ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
All statements other than
statements of historical fact included in this Report including, without limitation, statements under “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business
strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words
such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar
expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management.
Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed
in our filings with the SEC.
The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company
incorporated on April 19, 2021 as a Delaware corporation 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 (a “Business Combination”).
We consummated our initial public offering on December 22, 2021 and are currently in the process of locating suitable targets for our
business combination. We intend to use the cash proceeds from our Public Offering and the Private Placement described below as well as
additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt to complete the Business Combination.
We expect to incur significant
costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to raise capital or to complete our initial
Business Combination will be successful.
Results of Operations
As of December 31, 2021,
we had not commenced any operations. All activity for the period from April 19, 2021 (inception) through December 31, 2021 relates to
our formation and the Initial Public Offering, and, subsequent to the IPO, identifying a target company for a Business Combination. We
have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after the
completion of our initial Business Combination, at the earliest. We will generate non-operating income in the form of interest income
and unrealized gains from the cash and marketable securities held in the Trust Account. 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 from April
19, 2021 (inception) through December 31, 2021, we had net income of $300,433, which consisted of a gain of $597,567 for the change in
fair value of our warrant liabilities and interest income of $6,461, offset by formation and operating costs of $45,047 and offering costs
allocated to warrants of $258,548. We are required to revalue our liability-classified warrants at the end of each reporting period and
reflect in the statement of operations a gain or loss from the change in fair value of the warrant liabilities in the period in which
the change occurred.
Liquidity and Capital Resources
As of December 31, 2021, we had
$741,228 in cash and working capital of $998,574 (excluding the amount of franchise tax payable that could be paid from available trust
interest income). Prior to the completion of the initial public offering, our liquidity needs had been satisfied through a capital contribution
from the sponsor of $25,000 for the founder shares to cover certain of the offering costs and the loan under an unsecured promissory note
from the sponsor of $204,841, which was fully paid upon the initial public offering. Subsequent to the consummation of the initial public
offering and private placement, our liquidity needs have been satisfied through the proceeds from the consummation of the private placement
not held in the trust account.
In addition, in order to
finance transaction costs in connection with an intended business combination, the initial stockholders or an affiliate of the initial
stockholders or certain of our officers and directors may, but are not obligated to, provide us working capital loans. To date, there
were no amounts outstanding under any working capital loans.
39
Based on the foregoing, management
believes that we will have sufficient working capital and borrowing capacity 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 to pay 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.
Off-Balance Sheet Financing Arrangements
We did not have any off-balance
sheet arrangements as of December 31, 2021, as defined in Item 303(a)(4)(ii) of Regulation S-K.
Contractual Obligations
As of December 31, 2021,
we did not have any long-term debt, capital or operating lease obligations.
We entered into an administrative
services agreement pursuant to which we will pay an affiliate of one of our directors for office space and secretarial and administrative
services provided to members of our management team, in an amount of $5,000 per month.
We have engaged I-Bankers
and Dawson James as advisors in connection with our acquiring, engaging in a share exchange, share reconstruction and amalgamation with,
purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar Business
Combination with one or more businesses or entities. We will pay I-Bankers and Dawson James for such services a fee equal to 3.68% of
the gross proceeds of the Public Offering.
Critical Accounting Policies
Management’s discussion
and analysis of our results of operations and liquidity and capital resources are based on our financial information. We describe our
significant accounting policies in Note 2 – Significant Accounting Policies, of the Notes to Financial Statements included in this
report. Our financial statements have been prepared in accordance with U.S. GAAP. Certain of our accounting policies require that management
apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews
the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance
with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from
outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore,
actual results could differ from our estimates.
Warrant Liabilities
We
account for the warrants issued in connection with the IPO in accordance with the guidance contained in ASC 815-40. Such guidance provides
that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly,
we classified each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date.
With each such re-measurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in our
statement of operations.
Net Income Per Common Stock
We
have two categories of shares, which are referred to as common stock subject to possible redemption and common stock. Earnings and losses
are shared pro rata between the two categories of shares. The 17,404,250 potential shares of common stock for outstanding warrants
to purchase our shares were excluded from diluted earnings per share for the period from April 19, 2021 (inception) through December 31,
2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per
share of common stock is the same as basic net income per share of common stock for the period.
Common Stock Subject to Possible Redemption
Our
common stock sold as part of the Units in the IPO (“public common stock”) contain a redemption feature which allows for the
redemption of such public shares in connection with our liquidation, or if there is a stockholder vote or tender offer in connection with
the initial Business Combination. In accordance with ASC 480-10-S99, we classify public common stock subject to redemption outside of
permanent equity as the redemption provisions are not solely within our control. The public common stock sold as part of the Units in
the IPO was issued with other freestanding instruments (i.e., Public Warrants) and as such, the initial carrying value of public common
stock classified as temporary equity was the allocated proceeds determined in accordance with ASC 470-20. The public common stock is subject
to ASC 480-10-S99 and is currently not redeemable as the redemption is contingent upon the occurrence of events mentioned above.
According to ASC 480-10-S99-15, no subsequent adjustment is needed if it is not probable that the instrument will become redeemable.
40
Recent Accounting Standards
Our management does not believe
that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying
financial statements.
JOBS Act
The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging
growth company” under the JOBS Act and 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, our 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 independent registered public accounting firm’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 with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the independent
registered public accounting firm’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 initial public offering or until we are no longer an “emerging growth company,”
whichever is earlier.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
As of December 31, 2021,
we were not subject to any material market or interest rate risk. Following the consummation of our Public Offering, the net proceeds
of the Public Offering and the Private Placement, including amounts in the Trust Account, were invested in U.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
which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there
was no associated material exposure to interest rate risk.
We have not engaged in any
hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which
we are exposed.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this item
are set forth following Item 16 of this Report and are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There have been no disagreements with our independent
registered public accountants on accounting or financial disclosure matters during our most recent fiscal year.
41
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures
that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act,
such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms.
Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management,
including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our
“Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2021, pursuant to Rule 13a-15(b)
under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2021, our disclosure controls
and procedures were effective.
We do not expect that our
disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures
are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the
benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no
evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and
instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.
Management’s Report on Internal Controls Over Financial Reporting
This Report does not include
a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent
registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
There were no changes in our
internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most
recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS.
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
Our directors and officers are as follows:
Name Age Title
Jack Stover 68 Co-Founder, Director, Chief Executive Officer
Fred Knechtel 61 Co-Founder, Director, Chief Financial Officer
Peter O’Rourke 49 Chairman of the Board, Independent Director
Ed Johnson 61 Independent Director
Lauren Chung 48 Independent Director
Jack Stover — Co-Founder, Director
and Chief Executive Officer
Jack Stover has served as our
Chief Executive Officer and director since inception. From June 2016 to November 2020, Mr. Stover served as president and
chief executive officer of Interpace Biosciences, Inc., a publicly-traded small cap life sciences company providing complex molecular
analysis for the early diagnosis and treatment of cancer and supporting the development of targeted therapeutics. From December 2015
until June 2016, Mr. Stover served as interim president and chief executive officer of Interpace Biosciences, Inc. Mr. Stover
on the board of directors of Interpace Biosciences, Inc. from August 2005 until November 2020, and was chairman of the audit
committee from August 2005 until December 2015. From June 2016 to December 2016, Mr. Stover was chairman of the
audit committee and a member of the board of directors of Viatar CTC Solutions, Inc. From 2004 to 2008, he served as chief executive officer,
president and director of Antares Pharma, Inc., a publicly held specialty pharmaceutical company (current market cap of ~$700M) then listed
on the American Stock Exchange. In addition to other relevant experience, Mr. Stover was also formerly a partner with PricewaterhouseCoopers
(then Coopers and Lybrand), working in the bioscience industry division in New Jersey. Mr. Stover received his B.A. in Accounting
from Lehigh University and is a Certified Public Accountant. We believe that Mr. Stover is well-qualified to serve as a director
of our company based on Mr. Stover’s experience holding senior leadership positions in the life sciences industry, and his
specific experience and skills in the areas of general operations, financial operations and administration.
Fred Knechtel — Co-Founder, Director
and Chief Financial Officer
Fred Knechtel has served as
our Chief Financial Officer and director since inception. From January 2020 to January 2021, Mr. Knechtel served as chief
financial officer of Interpace Biosciences, Inc. From June 2018 to December 2018, Mr. Knechtel served as chief financial
officer of GENEWIZ, Inc., which had a private market valuation of $443M as of Nov. 2018. From November 2014 to November 2017,
Mr. Knechtel served as group chief financial officer of Sims Metal Management (current market cap of approx. $2.5B USD). From November 2009
to October 201, Mr. Knechtel served as chief financial officer of Remy International, Inc. Mr. Knechtel received a Bachelor
of Engineering from Stony Brook Universityand a M.B.A in Finance from Hofstra University.We believe that Mr. Knechtel
is well-qualified to serve as a director of our company based on Mr. Knechtel’s experience holding high level executive
positions in the life sciences industry, and his financial and accounting experience.
Peter O’Rourke — Chairman
of the Board
Peter O’Rourke has served
as our chairman of the board since the effective date our initial public offering. Since December 2018, Mr. O’Rourke has
served as Managing Partner at TCI Partners, a consulting firm focused on healthcare, aerospace and the public sector. From January 2017
to December 2018, Mr. O’Rourke served as the Acting Secretary and Chief of Staff of the Department of Veteran Affairs.
From May 2015 to July 2016, Mr. O’Rourke served as a principal of Calibre Systems, Inc., a consulting firm. Mr. O’Rourke
also served both U.S. Navy and Air Force. Mr. O’Rourke received a Bachelor of Arts in Political Science from the University
of Tennessee in Knoxville as well as a Master of Science in Logistics and Supply Chain Management from the United States Air Force’s
Institute of Technology.We believe that Mr. O’Rourke is well-qualified to serve as a director of our company
based on Mr. O’Rourke’s consulting experience in the healthcare industry.
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Ed Johnson — Director
Ed Johnson has served as a
director since the effective date of our initial public offering. Since March 2020, Mr. Johnson has served as the chief executive
officer of iONEBIOUSA Molecular COVID-19 Technologies, which he founded. Since March 2018, Mr. Johnson has served as chief
executive officer of Johnson Global Ventures, LLC. Since March 2018, Mr. Johnson has served on the Advisory Board to Advantage
Capital Partners. Mr. Johnson received a Bachelor of Science in Marketing from Florida State University and a M.B.A. from Nova Southeastern
University. We believe that Mr. Johnson is well-qualified to serve as a director of our company based on Mr. Johnson’s
healthcare focused experience.
Lauren Chung — Director
Lauren Chung has served as a
director since the effective date of our initial public offering. Since November 2019, Dr. Chung has served as chief executive
officer of MINLEIGH LLC, identifying, evaluating and partnering with companies for investments and strategic, operational, and commercial
opportunities, and venture partner at Yozma Group. From May 2017 to November 2019, Dr. Chung was an Equity Research Managing
Director at WestPark Capital. From August 2016 to April 2017, Dr. Chung as in equity research at Maxim Group. Previously,
Dr. Chung founded and served as chief operating officer of Tokum Capital Management, a global healthcare investment fund. Dr.
Chung serves as director of Todos Medical Ltd. Dr. Chung previously served as director of Cure Pharmaceutical Holding Corp, from
August 2019 until November 2021 and ADiTx Therapeutics Inc. from June 2021 until December 2021. Dr. Chung holds a Ph.D. in Neuropathology
from Columbia University-College of Physicians & Surgeons, and a BA with honors in Biochemistry and Economics from Wellesley
College. We believe that Dr. Chung is well-qualified to serve as a director of our company based on Dr. Chung’s extensive
corporate board and investment analysis experience.
Number of Officers and Directors
Our board of directors consists
of five directors. We may not hold an annual meeting of stockholders until after we consummate our initial business combination. Our officers
are elected by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office.
Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate.
Director Independence
The Nasdaq listing standards
require that a majority of our board of directors be independent. An “independent director” is defined generally as a person
other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion
of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out
the responsibilities of a director. Our board of directors have determined that Dr. Chung, Mr. Johnson and Mr. O’Rourke
are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors
have regularly scheduled meetings at which only independent directors are present.
Committees of the Board of Directors
Our board of directors has
three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Each committee
operates under a charter that has been approved by our board and has the composition and responsibilities described below. Our audit committee,
compensation committee and nominating and corporate governance committee is composed solely of independent directors.
Audit Committee
The members of our audit committee
are Dr. Chung, Mr. Johnson and Mr. O’Rourke. Dr. Chung serves as chair of the audit committee. Under the Nasdaq
listing standards and applicable SEC rules, we are required to have at least three members on the audit committee. The rules of Nasdaq
and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors.
Dr. Chung, Mr. Johnson and Mr. O’Rourke qualify as independent directors under applicable rules. Each member of the
audit committee is financially literate and our board of directors has determined that Dr. Chung qualifies as an “audit committee
financial expert” as defined in applicable SEC rules.
We have adopted an audit committee
charter, which details the principal functions of the audit committee, including:
44
Compensation Committee
The members of our Compensation
Committee are Mr. Johnson, Dr. Chung, and Mr. O’Rourke. Mr. Johnson serves as chair of the compensation committee.
Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members on the compensation committee,
all of whom must be independent.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
● reviewing our executive compensation policies and plans;
The charter also provides that
the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other
adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before
engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will
consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Nominating and Corporate Governance Committee
The members of our nominating
and corporate governance are Dr. Chung, Mr. O’Rourke and Mr. Johnson. Dr. Chung serves as chair of the nominating and
corporate governance committee.
The primary purposes of our
nominating and corporate governance committee will be to assist the board in:
The nominating and corporate governance committee is governed by a charter that complies with the rules of Nasdaq.
45
Director Nominations
Our nominating and corporate
governance committee will recommend to the board of directors candidates for nomination for election at the annual meeting of the stockholders.
The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they
are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of
stockholders).
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination
to our board of directors.
Code of Ethics
We have adopted a Code of Ethics
applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and our audit committee charter
as exhibits to the registration statement we filed in connection with our initial public offering. You are able to review these documents
by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the Code of Ethics will be provided
without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in
a Current Report on Form 8-K.
Conflicts of Interest
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which
such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our
officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she will honor these fiduciary obligations under applicable law. We do not believe, however,
that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our business
combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue.
Potential investors should
also be aware of the following other potential conflicts of interest:
46
The conflicts described above
may not be resolved in our favor.
In
general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business
opportunities to a corporation if:
● the corporation could financially undertake the opportunity;
● the opportunity is within the corporation’s line of business; and
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our initial stockholders, officers or directors. In the
event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain
an opinion from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such an
initial business combination is fair to our company from a financial point of view.
In
the event that we submit our initial business combination to our public stockholders for a vote, our sponsor, executive officers, and
directors have agreed to vote their founder shares and any public shares purchased in or after our initial public offering in favor of
our initial business combination.
The
following table summarizes the relevant pre-existing fiduciary or contractual obligations of our officers and directors:
Individual Entity Position at affiliated entity
Jack Stover Onconova Therapeutics, Inc. Director
Fred Knechtel None None
Peter O’Rourke TCI Partners Managing Partner
Ed Johnson iONEBIOSUSA CEO
Johnson Global Ventures LLC CEO
Advantage Capital Partners Advisor
Lauren Chung MINLEIGH, LLC CEO
Cure Pharmaceutical Holding Director
Todos Medical Ltd. Director
UltraSight, Inc. Director
ADiTx Therapeutics Inc. Director
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Limitation on Liability and Indemnification
of Officers and Directors
Our amended and restated certificate
of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law,
as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our
directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent
such exemption from liability or limitation thereof is not permitted by the DGCL.
We entered into agreements
with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended
and restated certificate of incorporation. Our bylaws also permit us to maintain insurance on behalf of any officer, director or employee
for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We have obtained
a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense,
settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
These provisions may discourage
stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect
of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise
benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs
of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions,
the directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented
and experienced officers and directors.
ITEM 11. EXECUTIVE COMPENSATION
Executive Officer and Director Compensation
None of our executive officers
or directors have received any cash compensation for services rendered to us. Until the earlier of consummation of our initial business
combination and our liquidation, beginning on the closing date of our initial public offering, we have agreed to pay an affiliate of one
of our officers a total of $5,000 per month for office space, utilities, secretarial support and other administrative and consulting services.
Our executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business
combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or
their affiliates.
After the completion of our
initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other
fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer
materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely
the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible
for determining executive officer and director compensation. Any compensation to be paid to our executive officers will be determined
by a compensation committee constituted solely by independent directors.
We
do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation
of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment
or consulting arrangements to remain with us after the initial business combination. The existence or terms of any such employment or
consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting
a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business
combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements
with our executive officers and directors that provide for benefits upon termination of employment.
Compensation Committee Interlocks and Insider Participation
None of our executive officers
currently serves, and in the past year has not served, as a member of the board of directors or compensation committee of any entity that
has one or more executive officers serving on our board of directors.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The
following table sets forth information regarding the beneficial ownership of our common stock as of March 1, 2022 based on information
obtained from the persons named below, with respect to the beneficial ownership of our shares of common stock, by:
● each of our executive officers and directors; and
● all our executive officers and directors as a group.
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially
owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants
are not exercisable within 60 days of the date of this Report.
Common Stock
Peter O’Rourke(5) — —
Ed Johnson(5) — —
Lauren Chung(5) — —
All directors and executive officers as a group (5 individuals) 4,743,750 19.6 %
Lighthouse Investment Partners, LLC (6) 1,978,583 8.2 %
* Less than 1%.
(2) Interests shown consist solely of founder shares.
(3) Based on 24,168,750 shares of common stock outstanding.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
In April 2021, our sponsor
purchased 5,175,000 founder shares for an aggregate purchase price of $25,000. In October 2021, our sponsor forfeited 862,500 founder
shares. On December 20, 2021, we effected a 1.1- for-1 stock dividend of our common stock, resulting in an aggregate of 4,743,750
founder shares (up to 618,750 of which are subject to forfeiture).
Our sponsor purchased an aggregate
of 5,162,500 private placement warrants, each exercisable to purchase one share of common stock at $11.50 per share, at a price of $1.00
per warrant ($5,162,500 in the aggregate), in a private placement that closed simultaneously with the closing of our initial public offering.
The private placement warrants (including the shares of common stock issuable upon exercise of the private placement warrants) may not,
subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business
combination.
49
If any of our officers or directors
becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current
fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior
to presenting such business combination opportunity to us. Our executive officers and directors currently have certain relevant fiduciary
duties or contractual obligations that may take priority over their duties to us.
We entered into an Administrative
Services Agreement pursuant to which we pay NorthView Sponsor I, LLC, an affiliate of one of our officers, a total of $5,000 per month
for office space, utilities, secretarial support and other administrative and consulting services. Upon completion of our initial business
combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business
combination takes the maximum 21 months, NorthView Sponsor I, LLC will be paid a total of $105,000 ($5,000 per month) for office space,
utilities, secretarial support and other administrative and consulting services and will be entitled to be reimbursed for any out-of-pocket
expenses.
Our sponsor, executive officers
and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities
on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit
committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates
and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement
of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the closing of our
initial public offering, our sponsor loaned us $204,841 to be used for a portion of the expenses of our initial public offering. These
loans were non-interest bearing, unsecured and were repaid on the closing of our initial public offering.
In addition, in order to finance
transaction costs in connection with an intended initial business combination, our initial stockholders or an affiliate of our initial
stockholders or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete
an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close,
we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust
account would be used for such repayment. Up to $1,500,000 of such loans may be, at the option of the lender, convertible into warrants
at a price of $1.00 per warrant of the post business combination entity. The warrants would be identical to the private placement warrants,
including as to exercise price, exercisability and exercise period. The terms of such loans, if any, have not been determined and no written
agreements exist with respect to such loans. We do not expect to seek loans from parties other than our initial stockholders or an affiliate
of our initial stockholders or certain officers and directors as we do not believe third parties will be willing to loan such funds and
provide a waiver against any and all rights to seek access to funds in our trust account.
We may pay consulting, finder
or success fees to our initial stockholders, officers, directors or their affiliates for assisting us in consummating our initial business
combination. Other than these consulting, finder or success fees, no compensation of any kind will be paid by us to our initial stockholders,
executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion
of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review and approve on a quarterly basis all payments that were made to our initial stockholders, officers, directors
or our or their affiliates.
After our initial business
combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company
with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation
materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution
of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable,
as it will be up to the directors of the post-combination business to determine executive officer and director compensation.
We entered into a registration
rights agreement with respect to the founder shares and private placement warrants (and underlying securities).
50
Policy for Approval of Related Party Transactions
The audit committee of our
board of directors has adopted a policy setting forth the policies and procedures for its review and approval or ratification of “related
party transactions.” Pursuant to the policy, the audit committee will consider (i) the relevant facts and circumstances of
each related party transaction, including if the transaction is on terms comparable to those that could be obtained in arm’s-length
dealings with an unrelated third party, (ii) the extent of the related party’s interest in the transaction, (iii) whether
the transaction contravenes our code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying
the transaction to be in the best interests of the company and its stockholders and (v) the effect that the transaction may have
on a director’s status as an independent member of the board and on his or her eligibility to serve on the board’s committees.
Management will present to the audit committee each proposed related party transaction, including all relevant facts and circumstances
relating thereto. Under the policy, we may consummate related party transactions only if our audit committee approves or ratifies the
transaction in accordance with the guidelines set forth in the policy. The policy will not permit any director or executive officer to
participate in the discussion of, or decision concerning, a related person transaction in which he or she is the related party.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following is a summary of fees paid or to be paid to Marcum LLP,
or Marcum, for services rendered.
Audit Fees. Audit fees consist of fees
billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by
Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional services rendered for the audit of
our annual financial statements and other required filings with the SEC for the period from April 19, 2021 (inception) through December
31, 2021 totaled $61,800. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related services
consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial
statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute
or regulation and consultations concerning financial accounting and reporting standards. We did not pay Marcum for consultations concerning
financial accounting and reporting standards for the period from April 19, 2021 (inception) through December 31, 2021.
Tax Fees. We did not pay Marcum for tax
planning and tax advice for the period from April 19, 2021 (inception) through December 31, 2021.
All Other Fees. We did not pay Marcum for
other services for the period from April 19, 2021 (inception) through December 31, 2021.
Pre-Approval Policy
Our audit committee was formed upon the consummation
of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services
rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee,
and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be
performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services
described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS
a. Documents filed as part of this Report
1. Financial Statements
The
financial statements and notes thereto which are attached hereto have been included by reference into Item 8 of this part of the annual
report on Form 10-K. See the Index to Financial Statements.
2. Financial Statement Schedules
All
schedules are omitted because they are inapplicable or not required or the required information is shown in the financial statements or
notes thereto.
3. Exhibits
Exhibit No. Description
4.3 * Description of Registrant’s Securities
101.INS Inline XBRL Instance Document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith.
ITEM 16. FORM 10-K SUMMARY
None.
52
NORTHVIEW ACQUISITION CORPORATION
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID # 688) F-2
Balance Sheet F-3
Statement of Operations F-4
Statement of Changes in Stockholders’ Deficit F-5
Statement of Cash Flows F-6
Notes to Financial Statements F-7 - F-19
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Stockholders and the Board of Directors
of
NorthView Acquisition Corporation
Opinion on the Financial
Statements
We have audited the accompanying
balance sheet of NorthView Acquisition Corporation (the “Company”) as of December 31, 2021, the related statements of operations,
changes in stockholders’ deficit and cash flows for the period from April 19, 2021 (inception) through December 31, 2021, and the
related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash
flows for the period from April 19, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted
in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to