
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION CORP. Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations. (type 10-Ok)
References on this report (the “Annual Report”) to “we,” “us” or the “Firm”
seek advice from Patria Latin American Alternative Acquisition Corp. (the “Firm”).
References to our “administration” or our “administration staff” seek advice from our officers
and administrators, and references to the “Sponsor” seek advice from Patria SPAC LLC. The
following dialogue and evaluation of the Firm’s monetary situation and
outcomes of operations must be learn at the side of the monetary
statements and the notes thereto contained elsewhere on this Annual Report.
Sure info contained within the dialogue and evaluation set forth beneath
contains forward-looking statements that contain dangers and uncertainties. Precise
outcomes and the timing of occasions might differ materially from these contained in
these forward-looking statements because of numerous components, together with these
mentioned within the part entitled “Merchandise 1A. Danger Components” and elsewhere on this
report.
Overview
We’re a clean examine firm integrated in Cayman Islands on February 25,
2021. The Firm was fashioned for the aim of effecting a merger, capital
inventory alternate, asset acquisition, extraordinary share buy, reorganization or
comparable enterprise mixture with a number of companies, or the “Enterprise
Mixture.” The Firm is an rising development firm and, as such, the
Firm is topic to all the dangers related to rising development
corporations.
Preliminary Enterprise Mixture
The Firm’s administration has broad discretion with respect to the particular
software of the online proceeds of the IPO, though considerably all the
internet proceeds are meant to be utilized typically towards consummating a Enterprise
Mixture. There isn’t a assurance that the Firm will be capable to full a
Enterprise Mixture efficiently. The Firm should full a number of preliminary
Enterprise Combos having an mixture honest market worth of at the very least 80% of
the online belongings held within the Belief Account (as outlined beneath) (excluding the
quantity of deferred underwriting fee held in Belief and taxes payable on
the earnings earned on the Belief Account) on the time of the settlement to enter
into the preliminary Enterprise Mixture. Nevertheless, the Firm solely intends to
full a Enterprise Mixture if the post-business mixture firm owns or
acquires 50% or extra of the issued and excellent voting securities of the
goal or in any other case acquires a controlling curiosity within the goal adequate for
it to not be required to register as an funding firm underneath the Funding
Firm Act 1940, as amended (the “Funding Firm Act”). Upon the closing of
the IPO, administration has agreed that an quantity equal to at the very least $10.30 per Unit
offered within the IPO, together with the proceeds from the sale of the Non-public Placement
Warrants, might be held in a belief account (“Belief Account”) situated within the
United States with Continental Inventory Switch & Belief Firm performing as trustee,
and invested solely in United States “authorities securities” inside the which means of
Part 2(a)(16) of the Funding Firm Act having a maturity of 185 days or
much less or in cash market funds assembly sure circumstances underneath Rule 2a-7
promulgated underneath the Funding Firm Act which make investments solely in direct U.S.
authorities treasury obligations, as decided by the Firm, till the sooner
of: (i) the completion of a Enterprise Mixture and (ii) the distribution of
the Belief Account as described beneath. The Firm will present the holders (the
“Public Shareholders”) of the Firm’s issued and excellent Class A extraordinary
shares, par worth $0.0001 per share, offered within the IPO (the “Public Shares”) with
the chance to redeem all or a portion of their Public Shares upon the
completion of a Enterprise Mixture both (i) in reference to a shareholder
assembly referred to as to approve the Enterprise Mixture or (ii) by the use of a young
supply. The choice as as to if the Firm will search shareholder approval of
a Enterprise Mixture or conduct a young supply might be made by the Public
Shares for a professional rata portion of the quantity then held within the Belief Account. The
per-share quantity to be distributed to Public Shareholders who redeem their
Public Shares won’t be decreased by the deferred underwriting commissions the
Firm can pay to the underwriters. If the Firm seeks shareholder approval,
the Firm will proceed with a Enterprise Mixture if a majority of the shares
voted are voted in favor of the Enterprise Mixture. If a shareholder vote is
not required by regulation and the Firm doesn’t determine to carry a shareholder vote
for enterprise or different authorized causes, the Firm will, pursuant to its Amended
and Restated Articles of Affiliation (the “Articles of Affiliation”), conduct
the redemptions pursuant to the tender supply guidelines of the U.S. Securities and
Change Fee (“SEC”) and file tender supply paperwork with the SEC prior
to finishing a Enterprise Mixture. If, nevertheless, shareholder approval of the
transaction is required by regulation, or the Firm decides to acquire shareholder
approval for enterprise or authorized causes, the Firm will supply to redeem the
Public Shares at the side of a proxy solicitation pursuant to the proxy
guidelines and never pursuant to the tender supply guidelines. Moreover, every Public
Shareholder might elect to redeem their Public Shares regardless of whether or not they
vote for or in opposition to the proposed transaction. If the Firm seeks shareholder
approval in reference to a Enterprise Mixture, the preliminary shareholders (as
outlined beneath) have agreed to vote their Founder Shares (as outlined beneath) and
any Public Shares bought throughout or after the IPO in favor of a Enterprise
Mixture. As well as, the preliminary shareholders have agreed to waive their
redemption rights with respect to their Founder Shares and Public Shares in
reference to the completion of a Enterprise Mixture.
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The Articles of Affiliation will present {that a} Public Shareholder, collectively
with any affiliate of such shareholder or every other particular person with whom such
shareholder is performing in live performance or as a “group” (as outlined underneath Part 13 of
the Securities Change Act of 1934, as amended (the “Change Act”)), might be
restricted from redeeming its shares with respect to greater than an mixture of
15% of the Public Shares, with out the prior consent of the Firm. The holders
of the Founder Shares (the “preliminary shareholders”) have agreed to not suggest an
modification to the Articles of Affiliation (A) to switch the substance or timing
of the Firm’s obligation to permit redemption in reference to a Enterprise
Mixture or to redeem 100% of the Public Shares if the Firm doesn’t
full a Enterprise Mixture inside the Mixture Interval (as outlined beneath)
or (B) with respect to every other provision referring to shareholders’ rights or
pre-initial Enterprise Mixture exercise, until the Firm offers the
Public Shareholders with the chance to redeem their Public Shares in
conjunction with any such modification.
If the Firm is unable to finish a Enterprise Mixture inside 15 months
from the closing of the IPO (or as much as inside 21 months if the Firm extends
the time frame to consummate the Preliminary Enterprise Mixture in accordance
with the phrases described within the Firm’s closing prospectus) of the IPO (the
“Mixture Interval”) and the Firm’s shareholders haven’t amended the
Articles of Affiliation to increase such Mixture Interval, the Firm will (i)
stop all operations apart from the aim of winding up; (ii) as promptly as
fairly attainable however not more than ten enterprise days thereafter topic to
lawfully out there funds therefor, redeem the Public Shares, at a per-share
value, payable in money, equal to the combination quantity then on deposit within the
Belief Account, together with curiosity earned on the funds held within the Belief Account
and never beforehand launched to the Firm to pay its taxes, if any (much less as much as
$100,000 of curiosity to pay dissolution bills) divided by the variety of the
then excellent Public Shares, which redemption will utterly extinguish
Public Shareholders’ rights as shareholders (together with the precise to obtain
additional liquidation distributions, if any), topic to relevant regulation; and (iii)
as promptly as fairly attainable following such redemption, topic to the
approval of the remaining shareholders and the board of administrators, liquidate and
dissolve, topic in every case to the Firm’s obligations underneath Cayman regulation to
present for claims of collectors and the necessities of different relevant regulation.
The preliminary shareholders have agreed to waive their rights to liquidating
distributions from the Belief Account with respect to the Founder Shares if the
Firm fails to finish a Enterprise Mixture inside the Mixture Interval.
Nevertheless, if the preliminary shareholders purchase Public Shares after the IPO, they
might be entitled to liquidating distributions from the Belief if the Firm
fails to finish a Enterprise Mixture inside the Mixture Interval. The
underwriters have agreed to waive their rights to the deferred underwriting
fee held within the Belief Account within the occasion the Firm doesn’t full
a Enterprise Mixture inside within the Mixture Interval and, in such occasion, such
quantities might be included with the opposite funds held within the Belief Account that
might be out there to fund the redemption of the Public Shares. Within the occasion of
such distribution, it’s attainable that the per share worth of the residual
belongings remaining out there for distribution (together with Belief Account belongings)
might be solely $10.30. With a view to defend the quantities held within the Belief Account,
the Sponsor has agreed to be liable to the Firm if and to the extent any
claims by a 3rd occasion (apart from the Firm’s unbiased registered public
accounting agency) for companies rendered or merchandise offered to the Firm, or a
potential goal enterprise with which the Firm has mentioned coming into right into a
transaction settlement (a “Goal”), scale back the quantity of funds within the Belief
Account to beneath (i) $10.30 per unit or (ii) the lesser quantity per Public Share
held within the Belief Account as of the date of the liquidation of the Belief Account
because of reductions within the worth of the belief belongings, in every case internet of curiosity
which can be withdrawn to pay taxes, offered that such legal responsibility won’t apply
to any claims by a 3rd occasion or Goal that executed a waiver of any and all
rights to hunt entry to the Belief Account nor will it apply to any claims underneath
the Firm’s indemnity of the underwriters of the IPO in opposition to sure
liabilities, together with liabilities underneath the Securities Act of 1933, as amended
(the “Securities Act”). Within the occasion that an executed waiver is deemed to be
unenforceable in opposition to a 3rd occasion, our sponsor won’t be accountable to the
extent of any legal responsibility for such third-party claims. The Firm will search to
scale back the likelihood that the Sponsor should indemnify the Belief Account
because of claims of collectors by endeavoring to have all distributors, service suppliers
(aside from the Firm’s unbiased registered public accounting agency),
potential goal companies or different entities with which the Firm does
enterprise, execute agreements with the Firm waiving any proper, title, curiosity
or declare of any sort in or to monies held within the Belief Account.
64 Outcomes of Operations
We’ve got neither engaged in any operations nor generated any revenues so far.
Our solely actions from February 25, 2021 (inception) by way of December 31, 2022
have been organizational actions, these obligatory to organize for the Preliminary
Public Providing, described beneath, and the Firm’s seek for a goal enterprise
with which to finish a Enterprise Mixture. We don’t count on to generate any
working revenues till after the completion of our preliminary Enterprise
Mixture. We generate non-operating earnings within the type of realized positive aspects on
the investments held within the belief account. We’re incurring bills consequently
of being a public firm (for authorized, monetary reporting, accounting and
auditing compliance), in addition to for due diligence bills in reference to
finishing a Enterprise Mixture.
For the 12 months ended December 31, 2022 we had a internet earnings of $9,256,245 which
consists of normal and administrative bills of $901,733 (made up of
skilled companies charges of $414,769 and different normal and administrative charges
of $486,964), change in honest worth of spinoff warrant liabilities of
$7,060,500, realized acquire on the investments held within the belief account of
$3,411,986, and transaction prices allotted to spinoff warrant liabilities of
$314,508.
For the interval from February 25, 2021 (inception) by way of December 31, 2021, we
had a internet lack of $49,868 which consisted of formation prices.
Liquidity and Going Concern Consideration
As of December 31, 2022, the Firm had working capital of $230,865,720
together with the Belief Account, deferred underwriting charges payable and By-product
warrant liabilities. Working capital was $943,734 when marketable securities
held in Belief Account, deferred underwriting charges payable and By-product warrant
liabilities have been excluded from the calculation. Of the online proceeds from the IPO
and related sale of Non-public Placement Warrants, $236,900,000 of money was
positioned within the Belief Account. The working capital surplus contains the quantity of
restricted marketable securities held within the Belief Account, deferred
underwriting charges payable and spinoff warrant liabilities, all of which have
been categorized as present at December 31, 2022 on account of the Firm being
lower than 12 months away from consuming the belongings held within the Belief Account to
both consummate a enterprise mixture or to liquidate.
For the 12 months ended December 31, 2022, money utilized in working actions was
$1,156,250 which is made up of a internet earnings of $9,256,245 and adjustments in
working belongings and liabilities, which used $254,517. These quantities have been offset
by realized acquire on investments held in Belief Account of $3,411,986, transaction
prices allotted to spinoff warrant liabilities of $314,508 and the change in
honest worth of spinoff warrant liabilities of $7,060,500.
In the course of the 12 months ended December 31, 2022, internet money utilized in investing actions
was $236,900,000 which included the redemption of U.S. authorities treasury
obligations of $715,209,000, absolutely offset by the acquisition of U.S. authorities
treasury obligations of $715,209,000. Money of $707,309 was held exterior of the
Belief Account and is offered for the Firm’s working capital functions.
As of December 31, 2022, we had money of $707,309. We intend to make use of the funds
held exterior the Belief Account primarily to establish and consider goal
companies, carry out enterprise due diligence on potential goal companies,
journey to and from the workplaces, vegetation or comparable places of potential
goal companies or their representatives or house owners, evaluate company paperwork
and materials agreements of potential goal companies, construction, negotiate
and full a Enterprise Mixture.
With a view to finance transaction prices in reference to an Preliminary Enterprise
Mixture, the Firm’s sponsor, or an affiliate of the sponsor or sure of
the Firm’s officers and administrators might, however are usually not obligated to, present
Working Capital Loans to the Firm. As of December 31, 2022, there have been no
quantities excellent underneath any Working Capital Loans.
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If the Firm’s estimates of the prices of figuring out a goal enterprise,
endeavor due diligence and negotiating an Preliminary Enterprise Mixture are
lower than the precise quantity obligatory to take action, the Firm might have
inadequate funds out there to function its enterprise previous to an Preliminary
Enterprise Mixture. Furthermore, the Firm might have to receive extra
financing both to finish an Preliminary Enterprise Mixture or as a result of it
turns into obligated to redeem a big variety of its Public Shares upon
completion of an Preliminary Enterprise Mixture, wherein case the Firm might
difficulty extra securities or incur debt in reference to such Preliminary
Enterprise Mixture.
The Firm anticipates that the money held exterior of the Belief Account as of
December 31, 2022 won’t be adequate to permit the Firm to function for at
least the following 12 months from the issuance of the monetary statements, assuming
{that a} Enterprise Mixture just isn’t consummated throughout that point. Over this time
interval, the Firm might be utilizing the funds held exterior of the Belief Account
for paying present accounts payable and accrued liabilities, figuring out and
evaluating potential preliminary Enterprise Mixture candidates, performing due
diligence on potential goal companies, paying for journey expenditures,
deciding on the goal enterprise to merge with or purchase, and structuring,
negotiating and consummating the Enterprise Mixture. These circumstances increase
substantial doubt concerning the Firm’s skill to proceed as a going concern for
a time frame inside one 12 months after the date that the monetary statements
are issued. Administration plans to deal with this uncertainty by way of the Enterprise
Mixture as mentioned above. As well as, the sponsor or an affiliate of the
sponsor, or sure of the Firm’s officers and administrators might, however are usually not
obligated to, mortgage the Firm funds as could also be required underneath the Working
Capital Loans. There isn’t a assurance that the Firm’s plans to consummate the
Enterprise Mixture might be profitable or profitable inside the Mixture
Interval or that the sponsor or an affiliate of the sponsor, or sure of the
Firm’s officers and administrators will mortgage the Firm funds as could also be required
underneath the Working Capital Loans.
The monetary statements don’t embrace any changes referring to the restoration
of the recorded belongings or the classification of the liabilities that is likely to be
obligatory ought to the Firm be unable to proceed as a going concern.
Commitments and Contractual Obligations
We don’t have any long-term debt, capital lease obligations, working lease
obligations or long-term liabilities.
The underwriters are entitled to a deferred charge of $0.35 per Unit, or $8,050,000
within the mixture. The deferred charge might be waived by the underwriters within the
occasion that the Firm doesn’t full a Enterprise Mixture, topic to the
phrases of the underwriting settlement.
Administrative Providers Settlement
Commencing on the date of the IPO, the Firm pays the Sponsor or an affiliate
a month-to-month charge of $10,000 for workplace area, utilities, secretarial and
administrative companies. For the 12 months ended December 31, 2022, we incurred and
paid $95,484 in administrative assist charges. For the interval from February 25,
2021 (inception) by way of December 31, 2021 we didn’t incur or pay any charges.
Registration Rights
The holders of Founder Shares and Non-public Placement Warrants, together with any that
could also be issued upon conversion of Working Capital Loans, if any (and any Class A
extraordinary shares issuable upon the train of the Non-public Placement Warrants,
together with any which may be issued upon conversion of the Working Capital Loans),
might be entitled to registration rights pursuant to a registration rights
settlement entered into previous to the consummation of the IPO. These holders will
be entitled to sure demand and “piggyback” registration rights. Nevertheless, the
registration rights settlement offers that the Firm just isn’t required to
impact or allow any registration or trigger any registration assertion to grow to be
efficient till termination of the relevant lock-up interval. The Firm will
bear the bills incurred in reference to the submitting of any such
registration statements.
Off-Stability Sheet Preparations
As of December 31, 2022 and December 31, 2021 we didn’t have any off-balance
sheet preparations as outlined in Merchandise 303(a)(4)(ii) of Regulation S-Ok.
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Essential Accounting Estimates
The preparation of monetary statements and associated disclosures in conformity
with accounting rules typically accepted in the US of America
requires administration to make estimates and assumptions that have an effect on the reported
quantities of belongings and liabilities, disclosure of contingent belongings and
liabilities on the date of the monetary statements, and earnings and bills
throughout the intervals reported. Precise outcomes may materially differ from these
estimates. We’ve got not recognized any vital accounting estimates.
Current Accounting Requirements
See “Current Accounting Pronouncements” in Notice 2 of the accompanying monetary
statements.
JOBS Act
The Jumpstart Our Enterprise Startups Act of 2012 (the “JOBS Act”) incorporates
provisions that, amongst different issues, calm down sure reporting necessities for
qualifying public corporations. We qualify as an “rising development firm” and
underneath the JOBS Act are allowed to adjust to new or revised accounting
pronouncements primarily based on the efficient date for personal (not publicly traded)
corporations. We’re electing to delay the adoption of recent or revised accounting
requirements, and consequently, we might not adjust to new or revised accounting
requirements on the related dates on which adoption of such requirements is required
for non-emerging development corporations. Consequently, the monetary statements might not
be similar to corporations that adjust to new or revised accounting
pronouncements as of public firm efficient dates.
Moreover, we’re within the means of evaluating the advantages of counting on the
different decreased reporting necessities offered by the JOBS Act. Topic to
sure circumstances set forth within the JOBS Act, if, as an “rising development
firm,” we select to depend on such exemptions we is probably not required to, amongst
different issues, (i) present an auditor’s attestation report on our system of
inner controls over monetary reporting pursuant to Part 404, (ii) present
all the compensation disclosure which may be required of non-emerging development
public corporations underneath the Dodd-Frank Wall Road Reform and Shopper Safety
Act, (iii) adjust to any requirement which may be adopted by the PCAOB
relating to necessary audit agency rotation or a complement to the auditor’s report
offering extra details about the audit and the monetary statements
(auditor dialogue and evaluation) and (iv) disclose sure government
compensation associated gadgets such because the correlation between government
compensation and efficiency and comparisons of the CEO’s compensation to median
worker compensation. These exemptions will apply for a interval of 5 years
following the completion of our Preliminary Public Providing or till we are not any
longer an “rising development firm,” whichever is earlier.
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