What changed in this filing

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Item 9A. Controls and Procedures

2023-02-22 compared with 2022-03-28 · 416 added, 250 removed, 712 unchanged (48% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms.

Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective, due solely to the material weakness in our internal control over financial reporting related to the Company’s accounting for complex financial instruments.

As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S.

generally accepted accounting principles.

Accordingly, management believes that the financial statements included in this Form 10-K present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

Management intends to implement remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting.

Specifically, we intend to expand and improve our review process for complex securities and related accounting standards.

We have improved this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.

Management’s Report on Internal Controls Over Financial Reporting

Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Accordingly, management believes that the consolidated financial statements included in this Annual Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

Management’s Annual Report on Internal Control Over Financial Reporting

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with U.S.

Our internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

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In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).

Based on our assessments and those criteria, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2021.

Management has implemented remediation steps to improve our internal control over financial reporting.

Specifically, we expanded and improved our review process for complex securities and related accounting standards.

We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience to supplement existing accounting professionals.

Based on our assessments and those criteria, management determined that we maintain effective internal control over financial reporting as of December 31, 2022.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

There were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The firm of WithumSmith+Brown, PC, or Withum, acts as our independent registered public accounting firm.

The following is a summary of fees paid to Withum for services rendered.

For the year ended December 31, 2022 and 2021, fees for our independent registered public accounting firm were approximately $78,988 and $116,415, respectively, for the services Withum performed in connection with our Initial Public Offering and the audit of our December 31, 2022 and 2021 consolidated financial statements included in this Annual Report on Form 10-K.

For the year ended December 31, 2022 and 2021, fees for our independent registered public accounting firm were approximately $9,152 and $8,320, respectively, for the services Withum performed in connection with our tax filings.

All Other Fees .

For the year ended December 31, 2022 and 2021, there were no fees billed for products and services provided by our independent registered public accounting firm other than those set forth above did not render any services to us other than those set forth above.

Pre-Approval Policy

Our audit committee was formed in connection with the effectiveness of our registration statement for our initial public offering.

As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors.

Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all audit services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

Exhibits, Financial Statement Schedules.

The following documents are filed as part of this Form 10-K:

Consolidated Financial Statements:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Shareholders’ Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Financial Statement Schedules:

We hereby file as part of this Report the exhibits listed in the attached Exhibit Index.

Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C.

Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C.

20549, at prescribed rates or on the SEC website at www.sec.gov.

Directors, Executive Officers and Corporate Governance

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We believe Mr.

Palmisano is qualified to serve on our board of directors due to his executive experience with several prominent global medical technology companies.

Palmisano is qualified to serve on the Board due to his executive experience with several prominent global medical technology companies.

Vikram Malik , 60, has been our President and a Director since December 2020.

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We believe Mr.

Malik is qualified to serve on our board of directors due to his financial experience in the healthcare industry.

Malik is qualified to serve on the Board due to his financial experience in the healthcare industry.

Oleg Grodnensky , 45, has been our Chief Operating Officer and Chief Financial Officer since December 2020 and Secretary of the Board since May 2021.

Grodnensky has over 24 years of experience working in finance, general advisory, business development and operations within the life sciences industry, and brings extensive financial and operational expertise to our company.

Grodnensky began his career on Wall Street in 1998 focusing on leading M&A transactions, restructurings, and equity and debt capital raising in the medical technology and life science sectors.

Grodnensky began his career on Wall Street in 1998 focusing on leading M&A transactions, restructurings, and equity and debt capital raising in life science sectors.

Grodnensky and Mr.

Malik have worked together at Banc of America Securities.

Following more than 10 years in healthcare investment banking and over 30 advisory roles totaling $17 billion in value, Mr.

Following more than ten years in healthcare investment banking and over 30 advisory roles totaling $17 billion in value, Mr.

Grodnensky founded HV Capital, where he provided operational turnaround, strategic business development and buy-side advisory services to global healthcare and private equity firms, and acted as a principal investor in growth and venture opportunities.

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Grodnensky received his BS in Economics and Mathematics from Duke University in 1998.

Berry , 49, has served on our board of directors since our initial public offering.

Berry has over fifteen years’ of experience in senior leadership roles for Wright Medical Group N.V.

Berry , 50, has served on the Board since the Initial Public Offering.

Berry has over fifteen years’ experience in senior leadership roles for Wright Medical Group N.V.

WMGI), a $1 billion global healthcare growth company.

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Berry has also served on the board of directors of Vapotherm Inc.

VAPO) since January 2020.

Prior to assuming his role as Executive Vice President, Chief Financial and Operations Officer, Mr Berry was Senior Vice President and Chief Financial Officer of Wright Medical from 2009 to January 2019 and Corporate Controller from 2002 to 2009.

VAPO) since January 2020 and of Treace Medical Concepts, Inc.

Prior to assuming his role as Executive Vice President, Chief Financial and Operations Officer, Mr.

Berry was Senior Vice President and Chief Financial Officer of Wright Medical from 2009 to January 2019 and Corporate Controller from 2002 to 2009.

Berry and Mr.

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We believe Mr.

Berry is qualified to serve on our board of directors due to his M&A experience in the healthcare industry.

Lightman , 64, has served on our board of directors since our initial public offering.

Berry is qualified to serve on the Board due to his M&A experience in the healthcare industry.

Lightman , 65, has served on the Board since the Initial Public Offering.

Lightman has over two decades of corporate legal experience and brings a diverse skill set in managing complex legal and business matters for public and private healthcare and medical device companies.

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We believe Mr.

Lightman is qualified to serve on our board of directors due to his corporate legal experience in public and private healthcare technology companies.

Andrews , 50, has served on our board of directors since our initial public offering.

Andrews has over fifteen years’ experience in senior finance leadership roles with leading medical technology companies and brings a broad skill set in executing strategic initiatives and leading global finance organizations.

Lightman is qualified to serve on the Board due to his corporate legal experience in public and private healthcare technology companies.

Andrews , 51, has served on the Board since the Initial Public Offering.

Andrews has over 15 years’ experience in senior finance leadership roles with leading medical technology companies and brings a broad skill set in executing strategic initiatives and leading global finance organizations.

Andrews is the Chief Financial Officer for Smart Wires Technology LTD.

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Andrews spent fourteen years at Medtronic, Inc., a global medical device company.

tenure with Medtronic, Ms.

During her tenure with Medtronic, Ms.

Andrews held numerous key financial positions including Vice President, Finance (Business Unit CFO) for the $3.5 billion Spine and Biologics business.

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Andrews also serves on the board of directors of RxSight (NASDAQ:

RXST) and as the chairperson of the audit committee since August of 2021.

RXST) and as the chairperson of the audit committee since August 2021, and as the Chief Financial Officer of Smart Wires Technology Ltd.

since September 2021.

Andrews received a BS in Accounting from Indiana University NW in 1993.

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We believe that Ms.

Andrews is qualified to serve on our board of directors due to her financial experience in the healthcare industry.

Andrews is qualified to serve on the Board due to her financial experience in the healthcare industry.

Director Independence

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Notwithstanding the foregoing, other than those payments and reimbursements described under the heading “Item 11.

Executive Compensation” below, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination.

Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.

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We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules.

In accordance with Rule 5605(e)(2) of the Nasdaq rules, a majority of the

independent directors may recommend a director nominee for selection by our board of directors.

In accordance with Rule 5605(e)(2) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by our board of directors.

Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.

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Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity.

Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to

the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.

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Former Chief Executive Officer of Wright Medical

Medical aethestics

Strathspey Crown

Medical aesthetics

Strathspey Crown (resigned 2022)

Growth equity

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Medical technologies

Former Executive Vice President, Chief Financial and Operations

Officer of Wright Medical

Former Executive Vice President, Chief Financial and Operations Officer of Wright Medical

Treace Medical Concepts, Inc.

Medical devices

Vapotherm Inc.

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Medical technologies

Former Senior Vice President, General Counsel and Secretary of

Wright Medical

Former Senior Vice President, General Counsel and Secretary of Wright Medical

Stryker Corporation (as successor-in-interest to Wright Medical)

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Former Senior Vice President, Global Finance of Wright Medical

RxSight, Inc.

Medical technologies

Director, Chairperson of the Audit Committee

Smart Wires Technology Ltd.

Power technologies

Chief Financial Officer

Potential investors should also be aware of the following other potential conflicts of interest:

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Furthermore, our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of:

(i) one year after the completion of our initial business combination and (ii) 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 common stock for cash, securities or other property.

Notwithstanding the foregoing, if the closing price of our 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, the founder shares will be released from the lockup.

Subject to certain limited exceptions, the private placement warrants will not be transferable until 30 days following the completion of our initial business combination.

Because certain of our executive officers and director nominees will own common stock or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

● Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

We are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers or directors or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors.

Because certain of our executive officers and director nominees will own common stock or warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business (including AEON) is an appropriate business with which to effectuate our initial business combination.

● Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination (including our proposed initial business combination with AEON) if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

In the event we seek to complete our initial business combination with a business combination target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking which is a member of FINRA or a valuation or appraisal firm, that such initial business combination is fair to our company from a financial point of view.

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Furthermore, other than those payments and reimbursements described under the heading “Item 11.

Executive Compensation” below, in no event will our sponsor or any of our existing officers or directors, or any of their respective affiliates, be paid by the company any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is, including the proposed initial business combination with AEON, which is described elsewhere in this Report).

We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.

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The number of founder shares outstanding was determined based on the total size of our initial public offering of 27,600,000 units, and therefore that such founder shares would represent 20% of the outstanding shares after our initial public offering.

Approximate Percentage of

Approximate Percentage of Outstanding

Shares Beneficially

Outstanding Common Stock

Name and Address of Beneficial Owner(1)

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A portion of the purchase price of the private placement warrants was added to the proceeds from our initial public offering to be held in the trust account.

If we do not complete our initial business combination by February 11, 2023, the private placement warrants will expire worthless.

If we do not complete our initial business combination by August 11, 2023, the private placement warrants will expire worthless.

The private placement warrants are subject to the transfer restrictions described below.

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The following is a summary of fees paid to Withum for services rendered.

For the year ended December 31, 2021 and for the period from November 17, 2020 (inception) through December 31, 2020, fees for our independent registered public accounting firm were approximately $108,420 and $38,110, respectively, for the services Withum performed in connection with our Initial Public Offering and the audit of our December 31, 2021 and 2020 financial statements included in this Annual Report on Form 10-K.

Audit-Related Fees.

For the year ended December 31, 2021 and for the period from November 17, 2020 (inception) through December 31, 2020, our independent registered public accounting firm did not render assurance and related services related to the performance of the audit or review of financial statements.

For the year ended December 31, 2022 and 2021, fees for our independent registered public accounting firm were approximately $78,988 and $116,415, respectively, for the services Withum performed in connection with our Initial Public Offering and the audit of our December 31, 2022 and 2021 financial statements included in this Annual Report on Form 10-K.

All Other Fees .

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Report of Independent Registered Public Accounting Firm

Balance Sheet

Statement of Operations

Statement of Changes in Stockholders’ Equity (Deficit)

Statement of Cash Flows

Notes to Financial Statements

Consolidated Financial Statements:

Consolidated Balance Sheets

Consolidated Statement of Operations

Consolidated Statement of Changes in Stockholders’ Deficit

Consolidated Statement of Cash Flows

Notes to Consolidated Financial Statements

(2) Financial Statement Schedules:

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Underwriting Agreement, dated February 8, 2021, by and among the Company and Wells Fargo Securities, LLC and Guggenheim Securities, LLC, as representatives of the several underwriters.

Business Combination Agreement, dated as of December 12, 2022, by and among the Registrant, Priveterra Merger Sub, Inc.

and AEON Biopharma, Inc.

Second Amended and Restated Certificate of Incorporation of the Company.

Amendment to the Second Amended and Restated Certificate of Incorporation.

Bylaws of the Company.

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Letter Agreement, dated February 8, 2021, by and among the Company, its executive officers, its directors and Priveterra Sponsor, LLC.

Form of Letter Agreement

Investment Management Trust Agreement, dated February 8, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee.

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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.

* Previously filed as an exhibit to our Form 10-K filed on March 28, 2022.

** Previously filed as an exhibit to our Current Report on Form 8-K filed on December 12, 2022 and incorporated herein by reference.

*** Previously filed as an exhibit to our Current Report on Form 8-K filed on January 11, 2023 and incorporated herein by reference.

Form 10-K Summary

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on March 28, 2022.

PRIVETERRA ACQUISITION CORP

/s/ Robert Palmisano

Robert Palmisano

/s/ Robert J.

Chief Executive Officer and Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed by the following persons in the capacity and on the dates indicated.

/s/ Robert Palmisano

Chief Executive Officer and Chairman (Principal Executive Officer)

March 28, 2022

Robert Palmisano

/s/ Robert J.

Chief Executive Officer and Chairman

February 21 , 2023

(Principal Executive Officer)

/s/ Vikram Malik

President and Director

March 28, 2022

February 21 , 2023

/s/ Oleg Grodnensky

Chief Operating Officer, Chief Financial Officer and Secretary

March 28, 2022

Chief Operating Officer, Chief Financial

February 21 , 2023

Oleg Grodnensky

March 28, 2022

Officer and Secretary

February 21 , 2023

February 21, 2023

February 21 , 2023

PRIVETERRA ACQUISITION CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Financial Statements:

Balance Sheets as of December 31, 2021 and 2020

Statements of Operations for the year ended December 31, 2021 and the period from November 17, 2020 (inception) through December 31, 2020

Statements of changes in stockholders' equity (deficit) for the year ended December 31, 2021 and the period from November 17, 2020 (inception) through December 31, 2020

Statements of cash flows for the year ended December 31, 2021 and the period from November 17, 2020 (inception) through December 31, 2020

Notes to Financial Statements

Consolidated Financial Statements:

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Stockholders’ Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Priveterra Acquisition Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Priveterra Acquisition Corp (the “Company”) as of December 31, 2021 and 2020, the related statements of operations, changes in stockholders’ (deficit) equity and cash flows for the year ended December 31, 2021 and the period from November 17, 2020 (Inception) through December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 and the period from November 17, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Priveterra Acquisition Corp.

(the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years ended December 31, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by February 11, 2023 then the Company will cease all operations except for the purpose of liquidating.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by August 11, 2023 (originally February 11, 2023;

see Note 10) then the Company will cease all operations except for the purpose of liquidating.

The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

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New York, New York

March 28, 2022

February 21, 2023

PCAOB ID Number 100

PRIVETERRA ACQUISITION CORP.

BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

Current assets

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Prepaid assets – non-current

Deferred offering costs

Investments held in Trust Account

Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ (Deficit) Equity

Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit

Current liabilities:

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Promissory Note – Related Party

Deferred tax liability

Income tax payable

Total current liabilities

Warrant liability

Deferred underwriters’ discount

Warrant liabilities

Deferred underwriting commission

Total liabilities

Commitments and Contingencies

Class A common stock subject to possible redemption, 27,600,000 and 0 shares as of December 31, 2021 and 2020, at redemption value of $ 10.00 , respectively

Stockholders’ (Deficit) Equity:

Class A common stock subject to possible redemption, 27,600,000 shares as of December 31, 2022 and 2021, at redemption value of $ 10.09 and $ 10.00 , respectively

Stockholders’ Deficit:

Preferred stock, $ 0.0001 par value;

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280,000,000 shares authorized;

0 shares issued and outstanding (excluding 27,600,000 and 0 shares subject to possible redemption) as of December 31, 2021 and 2020, respectively

0 shares issued and outstanding (excluding 27,600,000 shares subject to possible redemption) as of December 31, 2022 and 2021, respectively

Class B common stock, $ 0.0001 par value;

20,000,000 shares authorized;

6,900,000 shares issued and outstanding

6,900,000 shares issued and outstanding at December 31, 2022 and 2021, respectively

Additional paid-in capital

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( 9,469,643 )

Total stockholders’ (deficit) equity

( 16,962,545 )

Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ (Deficit) Equity

The accompanying notes are an integral part of the financial statements.

Total Stockholders’ Deficit

( 9,436,953 )

( 16,929,855 )

Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit

The accompanying notes are an integral part of these consolidated financial statements.

PRIVETERRA ACQUISITION CORP.

STATEMENTS OF OPERATIONS

Formation and operating costs

CONSOLIDATED STATEMENTS OF OPERATIONS

Operating costs

Loss from operations

( 3,325,605 )

Other income/(expense)

Unrealized gain on change in fair value of warrants

( 1,935,943 )

Unrealized change in fair value of warrants liabilities

Gain on forgiveness of deferred underwriting fee payable

Offering costs allocated to warrant liabilities

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Total other income, net

Net Income (Loss)

Income before provision for income taxes

Provision for income taxes

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption

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Basic and diluted weighted average shares outstanding, Class B common stock

Basic and diluted net income (loss) per share, Class B common stock

The accompanying notes are an integral part of the financial statements.

Basic and diluted net income per share, Class B common stock

The accompanying notes are an integral part of these consolidated financial statements.

PRIVETERRA ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2021 AND THE PERIOD FROM NOVEMBER 17, 2020 (INCEPTION)

THROUGH DECEMBER 31, 2020

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2022 AND 2021

Stockholders’

Equity (Deficit)

Balance – November 17,2020 (Inception)

Class B common stock issued to initial stockholders

Balance – December 31, 2020

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( 16,929,855 )

The accompanying notes are an integral part of the financial statements.

Accretion of Class A common stock to redemption value

( 2,487,272 )

Balance – December 31, 2022

( 9,469,643 )

( 9,436,953 )

The accompanying notes are an integral part of these consolidated financial statements.

PRIVETERRA ACQUISITION CORP.

STATEMENTS OF CASH FLOWS

For the Period

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Year Ended December 31,

Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Interest earned on investments held in Trust Account

Unrealized gain on change in fair value of warrants

( 3,706,667 )

Unrealized change in fair value of warrants liabilities

( 6,715,041 )

( 10,712,133 )

Gain on forgiveness of deferred underwriting fee payable

( 3,767,400 )

Offering costs allocated to warrant liabilities

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Franchise tax payable

Deferred tax liability

Accrued expenses

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( 276,000,000 )

Net cash used in investing activities

Withdraw from Trust Account

Net cash provided by (used in) investing activities

( 276,000,000 )

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Net Change in Cash

Cash - Beginning of period

Cash - End of period

Cash - Beginning of Year

Cash - End of Year

Supplemental Disclosure of Non-cash Financing Activities:

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Conversion of Working Capital Loans to Private Placement Warrants

Accretion of redeemable common stock

Deferred offering costs paid by Sponsor in exchange for issuance of common stock

Deferred offering costs paid by promissory note

Accrued deferred offering costs

The accompanying notes are an integral part of the financial statements.

ORGANIZATION AND BUSINESS OPERATION

The accompanying notes are an integral part of these consolidated financial statements.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

NOTE 1 — ORGANIZATION AND BUSINESS OPERATION

Organization and General

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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 (“Business Combination”).

On January 5, 2023, in connection with the Business Combination Proposal, a purposed shareholder of the Company filed a complaint in the United States District Court for the Southern District of New York, against the Company and its board of directors, alleging that the registration statement on Form S-4 filed on December 27, 2022 with the SEC omitted material information related to the Business Combination.

Since the filing of the complaint, several purported shareholders of the Company have also sent demand letters to the Company’s counsel, similarly alleging that the registration statement filed by the Company on December 27, 2022 with the SEC omitted material information related to the Business Combination and demanding that the Company, its board of directors and/or AEON make supplemental corrective disclosures addressing the alleged deficiencies.

On November 15, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Priveterra Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Priveterra Acquisition Corp.

The transactions contemplated by the Merger Agreement are intended to serve as the Company’s initial Business Combination.

See Note 6 for further information.

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

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The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.

The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO and unrealized gains and losses on the change in fair value of it warrants.

The Company generates non-operating income in the form of interest income from the proceeds derived from the IPO and unrealized gains and losses on the change in fair value of it warrants.

The Company has selected December 31 as its fiscal year end.

The Company’s sponsor is Priveterra Sponsor, LLC, a Delaware limited liability company (the “Sponsor”).

The Company received notice from Guggenheim Securities, LLC, on November 16, 2022 and Wells Fargo Securities, LLC on January 26, 2023, two of the underwriters in the initial public offering, resigning as financial advisors, terminating their financial advisor engagement and waiving any entitlement to any portion of the deferred underwriting commissions payable in connection with the Company’s Initial Public Offering, for a total of $ 8,694,000 of the deferred fee as waived.

The registration statement for the Company’s IPO was declared effective on February 8, 2021 (the “Effective Date”).

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Of the transaction costs, $ 655,046 is included in offering costs on the statements of operations and $ 14,975,165 is included in equity.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

Trust Account

Following the closing of the IPO on February 11, 2021, $ 276,000,000 ($ 10.00 per Unit) from the net offering proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), located in the United States with Continental Stock Transfer & Trust Company acting as trustee and will be invested in 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 in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (“Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company.

Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its franchise and income tax obligations, if any, the proceeds from the Company’s IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of initial Business Combination, (ii) the redemption of the Company’s public shares if the Company does not complete an initial Business Combination within 24 months from the closing of the IPO, subject to applicable law, or (iii) the redemption of the Company’s public shares properly submitted in connection with a stockholder vote to amend its amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100 % of its public shares if the Company has not consummated an initial business combination within 24 months from the closing of the IPO or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity.

The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.

In connection with the vote at the special meeting of stockholders held on February 10, 2023 (the “Special Meeting”) the holders of 25,597,728 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.11 per share, for an aggregate redemption amount of approximately $ 258,793,030.08 , resulting in 2,002,272 shares of Class A common stock after redemptions.

The trust account balance after the redemption payments are made will be $ 20,259,152.12 .

Initial Business Combination

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The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation, and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination Period.

On December 12, 2022, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, Priveterra Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and AEON Biopharma, Inc., a Delaware corporation (“AEON”).

The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into AEON, with AEON surviving as a wholly owned subsidiary of the Company (the “Merger”).

Upon the closing of the Merger (the “Closing”), the Company will change its name to “AEON Biopharma, Inc.” The date on which the Closing actually occurs is hereinafter referred to as the “Closing Date.”

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

The Company will have 24 months from the closing of the IPO to complete the initial Business Combination (the “Combination Period”).

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Therefore, the Company cannot assure that its Sponsor would be able to satisfy those obligations.

Liquidity and Capital Resources

Liquidity, Capital Resources and Going Concern

The Company’s liquidity needs up to February 11, 2021, the date of the IPO, had been satisfied through a capital contribution from the Sponsor of $ 25,000 (see Note 5) for the founder shares and the loans under an unsecured promissory note from the Sponsor of $ 73,295 (see Note 5).

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The Company’s IPO was on February 11, 2021.

As of December 31, 2021, the Company had $ 497,412 in its operating bank account, and working capital of $ 200,639 (excluding taxes payable which is funded by earnings from the Trust Account).

Going Concern

The Company has approximately $497,000 in cash and approximately $835,000 in current liabilities as of December 31, 2021, and has incurred and expects to incur additional significant costs in pursuit of its financing and acquisition plans.

Additionally, the Company has until February 11, 2023 to consummate a Business Combination.

As of December 31, 2022, the Company had $ 67,909 in its operating bank account, and working capital deficit of $ 2,874,594 (excluding taxes payable which is funded by earnings from the Trust Account) and has incurred and expects to incur additional significant costs in pursuit of its financing and acquisition plans.

Additionally, the Company has until August 11, 2023 (originally February 11, 2023;

see Note 10) to consummate a Business Combination.

In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements– Going Concern,” Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern.

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No adjustments have been made to the carrying amounts of assets or liabilities

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements are presented in U.S.

dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”).

Emerging Growth Company Status

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 auditor 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 accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary where the Company has the ability to exercise control.

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.

The JOBS Act provides that a 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 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 statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which 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 U.S.

GAAP requires the Company’s 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.

The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s 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 consolidated 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.

One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liability.

Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

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 consolidated 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 approximately $ 497,412 in cash and did not have any cash equivalents as of December 31, 2021.

At December 31, 2020 the Company had no cash or cash equivalents.

Marketable Securities Held in Trust Account

The Company had approximately $ 68,000 and $ 497,000 in cash and did not have any cash equivalents as of December 31, 2022 and 2021.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

Investments Held in Trust Account

The Company’s portfolio of investments held in the Trust Account is comprised of U.S.

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government securities, or a combination thereof.

The Company’s investments held in the Trust Account are classified as trading securities.

Trading securities 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 income from investments held in Trust Account in the accompanying statements of operations.

The estimated fair values of investments held in the Trust Account are determined using available market information.

The Company classifies its U.S.

Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity.

Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts.

Offering Costs associated with the Initial Public Offering

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Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering.

Offering costs are charged to temporary equity or the statement of operations based on the relative value of the Public Warrants to the proceeds received from the Units sold upon the completion of the IPO.

Accordingly, as of December 31, 2021, offering costs totaling $ 15,630,212 (consisting of $ 5,220,000 of underwriting discount, $ 9,660,000 of deferred underwriting discount, and $ 450,212 of other offering costs) were recognized with $ 655,046 which was allocated to the Public Warrants and Private Warrants, included in the statement of operations and $ 14,975,166 included in temporary equity.

Offering costs are charged to temporary equity or the consolidated statement of operations based on the relative value of the Public Warrants to the proceeds received from the Units sold upon the completion of the IPO.

Accordingly, as of December 31, 2022, offering costs totaling $ 15,630,212 (consisting of $ 5,520,000 of underwriting discount, $ 9,660,000 of deferred underwriting discount, and $ 450,212 of other offering costs) were recognized with $ 655,046 which was allocated to the Public Warrants and Private Warrants, included in the consolidated statement of operations and $ 14,975,166 included in temporary equity.

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 Coverage limit of $ 250,000 .

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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The Company’s Class A common stock feature certain redemption rights that is considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ (deficit) equity section of the Company’s balance sheets.

As of December 31, 2021, the common stock reflected on the balance sheet are reconciled in the following table:

Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s consolidated balance sheets.

As of December 31, 2022 and 2021, the common stock subject to possible redemption reflected on the consolidated balance sheets are reconciled in the following table:

Gross proceeds from IPO

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Accretion of carrying value to redemption value

Class A common stock subject to possible redemption

Net Income (Loss) Per Common Share

Class A common stock subject to possible redemption, December 31, 2021

Accretion of carrying value to redemption value

Class A common stock subject to possible redemption, December 31, 2022

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

See Note 10 for the current amount held in the Trust Account and the ordinary shares currently subject to redemption following the Company’s February 10, 2023 special meeting of shareholders to extend the Business Combination deadline date from February 11, 2023 to August 11, 2023.

Net Income Per Common Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”.

Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period.

Net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period.

The Company has two classes of common shares, which are referred to as Class A common stock and Class B common stock.

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Private and public warrants to purchase 14,480,000 Class A common stock at $ 11.50 per share were issued on February 8, 2021.

No warrants were exercised during the year ended December 31, 2021.

The calculation of diluted income per common share does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment, and (iii) Private Placement since the exercise of the warrants are contingent upon the occurrence of future events.

As of December 31, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company As a result, diluted net income per common share is the same as basic net income per common share for the periods.

No warrants were exercised during the years ended December 31, 2022 and 2021.

The calculation of diluted net income per common share does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment, and (iii) Private Placement since the exercise of the warrants are contingent upon the occurrence of future events.

As of December 31, 2022 and 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company.

As a result, diluted net income per common share is the same as basic net income per common share for the periods.

Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

Below is a reconciliation of the net income per share of common stock:

For the period from

November 17, 2020

For the Year Ended

(Inception) through

For the Year Ended

December 31, 2022

December 31, 2021

Basic and diluted net income (loss) per common share

Allocation of net income (loss)

Basic and diluted net income per common share

Allocation of net income

Weighted-average shares outstanding

Basic and diluted net income (loss) per common share

Basic and diluted net income per common share

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature, other than the derivative warrant liability.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the consolidated balance sheets, primarily due to its short-term nature, other than the derivative warrant liability.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

Derivative assets and liabilities are classified in the balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations.

Derivative assets and liabilities are classified in the consolidated balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

The Company has determined the warrants are a derivative instrument.

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Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

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;

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The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”).

ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards.

ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards.

ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

The deferred taxes were de minimums as of December 31, 2021 and 2020.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in the Company’s financial statements and prescribes a recognition threshold and measurement process for financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return.

As of December 31, 2022 and December 31, 2021, the Company’s deferred tax asset had a full valuation allowance recorded against it.

Our effective tax rate was 8.1 % and 0.0 % for the year ended December 31, 2022 and for the period from November 17, 2020 (inception) to December 31, 2021, respectively.

The effective tax rate differs from the statutory tax rate of 21% for the year ended December 31, 2022, due to changes in Merger and Acquisition costs and the valuation allowance on the deferred tax assets.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in the Company’s consolidated financial statements and prescribes a recognition threshold and measurement process for consolidated financial statements recognition and measurement of a tax position 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.

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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 has identified the United States as its only significant tax jurisdiction.

The Company has identified the United States and Florida State as its only significant tax jurisdictions.

The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes.

These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and

compliance with federal and state tax laws.

These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws.

The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

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.

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 consolidated financial statements.

The consolidated 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 consolidated financial statements.

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 consolidated financial statements.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law.

The IR Act provides for, among other things, a new U.S.

federal 1% excise tax on certain repurchases of stock by publicly traded U.S.

domestic corporations and certain U.S.

domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023.

The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased.

The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax.

Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.

In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined.

The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.

Recent Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update (“ASU”) No.

2020-06, Debt --Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’ Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S.

The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas.

The Company adopted ASU 2020-06 on January 1, 2021.

Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.

The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

ASU 2016-13 also requires additional disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio.

The Company expects to adopt the provisions of this guidance on January 1, 2023.

The adoption is not expected to have a material impact on the Company’s consolidated financial statements.

Besides the above, 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 consolidated financial statements.

INITIAL PUBLIC OFFERING

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The deferred portion of the fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

Warrants — Each whole warrant entitles the holder to purchase one Class A common stock at a price of $ 11.50 per share, subject to adjustment as discussed herein.

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if, and only if, the closing price of the common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like and for certain issuances of Class A common stock and equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination as described elsewhere in the IPO) for any 20 trading days within a 30 -trading day period ending three business days before the Company sends to the notice of redemption to the warrant holders;

if the last sale price of our Class A common stock is less than $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms (except as described above with respect to a holder’s ability to cashless exercise its warrants) as the outstanding public warrants, as described above.

if the last sale price of the Class A common stock is less than $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms (except as described above with respect to a holder’s ability to cashless exercise its warrants) as the outstanding public warrants, as described above.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

PRIVATE PLACEMENT

16 unchanged sentences

On January 13, 2021, the Sponsor agreed to loan the Company up to an additional $ 50,000 to be used for a portion of the expenses of the IPO.

These loans are non-interest bearing, unsecured and were due at the earlier of March 31, 2021 or the closing of the IPO.

These loans are non-interest bearing, unsecured and were due at the earlier of June 30, 2021 or the closing of the IPO.

The loan was repaid upon the closing of the IPO out of the offering proceeds.

As of December 31, 2021 and 2020, the Company had $ 0 and $ 38,588 borrowings under the promissory note, respectively.

As of December 31, 2022 and 2021, the Company had no amounts outstanding borrowings under the promissory note.

Additionally, this note is no longer available to the Company.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

On November 28, 2022, the Sponsor issued the Promissory Note to the Company, pursuant to which the Company was entitled to borrow up to an aggregate principal amount of $ 150,000 (the “Second Note”).

The Promissory Note is non-interest bearing and payable on the earlier of the date on which the Company consummates a Business Combination or the date that the winding up of the Company is effective.

In the month of December, the Sponsor deposited a total of $ 150,000 of such funds in the operating account.

As of December 31, 2022 and December 31, 2021, the outstanding principal balance under the Promissory Notes amounted to an aggregate of $ 150,000 and $ 0 , respectively.

Working Capital Loans

7 unchanged sentences

Administrative Service Fee

The Company has agreed, commencing on February 8, 2021, to pay up to $ 25,000 per month for administrative and other services, of which $ 10,000 per month will be paid to the Sponsor for office space and administrative services provided to members of the management team and up to $ 15,000 will be used to compensate the Company’s Chief Operating Officer and Chief Financial Officer and Chief Legal Officer and Secretary for a portion of their time spent on the Company’s affairs.

The Company has agreed, commencing on February 8, 2021, to pay $ 25,000 per month for administrative and other services, of which $ 10,000 per month will be paid to the Sponsor for office space and administrative services provided to members of the management team and up to $ 15,000 will be used to compensate the Company’s Chief Operating Officer and Chief Financial Officer and Secretary for a portion of their time spent on the Company’s affairs.

Upon completion of the Company’s Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.

For the year ended December 31, 2021, $ 266,964 was recognized in the statements of operations and has been paid.

For the period from November 17, 2020 (inception) through December 31, 2020, the Company did not incur any fees for these services.

For the year ended December 31, 2022, $ 300,000 was recognized in the consolidated statements of operations and has been paid.

For the year ended December 31, 2021, $ 266,964 was recognized in the consolidated statements of operations and has been paid.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

The deferred fee will become 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.

On November 16, 2022, the Company and one of the underwriters executed a waiver letter confirming the underwriter’s waiver of its deferred fee under the terms of the underwriting agreement.

As a result, the Company recognized a gain of $ 3,767,400 in relation to the waiver of the deferred underwriter fee allocated to the underwriter in the accompanying consolidated financial statements.

As of December 31, 2022 and 2021, the deferred underwriting fee payable is $ 5,892,600 and $ 9,660,000 , respectively.

On January 23, 2023, the Company and a second underwriter executed a waiver letter confirming the underwriter’s waiver of its deferred fee under the terms of the underwriting agreement which represents and additional $ 4,636,800 of the deferred fee as waived.

Registration Rights

2 unchanged sentences

In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by the Company.

STOCKHOLDERS’ (DEFICIT) EQUITY

Business Combination Agreement

On December 12, 2022, the Company entered into a business combination agreement (the “Business Combination Agreement”) by and among the Company, Priveterra Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and AEON Biopharma, Inc., a Delaware corporation (“AEON”).

Pursuant to the Business Combination Agreement, at the effective time of the Merger, each option, whether vested or unvested, exercisable for AEON equity that is outstanding immediately prior to the effective time of the Merger shall be assumed by the Company and continue in full force and effect on the same terms and conditions as are currently applicable to such options, subject to adjustments to exercise price and number of shares of Class A Common Stock issued upon exercise.

Under the Business Combination Agreement, the Company will acquire all of the outstanding equity interests of AEON (including equity interests issued upon conversion of the outstanding convertible notes of AEON) in exchange for shares of the Company’s Class A common stock, par value $ 0.0001 per share (the “Class A Common Stock”), based on an implied AEON equity value of $ 165,000,000 , to be paid to AEON stockholders at the effective time of the Merger, except that 809,000 shares of the Company’s Class A Common Stock otherwise issuable as merger consideration shall be held back to satisfy the exercise of certain of AEON’s convertible notes upon the maturity thereof.

For more information regarding the Business Combination Agreement, please see our Current Report on Form 8-K filed on December 12, 2022, and our registration statement Amendment No.

1 to Form S-4 filed on February 9, 2023.

STOCKHOLDERS’ DEFICIT

Preferred Stock — The Company is authorized to issue a total of 1,000,000 preferred shares at par value of $ 0.0001 each.

At December 31, 2022 and 2021, there were no shares of preferred stock issued or outstanding.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

Class A Common Stock —The Company is authorized to issue 280,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

As of December 31, 2021 and 2020, there were no shares of Class A common stock issued or outstanding (excluding 27,600,000 and 0 shares subject to redemption), respectively.

As of December 31, 2022 and 2021, there were no shares of Class A common stock issued or outstanding (excluding 27,600,000 shares subject to redemption), respectively.

Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $ 0.0001 per share.

6 unchanged sentences

provided that such conversion of founder shares will never occur on a less than one-for-one basis.

The Company’s net deferred tax assets are as follows:

Deferred tax asset

Net operating loss carryforward

Startup costs

Total deferred tax asset

Valuation allowance

Deferred tax asset, net of allowance

The income tax provision consists of the following:

Change in valuation allowance

Income tax provision

As of December 31, 2021 and 2020, the Company had $ 120,763 and $ 0 of U.S.

federal and state net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets 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 liabilities, 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 assets and has therefore established a full valuation allowance.

For the year ended December 31, 2021 and for the period from November 17, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $ 389,814 and $ 0 , respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 and 2020 is as follows:

Statutory federal income tax rate

Offering costs

Change in fair value of warrant liability

Valuation allowance

Income tax provision

The Company files income tax returns in the U.S.

federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.

RECURRING FAIR VALUE MEASUREMENTS

At December 31, 2021, the Company’s warrant liability was valued at $ 7,384,800 .

At December 31, 2022 and 2021, the Company’s warrant liability was valued at $ 669,759 and $ 7,384,800 , respectively.

Under the guidance in ASC 815-40 the Warrants do not meet the criteria for equity treatment.

1 unchanged sentence

This valuation is subject to re-measurement at each balance sheet date.

With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s consolidated statement of operations.

The Company’s warrant liability for the Private Placement Warrants is based on a valuation model utilizing inputs from observable and unobservable markets with less volume and transaction frequency than active markets.

2 unchanged sentences

The fair value of the Public Warrant liability is classified within Level 2 of the fair value hierarchy.

Substantially all of the Company’s trust assets on the balance sheet consist of U.

Treasury Securities which are classified as cash equivalents.

Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Investments held in Trust Account - U.S.

Treasury Securities (1)

The Company classifies its U.S.

Held-to-maturity treasury securities are recorded at amortized cost on the accompanying consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts.

At December 31, 2022, assets held in the Trust Account were comprised of $ 4,858 in cash and $ 279,379,571 in U.S.

Treasury Bills.

The sum of the cash held in trust and the U.S.

Treasury bills total the consolidated Balance sheet balance of $ 279,384,429 .

During the period ended December 31, 2022, the Company withdrew $ 401,925 in interest income from the Trust Account for tax obligation purposes.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

At December 31, 2021, assets held in the Trust Account were comprised of $ 52 in cash and $ 276,079,635 in U.S.

Treasury Bills.

The sum of the cash held in trust and the U.S.

Treasury bills total the consolidated Balance sheet balance of $ 276,079,687 in U.S.

Treasury Bills.

During the year ended December 31, 2021, the Company did not withdraw interest income from the Trust Account.

The following table presents information about the Company’s gross holding gains and fair value of held-to-maturity securities at December 31, 2022 and 2021:

Held-To-Maturity

December 31, 2022

Treasury Bill (Matures on 01/05/2023)

December 31, 2021

Treasury Bill (Matures on 01/06/2022)

The following table presents information about the Company’s liabilities that were measured at fair value on a recurring basis as of December 31, 2022 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Private Placement Warrants

Public Warrants

(1) Matures January 6, 2022.

The following table presents information about the Company’s liabilities that were measured at fair value on a recurring basis as of December 31, 2021 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Private Placement Warrants

Public Warrants

The Company established the initial fair value for the Warrants on February 11, 2021, the date of the consummation of the Company’s IPO using a Monte Carlo simulation model to value the Public Warrants and a modified Black-Scholes model to value the Private Placement Warrants.

1 unchanged sentence

In April 2021, the Public Warrants began trading in the open market and were reclassified to Level 1.

On December 31, 2021 the fair value was remeasured.

At December 31, 2021, the Company used a modified Black-Scholes model to value the Private Placement Warrants.

On December 31, 2022 and 2021, the fair value was remeasured.

At December 31, 2022 and 2021, the Company used a Monte Carlo simulation and modified Black-Scholes model, respectively, to value the Private Placement Warrants.

The Public Warrants were previously classified as Level 3 due to the lack of an observable market price for the warrants and initially valued using the Black-Scholes Option Pricing Model.

Public Warrants were transferred to a level 2 due to the lack of an active market as of September 30, 2022 and continue to be included in level 2 as of December 31, 2022, and the presence of observable inputs in surrounding periods for the same instrument.

The Private Placement Warrants were classified within Level 3 of the fair value hierarchy at the measurement date due to the use of unobservable inputs.

1 unchanged sentence

Significant deviations from these estimates and inputs could result in a material change in fair value.

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

The key inputs into the valuation models was as follows:

February 11, 2021

measurement date)

Risk-free interest rate

3 unchanged sentences

Exercise price

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our assets and liabilities classified as level 3 for the period ended December 31, 2021.

Market implied likelihood of Initial Business Combination

The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the Company’s assets and liabilities classified as level 3 for the years ended December 31, 2022 and 2021.

Fair value at issuance February 11, 2021

5 unchanged sentences

Fair Value at December 31, 2021

(1) Assumes the Public Warrants were reclassified on June 30, 2021.

Fair Value at December 31, 2021

Change in fair value

( 2,442,561 )

Fair Value at December 31, 2022

The Company’s net deferred tax assets are as follows:

Deferred tax assets

Net operating loss carryforward

Startup Costs

Unrealized gain/loss - Trust

Total deferred tax assets

Valuation allowance

( 1,231,441 )

Deferred tax assets, net of allowance

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

The income tax provision for the years ended December 31, 2022 and 2021 consists of the following:

Change in valuation allowance

Provision for income taxes

As of December 31, 2022 and 2021, the Company had $ 0 and $ 120,763 , respectively, of U.S.

federal and state net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

For the years ended December 31, 2022 and 2021, the change in the valuation allowance was $ 841,627 and $ 389,814 , respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows:

Statutory federal income tax rate

State taxes, net of federal tax benefit

State tax credit

Deferred tax liability change in rate

Acquisition facilitative expenses

Penalties and interest

Offering costs

Change in fair value of warrant liability

Reduction in deferred underwriting fee

Valuation allowance

Income tax provision

The Company files income tax returns in the U.S.

federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.

SUBSEQUENT EVENTS

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.

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.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued.

Based upon this review, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the financial statements.

The Company evaluated subsequent events and transactions that occurred after the balance sheets date up to the date that the consolidated financial statements were issued.

Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements, other than as described below.

On February 10, 2023, at the special meeting of stockholders of the Company, stockholders of the Company approved the certificate of amendment to the second amended and restated certificate of incorporation to amend the Company’s contractual expiration date of February 11, 2023 by changing the date by which the Company must cease all operations except for the purpose of winding up if it fails

PRIVETERRA ACQUISITION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

to complete a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination from February 11, 2023 to August 11, 2023.

In connection with the vote at the special meeting, the holders of 25,597,728 shares of Class A Common Stock, par value $ 0.0001 per share, properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.11 per share, for an aggregate redemption amount of approximately $ 258,793,030.08 .

The remaining shares to be redeemed is 2,002,272 .

On January 11, 2023, the Company and AEON entered into interim financing letter agreements with certain investors for a total aggregate amount of $ 20 million.

On January 5, 2023, in connection with the Business Combination proposal, a purposed shareholder of the Company filed a complaint in the United States District Court for the Southern District of New York, against the Company and its board of directors, alleging that the registration statement on Form S-4 filed on December 27, 2022 with the SEC omitted material information related to the Business Combination.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures