ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
par value |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
ii |
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1 |
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ITEM 1. |
1 |
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ITEM 1A. |
20 |
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ITEM IB. |
54 |
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ITEM 2. |
54 |
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ITEM 3. |
54 |
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ITEM 4. |
54 |
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55 |
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ITEM 5. |
55 |
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ITEM 6. |
56 |
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ITEM 7. |
56 |
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ITEM 7A. |
60 |
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ITEM 8. |
60 |
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ITEM 9. |
60 |
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ITEM 9A. |
61 |
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ITEM 9B. |
61 |
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ITEM 9C. |
61 |
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62 |
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ITEM 10. |
62 |
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ITEM 11. |
67 |
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ITEM 12. |
68 |
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ITEM 13. |
71 |
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ITEM 14. |
73 |
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74 |
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ITEM 15. |
74 |
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ITEM 16. |
75 |
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76 |
• |
our ability to select an appropriate target business or businesses; |
• |
our ability to complete our initial business combination; |
• |
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
• |
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements; |
• |
our potential ability to obtain additional financing to complete our initial business combination; |
• |
our pool of prospective target businesses; |
• |
the ability of our officers and directors to generate a number of potential investment opportunities; |
• |
our public securities’ potential liquidity and trading; |
• |
the lack of a market for our securities; |
• |
the use of proceeds not held in the Trust Account (as described herein) or available to us from interest income on the Trust Account balance; |
• |
the Trust Account not being subject to claims of third parties; or |
• |
our financial performance. |
• |
We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
• |
Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination. |
• |
Your only opportunity to effect your investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
• |
If we seek stockholder approval of our initial business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote. |
• |
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target. |
• |
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure. |
• |
The requirement that we complete our initial business combination within the completion window may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders. |
• |
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (COVID-19) outbreak and the status of debt and equity markets, as well as protectionist legislation in our target markets. |
• |
If we seek stockholder approval of our initial business combination, our Sponsor, initial stockholders, directors, officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock. |
• |
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed. |
• |
You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss. |
• |
The Nasdaq Stock Market LLC (“Nasdaq”) may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. |
• |
You will not be entitled to protections normally afforded to investors of many other blank check companies. |
• |
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the completion window, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account. |
• |
If the net proceeds of our initial public offering and the sale of the private placement shares not being held in the Trust Account are insufficient to allow us to operate for at least the duration of the completion window, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination, and we will depend on loans from our Sponsor, its affiliates or our management team to fund our search and to complete our initial business combination. |
• |
Past performance by our management team and their affiliates, including investments and transactions in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an investment in the company. |
• |
Unlike some other similarly structured special purpose acquisition companies, our initial stockholders will receive additional Class A common stock if we issue certain shares to consummate an initial business combination. |
• |
We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on stockholders. |
• |
Our initial business combination and our structure thereafter may not be tax-efficient to our stockholders. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain. |
• | Life Sciences Tools point-of-care |
• | Diagnostics |
• | Synthetic Biology DNA-based data storage for customers in pharmaceuticals and diagnostics, as well as segments ranging from industrial to food to consumer. Synthetic biology platforms have had a cross-sector impact, addressing a myriad of use cases in expanding target markets both within and beyond life sciences. In particular, research institutions and the biopharma industry are leveraging technologies which control and manipulate biological systems to execute a broad variety of applications, including therapeutic, diagnostic, and broader industrial solutions. We believe engineering advances will continue to improve product offerings and that demand from research, biopharma and diagnostics, along with opportunities to forward-integrate along the value chain, create attractive opportunities in this sector. |
• | Data and Analytics Platforms |
• | Create or leverage transformational and protectable underlying science and technology; |
• | Address unmet research, clinical or commercial needs in large and growing addressable markets; |
• | Yield a clear value proposition to ultimate beneficiaries of the technology including patients, providers, payers, researchers, biopharma and diagnostic companies, or others; |
• | Hold market leadership potential with clear competitive differentiation, high barriers to entry and clearly defined milestones to drive value-creation; and |
• | Are prepared or can be augmented with the sponsors’ support to operate successfully as a public company. |
• | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and |
• | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
TYPE OF TRANSACTION |
WHETHER STOCKHOLDER APPROVAL IS REQUIRED | |
Purchase of assets |
No | |
Purchase of stock of target not involving a merger with the company |
No | |
Merger of target into a subsidiary of the company |
No | |
Merger of the company with a target |
Yes |
• | We issue (other than in a public offering for cash) shares of common stock that will either (a) be equal to or in excess of 20% of the number of our shares of common stock then issued and outstanding (excluding the private placement shares) or (b) have voting power equal to or in excess of 20% of the voting power then outstanding; |
• | Any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest, directly or indirectly, in the target business or assets to be acquired and if the number of shares of common stock to be issued, or if the number of shares of common stock in which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors and officers and (b) 5% of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial security holder; or |
• | The issuance or potential issuance of common stock will result in our undergoing a change of control. |
• | conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and |
• | file proxy materials with the SEC. |
• | conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
• | file tender offer documents with the SEC prior to completing our initial business combination, which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
• | restrictions on the nature of our investments; and |
• | restrictions on the issuance of securities, |
• | registration as an investment company with the SEC; |
• | adoption of a specific form of corporate structure; and |
• | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are not currently subject to. |
• | solely dependent upon the performance of a single business, property or asset, or |
• | dependent upon the development or market acceptance of a single or limited number of products, processes or services. |
• | costs and difficulties inherent in managing cross-border business operations; |
• | rules and regulations regarding currency redemption; |
• | complex corporate withholding taxes on individuals; |
• | laws governing the manner in which future business combinations may be effected; |
• | exchange listing and/or delisting requirements; |
• | tariffs and trade barriers; |
• | regulations related to customs and import/export matters; |
• | local or regional economic policies and market conditions; |
• | unexpected changes in regulatory requirements; |
• | challenges in managing and staffing international operations; |
• | longer payment cycles; |
• | tax issues, such as tax law changes and variations in tax laws as compared to the United States; |
• | currency fluctuations and exchange controls; |
• | rates of inflation; |
• | challenges in collecting accounts receivable; |
• | cultural and language differences; |
• | employment regulations; |
• | underdeveloped or unpredictable legal or regulatory systems; |
• | corruption; |
• | protection of intellectual property; |
• | social unrest, crime, strikes, riots and civil disturbances; |
• | regime changes and political upheaval; |
• | terrorist attacks and wars; and |
• | deterioration of political relations with the United States. |
• | a limited availability of market quotations for our Class A common stock; |
• | reduced liquidity for our Class A common stock; |
• | a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our shares of Class A common stock; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | may significantly dilute the equity interest of investors in the Public Offering; |
• | may subordinate the rights of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock; |
• | could cause a change in control if a substantial number of shares of Class A common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our Class A common stock. |
Class A common stock held by public stockholders |
16,000,000 | |||
Class A common stock held by the Sponsor Funds |
4,000,000 | |||
Class A common stock held by our Sponsor |
650,000 | |||
Class B common stock held by our initial stockholders |
5,000,000 |
Total common stock |
25,650,000 | |||
Total funds in trust available for initial business combination |
$ | 200,000,000 | ||
Public stockholders’ investment per share of Class A common stock. |
$ | 10.00 | ||
Our Sponsor’s total investment per share of common stock(1) |
$ | 1.15 | ||
Implied value per share of Class A common stock upon the initial business combination(2) |
$ | 7.80 |
(1) | The Sponsor’s total investment in the equity of the company, inclusive of the founder shares and the Sponsor’s $6,500,000 investment in shares of our Class A common stock, is $6,525,000. |
(2) | All founder shares will automatically convert into shares of Class A common stock upon completion of our initial business combination. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• | our inability to pay dividends on our Class A common stock; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | the history and prospects of companies whose principal business is the acquisition of other companies; |
• | prior offerings of those companies; |
• | our prospects for acquiring an operating business at attractive values; |
• | a review of debt to equity ratios in leveraged transactions; |
• | our capital structure; |
• | an assessment of our management and their experience in identifying operating companies; |
• | general conditions of the securities markets at the time of the Public Offering; and |
• | other factors as were deemed relevant. |
Name |
Age |
Position | ||
Steve Kafka | 52 | Chief Executive Officer and Director | ||
Christopher Wolfe | 42 | Chief Financial Officer and Secretary | ||
Andrew ElBardissi | 40 | Director | ||
Keith Crandell | 61 | Director | ||
Mara Aspinall | 59 | Director | ||
Kevin Hrusovsky | 60 | Director | ||
Angela Lai | 51 | Director | ||
Nick Roelofs | 64 | Director |
• | assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm; the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us; |
• | pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
• | reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence; |
• | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the independent registered public accounting firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
• | meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
• | reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation (if any) evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive compensation and equity based plans that are subject to board approval of all of our other officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | each person known by us to be a beneficial owner of more than 5% of our outstanding common stock, on an as-converted basis; |
• | each of our officers and directors; and |
• | all of our officers and directors as a group. |
Name and Address of Beneficial Owner (1) |
Number of Class A Common Stock Beneficially Owned |
Approximate Percentage of Outstanding Class A Common Stock |
Number of Class B Common Stock Beneficially Owned (2) |
Approximate Percentage of Outstanding Class B Common Stock |
||||||||||||
DA32 Sponsor LLC (3) |
650,000 | 3.1 | % | 4,465,000 | 89.3 | % | ||||||||||
Steve Kafka |
— | — | — | — | ||||||||||||
Chris Wolfe |
— | — | 125,000 | 2.5 | % | |||||||||||
Andrew ElBardissi |
— | — | 30,000 | * | ||||||||||||
Keith Crandell (4) |
2,250,000 | 10.9 | % | 4,495,000 | 89.9 | % | ||||||||||
Mara Aspinall |
— | — | 30,000 | * | ||||||||||||
Kevin Hrusovsky |
— | — | 30,000 | * | ||||||||||||
Angela Lai |
— | — | 30,000 | * | ||||||||||||
Nick Roelofs |
— | — | 30,000 | * | ||||||||||||
All executive officers and directors as a group (8 individuals) |
2,250,000 | 10.9 | % | 4,770,000 | 95.4 | % | ||||||||||
ARCH Venture Fund XI, L.P., ARCH Venture Partners XI, L.P., ARCH Venture Partners XI, LLC, Keith Crandell, Kristina Burow, Robert Nelsen and Steven Gillis (4) |
2,250,000 | 10.9 | % | 4,465,000 | 89.3 | % | ||||||||||
Deerfield Management Company, L.P., Deerfield Partners, L.P., Deerfield Mgmt, L.P. and James E. Flynn (5) |
2,250,000 | 10.9 | % | 4,495,000 | 89.9 | % | ||||||||||
Section 32 Fund 3, LP, Section 32 GP 3, LLC and William J. Maris (6) |
1,450,000 | 7.0 | % | 4,665,000 | 93.3 | % |
Wellington Management Funds (Ireland) plc (7) |
1,479,148 | 7.2 | % | — | — | |||||||||||
RA Capital Management, L.P., Peter Kolchinsky, Rajeev Shah and RA Capital Healthcare Fund, L.P. (8) |
1,500,000 | 7.3 | % | — | — | |||||||||||
Wellington Management Company LLP (9) |
2,826,091 | 13.7 | % | — | — | |||||||||||
Victory Capital Management Inc. (10) |
1,126,959 | 5.5 | % | — | — | |||||||||||
BlackRock, Inc. (11) |
1,501,060 | 7.3 | % | — | — | |||||||||||
Saba Capital Management, L.P., Saba Capital Management GP, LLC and Boaz R. Weinstein (12) |
1,120,277 | 5.4 | % | — | — |
* | Less than one percent |
(1) | Unless otherwise noted, the business address of each of our stockholders listed is 345 Park Avenue South, 12th Floor, New York, NY 10010. |
(2) | Interests shown consist solely of founder shares, classified as shares of Class B common stock. Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one |
(3) | The reported shares include (i) 4,465,000 shares of Class B common stock and (ii) 650,000 shares of Class A common stock purchased by the Sponsor in a private placement pursuant to the Private Placement Class A Common Stock Purchase Agreement, dated as of July 27, 2021, by and between the Company and the Sponsor. The Sponsor is the record holder of the securities reported herein. Deerfield Partners, L.P., ARCH Venture Fund XI, L.P. and Section 32 Fund 3, LP are the managing members of the Sponsor and may be deemed to beneficially own the securities owned directly by the Sponsor. |
(4) | The reported shares include (i) 4,465,000 shares of Class B common stock, (ii) 650,000 private placement shares and (iii) 1,600,000 shares of Class A common stock purchased by ARCH Venture Fund XI, L.P. (“AVF”) in the Public Offering. The Sponsor is the record holder of the Class B common stock and the private placement shares reported herein. AVF is the record holder of the 1,600,000 shares of Class A common stock reported herein. Keith Crandell is the record holder of 30,000 shares of Class B common stock held in an individual capacity. As one of three managing members of the Sponsor, AVF may be deemed to beneficially own the securities owned directly by the Sponsor. As the sole general partner of AVF, ARCH Venture Partners XI, L.P. (“AVP LP”) may be deemed to beneficially own the securities owned directly by the Sponsor and AVF. As the sole general partner of AVP LP, ARCH Venture Partners XI, LLC (“AVP LLC”) may be deemed to beneficially own securities owned directly by the Sponsor and AVF. As the members of the investment committee of AVP LLC, each of Keith Crandell, Kristina Burow, Robert Nelsen and Steven Gillis may be deemed to beneficially own securities owned directly by the Sponsor and AVF. Each of AVF, AVP LP and AVP LLC is organized under the laws of the State of Delaware. Each of Keith Crandell, Kristina Burow, Robert Nelsen and Steven Gillis is a citizen of the United States of America. The address of the principal business and/or principal office is 8755 W. Higgins Road, Suite 1025, Chicago, IL 60631. |
(5) | The reported shares consist of (i) 4,465,000 shares of Class B common stock, (ii) 650,000 private placement shares, (iii) 1,600,000 shares of Class A common stock purchased by Deerfield Partners, L.P (“Deerfield Partners”) in the Public Offering and (iv) 30,000 shares of Class B common stock held by Andrew ElBardissi for the benefit and at the direction of Deerfield Management Company, L.P. (“Deerfield Management”). As one of three managing members of the Sponsor, Deerfield Partners may be deemed to beneficially own the securities owned directly by the Sponsor. As the general partner of Deerfield Partners, Deerfield Mgmt, L.P. (“Deerfield Mgmt”) may be deemed to beneficially own the securities owned directly by the Sponsor and Deerfield Partners. As the investment manager of Deerfield Partners, Deerfield Management may be deemed to beneficially own securities owned directly by the Sponsor and Deerfield Partners. As the sole member of the general partner of each of Deerfield Management and Deerfield Mgmt, James E. Flynn may be deemed to beneficially own the securities owned directly by the Sponsor and Deerfield Partners. Each of Deerfield Management, Deerfield Mgmt and Deerfield Partners is organized under the laws of the State of Delaware. James E. Flynn is a citizen of the United States of America. |
(6) | The reported shares include (i) 4,465,000 shares of Class B common stock, (ii) 650,000 private placement shares, (iii) 200,000 shares of Class B common stock owned by Section 32 Fund 3, LP (“S32 Fund”) and (iv) 800,000 shares of Class A common stock purchased by S32 Fund in the Public Offering. The Sponsor is the record holder of the 4,465,000 shares of Class B common stock and the private placement shares reported herein. S32 Fund is the record holder of the 800,000 shares of Class A common stock and 200,000 shares of Class B common stock reported herein. As one of three managing members of the Sponsor, S32 Fund may be deemed to beneficially own the securities owned directly by the Sponsor. As the general partner of S32 Fund, Section 32 GP 3, LLC (“S32 GP”) may be deemed to beneficially own the securities owned directly by the Sponsor and S32 Fund. As the sole Managing Member of S32 GP, William J. Maris may be deemed to beneficially own securities owned directly by the Sponsor and S32 Fund. Each of S32 Fund and S32 GP is organized under the laws of the State of Delaware. William J. Maris is a citizen of the United States of America. The address of the principal business and/or principal office is 171 Main Street, #671, Los Altos, CA, 94022. |
(7) | According to a Schedule 13G filed by Wellington Management Funds (Ireland) plc, a public limited company of Ireland on August 9, 2021, and a Schedule 13G/A filed on February 4, 2022, the securities reported by Wellington Management Funds (Ireland) plc, in its capacity as investment adviser, are owned of record by clients of Wellington Management Funds (Ireland) plc. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. No such client is known to have such right or power with respect to more than five percent of this class of securities. The address of the principal business office is 25-28 North Wall Quay, International Financial Services Centre, Dublin 1, Ireland. |
(8) | According to a Schedule 13G filed by RA Capital Management, L.P. (“RA Capital”), a Delaware limited partnership, Peter Kolchinsky, a U.S. citizen, Rajeev Shah, a U.S. citizen, and RA Capital Healthcare Fund, L.P. (the “Fund”), a Delaware limited partnership, on August 9, 2021, the Fund directly holds 1,500,000 shares of Class A common stock. RA Capital Healthcare Fund GP, LLC is the general partner of the Fund. The general partner of RA Capital is RA Capital Management GP, LLC, of which Dr. Kolchinsky and Mr. Shah are the controlling persons. RA Capital serves as investment adviser for the Fund may be deemed a beneficial owner, for purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “Act”), of any securities of the Issuer held by the Fund. The Fund has delegated to RA Capital the sole power to vote and the sole power to dispose of all securities held in the Fund’s portfolio, including the shares of the Issuer’s Class A Common Stock reported herein. Because the Fund has divested voting and investment power over the reported securities it holds and may not revoke that delegation on less than 61 days’ notice, the Fund disclaims beneficial ownership of the securities it holds for purposes of Section 13(d) of the Act. As managers of RA Capital, Dr. Kolchinsky and Mr. Shah may be deemed beneficial owners, for purposes of Section 13(d) of the Act, of any securities of the Issuer beneficially owned by RA Capital. RA Capital, Dr. Kolchinsky, and Mr. Shah disclaim ownership of the securities reported other than for the purpose of determining their obligations under Section 13(d) of the Act, and the filing of the Schedule 13G shall not be deemed an admission that either RA Capital, Dr. Kolchinsky, or Mr. Shah is the beneficial owner of such securities for any other purpose. The address of the principal business office is c/o RA Capital Management, L.P., 200 Berkeley Street, 18th Floor, Boston MA 02116. |
(9) | According to a Schedule 13G/A filed by Wellington Management Company LLP, a Delaware limited liability partnership, on February 4, 2022, Wellington Management Company LLP has voting and dispositive power of 2,826,091 shares. The shares are owned of record by clients of Wellington Management Company LLP which is directly or indirectly owned by Wellington Management Group LLP. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. The address of the principal business office is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210. |
(10) | According to a Schedule 13G filed on February 2, 2022, Victory Capital Management Inc. owns 1,126,959 shares. The clients of Victory Capital Management Inc., including investment companies registered under the Investment Company Act of 1940 and separately managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares reported herein. No client has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, more than 5% of such class. The address of the principal business office is 4900 Tiedeman Rd. 4th Floor, Brooklyn, OH 44144. |
(11) | According to a Schedule 13G filed on February 4, 2022, BlackRock, Inc. owns 1,501,060 shares. The address of the principal business office is 55 East 52nd Street, New York, NY 10055. |
(12) | According to a Schedule 13G filed on February 7, 2022, Saba Capital Management, L.P., a Delaware limited partnership (“Saba Capital”), Saba Capital Management GP, LLC, a Delaware limited liability company (“Saba GP”), and Mr. Boaz R. Weinstein, a United States citizen share voting and dispositive power of 1,120,277 shares of Class A common stock. The address of the principal business office is 405 Lexington Avenue, 58th Floor, New York, New York 10174. |
(a) | The following documents are filed as part of this report: |
(1) | Financial Statements |
(2) | Financial Statement Schedule |
(3) | Exhibits |
* |
Filed herewith. |
DA32 LIFE SCIENCE TECH ACQUISITION CORP. | ||||||
By: | /s/ Steve Kafka | |||||
Name: | Steve Kafka | |||||
Dated: March 31, 2022 | Title: | Chief Executive Officer |
Name |
Title |
Date | ||
/s/ Steve Kafka |
Chief Executive Officer and Director | March 31, 2022 | ||
Steve Kafka | (Principal Executive Officer) | |||
/s/ Christopher Wolfe |
Chief Financial Officer and Secretary | March 31, 2022 | ||
Christopher Wolfe | (Principal Financial and Accounting Officer) | |||
/s/ Andrew ElBardissi |
Director | March 31, 2022 | ||
Andrew ElBardissi | ||||
/s/ Keith Crandell |
Director | March 31, 2022 | ||
Keith Crandell | ||||
/s/ Mara Aspinall |
Director | March 31, 2022 | ||
Mara Aspinall | ||||
/s/ Kevin Hrusovsky |
Director | March 31, 2022 | ||
Kevin Hrusovsky | ||||
/s/ Angela Lai |
Director | March 31, 2022 | ||
Angela Lai | ||||
/s/ Nick Roelofs |
Director | March 31, 2022 | ||
Nick Roelofs |
Page |
||||
Audited Financial Statements of DA32 Life Science Tech Acquisition Corp.: |
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7 |
Assets: |
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Current assets: |
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Cash |
$ | |||
Prepaid expenses |
||||
|
|
|||
Total current assets |
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Investments held in Trust Account |
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|
|
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Total Assets |
$ |
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|
|
|||
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: |
||||
Current liabilities: |
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Accrued expenses |
$ | |||
Franchise tax payable |
||||
|
|
|||
Total current liabilities |
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Deferred underwriting commissions |
||||
|
|
|||
Total Liabilities |
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Commitments and Contingencies |
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Class A common stock subject to possible redemption, $ |
||||
Stockholders’ Deficit: |
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Preferred stock, $ |
||||
Class A common stock, $ 20,000,000 shares subject to possible redemption) |
||||
Class B common stock, $ |
||||
Additional paid-in capital |
||||
Accumulated deficit |
( |
) | ||
|
|
|||
Total stockholders’ deficit |
( |
) | ||
|
|
|||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit |
$ |
|||
|
|
General and administrative expenses |
$ | |||
General and administrative expenses - related party |
||||
Franchise tax expenses |
||||
|
|
|||
Loss from operations |
( |
) | ||
Other income |
||||
Gain on investments held in Trust Account |
||||
|
|
|||
Net loss |
$ | ( |
) | |
|
|
|||
Weighted average Class A common shares outstanding, basic and diluted |
||||
|
|
|||
Basic and diluted net loss per share, Class A common shares |
$ | ( |
) | |
|
|
|||
Weighted average Class B common shares outstanding, basic and diluted |
||||
|
|
|||
Basic and diluted net loss per share, Class B common shares |
$ | ( |
) | |
|
|
Common Stock |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||
Class A |
Class B |
Additional Paid- In Capital |
Accumulated Deficit |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance - April 16, 2021 (inception) |
$ | $ | $ | $ | $ | |||||||||||||||||||||||
Issuance of Class B common stock to Sponsor |
— |
— |
— |
|||||||||||||||||||||||||
Sale of private placement shares to Sponsor in private placement |
— |
— |
— |
|||||||||||||||||||||||||
Forfeited shares |
— |
— |
( |
) | ( |
) | — |
— |
||||||||||||||||||||
Accretion of Class A common stock to redemption amount |
— |
— |
— |
— |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance - December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities: |
||||
Net loss |
$ | ( |
) | |
Adjustments to reconcile net loss to cash used in operating activities: |
||||
Income from investments held in Trust Account |
( |
) | ||
Changes in operating assets and liabilities: |
||||
Prepaid expenses |
( |
) | ||
Accrued expenses |
||||
Franchise tax payable |
||||
Net cash used in operating activities |
( |
) | ||
Cash Flows from Investing Activities: |
||||
Cash deposited in Trust Account |
( |
) | ||
Net cash used in investing activities |
( |
) | ||
Cash Flows from Financing Activities: |
||||
Proceeds from issuance of Class B common stock to Sponsor |
||||
Proceeds from note payable to related party |
||||
Repayment of note payable to related party |
( |
) | ||
Proceeds received from Initial Public Offering, gross |
||||
Proceeds received from private placement |
||||
Offering costs paid |
( |
) | ||
Net cash provided by financing activities |
||||
Net change in cash |
||||
Cash - beginning of the period |
||||
Cash - end of the period |
$ |
|||
Supplemental disclosure of noncash activities: |
||||
Offering costs included in accrued expenses |
$ | |||
Deferred underwriting commissions |
$ |
As of July 30, 2021 |
As Reported |
Adjustment |
As Restated |
|||||||||
Total assets |
$ |
$ |
||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
$ |
$ |
||||||||||
|
|
|
|
|
|
|||||||
Class A common stock subject to redemption |
$ | |||||||||||
Preferred stock |
||||||||||||
Class A common stock |
( |
) | ||||||||||
Class B common stock |
||||||||||||
Additional paid-in capital |
( |
) | ||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total stockholders’ equity (deficit) |
$ |
$ |
( |
) |
$ |
( |
) | |||||
|
|
|
|
|
|
|||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Shares of Class A common stock subject to redemption |
||||||||||||
Shares of Class A common stock |
( |
) |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the period from April 16, 2021 (inception) through December 31, 2021 |
||||||||
Class A |
Class B |
|||||||
Basic and diluted net loss per common share: |
||||||||
Numerator: |
||||||||
Allocation of net loss |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Basic and diluted weighted average common shares outstanding |
||||||||
|
|
|
|
|||||
Basic and diluted net loss per common share |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Gross proceeds |
$ | |||
Less: |
||||
Class A common stock issuance costs |
( |
) | ||
Plus: |
||||
Accretion of carrying value to redemption value |
||||
Class A common stock subject to possible redemption |
$ | |||
Description |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Other Unobservable Inputs (Level 3) |
|||||||||
Investments held in Trust Account – U.S. Treasury Bills |
$ | $ | $ |
Current |
||||
Federal |
$ | |||
State |
||||
Deferred |
||||
Federal |
( |
) | ||
State |
||||
Valuation allowance |
||||
Income tax provision |
$ | |||
Deferred tax assets: |
||||
Start-up/Organization costs |
$ | |||
Net operating loss carryforwards |
||||
Total deferred tax assets |
||||
Valuation allowance |
( |
) | ||
Deferred tax asset, net of allowance |
$ | |||
Statutory federal income tax rate |
% | |||
Change in valuation allowance |
( |
)% | ||
Effective tax rate |
% | |||
Exhibit 4.2
Description of shares
We are a Delaware corporation and our affairs are governed by our amended and restated certificate of incorporation and the DGCL. Pursuant to our amended and restated certificate of incorporation, which was adopted prior to the consummation of our initial public offering on July 30, 2021 (the Public Offering), we are authorized to issue 110,000,000 shares of common stock, $0.0001 par value each, including 100,000,000 shares of Class A common stock and 10,000,000 shares of Class B common stock, as well as 1,000,000 shares of preferred stock, $0.0001 par value each. The following description summarizes certain terms of our capital stock as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it may not contain all the information that is important to you.
Common stock
Prior to the date of this Annual Report, there were 5,000,000 shares of Class B common stock outstanding, all of which are held of record by our initial stockholders, so that our initial stockholders own 20% of our issued and outstanding shares of common stock after the Public Offering (excluding the private placement shares and any shares of Class A common stock purchased by the initial stockholders in the Public Offering). Upon the closing of the Public Offering, 25,650,000 of our shares of common stock were outstanding including:
| 20,000,000 shares of Class A common stock issued as part of the Public Offering; |
| 650,000 shares of Class A common stock issued as private placement shares; and |
| 5,000,000 shares of Class B common stock held by our initial stockholders. |
Stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as required by law. Unless specified in our amended and restated certificate of incorporation, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our initial business combination. Our board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our by laws, unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred
underwriting commissions we will pay to the underwriters. Our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares they hold in connection with the completion of our initial business combination. Unlike many special purpose acquisition companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation requires these tender offer documents to contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under the SECs proxy rules. If, however, a stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many special purpose acquisition companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the shares of common stock voted are voted in favor of our initial business combination. However, the participation of our sponsor, officers, directors, advisors or their respective affiliates in privately-negotiated transactions, if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such initial business combination. For purposes of seeking approval of the majority of our issued and outstanding shares of common stock, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. However, we would not be restricting our stockholders ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 20% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our initial business combination, our initial stockholders, sponsor, officers and directors have agreed to vote any founder shares and private placement shares they hold and any public shares purchased during or after the Public Offering in favor of our initial business combination. As a result, in addition to our initial stockholders founder shares and private placement shares, we would need 7,175,001, or 35.88%, of the 20,000,000 public shares sold in the Public Offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming all issued and outstanding shares of common stock are voted and the private placement shares to be issued to our sponsor are voted in favor of the transaction), and we would need 762,501, or 3.81%, of the 20,000,000 public shares sold in the Public Offering to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming the minimum number of shares representing a quorum are voted and the private placement shares to be issued to our sponsor are voted in favor of the transaction). Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.
Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our initial business combination within 24 months from the closing of the Public Offering or during any Extension Period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no 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 and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
2
public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our initial stockholders have entered into agreements with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares and private placement shares if we fail to complete our initial business combination within 24 months from the closing of the Public Offering or during any Extension Period. However, if our initial stockholders or management team acquire public shares in or after the Public Offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our public stockholders with the opportunity to redeem their public shares for cash at a per share price equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, upon the completion of our initial business combination, subject to the limitations described herein.
Founder shares and private placement shares
The founder shares are designated as Class B common stock and, except as described below, are identical to the shares of Class A common stock sold in the Public Offering, and holders of founder shares and private placement have the same stockholder rights as public stockholders, except that (i) the founder shares and private placement shares are subject to certain transfer restrictions, as described in more detail below, (ii) our initial stockholders, sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares, private placement shares and public shares they hold in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect to any founder shares, private placement shares and public shares they hold in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 24 months from the closing of the Public Offering or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity and (C) to waive their rights to liquidating distributions from the trust account with respect to any founder shares and private placement shares they hold if we fail to complete our initial business combination within 24 months from the closing of the Public Offering or during any Extension Period, although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within such time period, and (iii) the founder shares are automatically convertible into Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment as described herein and in our amended and restated certificate of incorporation. If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares, private placement shares and any public shares purchased during or after the Public Offering in favor of such initial business combination.
The founder shares will automatically convert into shares of Class A common stock concurrently with or immediately following the consummation of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection with our initial business combination, the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock issued and outstanding (excluding the private placement shares) after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business combination, excluding
3
any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial business combination and any private placement shares issued to our sponsor, officers or directors upon conversion of working capital loans, provided that such conversion of founder shares will never occur on a less than one-for-one basis. The term equity-linked securities refers to any debt or equity securities that are convertible, exercisable or exchangeable for our shares of Class A common stock issued in a financing transaction in connection with our initial business combination, including, but not limited to, a private placement of equity or debt.
With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our initial business combination, the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, and (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their Class A common stock for cash, securities or other property. With certain limited exceptions, the private placement shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until 30 days after the completion of our initial business combination.
Preferred stock
Our amended and restated certificate of incorporation authorizes 1,000,000 shares of preferred stock and provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue shares of preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred shares outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock were issued or registered in the Public Offering.
Dividends
We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Our transfer agent
The transfer agent for our common stock is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its role as transfer agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence or intentional misconduct of the indemnified person or entity. Continental Stock Transfer & Trust Company has agreed that it has no right of set-off or any right, title, interest or claim of any kind to, or to any monies in, the trust account, and has irrevocably waived any right, title, interest or claim of any kind to, or to any monies in, the trust account that it may have now or in the future. Accordingly, any indemnification provided will only be able to be satisfied, or a claim will only be able to be pursued, solely against us and our assets outside the trust account and not against the any monies in the trust account or interest earned thereon.
4
Amended and restated certificate of incorporation
Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to the Public Offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of at least 65% of all then issued and outstanding shares of common stock. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of the Public Offering (excluding the private placement shares and assuming they do not purchase any shares in the Public Offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:
| If we are unable to complete our initial business combination within 24 months from the closing of the Public Offering or during any Extension Period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no 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 and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and in all cases subject to the requirements of other applicable law; |
| Prior to our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on our initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond 24 months from the closing of the Public Offering or (y) amend the foregoing provisions; |
| Although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm that such a business combination is fair to our company from a financial point of view; |
| If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act. Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above; |
| So long as we maintain a listing for our securities on Nasdaq, Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination; |
| If our stockholders approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of the Public Offering, or with respect to any other material provisions relating to stockholders rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their Class A common stock upon such approval 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 and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein; and |
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| We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
Certain anti-takeover provisions of Delaware law and our amended and restated certificate of incorporation and by laws
We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of the Public Offering. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a business combination with:
| a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an interested stockholder); |
| an affiliate of an interested stockholder; or |
| an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
A business combination includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
| our board of directors approves the transaction that made the stockholder an interested stockholder, prior to the date of the transaction; |
| after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or |
| on or subsequent to the date of the transaction, the initial business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
Our amended and restated certificate of incorporation provides that our board of directors be classified into three classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.
Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive forum for certain lawsuits
Our amended and restated certificate of incorporation will require, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or by laws, or (iv) any action asserting a claim against us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware, except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction, as to which the
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Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholders counsel. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing, our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22 of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions; however, we note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Special meeting of stockholders
Our by laws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our Chief Executive Officer or by our Chairman.
Advance notice requirements for stockholder proposals and director nominations
Our by laws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholders notice will need to be received by the company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our by laws also specify certain requirements as to the form and content of a stockholders meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Action by written consent
Subsequent to the consummation of the Public Offering, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to our Class B common stock.
Classified board of directors
Our board of directors is initially divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. Our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of the board of directors. Subject to the terms of any preferred stock, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then issued and outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.
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Class B common stock consent right
For so long as any shares of Class B common stock remain outstanding, we may not, without the prior vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock. Any action required or permitted to be taken at any meeting of the holders of Class B common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B common stock were present and voted.
Securities eligible for future sale
Immediately after the Public Offering we had 25,650,000 shares of common stock outstanding. Of these shares, the shares of Class A common stock sold in the Public Offering (20,000,000 Class A common stock) are freely tradable without restriction or further registration under the Securities Act, except for any Class A common stock purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the outstanding founder shares (5,000,000 founder shares) and all of the outstanding private placement shares (650,000 shares) are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
| 1% of the total number of shares of common stock then outstanding, which equals 256,500 shares immediately after the Public Offering; or |
| the average weekly reported trading volume of the Class A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the use of Rule 144 by shell companies or former shell companies
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
| the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
| the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
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| the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
| at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
As a result, our initial stockholders will be able to sell their founder shares and private placement shares, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Public Offering, (ii) private placement shares, which were issued in a private placement simultaneously with the closing of the Public Offering and (iii) private placement shares that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held by them pursuant to the registration rights agreement signed on the effective date of the Public Offering. Pursuant to the registration rights agreement and assuming $1.5 million of working capital loans are converted into private placement shares, we will be obligated to register up to 5,800,000 shares of Class A common stock. The number of shares of Class A common stock includes (i) 5,000,000 shares of Class A common stock to be issued upon conversion of the founder shares, (ii) 650,000 private placement shares and (iii) 150,000 shares of Class A common stock issued upon conversion of working capital loans. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain piggy-back registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of securities
Our shares of Class A common stock are listed on Nasdaq under the symbol DALS.
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Exhibit 10.9
DA32 LIFE SCIENCE TECH ACQUISITION CORP.
345 Park Avenue South, 12th Floor
New York, NY 10010
July 27, 2021
Deerfield Partners, L.P.
345 Park Avenue South, 12th Floor
New York, NY 10010
Re: Amended and Restated Administrative Services Agreement
Ladies and Gentlemen:
This letter agreement (this Agreement) by and between DA32 Life Science Tech Acquisition Corp. (the Company) and Deerfield Partners, L.P., an affiliate of DA32 Sponsor LLC (Deerfield), dated as of the date hereof, hereby amends and restates, in its entirety, the original Administrative Services Agreement (the Original Agreement), dated as of July 27, 2021, entered into by and between the Company and DA32 Sponsor LLC (the Sponsor). The Original Agreement provided that the Sponsor would make available office space and secretarial and administrative services as may be reasonably required by the Company in exchange for $10,000 per month until the Termination Date. However, it was always intended by the Company, Deerfield and the Sponsor that Deerfield, and not the Sponsor, would provide such services and be entitled to such payment, as the Sponsor does not engage in any activity other than owning equity interests in the Company, and thus neither owns any property nor employees or otherwise engages service providers that could be expected to provide such services as contemplated by the Original Agreement. In recognition of the foregoing and to correct the named entity required to provide such services and receive such payments, this Agreement will confirm our agreement that, commencing on the date the securities of the Company are first listed on The Nasdaq Capital Market (the Listing Date), pursuant to a Registration Statement on Form S-1 and prospectus filed with the U.S. Securities and Exchange Commission (the Registration Statement) and continuing until the earlier of the consummation by the Company of an initial business combination or the Companys liquidation (in each case as described in the Registration Statement) (such earlier date hereinafter referred to as the Termination Date):
1. Deerfield shall make available, or cause to be made available, to the Company, at 345 Park Avenue South, 12th Floor, New York, New York 10010 (or any successor location), office space and secretarial and administrative services as may be reasonably required by the Company. In exchange therefor, the Company shall pay Deerfield $10,000 per month on the Listing Date and continuing monthly thereafter until the Termination Date; and
2. Deerfield hereby irrevocably waives any and all right, title, interest, causes of action and claims of any kind as a result of, or arising out of, this Agreement (each, a Claim) in or to, and any and all right to seek payment of any amounts due to it out of, the trust account established for the benefit of the public stockholders of the Company and into which substantially all of the proceeds of the Companys initial public offering will be deposited (the Trust Account), and hereby irrevocably waives any Claim it may have in the future as a result of, or arising out of, this Agreement, which Claim would reduce, encumber or otherwise adversely affect the Trust Account or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction of any Claim against the Trust Account for any reason whatsoever.
This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of its subject matter and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by the parties hereto.
No party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.
This Agreement constitutes the entire relationship of the parties hereto, and any litigation between the parties (whether grounded in contract, tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the laws of the State of New York.
[Signature Page Follows]
Very truly yours,
DA32 LIFE SCIENCE TECH ACQUISITION CORP. | ||
By: | /s/ Christopher Wolfe | |
Name: Christopher Wolfe Title: Chief Financial Officer |
AGREED AND ACCEPTED BY:
DEERFIELD PARTNERS, L.P. By: Deerfield Mgmt, L.P., its General Partner By: J.E. Flynn Capital, LLC, its General Partner | ||
By: | /s/ David J. Clark | |
Name: David J. Clark Title: Authorized Signatory |
[Signature Page to Amended and Restated Administrative Services Agreement]
Exhibit 31.1
CERTIFICATION
PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Steve Kafka, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2021 of DA32 Life Science Tech Acquisition Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
c. Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting.
Date: March 31, 2022 | By: | /s/ Steve Kafka | ||||
Steve Kafka | ||||||
Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Christopher Wolfe, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2021 of DA32 Life Science Tech Acquisition Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
c. Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls over financial reporting.
Date: March 31, 2022 | By: | /s/ Christopher Wolfe | ||||
Christopher Wolfe | ||||||
Chief Financial Officer (Principal Accounting and Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Annual Report on Form 10-K of DA32 Life Science Tech Acquisition Corp. (the Company) for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Steve Kafka, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 31, 2022 | By: | /s/ Steve Kafka | ||||
Steve Kafka | ||||||
Chief Executive Officer (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Annual Report of DA32 Life Science Tech Acquisition Corp. (the Company) on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Christopher Wolfe, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 31, 2022 | By: | /s/ Christopher Wolfe | ||||
Christopher Wolfe | ||||||
Chief Financial Officer (Principal Accounting and Financial Officer) |
Statement of Operations |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
$ / shares
shares
| |
General and administrative expenses | $ 365,964 |
General and administrative expenses - related party | 87,500 |
Franchise tax expenses | 142,516 |
Loss from operations | (595,980) |
Gain on investments held in Trust Account | 24,686 |
Net loss | (571,294) |
Common Class A [Member] | |
Net loss | $ (419,324) |
Weighted average shares outstanding, basic and diluted | shares | 12,310,577 |
Basic and diluted net loss per share | $ / shares | $ (0.03) |
Common Class B [Member] | |
Net loss | $ (151,970) |
Weighted average shares outstanding, basic and diluted | shares | 4,461,538 |
Basic and diluted net loss per share | $ / shares | $ (0.03) |
Statement of Changes In Stockholders' Deficit - 9 months ended Dec. 31, 2021 - USD ($) |
Total |
Private Placement [Member]
Sponsor [Member]
|
Additional Paid-in Capital [Member] |
Additional Paid-in Capital [Member]
Private Placement [Member]
Sponsor [Member]
|
Accumulated Deficit [Member] |
Common Class A [Member] |
Common Class A [Member]
Common Stock [Member]
|
Common Class A [Member]
Common Stock [Member]
Private Placement [Member]
Sponsor [Member]
|
Common Class B [Member] |
Common Class B [Member]
Sponsor [Member]
|
Common Class B [Member]
Private Placement [Member]
Sponsor [Member]
|
Common Class B [Member]
Common Stock [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at the beginning at Apr. 15, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Balance at the beginning (in shares) at Apr. 15, 2021 | 0 | 0 | ||||||||||
Issuance of Class B common stock to Sponsor(Value) | 25,000 | 24,425 | $ 25,000 | $ 575 | ||||||||
Issuance of Class B common stock to Sponsor(Shares) | 5,750,000 | |||||||||||
Sale of private placement shares to Sponsor in private placement(Value) | $ 6,500,000 | $ 6,499,935 | $ 65 | |||||||||
Sale of private placement shares to Sponsor in private placement(Shares) | 650,000 | 650,000 | ||||||||||
Forfeited shares(Value) | 75 | $ (75) | ||||||||||
Forfeited shares(Shares) | (750,000) | |||||||||||
Accretion of Class A common stock to redemption amount | (9,347,293) | (6,524,435) | (2,822,858) | |||||||||
Net loss | (571,294) | (571,294) | $ (419,324) | $ (151,970) | ||||||||
Balance at the ending at Dec. 31, 2021 | $ (3,393,587) | $ 0 | $ (3,394,152) | $ 65 | $ 500 | |||||||
Balance at the ending (in shares) at Dec. 31, 2021 | 650,000 | 5,000,000 |
Description of Organization and Business Operations |
9 Months Ended |
---|---|
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Organization and Business Operations | Note 1 - Description of Organization and Business Operations DA32 Life Sciences Tech Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on April 16, 2021. The Company was 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 (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies. As of December 31, 2021, the Company had not commenced any operations. All activity for the period from April 16, 2021 (inception) through December 31, 2021, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described below, and since the Initial Public Offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income earned on the Trust Account (as defined below). The Company has selected December 31 as its fiscal year end. The Company’s sponsor is DA32 Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2021. On July 30, 2021, the Company consummated its Initial Public Offering of 20,000,000 shares of Class A common stock (the “Public Shares”), at an offering price of $10.00 per Public Share, generating gross proceeds of $200.0 million, and incurring offering costs of approximately $9.3 million, inclusive of $5.6 million in deferred underwriting commissions (Note 5). Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 650,000 shares of Class A common stock (the “Private Placement Shares”), at a price of $10.00 per Private Placement Share to the Sponsor, generating gross proceeds of $6.5 million (Note 4), paid on August 3, 2021. Upon the closing of the Initial Public Offering and the Private Placement, $200.0 million ($10.00 per Public Share) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.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. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. The Company will provide the holders of the Company’s outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially at $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes). The per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares were recorded at a redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the Initial Stockholders (as defined below) agreed to vote their Founder Shares (as defined below in Note 4), their Private Placement Shares and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Stockholders agreed to waive their redemption rights with respect to their Founder Shares, their Private Placement Shares and Public Shares in connection with the completion of a Business Combination. The Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% of the Public Shares, without the prior consent of the Company. The Sponsor and the Company’s officers and directors (the “Initial Stockholders”) agreed not to propose an amendment to the Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. If the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or July 30, 2023, or during any extended period of time that the Company may have to consummate a Business Combination as a result of an amendment to the Certificate of Incorporation (the “Combination 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 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 and not previously released to the Company to pay its taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Initial Stockholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Private Placement Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.00. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity and Capital Resources As of December 31, 2021, the Company had approximately $1.9 million in its operating bank account and working capital of approximately $2.0 million (not taking into account approximately $143,000 in tax obligations that may be paid using investment income earned in Trust Account). The Company’s liquidity needs to date have been satisfied through a cash payment of $25,000 from Sponsor to purchase the Founder Shares, the loan of $200,000 from the Sponsor pursuant to the Note (as defined in Note 4), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note upon closing of the Initial Public Offering. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in Note 4). As of December 31, 2021, there were no amounts outstanding under any Working Capital Loan. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company 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. |
Basis of Presentation and Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 - Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Restatement of Previously Filed Balance Sheet In preparation of the Company’s financial statements for the year ended December 31, 2021, the Company concluded it should restate its previously issued financial statement to classify all Class A common stock subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC 480, paragraph 10-S99, redemption provisions not solely within the control of the Company require Class A common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’ equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that, the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. Accordingly, effective with this filing, the Company presents all of its redeemable Class A common stock as temporary equity and recognized accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material to the previously filed balance sheet that contained the error, reported in the Company’s Form 8-K filed with the SEC on July 30, 2021 (the “Post-IPO Balance Sheet”). As such, the Company is restating the Post-IPO Balance Sheet in this filing. The previously presented Post-IPO Balance Sheet should no longer be relied upon. The following table summarizes the effect of the restatement on each financial statement line item as of the date indicated:
Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2021. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation Coverage limit of $250,000. As of December 31, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Investments Held in Trust Account The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in gain from investments held in the Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the balance sheet, primarily due to their short-term nature. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting and other costs incurred that were directly related to the Initial Public Offering. Offering costs associated with the Public Shares were charged against the carrying value of the shares of Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions 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. Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A shares of common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable shares of Class A common stock (including shares of Class A common stock 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 common stock are classified as stockholders’ equity. The Company’s Public Shares of Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2021, 20,000,000 shares of Class A common stock subject to possible redemption at the redemption amount are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Income Taxes The Company’s taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative expenses are generally considered start-up costs and are not currently deductible. The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net Income (Loss) Per Share of Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The following table reflects presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of common stock:
Recent Accounting Pronouncements The Company’s 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. |
Initial Public Offering |
9 Months Ended |
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Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Initial Public Offering | Note 3 - Initial Public Offering On July 30, 2021, the Company consummated its Initial Public Offering of 20,000,000 Public Shares, at an offering price of $10.00 per Public Share, generating gross proceeds of $200.0 million, and incurring offering costs of approximately $9.3 million, inclusive of $5.6 million in deferred underwriting commissions. Of the 20,000,000 Public Shares sold in the Initial Public Offering, 4,000,000 Public Shares were purchased by affiliates of the Sponsor (the “Affiliated Shares”). The Company granted the underwriters a
45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional shares of Class A common stock to cover over-allotments, if any, at the Initial Public Offering price, less underwriting discounts and commissions. On August 4, 2021, the underwriters informed the Company that they decided not to exercise their over-allotment option. |
Related Party Transactions |
9 Months Ended |
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Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4 - Related Party Transactions Founder Shares On May 13, 2021, the Sponsor paid $25,000 to purchase 5,750,000 shares of the Company’s Class B common stock, par value $0.0001 per share, (the “Founder Shares”). The Sponsor agreed to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters, so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding shares of common stock after the Initial Public Offering (excluding the Private Placement Shares). On June 15, 2021, the Sponsor transferred 143,750 founder shares to Christopher Wolfe, our Chief Financial Officer, 230,000 founder shares to Section 32 Fund 3, LP, a managing member of the Sponsor, 30,000 founder shares to each of Andrew ElBardissi, Keith Crandell, Mara Aspinall, Kevin Hrusovsky, Angela Lai and Nick Roelofs, the Company’s directors, and 10,000 founder shares to each of Bonnie Anderson, Peer Schatz and Vince Miller, certain of the Company’s advisors, for the same per-share price initially paid by the Sponsor, resulting in the Sponsor holding 5,166,250 founder shares. On August 4, 2021, the underwriters informed the Company that they decided not to exercise their over-allotment option; thus, 750,000 shares of Class B common stock were forfeited on August 5, 2021, accordingly. Private Placement Shares Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 650,000 Private Placement Shares, at a price of $10.00 per Private Placement Share to the Sponsor, generating gross proceeds of $6.5 million. As of July 30, 2021, the Company received $5.7 million from the proceeds of the Private Placement and recorded $800,000 in subscription receivable. The Sponsor paid the subscription in full on August 3, 2021. The Initial Stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (i) year after the completion of the initial Business Combination and (ii) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the stockholders having the right to exchange their common stock for cash, securities or other property and the Sponsor agreed not to transfer, assign or sell any of its Private Placement Shares until 30 days after the completion of the initial Business Combination. Notwithstanding the foregoing, if the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, the Founder Shares will be released from the lockup. Related Party Loans On May 13, 2021, the Sponsor agreed to loan the Company an aggregate of up to $200,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note, as amended (the “Note”). This loan was non-interest bearing and payable upon the completion of the Initial Public Offering. The Company borrowed $200,000 under the Note and fully repaid this amount on July 30, 2021 and is no longer available to the Company.In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into shares of Class A common stock of the post-Business Combination entity at a price of $10.00 per share. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2021, the Company had no borrowings under the Working Capital Loans. Administrative Services Agreement On July 27, 2021, the Company entered into an agreement that provided that, commencing on the date that the Company’s securities were first listed on Nasdaq and continuing until the earlier of the Company’s consummation of a Business Combination and the Company’s liquidation, the Company agreed to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services provided to members of the Company’s management team. As of July 27, 2021, the original Administrative Services Agreement was amended and restated in full to correct a clerical error in the parties to the agreement. The Amended and Restated Administrative Services Agreement (the “A&R Administrative Services Agreement”), by and between the Company and Deerfield Partners, L.P. (“Deerfield Affiliate”), an affiliate of the Sponsor, provides that the Company will pay Deerfield Affiliate a total of $10,000 per month for office space, secretarial and administrative services provided to members of the Company’s management team. For the period from April 16, 2021 (inception) through December 31, 2021, the Company incurred expenses of $50,000 under this agreement, included in administrative expenses – related party on the accompanying statements of operations. As of December 31, 2021, no amounts were outstanding for these services. The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket Wolfe Strategic Services Agreement On July 27, 2021, the Company entered into an agreement that provided that, commencing on the date that the Company’s securities were first listed on Nasdaq, the Company agreed to pay its Chief Financial Officer, Christopher Wolfe, $7,500 per month for his services prior to the initial Business Combination. For the period from April 16, 2021 (inception) through December 31, 2021, the Company incurred $37,500 in expenses for these services which is included in administrative expenses – related party on the accompanying statements of operations. As of December 31, 2021, no amounts were outstanding for these services. |
Commitments and Contingencies |
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Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5 - Commitments and Contingencies Registration Rights The holders of Founder Shares, Private Placement Shares, and shares of Class A common stock that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters did not earn any underwriting commissions on the 4,000,000 Affiliated Shares. Except for the Affiliated Shares, the underwriters were entitled to an upfront underwriting discount of $0.20 per share, or $3.2 million in the aggregate, paid upon the closing of the Initial Public Offering, and a deferred underwriting commissions of $0.35 per share, or $5.6 million in the aggregate will be payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements. |
Class A Common Stock Subject to Possible Redemption |
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Class A Common Stock Subject to Possible Redemption | Note 6 - Class A Common Stock Subject to Possible Redemption The Company’s Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s Class A common stock are entitled to one vote for each share. As of December 31, 2021, there were 20,000,000 shares of Class A common stock outstanding subject to possible redemption. The Class A common stock subject to possible redemption reflected on the balance sheet is reconciled on the following table:
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Stockholders' Deficit |
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Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 7 - Stockholders’ Deficit Preferred Stock- Class A Common Stock- e d as temporary equity in the accompanying balance sheet (see Note 6). Class B Common Stock Holders of record of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, with each share of common stock entitling the holder to one vote except as required by law. The Class B common stock will automatically convert into Class A common stock concurrently with or immediately following the consummation of the initial Business Combination on a
one-for-one as-converted basis, 20% of the total number of shares of Class A common stock issued and outstanding (excluding the Private Placement Shares) after such conversion (after giving effect to any redemptions of shares of Class A common stock by Public Stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Shares issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 8 - Fair Value Measurements The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
Transfers to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. There were no transfers between levels in the period from April 16, 2021 (inception) through December 31, 2021. Level 1 instruments include investments in U.S. government securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Note 9 - Income Taxes The Company’s general and administrative costs are generally considered start-up costs and are not currently deductible. The income tax (benefit) provision consists of the following for the period from April 16, 2021 (inception) through December 31, 2021:
The Company’s net deferred tax asset is summarized as follows as of December 31, 2021:
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of a deferred tax asset is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax asset and has therefore established a full valuation allowance. For the period from April 16, 2021 (inception) through December 31, 2021, the valuation allowance increased by approximately $120,000. As of December 31, 2021, the Company had approximately $118,000 of U.S. federal net operating loss carryovers, which do not expire, available to offset future taxable income. There were no unrecognized tax benefits as of December 31, 2021. No amounts were accrued for the payment of interest and penalties as of December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) for the period from April 16, 2021 (inception) through December 31, 2021 is as follows:
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Subsequent Events |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 - Subsequent Events The Company evaluated subsequent events and transactions that occurred up to the date the financial statements were issued. Based upon this review, the Company determined that there have been no events that have occurred that would require adjustments to the disclosures in the financial statements. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. |
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Revision to Previously Reported Financial Statements | Restatement of Previously Filed Balance Sheet In preparation of the Company’s financial statements for the year ended December 31, 2021, the Company concluded it should restate its previously issued financial statement to classify all Class A common stock subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC 480, paragraph 10-S99, redemption provisions not solely within the control of the Company require Class A common stock subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Class A common stock in permanent equity, or total stockholders’ equity. Although the Company did not specify a maximum redemption threshold, its charter currently provides that, the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. Accordingly, effective with this filing, the Company presents all of its redeemable Class A common stock as temporary equity and recognized accretion from the initial book value to redemption value at the time of its Initial Public Offering and in accordance with ASC 480. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material to the previously filed balance sheet that contained the error, reported in the Company’s Form 8-K filed with the SEC on July 30, 2021 (the “Post-IPO Balance Sheet”). As such, the Company is restating the Post-IPO Balance Sheet in this filing. The previously presented Post-IPO Balance Sheet should no longer be relied upon. The following table summarizes the effect of the restatement on each financial statement line item as of the date indicated:
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Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
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Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. |
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Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2021. |
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Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation Coverage limit of $250,000. As of December 31, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. |
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Investments Held in Trust Account | Investments Held in Trust Account The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in gain from investments held in the Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the balance sheet, primarily due to their short-term nature. |
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Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
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Offering Costs Associated with the Initial Public Offering | Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting and other costs incurred that were directly related to the Initial Public Offering. Offering costs associated with the Public Shares were charged against the carrying value of the shares of Class A common stock subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions 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. |
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Class A Common Stock Subject to Possible Redemption | Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A shares of common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable shares of Class A common stock (including shares of Class A common stock 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 common stock are classified as stockholders’ equity. The Company’s Public Shares of Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2021, 20,000,000 shares of Class A common stock subject to possible redemption at the redemption amount are presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional
paid-in capital (to the extent available) and accumulated deficit. |
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Income Taxes | Income Taxes The Company’s taxable income primarily consists of interest income on the Trust Account. The Company’s general and administrative expenses are generally considered start-up costs and are not currently deductible. The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. |
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Net Income (Loss) Per Share of Common Stock | Net Income (Loss) Per Share of Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. The following table reflects presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of common stock:
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Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company’s 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. |
Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restatement of previously filed financial statement | The following table summarizes the effect of the restatement on each financial statement line item as of the date indicated:
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Summary of basic and diluted net income (loss) per share | The following table reflects presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of common stock:
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Class A Common Stock Subject to Possible Redemption (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Summary of Class A common stock subject to possible redemption reflected on condensed balance sheet | The Class A common stock subject to possible redemption reflected on the balance sheet is reconciled on the following table:
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Fair Value Measurements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||
Summary of Assets Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
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Income Taxes (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Income Tax (Benefit) Provision | The income tax (benefit) provision consists of the following for the period from April 16, 2021 (inception) through December 31, 2021:
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Summary of Net Deferred Tax Assets | The Company’s net deferred tax asset is summarized as follows as of December 31, 2021:
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Summary of Effective Tax Rate Benefit | A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) for the period from April 16, 2021 (inception) through December 31, 2021 is as follows:
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Basis of Presentation and Summary of Significant Accounting Policies - Summary of Basic and Diluted Net Income (Loss) Per Share (Detail) |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
$ / shares
shares
| |
Numerator: | |
Allocation of net loss | $ (571,294) |
Common Class A [Member] | |
Numerator: | |
Allocation of net loss | $ (419,324) |
Denominator: | |
Basic and diluted weighted average common shares outstanding | shares | 12,310,577 |
Basic and diluted net loss per common share | $ / shares | $ (0.03) |
Common Class B [Member] | |
Numerator: | |
Allocation of net loss | $ (151,970) |
Denominator: | |
Basic and diluted weighted average common shares outstanding | shares | 4,461,538 |
Basic and diluted net loss per common share | $ / shares | $ (0.03) |
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) |
Dec. 31, 2021
USD ($)
shares
|
---|---|
Accounting Policies [Line Items] | |
Minimum networth needed to effect business combination | $ 5,000,001 |
Temporary equity shares outstanding | shares | 20,000,000 |
Cash equivalents | $ 0 |
Cash insured with federal depository insurance corporation | $ 250,000 |
Common Class A [Member] | |
Accounting Policies [Line Items] | |
Temporary equity shares outstanding | shares | 20,000,000 |
Initial Public Offering - Additional Information (Detail) - USD ($) |
9 Months Ended | |
---|---|---|
Jul. 30, 2021 |
Dec. 31, 2021 |
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Disclosure Of Initial Public Offer [Line Items] | ||
Proceeds from initial public offering | $ 200,000,000.0 | $ 200,000,000 |
Deferred underwriting commission | $ 5,600,000 | |
Common Class A [Member] | IPO [Member] | ||
Disclosure Of Initial Public Offer [Line Items] | ||
Stock issued during the period new issues shares | 20,000,000 | |
Shares issued price per share | $ 10.00 | |
Stock issuance costs incurred | $ 9,300,000 | |
Common Class A [Member] | IPO [Member] | Affiliate Of Sponsor [Member] | ||
Disclosure Of Initial Public Offer [Line Items] | ||
Stock issued during the period new issues shares | 4,000,000 | |
Common Class A [Member] | Over-Allotment Option [Member] | Underwriting Agreement [Member] | ||
Disclosure Of Initial Public Offer [Line Items] | ||
Number of days granted for subscribing to the option | 45 days | |
Common stock shares subscribed but not issued | 3,000,000 |
Commitments and Contingencies - Additional Information (Detail) $ / shares in Units, $ in Millions |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
$ / shares
| |
Other Commitments [Line Items] | |
Underwriting discount per share | $ / shares | $ 0.20 |
Underwriting discount payable | $ | $ 3.2 |
Deferred underwriting discount per share | $ / shares | $ 0.35 |
Deferred underwriting commission payable | $ | $ 5.6 |
Class A Common Stock Subject to Possible Redemption - Additional Information (Detail) |
Dec. 31, 2021
$ / shares
shares
|
---|---|
Temporary Equity [Line Items] | |
Temporary equity par or stated value per share | $ / shares | $ 0.0001 |
Temporary equity shares outstanding | 20,000,000 |
Common Class A [Member] | |
Temporary Equity [Line Items] | |
Temporary equity shares authorized | 100,000,000 |
Temporary equity par or stated value per share | $ / shares | $ 0.0001 |
Temporary equity shares outstanding | 20,000,000 |
Class A Common Stock Subject to Possible Redemption - Summary of Class A Common Stock Subject to Possible Redemption Reflected on Condensed Balance Sheet (Detail) |
Dec. 31, 2021
USD ($)
|
---|---|
Temporary Equity Disclosure [Abstract] | |
Gross Proceeds | $ 200,000,000 |
Class A common stock issuance costs | (9,347,293) |
Accretion of carrying value to redemption value | 9,347,293 |
Class A common stock subject to possible redemption | $ 200,000,000 |
Fair Value Measurements - Additional Information (Detail) |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Fair Value, Inputs, Level 1, 2 and 3 [Member] | |
Fair Value Disclosures [Line Items] | |
Transfers between levels | $ 0 |
Income Taxes - Summary of Income Tax (Benefit) Provision (Detail) |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Current Federal | $ 0 |
Current State | 0 |
Deferred Federal | (119,972) |
Deferred State | 0 |
Valuation allowance | 119,972 |
Income tax provision | $ 0 |
Income Taxes - Summary of Net Deferred Tax Assets (Detail) |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Deferred tax assets: | |
Start-up/Organization costs | $ 95,227 |
Net operating loss carryforwards | 24,744 |
Total deferred tax assets | 119,972 |
Valuation allowance | (119,972) |
Deferred tax asset, net of allowance | $ 0 |
Income Taxes - Summary of Effective Tax Rate Benefit (Detail) |
9 Months Ended |
---|---|
Dec. 31, 2021 | |
Statutory federal income tax rate | 21.00% |
Change in valuation allowance | (21.00%) |
Effective tax rate | 0.00% |
Income Taxes - Additional Information (Detail) |
9 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Unrecognized tax benefits | $ 0 |
Accrued payment of interest and penalties | 0 |
Increase in valuation allowance deferred tax assets | 120,000 |
Domestic Tax Authority [Member] | |
Operating loss carryforwards | $ 118,000 |
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