordinary shares sold as part of the Units in the
Public Offering contain a redemption feature which allows for the redemption of
such public shares in connection with our liquidation if there is a shareholder
vote or tender offer in connection with the Business Combination and in
connection with certain amendments to our second amended and restated
certificate of incorporation. In accordance with SEC and its staff's guidance on
redeemable equity instruments, which has been codified in ASC 480-10-S99,
redemption provisions not solely within our control require common stock subject
to redemption to be classified outside of permanent equity. Ordinary liquidation
events, which involve the redemption and liquidation of all of the entity's
equity instruments, are excluded from the provisions of ASC 480.
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We recognize changes in redemption value immediately as they occur and adjusts
the carrying value of redeemable ordinary shares to equal the redemption value
at the end of each reporting period. Increases or decreases in the carrying
amount of redeemable ordinary shares are affected by charges against additional
paid-in capital and accumulated deficit.
Offering Costs
We comply with the requirements of Accounting Standards Codification ("ASC")
340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A, "Expenses of Offering."
We incurred offering costs of $799,929 in connection with our Public Offering
primarily consisting of accounting and legal services, securities registration
expenses and exchange listing fees. These costs, along with paid and deferred
underwriter discounts totaling $22,000,000, were charged to temporary equity at
the Close Date.
Net Loss Per Ordinary Share
We comply with accounting and disclosure requirements of Financial Accounting
Standards Board ("FASB") ASC Topic 260, "Earnings Per Share". Net loss per
ordinary share is computed by dividing net loss applicable to ordinary
shareholders by the weighted average number of ordinary shares outstanding
during the period as calculated using the treasury stock method. At December 31,
2022 and 2021, we had outstanding forward purchase contracts to purchase up to
17,500,000 Class A ordinary shares. The weighted average of these shares was
excluded from the calculation of diluted net loss per ordinary share since the
exercise of the forward purchase contracts is contingent upon the occurrence of
future events. As a result, diluted net loss per ordinary share is the same as
basic net loss per ordinary share for the periods presented.
As of December 31, 2022 and 2021, we had two participating classes of ordinary
shares, Class A ordinary shares and Class F ordinary shares. The Company's Class
G ordinary shares convert to Class A ordinary shares at a certain point in time
after a Business Combination and then, only if the Company's Class A ordinary
shares are trading at certain levels. As such, our Class G ordinary shares are
determined to be non-participating for the purposes of computations of basic
earnings per share. The weighted average of these shares was excluded from the
calculation of diluted net loss per ordinary share because its inclusion would
have been anti-dilutive.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
our financial statements.
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