What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-12 compared with 2022-05-20 · 39 added, 30 removed, 115 unchanged (38% of the section changed)

16 unchanged sentences

We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering (the “Initial Public Offering”) and the private placement of the Private Placement Warrants (as defined below), the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the Initial Public Offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

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 (as defined below)) was placed in a trust account (the “Trust Account”) and invested in only in U.S.

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.

government treasury obligations.

Proposed Business Combination

7 unchanged sentences

The Distribution and Merger are intended to qualify as “tax-free” transactions.

Upon consummation of the proposed OmniAb Business Combination, and after the Domestication, we will have one class of common stock, par value $0.0001 per share (“APAC Common Stock”), which will be listed on Nasdaq under the ticker symbol “OABI”.

On April 28, 2022, the Company filed a registration statement on Form S-4 (File No.

333-264525) (as amended, the “Form S-4”) with the SEC, which includes the proxy statement/prospectus/information statement to be distributed to holders of the Company’s ordinary shares in connection with the Company’s solicitation for proxies for the vote by the Company’s shareholders in connection with the proposed OmniAb Business Combination and other matters as described in the Form S-4.

After the Form S-4 has been declared effective by the SEC, the definitive proxy statement/prospectus/information statement will be mailed to the Company’s shareholders as of a record date to be disclosed for voting on the proposed OmniAb Business Combination.

The proposed OmniAb Business Combination is expected to close in the fourth quarter of 2022, subject to approval by our shareholders and other customary closing conditions.

Upon consummation of the proposed OmniAb Business Combination, and after the Domestication, we will have one class of common stock, par value $0.0001 per share, which will be listed on Nasdaq under the ticker symbol “OABI”.

Our then-outstanding warrants will be listed on Nasdaq under the ticker symbol “OABIW”.

Agreement and Plan of Merger

At the time the proposed OmniAb Business Combination is effected (the “Closing”), each share of OmniAb Common Stock outstanding after the Distribution and immediately prior to the effective time of the Merger will be converted into a number of shares of APAC Common Stock based on an exchange ratio determined by reference to a pre-money equity value for OmniAb of $850 million.

At the time the proposed OmniAb Business Combination is effected (the “Closing”), each share of OmniAb Common Stock outstanding after the Distribution and immediately prior to the effective time of the Merger 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 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.

3 unchanged sentences

On March 23, 2022, in connection with the execution of the Merger Agreement, we entered into the Separation Agreement with OmniAb and Ligand, 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 Merger and after the Separation, Ligand will distribute 100% of the outstanding shares of OmniAb Common Stock to Ligand’s stockholders in the Distribution.

The Separation Agreement also sets forth other agreements among Ligand and OmniAb related to the 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.

12 unchanged sentences

Certain additional agreements will be entered into in connection with the transactions contemplated by the Merger Agreement, the Separation Agreement and the other agreements described above, including, among others:

● a Tax Matters Agreement by and among Ligand, OmniAb and the Company, which governs, among other things, Ligand’s, OmniAb’s and the Company’s respective rights, responsibilities and obligations with respect to taxes, tax attributes and the preparation and filing of tax returns and responsibility for and preservation of the expected tax-free status of the transactions contemplated by the Separation Agreement and the Merger Agreement;

and certain other tax matters;

● an Amended and Restated Registration and Stockholder Rights Agreement by and among the Company, our sponsor and the other parties signatory thereto, pursuant to which our the Registration Rights Agreement (as defined herein) will be amended and restated in order to, among other things, provide certain equityholders of OmniAb as of immediately prior to the Closing of the proposed OmniAb Business Combination with customary registration rights;

a Transition Services Agreement by and between Ligand and OmniAb, pursuant to which Ligand will, on a transitional basis, provide OmniAb with certain support services and other assistance after the Closing;

preparation and filing of tax returns and responsibility for and preservation of the expected tax-free status of the transactions contemplated by the Separation Agreement and the Merger Agreement, and certain other tax matters;

● an Amended and Restated Registration and Stockholder Rights Agreement by and among the Company, our Sponsor and the other parties signatory thereto, pursuant to which the Registration Rights Agreement, dated August 9, 2021, among the Company, our Sponsor and certain other security holders named therein will be amended and restated in order to, among other things, provide certain equityholders of OmniAb as of immediately prior to the Closing of the proposed OmniAb Business Combination with customary registration rights;

● a Transition Services Agreement by and between Ligand and OmniAb, pursuant to which OmniAb will, on a transitional basis, provide Ligand with certain support services and other assistance after the Closing.

2 unchanged sentences

We have neither engaged in any operations nor generated any operating revenues to date.

Our only activities for the three month period ended March 31, 2022 and for the period from February 5, 2021 (inception) through March 31, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, 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.

Our only activities for the period from February 5, 2021 (inception) through June 30, 2022 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, 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 the Trust Account from the proceeds derived from the Initial Public Offering.

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

For the three months ended March 31, 2022, we had a net loss of $4,361,240, which resulted from formation and operating costs of $3,821,215 and the change in fair value of Forward Purchase and Backstop Securities of $591,310, partially offset by unrealized gains on investments held in the Trust Account of $51,285.

For the period from February 5, 2021 (inception) through March 31, 2021, we had a net loss of $7,786, which resulted entirely from formation and operating costs.

For the three months ended June 30, 2022, we had a net loss of $1,624,916, which resulted from formation and operating costs of $2,578,263, partially offset by the change in fair value of Forward Purchase and Backstop Securities of $656,300, and gain on investments held in the Trust Account of $297,047.

For the three months ended June 30, 2021, we had net loss of $2,185, which resulted entirely from formation and operating costs.

For the six months ended June 30, 2022, we had a net loss attributable to ordinary shareholders of $6,211,156, which resulted from formation and operating costs of $6,399,478, a deemed dividend relating to the forward purchase and backstop securities of $225,000, partially offset by the change in fair value of Forward Purchase and Backstop Securities of $64,990, and gain on investments held in the Trust Account of $348,332.

For the period from February 5, 2021 (inception) through June 30, 2021, we had a net loss of $9,971, which resulted entirely from formation and operating costs.

Liquidity and Capital Resources

For the three months ended March 31, 2022 net cash used in operating activities was $255,342, which was due to our net loss of $4,361,240 and unrealized gain on investments held in Trust Account of $51,285, partially offset by a change in operating assets and liabilities of $3,565,873 and change in fair value of Forward Purchase and Backstop Securities of $591,310.

For the period from February 5, 2021 (inception) through March 31, 2021, net cash used in operating activities was $0, which was due to our net loss of $7,786, which was fully offset by formation costs paid by our Sponsor in exchange for issuance of Class B ordinary shares.

For the three months ended March 31, 2022, net cash provided by financing activities was $500,000 from the proceeds of the convertible promissory note from our Sponsor.

For the six months ended June 30, 2022 net cash used in operating activities was $780,777, which was due to our net loss of $5,986,156, gain on investments held in Trust Account of $348,332 and change in fair value of Forward Purchase and Backstop Securities of $64,990, partially offset by a change in operating assets and liabilities of $5,618,701.

For the period from February 5, 2021 (inception) through June 30, 2021, net cash used in operating activities was $5, which was due to our net loss of $9,971, offset by amounts due to our Sponsor of $5, and by the payment of formation costs by our Sponsor in exchange for the issuance of Class B ordinary shares of $9,961.

There were no cash flows from investing activities for the six months ended June 30, 2022, and for the period from February 5, 2021 (inception) through June 30, 2021.

For the six months ended June 30, 2022, net cash provided by financing activities was $750,000 from the proceeds of the convertible promissory note from our Sponsor.

For the period from February 5, 2021 (inception) through June 30, 2021, net cash provided by financing activities was $36,150, which was due to proceeds from the issuance of the promissory note - related party of $119,275, offset in part by the payment of offering costs of $83,125.

On August 12, 2021, we consummated the Initial Public Offering of 23,000,000 units, including 3,000,000 Units that were issued pursuant to the underwriter’s exercise of its over-allotment option in full, at $10.00 per unit, generating gross proceeds of $230,000,000.

Each unit consisted of one Class A ordinary share (the “Public Shares”), $0.0001 par value, and one-third of one redeemable warrant (“Public Warrant”).

Each unit consisted of one Class A ordinary share (the “Public Shares”), $0.0001 par value, and one-third of one redeemable warrant (the “Public Warrants”).

Each Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share.

Simultaneously with the closing of the Initial Public Offering, our Sponsor purchased an aggregate 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 unit ($12,350,000 in the aggregate).

Simultaneously with the closing of the Initial Public Offering, our Sponsor purchased an aggregate of 8,233,333 warrants (the “Private Placement Warrants” and, together with the Public Warrants, the “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 unit ($12,350,000 in the aggregate).

Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share.

5 unchanged sentences

We expect the interest income earned on the amount in the Trust Account (if any) will be sufficient to pay our franchise and income taxes.

To the extent that our equity or debt is used, in whole or in part, as

consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

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.

To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of June 30, 2022, the Company had $159,194 in cash held outside of the Trust Account and a working capital deficit of $6,286,566.

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

4 unchanged sentences

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2022 or December 31, 2021.

We did not have any off-balance sheet arrangements as of June 30, 2022 or December 31, 2021.

Contractual Obligations

5 unchanged sentences

The Promissory Note is no longer available to the Company.

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

On March 14, 2022, the Company entered into a convertible promissory note pursuant to the Working Capital Loans terms with our 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.

1 unchanged sentence

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.

As of June 30, 2022, the outstanding balance on the convertible promissory note is $750,000.

Administrative Support Agreement

1 unchanged sentence

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

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.

For the three and six months ended June 30, 2022 the Company incurred expenses of $30,000 and $60,000, respectively, under the agreement.

Underwriting Agreement

The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate, upon the closing of the Initial Public Offering and exercise of the over-allotment in full on August 12, 2021.

In addition, $0.35 per unit, or $8,050,000 in the aggregate will be payable to the underwriters for deferred underwriting commissions.

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.

The underwriters purchased Units at a purchase price of $9.80 per unit (i.e., at a cash underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate) upon the closing of the Initial Public Offering and the exercise of the over-allotment in full on August 12, 2021.

In addition, the Company agreed to pay the underwriters a deferred underwriting fee of up to $0.35 per unit, or $8,050,000 in the aggregate, which would be payable to the underwriters upon the consummation of an initial Business Combination, except that the Company’s management team would be permitted, in its sole discretion, to allocate up to 50% of the deferred underwriting fee, or $4,025,000 in the aggregate, to third parties that assist in identifying and consummating an initial Business Combination.

On July 25, 2022, the Company’s board of directors passed a unanimous written consent whereby it decided not to pay or allocate to any third party, including Credit Suisse, any of the remaining 50%, or $4,025,000 in the aggregate, of the deferred underwriting fee.

Forward Purchase Agreement

7 unchanged sentences

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 our Sponsor a termination fee of $12.5 million in connection therewith.

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.

Critical Accounting Policies

15 unchanged sentences

Fair value of the Public and Private Placement Warrants was determined by an independent valuation expert as of August 12, 2021 using a Monte Carlo Model.

Proceeds from the IPO and subsequent partial exercise of the over-allotment option allocated to the Public

Warrants was an aggregate $9,813,334 ($9,232,604, net of offering costs) and is recorded in additional paid-in capital.

Proceeds from the IPO and subsequent partial exercise of the over-allotment option allocated to the Public Warrants was an aggregate $9,813,334 ($9,232,604, net of offering costs) and is recorded in additional paid-in capital.

Proceeds from the issuance of the Private Placement Warrants were $12,350,000 ($12,298,375, net of offering costs) and is recorded in additional paid-in capital.

5 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2022 and December 31, 2021, we were not subject to any market or interest rate risk.

As of June 30, 2022 and December 31, 2021, we were not subject to any market or interest rate risk.

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 2. Management’s Discussion and Analysis