References to the "Company," "our," "us" or "we" refer toTrepont Acquisition Corp I . The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the audited condensed financial statements and the notes thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. In this Annual Report, we are restating our audited financial statements as ofDecember 31, 2020 , our audited financial statements for the period fromSeptember 25, 2020 (inception) throughDecember 31, 2020 and the audited balance sheet issued in connection with our initial public offering onDecember 4, 2020 . . In preparation of our financial statements as of and for the quarterly period endedSeptember 30, 2021 , we concluded we should revise our previously filed financial statements to classify all Class A ordinary shares subject to possible redemption in temporary equity. In accordance with theSEC and its staff's guidance on redeemable equity instruments in ASC 480-10-S99, redemption provisions not solely within our control require shares subject to redemption to be classified outside of permanent equity. We had previously classified a portion of its Class A ordinary shares in permanent equity, or total shareholders' equity. Although we did not specify a maximum redemption threshold, our charter currently provides that we will not redeem our public shares in an amount that would cause our net tangible assets to be less than$5,000,001 . Previously, we did not consider redeemable share classified as temporary equity as part of net tangible assets. Effective with its financial statements for the quarterly period endedSeptember 30, 2021 , the Company revised this interpretation to include temporary equity in net tangible assets. In addition, in connection with the change in presentation for the Class A ordinary shares subject to possible redemption, we determined we should restate our earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a business combination as the most likely outcome, in which case, both classes of shares share pro rata in our income and losses. After further consideration of the impact of the error that led to the revisedSeptember 30, 2021 financial statements, onJanuary 24, 2022 , the management and the audit committee of our board of directors concluded that our previously issued (i) audited balance sheet as ofDecember 4, 2020 (the "Post IPO Balance Sheet"), as previously revised in our 2020 Form 10-K/A No. 1, (ii) audited financial statements included in the 2020 Form 10- K/A No. 1, (iii) unaudited interim financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period endedMarch 31, 2021 , filed with theSEC onJune 21, 2021 ; and (iv) unaudited interim financial statements included in our Quarterly Report on Form 10-Q for the quarterly period endedJune 30, 2021 , filed with theSEC onAugust 16, 2021 , should be restated to report all Public Shares as temporary equity and should no longer be relied upon. As such, we will restate our financial statements for the Affected Periods in this Form 10- K/A for the Post IPO Balance Sheet and our audited financial statements included in the 2020 Form 10-K/A No. 1. The unaudited condensed financial statements for the periods endedMarch 31, 2021 andJune 30, 2021 will be amended in our Quarterly Report on Form 10-Q/A for the quarterly period endedSeptember 30, 2021 , to be filed with theSEC . The restatement does not have an impact on our cash position and cash held in the Trust Account. In connection with the restatement, our management reassessed the effectiveness of our disclosure controls and procedures for the periods affected by the restatement. As a result of that reassessment, we determined that our disclosure controls and procedures for such periods were not effective with respect to the classification of the Company's complex financial instruments. For more information, see "Part II, Item 9A. Controls and Procedures" included in this Annual Report . 51 -------------------------------------------------------------------------------- Table of Contents The financial information that has been previously filed or otherwise reported for these periods is superseded by the information in this Annual Report, and the financial statements and related financial information contained in such previously filed reports should no longer be relied upon. The restatement is more fully described in Note 2 of the notes to the financial statements included herein. Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-K. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our otherSEC filings. Overview We are a blank check company incorporated onSeptember 25, 2020 as aCayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that we have not yet identified. Our sponsor isTrepont Acquisition I, LLC , aDelaware limited liability company. The registration statement for our IPO was declared effective onDecember 1, 2020 . OnDecember 4, 2020 , we consummated our IPO of 23,000,000, at$10.00 per Unit, generating gross proceeds of$230.0 million . Simultaneously with the closing of the IPO, we consummated the private placement of 8,900,000 warrants, at a price of$1.00 per private placement warrant, generating total gross proceeds of$8.9 million . Upon the closing of the IPO and the private placement,$232.3 million ($10.10 per Unit) of the net proceeds of the IPO and certain of the proceeds of the private placement were placed in a trust account, located inthe United States withContinental Stock Transfer & Trust Company acting as trustee, and invested only inU.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, or the "Investment Company Act," which invest only in directU.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the trust account as described below. Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of private placement warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination. If we are unable to complete a business combination within the alloted 18-month period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to$100,000 of interest income to pay dissolution expenses), divided by the 52 -------------------------------------------------------------------------------- Table of Contents number of then outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company's obligations underCayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if the Company fails to complete its initial business combination within the alloted 18-month period. Liquidity and Capital Resources As ofDecember 31, 2020 , we had approximately$1.6 million due from related party and working capital of approximately$2.1 million . To date, our liquidity needs have been satisfied through a payment of$25,000 from our sponsor to cover certain expenses on our behalf in exchange for the issuance of the founder shares to our sponsor, a loan of approximately$89,000 pursuant to a promissory note issued to our sponsor and the net proceeds from the consummation of the private placement not held in the trust account. We repaid approximately$64,000 of the principal balance onDecember 10, 2020 . As ofDecember 31, 2020 , the outstanding principal balance was$25,000 . In addition, in order to finance transaction costs in connection with a business combination, our sponsor may, but is not obligated to, provide us working capital loans. To date, we have not borrowed under the working capital loans. Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our sponsor or an affiliate of our sponsor, or our officers and directors to meet our needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination. Subsequent to the Company's previously issued Form 10-K/A onJune 9, 2021 , in connection with the Company's assessment of going concern considerations in accordance with FASB's ASU No. 205-40, Basis of Presentation-Going Concern , management has determined that the mandatory liquidation and subsequent dissolution raise substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate afterJune 4, 2022 . The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The Company intends to complete its initial business combination before the mandatory liquidation date; however, there can be no assurance that the Company will be able to consummate any business combination byJune 4, 2022 . Results of Operations Our entire activity since inception throughDecember 31, 2020 related to our formation, the preparation for the IPO, and since the closing of the IPO, the search for a prospective initial business combination. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. For the period fromSeptember 25, 2020 (inception) throughDecember 31, 2020 , we had net loss of approximately$6.2 million , which consisted of approximately$5.3 million loss from changes in fair value of derivative warrant liabilities, financing costs of approximately$0.8 million , and approximately$126,000 in general and administrative expenses, which was partially offset by an approximately$1,000 interest earned on investments held in trust account. 53 -------------------------------------------------------------------------------- Table of Contents We classify the Warrants issued in connection with our Initial Public Offering and Private Placement as liabilities at their fair value and adjust the warrant instruments to fair value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. For the period fromSeptember 25, 2020 (inception) throughDecember 31, 2020 , the change in fair value of warrants was an increase of$5.3 million . Contractual Obligations We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities. Critical Accounting Policies This management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America . The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company has identified the following as its critical accounting policies: Class A Ordinary Shares Subject to Possible Redemption Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders' equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, atDecember 31, 2020 , 23,000,000 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders' equity section of the Company's balance sheet. Net Income (Loss) Per Ordinary Share We have two classes of shares: Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding during the periods. We do not consider the effect the warrants sold in the IPO and the private placement, an aggregate of 20,400,000 warrants, would have on diluted net income (loss) per share if exercised to purchase the Company's Class A ordinary shares because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the period fromSeptember 25, 2020 (inception) throughDecember 31, 2020 . Accretion associated with the Class A ordinary shares subject to possible redemption is excluded from earnings per share as the redemption value approximates fair value. Derivative Warrant Liabilities We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. 54 -------------------------------------------------------------------------------- Table of Contents We issued 11,500,000 warrants to purchase Class A ordinary shares to investors in our Initial Public Offering and issued 8,900,000 Private Placement Warrants. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of Public Warrants issued in connection with the Initial Public Offering was measured using a Monte Carlo simulation model. The fair value of the Private Placement warrants has been estimated using a Black Scholes simulation model at each measurement date. The fair value of the Public Warrants issued in connection with our Initial Public Offering will be measured based on the listed market price of such warrants, once these warrants begin separately trading. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. Recent Accounting Pronouncements InAugust 2020 , the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity' Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity' Own Equity ("ASU 2020-06"), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 onJanuary 1, 2021 using the modified retrospective method for transition. Adoption of the ASU did not impact the Company's financial position, results of operations or cash flows. The Company's management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. Off-Balance Sheet Arrangements As ofDecember 31, 2020 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. Inflation We do not believe that inflation had a material impact on our business, revenues or operating results during the period presented. JOBS Act The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply 55
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Table of Contents with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an "emerging growth company," whichever is earlier.
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