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Item 1. Financial Statements

2022-05-20 compared with 2021-11-10 · 262 added, 179 removed, 268 unchanged (62% of the section changed)

1 unchanged sentence

AVISTA PUBLIC ACQUISITION CORP.

CONDENSED BALANCE SHEET

SEPTEMBER 30, 2021

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2022

December 31, 2021

Current assets:

1 unchanged sentence

Total current assets

Cash held in trust account

Investments held in Trust Account

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:

Accounts payable and other payables

Accrued expenses - related party

Accrued offering costs and expenses

Accounts payable

Accrued expenses

Accrued offering costs

Convertible promissory note

Due to related party

Derivative - Forward Purchase and Backstop Securities

Total current liabilities

17 unchanged sentences

( 12,363,893 )

( 7,554,273 )

Total Shareholders’ Deficit

( 12,363,318 )

( 7,553,698 )

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT

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

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

AVISTA PUBLIC ACQUISITION CORP.

CONDENSED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Period

from February

Ended September

Through September

Through March 31,

Formation and operating costs

Weighted average shares outstanding , basic and diluted

Basic and diluted net loss per ordinary share

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

Loss from operations

( 3,821,215 )

Unrealized gain on investments held in Trust Account

Change in fair value of Forward Purchase and Backstop Securities

( 4,361,240 )

Deemed dividend - Forward Purchase and Backstop Securities

Net loss attributable to ordinary shareholders

( 4,586,240 )

Basic and diluted weighted average shares outstanding, Class A ordinary shares

Basic and diluted net loss per share, Class A ordinary shares

Basic and diluted weighted average shares outstanding, Class B ordinary shares (1)

Basic and diluted net loss per share, Class B ordinary shares

(1) For the period from February 5, 2021 (inception) through March 31, 2021, 750,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter are excluded from the basic and diluted weighted average shares outstanding, Class B ordinary shares (see Note 5).

The underwriters exercised their over-allotment option in full on August 12, 2021;

thus, no ordinary shares remain subject to forfeiture (see Note 6).

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

AVISTA PUBLIC ACQUISITION CORP.

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE PERIOD FROM FEBRUARY 5, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

Class A Ordinary Shares

5 unchanged sentences

Issuance of Class B ordinary shares to Sponsor (1)

Balance at March 31, 2021

Balance at June 30, 2021

Proceeds from Initial Public Offering Costs allocated to Public Warrants (net of offering costs)

Proceeds from sale of Private Placement Warrants to the Sponsor (net of offering costs)

Accretion of Class A ordinary shares to redemption value

Balance at March 31, 2021 (Unaudited)

Balance at December 31, 2021

( 7,554,273 )

( 7,553,698 )

Reclassification of Forward Purchase Agreement

Deemed dividend - Forward Purchase and Backstop Securities

( 4,361,240 )

Balance at September 30, 2021

( 4,361,240 )

Balance at March 31, 2022 (Unaudited)

( 12,363,893 )

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

( 12,363,318 )

The underwriters exercised their over-allotment option in full on August 12, 2021;

thus, no ordinary shares remain subject to forfeiture (see Note 6).

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

AVISTA PUBLIC ACQUISITION CORP.

CONDENSED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM FEBRUARY 5, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the period

from February

(Inception) to

Ended March 31,

Cash Flows from Operating Activities:

( 4,361,240 )

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

Unrealized gain on investments held in Trust Account

Change in fair value of Forward Purchase and Backstop Securities

Formation costs paid by Sponsor in exchange for issuance of Class B ordinary shares

Changes in operating assets and liabilities:

Prepaid expenses

Accounts payable and other payables

Accrued expenses - related party

Accrued offering costs and expenses

Accounts payable

Due to related party

Accrued expenses

Net cash used in operating activities

Cash Flows from Investing Activities:

Investment of cash into Trust Account

( 235,750,000 )

Net cash used in investing activities

( 235,750,000 )

Cash Flows from Financing Activities:

Proceeds from initial public offering, net of underwriter's discount paid

Proceeds from sale of Private Placement Warrants

Proceeds from Sponsor note

Repayment of Sponsor note

Payment of offering costs

Proceeds from convertible promissory note

Net cash provided by financing activities

2 unchanged sentences

Cash - End of period

Non-cash investing and financing activities

Accretion of Class A ordinary shares to redemption value

Deferred underwriting fee payable

Offering costs paid by Sponsor and included in promissory note - related party

Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares

Offering costs included in accrued offering costs

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

Supplemental disclosure of noncash investing and financing

Initial classification of the Forward Purchase and Backstop Securities

Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares

Deferred offering costs included in promissory note - related party

Deferred offering costs included in accrued offering costs

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

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND LIQUIDITY

Avista Public Acquisition Corp.

II (the “Company”) is a blank check company incorporated in the Cayman Islands on February 5, 2021.

II is a blank check company incorporated in the Cayman Islands on February 5, 2021.

As used herein, the references to the “Company” are to Avista Public Acquisition Corp.

II and its wholly-owned and controlled subsidiary, Orwell Merger Sub Inc.

(“Merger Sub”), unless the context indicates otherwise.

The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”).

1 unchanged sentence

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.

As of September 30, 2021, the Company had not commenced any operations.

All activity for the period from February 5, 2021 (inception) through September 30, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below.

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

The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

As of March 31, 2022, the Company had not commenced any operations.

All activity for the three months ended March 31, 2022 and for the period from February 5, 2021 (inception) through March 31, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination, which is described below.

The Company generates non-operating income in the form of interest and dividend income or gains on investments on the cash and investments held in a Trust Account (as defined below) from the proceeds derived from the Initial Public Offering.

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

2 unchanged sentences

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,233,333 warrants (the “Private Placement Warrants”), including 900,000 Private Placement Warrants that were issued pursuant to the underwriter’s exercise of its over-allotment option in full, at a price of $ 1.50 per Private Placement Warrant in a private placement to Avista Acquisition LP II (the “Sponsor”), generating gross proceeds of $ 12,350,000 (see Note 4).

Transaction costs amounted to $ 13,348,103 consisting of $ 4,600,000 of underwriting fees, $ 8,050,000 of deferred underwriting fees, and $ 698,103 of other offering costs.

In addition, as of September 30, 2021, cash of $ 362,203 is held outside of the Trust Account (as defined below) and is available for the payment of accrued offering costs and for working capital purposes.

Upon closing of the Initial Public Offering and the sale of the Private Placement Warrants, a total of $ 235,750,000 ($ 10.25 per Public Share) was placed in a trust account (the “Trust Account”) and will be invested only in U.S.

As of March 31, 2022, cash of $ 434,629 is held outside of the Trust Account (as defined below) and is available for the payment of accrued offering costs and for working capital purposes.

government treasury obligations with maturities of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S.

3 unchanged sentences

The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion.

The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($ 10.25 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).

The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($ 10.25 per Public Share, plus any pro rata interest and dividends or gains on investments earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).

There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity.

The Public Shares subject to redemption was recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) .

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $ 5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the shares voted are voted in favor of the Business Combination.

7 unchanged sentences

However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within 18 months from the closing of the Initial Public Offering.

The Company will have until 18 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”).

The Company has until 18 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”).

If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up;

2 unchanged sentences

There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares.

In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($ 10.00 ).

Proposed Combination Agreement

On March 23, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Ligand Pharmaceuticals Incorporated, a Delaware corporation (“Ligand”), OmniAb, Inc., a Delaware corporation and wholly-owned subsidiary of Ligand (“OmniAb”), and Merger Sub, pursuant to which the Company will combine with OmniAb, Ligand’s antibody discovery business (the “OmniAb Business”), in a Reverse Morris Trust transaction (the “OmniAb Business Combination”).

Also on March 23, 2022, and in connection with the execution of the Merger Agreement, (a) the Company, Ligand, OmniAb and Merger Sub entered into that certain Employee Matters Agreement (the “Employee Matters Agreement”), (b) OmniAb and the Sponsor entered into that certain sponsor insider letter agreement (the “Sponsor Insider Agreement”) with the Company and certain insiders of the Company (the “Insiders”) and (c) the Company amended and restated that certain previously disclosed forward purchase agreement, dated August 9, 2021, by entering into the amended and restated forward purchase agreement (the “A&R FPA”), by and among the Company, the Sponsor and OmniAb pursuant to which they will consummate the proposed OmniAb Business Combination.

Agreement and Plan of Merger

At the closing of the OmniAb Business Combination, each share of OmniAb’s common stock outstanding prior to the effective time of the OmniAb Business Combination will be converted into a number of shares of common stock in the newly formed company (“APAC Common Stock”) based on an exchange ratio determined by reference to a pre-money equity value for OmniAb of $ 850 million.

Holders of OmniAb options, restricted stock units and performance stock units (determined after the Distribution (as defined below) and the division of Ligand equity awards into both Ligand equity awards and OmniAb equity awards pursuant to the Employee Matters Agreement) will have their awards rolled over into equity awards of the Company and adjusted pursuant to the exchange ratio.

In addition, at the closing of the OmniAb Business Combination, holders of OmniAb Common Stock and equity awards will also receive the OmniAb Earnout Shares, with 50 % of such earnout shares vesting upon the combined company’s achievement of a post-transaction volume-weighted average price (“VWAP”) of $ 12.50 per share of APAC Common Stock for any 20 trading days over a consecutive 30 trading-day period, and the remainder vesting upon achievement of a post-transaction VWAP of $ 15 per share of APAC Common Stock for any 20 trading days over a consecutive 30 trading-day period, in each case provided such vesting occurs during the five-year period following the closing of the OmniAb Business Combination.

In connection with the proposed OmniAb Business Combination, upon the re-domestication of the Company to Delaware (i) all issued and outstanding Class A ordinary shares and Class B ordinary shares will convert automatically, on a one-for-one basis, into shares of APAC Common Stock, (ii) all issued and outstanding warrants will convert automatically into warrants to acquire shares of APAC Common Stock and (iii) all issued and outstanding Units will separate and convert automatically into one share of APAC Common Stock and one-third of one warrant to purchase APAC Common Stock.

Separation and Distribution Agreement

On March 23, 2022, in connection with the execution of the Merger Agreement, the Company entered into a separation agreement with OmniAb and Ligand (the “Separation Agreement”), pursuant to which, among other things, (i) Ligand will undertake a series of internal reorganization and restructuring transactions to effect the transfer of its (direct or indirect) ownership of the OmniAb Business to OmniAb in the separation and (ii) immediately prior to the OmniAb Business Combination and after the separation, Ligand will distribute 100 % of the outstanding shares of OmniAb common stock to Ligand’s stockholders in a distribution (the “Distribution”).

The Separation Agreement also sets forth other agreements among Ligand and OmniAb related to a separation, including provisions concerning the termination and settlement of intercompany accounts and the obtaining of necessary governmental approvals and third-party consents.

The Separation Agreement also sets forth agreements that will govern certain aspects of the relationship between Ligand and OmniAb after the Distribution, including provisions with respect to release of claims, indemnification, access to financial and other information and access to and provision of records.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

Employee Matters Agreement

On March 23, 2022, in connection with the execution of the Merger Agreement, the Company, Ligand, OmniAb and Merger Sub entered into the Employee Matters Agreement, which will provide for employee-related matters in connection with the transaction, including allocation of benefit plan assets and liabilities between Ligand and OmniAb, treatment of incentive equity awards in the Distribution and the proposed OmniAb Business Combination and related covenants and commitments of the parties.

Each existing Ligand equity award will generally be split into (i) a new Ligand equity award and (ii) a new OmniAb equity award, with any accrued value in the original Ligand equity award split between such awards based on the relative post-Closing values of Ligand and OmniAb.

Sponsor Insider Agreement

On March 23, 2022, in connection with the execution of the Merger Agreement, OmniAb and the Sponsor entered into the Sponsor Insider Agreement with the Company and the Insiders, pursuant to which, among other things, the Insiders agreed to vote any of our securities held by them to approve the proposed OmniAb Business Combination and the other Company shareholder matters required pursuant to the Merger Agreement, and not to seek redemption of any of their Company securities in connection with the consummation of the proposed OmniAb Business Combination.

Pursuant to the Sponsor Insider Agreement, the Sponsor also agreed to subject up to 1,916,667 Earnout Founder Shares (as defined in the Sponsor Insider Agreement), to the same price-based vesting conditions as the OmniAb Earnout Shares.

Amended and Restated Forward Purchase Agreement

On March 23, 2022, in connection with the execution of the Merger Agreement, the Company entered into Amended and Restated Forward Purchase Agreement (the “A&R FPA”) with the Sponsor and OmniAb.

Pursuant to the A&R FPA, the Company has agreed that, in connection with the consummation of the proposed OmniAb Business Combination, they will issue and sell to the Sponsor 1,500,000 shares of APAC Common Stock (the “Forward Purchase Shares”) and warrants to acquire 1,666,667 shares of APAC Common Stock (the “Forward Purchase Warrants”) for an aggregate purchase price of $ 15.0 million with such purchases to be consummated immediately following the re-domestication to Delaware and prior to the proposed OmniAb Business Combination.

In addition, the Sponsor has agreed to purchase up to an additional 10,000,000 shares of APAC Common Stock (the “Backstop Shares”) and up to an additional 1,666,667 warrants, (The “Backstop Warrants” and, together with the Forward Purchase Shares, Forward Purchase Warrants and Backstop Shares, the “Forward Purchase and Backstop Securities”) for an aggregate additional purchase price of up to $ 100.0 million, in order to backstop shareholder redemptions to the extent such redemptions would result in the cash proceeds to be received by OmniAb stockholders from the Trust Account to be less than $ 100.0 million.

The A&R FPA also provides that in the event the Merger Agreement is terminated by Ligand under circumstances in which the Termination Fee (as defined in the Merger Agreement) would be payable under the Merger Agreement, Ligand shall pay the Sponsor a termination fee of $ 12.5 million in connection therewith.

The consummation of the proposed OmniAb Business Combination is subject to certain conditions as further described in the Merger Agreement.

In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting firm), or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $ 10.25 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $ 10.25 per Public Share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

As of September 30, 2021, the Company had $ 362,203 in cash held outside of the Trust Account and a working capital surplus of $ 1,146,346 .

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

As of March 31, 2022, the Company had $ 434,629 in cash held outside of the Trust Account and a working capital deficit of $ 4,364,603 .

The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.

These conditions raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern within the earlier of the Combination Period, which will end on February 12, 2023, or one year after the date that the condensed consolidated financial statements are issued.

Moreover, the Company may need to obtain additional financing either to complete a Business Combination or if the Company becomes obligated to redeem a significant number of public shares upon completion of a Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination.

Of the total proceeds from the Initial Public Offering and sale of the Private Placement Warrants, an amount of approximately $ 2 million was deposited in an operating account for the Company’s working capital needs.

The amounts held in the operating account are not expected to provide the Company with sufficient funds to meet its operational and liquidity obligations over the next twelve months.

In addition, the Company entered into a promissory note pursuant to the Working Capital Loans terms as outlined in Note 5 with the Sponsor (the “Sponsor Working Capital Loan”) to which the Company can borrow up to an aggregate of $ 750,000 .

As of March 31, 2022, the Company has borrowed $ 500,000 under the Sponsor Working Capital Loan.

The amounts held in the operating account are not expected to provide the Company with sufficient funds to meet its operational and liquidity obligations over the remainder of the Combination Period.

Going Concern Consideration

As of September 30, 2021, the Company had $ 362,203 in cash held outside of the Trust Account and a working capital surplus of $ 1,146,346 .

The Company anticipates that the cash held outside of the Trust Account as of September 30, 2021 will be not sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time.

As of March 31, 2022, the Company had $ 434,629 in cash held outside of the Trust Account and a working capital deficit of $ 4,364,603 .

The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.

These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the condensed consolidated financial statements are issued.

Management plans to address this uncertainty through the Business Combination as discussed above.

There is no assurance that the Company's plans to consummate the Business Combination will be successful or successful within the Combination Period.

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

There is no assurance that the Company’s plans to consummate the Business Combination will be successful or successful within the Combination Period, which will end on February 12, 2023.

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

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 prospective partner 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.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENT

In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in Accounting Standards Codification ("ASC") 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.

The Company had previously classified a portion of the Class A ordinary shares in permanent equity.

Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $ 5,000,001 .

The Company revised its financial statement to classify all Class A ordinary shares as temporary equity and any related impact, as the threshold in its charter would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside of permanent equity.

The reclassification of amounts from permanent equity to temporary equity result in non-cash financial statement corrections and will have no impact on the Company’s current or previously reported cash position, operating expenses or total operating, investing or financing cash flows.

Based on the quantitative and qualitative analysis performed, the Company has determined that the impact of the adjustment is immaterial to the previously issued balance sheet included on Form 8-K, as filed with the SEC on August 18, 2021.

The following table summarize the effect of the revision on each financial statement line item as of the dates, and for the periods, indicated:

August 12, 2021

As Previously

Balance Sheet (audited)

Class A ordinary shares subject to possible redemption, 23,000,000 shares at redemption value

( 3,826,246 )

Allocation of underwriter's discounts, offering costs and deferred fees to Class A shares

( 12,744,493 )

Immediate accretion to redemption value

Total Class A ordinary shares subject to possible redemption

Class A ordinary shares

Additional paid-in capital

( 5,013,294 )

Accumulated deficit

( 6,723,679 )

( 6,737,662 )

Total shareholders' equity (deficit)

( 11,737,088 )

( 6,737,087 )

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

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

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s final prospectus for its Initial Public Offering as filed with the SEC on August 10, 2021, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on August 12, 2021 and August 18, 2021.

The interim results for the period from February 5, 2021 (inception) through September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.

In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s Form 10-K as filed with the SEC on March 28, 2022.

The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future periods.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

All significant intercompany balances and transactions have been eliminated in consolidation.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

Reclassification

Certain amounts in the prior period have been reclassified to conform to the current period presentation.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

Emerging Growth Company

3 unchanged sentences

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 condensed 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 expenses during the reporting period.

The preparation of condensed consolidated 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 condensed consolidated financial statements and the reported amounts of 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.

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 condensed 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 from those estimates.

The valuation of the Forward Purchase and Backstop Securities required management to exercise significant judgement in its 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 did not have any cash equivalents as of September 30, 2021.

The Company did not have any cash equivalents as of March 31, 2022 or December 31, 2021.

Investments Held in Trust Account

At March 31, 2022, substantially all of the assets held in the Trust Account were held in U.S.

Treasury bills.

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

Trading securities are presented on the balance sheet at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of investments held in Trust Account are included in unrealized gain on investments held in Trust Account in the accompanying condensed consolidated statements of operations.

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

At December 31, 2021, the assets held in the Trust Account were held in cash.

Class A Ordinary Shares Subject to Possible Redemption

All of the 23,000,000 shares of Class A ordinary shares sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation.

In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.

Therefore, all Class A ordinary shares have been classified outside of permanent equity.

In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.

Therefore, all Class A ordinary shares have been classified outside of permanent equity.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period.

Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid-in capital and accumulated deficit.

As of September 30, 2021, the Class A ordinary shares reflected in the condensed balance sheet are reconciled in the following table:

As of March 31, 2022 and December 31, 2021, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:

Gross proceeds

11 unchanged sentences

The Company incurred offering costs amounting to $ 13,662,256 as a result of the Initial Public Offering (consisting of $ 4,600,000 of cash underwriting discounts, $ 8,050,000 in deferred underwriting fees and $ 1,012,256 of other offering costs).

As such, the Company recorded $ 13,348,103 of offering costs as a reduction of equity in connection with the issuance of the Units in the Initial Public Offering and the Private Placement Warrants.

As such, the Company recorded $ 13,029,901 of offering costs as a reduction of temporary equity and $ 632,355 of offering costs as a reduction of permanent equity in connection with the issuance of the Units in the Initial Public Offering and the Private Placement Warrants.

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

1 unchanged sentence

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.

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

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s condensed consolidated financial statements and prescribes a recognition threshold and measurement process for financial statement 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.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statement.

Since the Company was incorporated on February 5, 2021, the evaluation was performed for the upcoming 2021 tax year which will be the only period subject to examination.

ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s condensed consolidated financial statements.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2022 and December 31, 2021.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.

Consequently, income taxes are not reflected in the Company’s financial statement.

Consequently, income taxes are not reflected in the Company’s condensed consolidated financial statements.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

Net Income (Loss) Per Ordinary Share

Net loss per common share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period.

As the Class A shares are considered to be redeemable at fair value, and a redemption at fair value does not amount to a distribution different than other stockholders, Class A and Class B common stock are presented as one class of stock in calculating net income per share.

As a result, the calculated net income per share is the same for Class A and Class B shares of common stock.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

Net Loss Per Ordinary Share

Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period.

The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 15,900,000 shares in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

The following table reflects the calculation of basic and diluted net income per common share (in dollars, except per share amounts):

The following table reflects the calculation of basic and diluted net loss per ordinary share (in dollars, except per share amounts):

For the Period from

1 unchanged sentence

February 5, 2021 (Inception) Through

September 30, 2021

March 31,2022

March 31,2021

Basic and diluted net loss per share:

Weighted average shares outstanding, basic and diluted

Basic and diluted net loss per ordinary share

( 3,668,992 )

Basic and diluted weighted average shares outstanding

Basic and diluted net loss per share

Concentration of Credit Risk

1 unchanged sentence

The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

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 .

For derivative financial instruments that are accounted for as assets or liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

The Forward Purchase and Backstop Securities contained within the A&R FPA (see Note 6) are classified as derivatives in the condensed consolidated balance sheet with changes in the fair value recognized in the condensed consolidated statements of operations.

Fair Value of Financial Instruments

5 unchanged sentences

The carrying amounts reflected in the balance sheet for cash, deferred offering costs, accrued offering costs, promissory note - related party, and advance from anchor investor approximate fair value due to their short-term nature.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges.

1 unchanged sentence

Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt -- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging -- Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments.

ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity.

ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021.

The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

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

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

INITIAL PUBLIC OFFERING

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On February 12, 2021, the Sponsor paid an aggregate of $ 25,000 to cover certain expenses on behalf of the Company in exchange for the issuance of 5,750,000 Class B ordinary shares (the “Founder Shares”).

The Founder Shares include an aggregate of up to 750,000 Class B ordinary shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Sponsor will own, on an as-converted basis, 20 % of the Company’s issued and outstanding shares after the Initial Public Offering (see note 6).

The Founder Shares include an aggregate of up to 750,000 Class B ordinary shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the holders of the Founder Shares will own, on an as-converted basis, 20 % of the Company’s issued and outstanding shares after the Initial Public Offering.

On June 16, 2021, the Company transferred 35,000 Class B ordinary shares each to three members of the Company’s board of directors (or 105,000 Class B ordinary shares in total) at their original cost (see Note 7).

2 unchanged sentences

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

The Sponsor has agreed that, subject to certain limited exceptions, the Founder Shares will not be transferred, assigned, or sold until the earlier of (i) one year after the completion of a Business Combination or (ii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after an initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

5 unchanged sentences

On August 12, 2021, the Company repaid the outstanding balance under the Promissory Note of $ 175,000 .

The Promissory Note is no longer available to the Company.

Administrative Support Agreement

1 unchanged sentence

Upon the completion of an initial Business Combination, the Company will cease paying these monthly fees.

Under this agreement, $ 20,000 of expenses were incurred during the three months ended September 30, 2021 and for the period from February 5, 2021 (inception) through September 30, 2021.

Related Party Loans

In order to finance transaction costs in connection with an intended initial Business Combination, the Company’s sponsor or an affiliate of the sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the "working capital loans").

During the three months ended March 31, 2022, and for the period from February 5, 2021 (inception) through March 31, 2021, the Company incurred expenses of $ 30,000 and $ 0 , respectively, under the administrative support agreement.

Due to Related Party

Due to related party consists of payments made by the Sponsor and/or an affiliate of the Sponsor on behalf of the Company for offering costs and formation costs, along with the Administrative Support monthly fee and are payable on demand.

Convertible Promissory Note

If the Company completes the initial Business Combination, it may repay such loaned amounts out of the proceeds of the Trust Account released to us.

5 unchanged sentences

Prior to the completion of the initial Business Combination, the Company does not expect to seek loans from parties other than the Company’s sponsor, its affiliates or any members of the management team as the Company does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Trust Account.

As of September 30, 2021, there was no balance outstanding under the working capital loans.

On March 14, 2022, the Company entered into a promissory note pursuant to the Working Capital Loans terms with the Sponsor (the “Sponsor Working Capital Loan”) to which the Company could borrow up to an aggregate of $ 750,000 .

The Sponsor Working Capital Loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date that the winding up of the Company is effective.

The unpaid principal balance on the Sponsor Working Capital Loan may be convertible into warrants at the option of the Sponsor at a price of $ 1.50 per warrant.

The warrants would be identical to the Private Placement Warrants.

As of March 31, 2022, the outstanding balance on the promissory note is $ 500,000 .

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

Registration and Shareholder Rights Agreement

8 unchanged sentences

Forward Purchase Agreement

In connection with the consummation of the Initial Public Offering, the Company entered into a forward purchase agreement with the Sponsor, Avista Acquisition LP II, a Cayman Islands exempted limited partnership, which provides for the purchase of an aggregate of 10,000,000 Class A ordinary shares plus an aggregate of 3,333,333 redeemable warrants to purchase Class A ordinary shares at $ 11.50 per share, for an aggregate purchase price of $ 100,000,000 , in the private placement.

In connection with the consummation of the Initial Public Offering, the Company entered into a forward purchase agreement with the Sponsor which provides for the purchase of an aggregate of 10,000,000 Class A ordinary shares plus an aggregate of 3,333,333 redeemable warrants to purchase Class A ordinary shares at $ 11.50 per share, for an aggregate purchase price of $ 100,000,000 , in the private placement.

The obligations under the forward purchase agreement do not depend on whether any Class A ordinary shares are redeemed by the Company’s Public Shareholders.

1 unchanged sentence

The proceeds from the sale of forward purchase securities will be used as part of the consideration to the sellers in the Company’s initial Business Combination, expenses in connection with the initial Business Combination or for working capital in the post-transaction company.

SHAREHOLDER’S (DEFICIT) EQUITY

On March 23, 2022, in connection with the execution of the Merger Agreement, the Company entered into the A&R FPA with the Sponsor and OmniAb.

Pursuant to the A&R FPA, the Company has agreed that, in connection with the consummation of the proposed OmniAb Business Combination, they will issue and sell to the Sponsor 1,500,000 shares of APAC Common Stock and warrants to acquire 1,666,667 shares of APAC Common Stock for an aggregate purchase price of $ 15.0 million with such purchases to be consummated immediately following the re-domestication to Delaware and prior to the proposed OmniAb Business Combination.

In addition, the Sponsor has agreed to purchase up to an additional 10,000,000 shares of APAC Common Stock and up to an additional 1,666,667 warrants, for an aggregate additional purchase price of up to $ 100.0 million, in order to backstop shareholder redemptions to the extent such redemptions would result in the cash proceeds to be received by OmniAb stockholders from the Trust Account to be less than $ 100.0 million.

As a result of the A&R FPA, the Company evaluated the modification of the equity contract, which resulted in a reclassification between equity and a liability, in which the difference between the fair value at issuance of the original forward purchase agreement and the fair value at issuance of the A&R FPA (the modification date) was treated as a deemed dividend.

An amount of $ 225,000 was recorded to accumulated deficit as a deemed dividend upon modification of the forward purchase agreement on March 23, 2022.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

SHAREHOLDERS’ EQUITY (DEFICIT)

Preference shares — The Company is authorized to issue 5,000,000 preference shares with a par value of $ 0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors.

As of September 30, 2021, there were no preference shares issued or outstanding .

As of March 31, 2022 and December 31, 2021, there were no preference shares issued or outstanding .

Class A ordinary shares — The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $ 0.0001 per share.

Holders of Class A ordinary shares are entitled to one vote for each share.

At September 30, 2021, there were 23,000,000 Class A ordinary shares issued and outstanding , including 23,000,000 Class A ordinary shares subject to possible redemption.

At March 31, 2022 and December 31, 2021, there were 23,000,000 Class A ordinary shares issued and outstanding , including 23,000,000 Class A ordinary shares subject to possible redemption.

Class B ordinary shares — The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $ 0.0001 per share.

Holders of Class B ordinary shares are entitled to one vote for each share.

As of September 30, 2021, there were 5,750,000 Class B ordinary shares issued and outstanding , and the Sponsor owns, on an as-converted basis, 20 % of the Company’s issued and outstanding shares.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

As of March 31, 2022 and December 31, 2021, there were 5,750,000 Class B ordinary shares issued and outstanding , and the holders of the Founder Shares own, on an as-converted basis, 20 % of the Company’s issued and outstanding shares.

Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders.

18 unchanged sentences

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company’s satisfying of the obligations described below with respect to registration, or a valid exemption from registration is available.

No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

No warrant will be

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.

1 unchanged sentence

In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the Class A ordinary share underlying such unit.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC a registration statement (which may be a post-effective amendment to the registration statement of which the Company’s prospectus is a part or any other applicable registration statement) for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement;

12 unchanged sentences

The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price.

If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date.

However, the price of the Class A ordinary shares may fall below the $ 18.00 redemption trigger price (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) as well as the $ 11.50 (for whole shares) warrant exercise price after the redemption notice is issued.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

No fractional Class A ordinary shares will be issued upon exercise.

5 unchanged sentences

For these purposes, (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) “historical fair market value” means the volume weighted average price of Class A ordinary shares as reported during the 10 trading day period ending on the trading day prior to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if the Company, at any time while the warrants are outstanding and unexpired, pays a dividend or makes a distribution in cash, securities or other assets to all or substantially all of the holders of the Class A ordinary shares on account of such Class A ordinary shares (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Class A ordinary shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $ 0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Class A ordinary shares issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $ 0.50 per share , (c) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a shareholder vote to amend the Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100 % of the public shares if the Company does not complete it’s initial Business Combination within 18 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares, or (e) in connection with the redemption of the Company’s public shares upon failure to complete the Company’s initial Business Combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each Class A ordinary share in respect of such event.

In addition, if the Company, at any time while the warrants are outstanding and unexpired, pays a dividend or makes a distribution in cash, securities or other assets to all or substantially all of the holders of the Class A ordinary shares on account of such Class A ordinary shares (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Class A ordinary shares during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $ 0.50 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Class A ordinary shares issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $ 0.50 per share , (c) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of Class A ordinary shares in connection with a shareholder vote to amend the Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100 % of the public shares if the Company does not complete its initial Business Combination within 18 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares, or (e) in connection with the redemption of the Company’s public shares upon failure to complete the Company’s initial Business Combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each Class A ordinary share in respect of such event.

Whenever the number of Class A ordinary shares purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Class A ordinary shares purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of Class A ordinary shares so purchasable immediately thereafter.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $ 9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Company’s sponsor or its affiliates, without taking into account any founder shares held by the sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates it’s initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above under “Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $ 9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Company’s sponsor or its affiliates, without taking into account any founder shares held by the sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above under “Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price.

No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

2 unchanged sentences

The Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in the Initial Public Offering.

The Company accounts for the 15,900,000 warrants issued in connection with the Initial Public Offering (including 7,666,667 Public Warrants and 8,233,333 Private Placement Warrants), and will account for the 3,333,333 Forward Purchase Warrants to be issued in connection with the initial Business Combination, in accordance with the guidance contained in ASC 815-40.

The Company accounts for the 15,900,000 warrants issued in connection with the Initial Public Offering and to be issued in connection with the initial Business Combination (including 7,666,667 Public Warrants, 8,233,333 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40.

Such guidance provides that the warrants described above are not precluded from equity classification.

1 unchanged sentence

Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity.

FAIR VALUE MEASUREMENTS

The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

March 31, 2022

Investments held in Trust Account - U.S.

Treasury bills

Derivative liability - Forward Purchase and Backstop Securities

The Forward Purchase and Backstop Securities were fair valued based on the difference between the current fair values of each of the underlying components of the agreement (i.e.

the Class A Shares and the Warrants) and the present value of the contractual forward prices.

As the Backstop Shares and Backstop Warrants only apply in the event of and to the extent that the funds in the Company’s Trust Account falls below $ 100 million as the result of redemptions, the valuation considered an expected redemption rate based on redemption rates exhibited by similar companies in the market during the first quarter of 2022 and the expected post-redemption Trust Account balance.

As the Forward Purchase and Backstop Securities will only apply in the event that the Company completes an initial business combination, the value reflects the probability of completing an initial business combination.

AVISTA PUBLIC ACQUISITION CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2022

As of March 31, 2022, the derivative liability for the Forward Purchase and Backstop Securities are classified as Level 3 due to the use of unobservable inputs.

The following table provides the significant inputs to the valuation for the Forward Purchase and Backstop Securities liability as of March 23, 2022 (initial measurement):

As of March 23, 2022 (Initial

Fair value of Forward Purchase and Backstop Securities

Present value of Forward Purchase and Backstop Securities

Time to Business Combination (years)

Risk-free rate

Discount factor

Expected redemption rate

Probability of completing an initial Business Combination

Fair value of Forward Purchase and Backstop Securities

The following table provides the significant inputs to the valuation for the Forward Purchase and Backstop Securities liability as of March 31, 2022:

At March 31, 2022

Fair value of Forward Purchase and Backstop Securities

Present value of Forward Purchase and Backstop Securities

Time to Business Combination (years)

Risk-free rate

Discount factor

Expected redemption rate

Probability of completing an initial Business Combination

Fair value of Forward Purchase and Backstop Securities

The following table presents the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value:

Fair value as of December 31, 2021

Initial measurement as of March 23, 2022

Change in fair value

Fair value as of March 31,2022

The Company recognized losses in connection with changes in the fair value of the Forward Purchase and Backstop Securities of $ 591,310 and $ 0 within change in fair value of forward purchase and backstop securities in the condensed consolidated statements of operations during the three months ended March 31, 2022 and for the period from February 5, 2021 (inception) through March 31, 2021, respectively.

As of December 31, 2021, the Company had no financial assets or liabilities measured at fair value on a recurring basis.

SUBSEQUENT EVENTS

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

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

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-Q

Item 1. Financial Statements