−Removed: Risk Factors.
−Removed: An investment in our securities involves a high degree of risk.
−Removed: Parties interested in investing should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, before making a decision to invest in our securities.
−Removed: If any of the following events occur, our business, financial condition and operating results may be materially adversely affected.
−Removed: In that event, the trading price of our securities could decline, and public shareholders could lose all or part of their investments.
−Removed: Risk Factor Summary
−Removed: The risk factors summarized below could materially harm our business, financial condition and operating results, impair our future prospects and/or cause the price of our ordinary shares to decline.
−Removed: These risks are discussed more fully following this summary.
−Removed: Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, the following:
−Removed: ● The proposed OmniAb Business Combination is subject to the satisfaction of certain conditions, which may not be satisfied on a timely basis, if at all.
−Removed: ● Our shareholders may not be afforded an opportunity to vote on our proposed initial Business Combination, which means we may complete our initial Business Combination even though a majority of our shareholders do not support such a combination.
−Removed: ● If we seek shareholder approval of our initial Business Combination, our sponsor and members of our management team have agreed to vote in favor of such initial Business Combination, regardless of how our public shareholders vote.
−Removed: ● The requirement that we consummate an initial Business Combination within 18 months of the IPO Closing Date may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets.
−Removed: ● Our search for a Business Combination, and any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the COVID-19 pandemic and the status of debt and equity markets.
−Removed: ● Subsequent to our completion of our initial Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities.
−Removed: ● If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.25 per Public Share.
−Removed: ● If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial Business Combination .
−Removed: ● We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
−Removed: We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, public shareholders may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
−Removed: We may issue additional Class A ordinary shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination.
−Removed: We may face risks related to companies in the healthcare industry.
−Removed: We may attempt to complete our initial Business Combination with a private company about which little information is available, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all.
−Removed: Public shareholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances.
−Removed: Nasdaq may delist our securities from trading on its exchange, which could limit investors ’ ability to make transactions in our securities and subject us to additional trading restrictions.
−Removed: Holders of Class A ordinary shares will not be entitled to vote on any appointment of directors we hold prior to our initial Business Combination.
−Removed: The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares.
−Removed: We may reincorporate in another jurisdiction in connection with our initial Business Combination and such reincorporation may result in taxes imposed on shareholders.
−Removed: We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders ’ investment in us.
−Removed: We may redeem any unexpired warrants prior to their exercise at a time that is disadvantageous to holders, thereby making such warrants worthless.
−Removed: Nasdaq considers us to be a “ controlled company ” within the meaning of Nasdaq rules and, as a result, we qualify for exemptions from certain corporate governance requirements.
−Removed: Because we are incorporated under the laws of the Cayman Islands, our shareholders may face difficulties in protecting their interests, and their ability to protect their rights through the U.S.
−Removed: federal courts may be limited.
−Removed: We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial Business Combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
−Removed: The loss of a Business Combination target ’ s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: Our officers and directors presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: We are an exempted company with no operating history and no revenues, and there is no basis on which to evaluate our ability to achieve our business objective.
−Removed: Past performance by our management team or their respective affiliates may not be indicative of future performance of an investment in us.
−Removed: We may become a passive foreign investment company, or “ PFIC, ” which could result in U.S.
−Removed: federal income tax consequences to U.S.
−Removed: We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “ emerging growth companies ” or “ smaller reporting companies, ” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
−Removed: After our initial Business Combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country.
−Removed: Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
−Removed: Risks Relating to Our Search for, and Consummation of or Inability to Consummate, a Business Combination
−Removed: The Proposed Business Combination is subject to the satisfaction of certain conditions, which may not be satisfied on a timely basis, if at all.
−Removed: The consummation of the proposed OmniAb Business Combination is subject to customary closing conditions for transactions involving special purpose acquisition companies, including, among others:
−Removed: ● t he expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
−Removed: ● r eceipt of required consents and approvals from certain governmental authorities;
−Removed: ● n o agreement between Ligand or the Company and any governmental authority pursuant to which Ligand or the Company has agreed not to consummate the proposed OmniAb Business Combination shall have been effected;
−Removed: ● n o governmental authority of competent jurisdiction shall have enacted, issued or granted any law (whether temporary, preliminary or permanent), in each case that is in effect and which has the effect of restraining, enjoining or prohibiting the consummation of the proposed OmniAb Business Combination;
−Removed: ● the Company shall have at least $5,000,001 of net tangible assets as of the Closing;
−Removed: ● t he APAC Common Stock issuable pursuant to the proposed OmniAb Business Combination shall have been approved for listing on Nasdaq, subject to official notice of issuance;
−Removed: ● L igand, OmniAb, the Company and Merger Sub shall each have performed and complied in all material respects with the obligations, covenants and agreements required by the Merger Agreement to be performed or complied with by it at or prior to filing, or a later date as agreed to by the parties;
−Removed: ● c ustomary bring down conditions related to the accuracy of the parties’ respective representations, warranties and pre-Closing covenants in the Merger Agreement;
−Removed: ● t he consummation of the Distribution, Reorganization and other transactions contemplated by the Separation and Distribution Agreement;
−Removed: ● e ach of the Company’s and OmniAb’s registration statements to be filed with the SEC shall have become effective;
−Removed: ● our shareholders’ approval shall have been obtained;
−Removed: ● t he receipt by Ligand and the Company of certain tax opinions.
−Removed: In addition, the respective obligations of OmniAb and Ligand to consummate the proposed OmniAb Business Combination is conditioned upon, among other items, the completion of the Forward Purchase and the Redemption Backstop, the resignation of all directors and all executive officers of the Company and the occurrence of the Domestication.
−Removed: Our obligation to consummate the proposed OmniAb Business Combination is also conditioned on there having been no “Material Adverse Effect” on OmniAb since the date of the Merger Agreement.
−Removed: If one or more of these conditions is not satisfied, then the proposed OmniAb Business Combination may not occur.
−Removed: Our shareholders may not be afforded an opportunity to vote on our proposed initial Business Combination, which means we may complete our initial Business Combination even though a majority of our shareholders do not support such a combination.
−Removed: We may choose not to hold a shareholder vote before we complete our initial Business Combination if the Business Combination would not require shareholder approval under applicable law or stock exchange listing requirement.
−Removed: For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction.
−Removed: Except for as required by applicable law or stock exchange listing requirement, the decision as to whether we will seek shareholder approval of a proposed Business Combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval.
−Removed: Accordingly, we may complete our initial Business Combination even if holders of a majority of our issued and outstanding ordinary shares do not approve of the Business Combination we complete.
−Removed: Please see the section entitled “Item 1.
−Removed: Business—Shareholders May Not Have the Ability to Approve Our Business Combination” for additional information.
−Removed: A public shareholder’s only opportunity to affect the investment decision regarding a potential Business Combination may be limited to the exercise of its right to redeem its shares from us for cash.
−Removed: Since our board of directors may complete a Business Combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the Business Combination, unless we seek such shareholder approval.
−Removed: Accordingly, a public shareholder’s only opportunity to affect the investment decision regarding a potential Business Combination may be limited to exercising its redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial Business Combination.
−Removed: If we seek shareholder approval of our initial Business Combination, our sponsor and members of our management team have agreed to vote in favor of such initial Business Combination, regardless of how our public shareholders vote.
−Removed: Our sponsor owns, on an as- converted basis, approximately 20% of our outstanding ordinary shares, as of March 25, 2022.
−Removed: Our sponsor and members of our management team also may from time to time purchase Class A ordinary shares prior to our initial Business Combination.
−Removed: Our amended and restated memorandum and articles of association provides that, if we seek shareholder approval of our initial Business Combination, we will complete our initial Business Combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company.
−Removed: As a result, in addition to our initial shareholders’ founder shares, we would need 8,625,001, or 37.5% (assuming all issued and outstanding shares are voted), or 1,437,501, or 6.25% (assuming only the minimum number of shares representing a quorum are voted), of the 23,000,000 public shares sold in the Public Offering to be voted in favor of our initial Business Combination in order to have our initial Business Combination approved.
−Removed: Accordingly, if we seek shareholder approval of our initial Business Combination, the agreement by our sponsor and each member of our management team to vote in favor of our initial Business Combination will increase the likelihood that we will receive the requisite shareholder approval for such initial Business Combination.
−Removed: In evaluating a prospective target business for our initial business combination, our management will rely on the availability of all of the funds from the sale of the forward purchase securities to be used as part of the consideration to the sellers in the initial business combination.
−Removed: If the sale of the forward purchase securities does not close, we may lack sufficient funds to consummate our initial business combination.
−Removed: In connection with the consummation of the Public Offering, we entered into a forward purchase agreement with our 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 a private placement to occur concurrently with the closing of our initial Business Combination.
−Removed: However, if the sale of the forward purchase securities does not close, we may lack sufficient funds to consummate our initial Business Combination.
−Removed: The forward purchase agreement contains customary closing conditions, the fulfillment of which is a condition for our sponsor to purchase the forward purchase securities, including that our initial Business Combination must be consummated substantially concurrently with, and immediately following, the purchase of forward purchase securities.
−Removed: The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which may make it difficult for us to enter into an initial Business Combination with a target.
−Removed: We may seek to enter into a Business Combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
−Removed: If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the Business Combination.
−Removed: Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of our initial Business Combination (so that we do not then become subject to the SEC’s “penny stock” rules).
−Removed: Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of our initial Business Combination or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related Business Combination and may instead search for an alternate Business Combination.
−Removed: Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a Business Combination transaction with us.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business Combination or optimize our capital structure.
−Removed: At the time we enter into an agreement for our initial Business Combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.
−Removed: If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for additional third-party financing.
−Removed: Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.
−Removed: The above considerations may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure.
−Removed: The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial Business Combination.
−Removed: The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in the Trust Account will continue to reflect our obligation to pay the entire deferred underwriting commissions.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business Combination would be unsuccessful and that they would have to wait for liquidation in order to redeem their shares.
−Removed: If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial Business Combination would be unsuccessful is increased.
−Removed: If our initial Business Combination is unsuccessful, our public shareholders would not receive their pro rata portion of the funds in the Trust Account until we liquidate the Trust Account.
−Removed: If a public shareholder is in need of immediate liquidity, it could attempt to sell its shares in the open market;
−Removed: however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account.
−Removed: In either situation, our public shareholders may suffer a material loss on their investments or lose the benefit of funds expected in connection with our redemption until we liquidate or they are able to sell their shares in the open market.
−Removed: The requirement that we consummate an initial Business Combination within 18 months of the IPO Closing Date may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our shareholders.
−Removed: Any potential target business with which we enter into negotiations concerning a Business Combination will be aware that we must consummate a Business Combination within 18 months of the IPO Closing Date.
−Removed: Consequently, such target business may obtain leverage over us in negotiating a Business Combination, knowing that if we do not complete a Business Combination with that particular target business, we may be unable to complete our initial Business Combination with any target business.
−Removed: This risk will increase as we get closer to the time frame described above.
−Removed: In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination on terms that we would have rejected upon a more comprehensive investigation.
−Removed: Our search for a Business Combination, and any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the COVID-19 pandemic and the status of debt and equity markets.
−Removed: The COVID-19 pandemic, together with resulting voluntary and U.S.
−Removed: federal and state and non-U.S.
−Removed: governmental actions, including, without limitation, mandatory business closures, public gathering limitations, restrictions on travel and quarantines, has meaningfully disrupted the global economy and markets.
−Removed: Although the long-term economic fallout of COVID-19 is difficult to predict, it has and is expected to continue to have ongoing material adverse effects across many, if not all, aspects of the regional, national and global economy .
−Removed: The COVID-19 pandemic has, and a significant outbreak of other infectious diseases could, result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a Business Combination could be materially and adversely affected.
−Removed: Furthermore, we may be unable to complete a Business Combination if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner.
−Removed: The extent to which COVID-19 impacts our search for a Business Combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
−Removed: If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a Business Combination, or the operations of a target business with which we ultimately consummate a Business Combination, may be materially adversely affected.
−Removed: In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.
−Removed: We may not be able to consummate an initial Business Combination within 18 months of the IPO Closing Date, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
−Removed: We may not be able to find a suitable target business and consummate an initial Business Combination within 18 months after the IPO Closing Date.
−Removed: Our ability to complete our initial Business Combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.
−Removed: For example, the outbreak of COVID -19 continues to grow both in the United States and globally and, while the extent of the impact of the pandemic on us will depend on future developments, it could limit our ability to complete our initial Business Combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
−Removed: Additionally, the COVID-19 pandemic may negatively impact businesses we may seek to acquire.
−Removed: Additionally, financial markets may be adversely affected by current or anticipated military conflict, including between Russia and Ukraine, terrorism, sanctions or other geopolitical events globally.
−Removed: If we have not consummated our initial Business Combination within such applicable time period, we will:
−Removed: (i) cease all operations except for the purpose of winding up;
−Removed: (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);
−Removed: and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
−Removed: Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the consummation of our initial Business Combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
−Removed: In either such case, our public shareholders may receive only $10.25 per public share, or less than $10.25 per public share, on the redemption of their shares, and our warrants will expire worthless.
−Removed: See “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.25 per public share” and other risk factors herein.
−Removed: If we seek shareholder approval of our initial Business Combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase public shares or warrants, which may influence a vote on a proposed Business Combination and reduce the public “float” of our Class A ordinary shares or public warrants.
−Removed: If we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination, although they are under no obligation to do so.
−Removed: However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions.
−Removed: None of the funds in the Trust Account will be used to purchase public shares or warrants in such transactions.
−Removed: In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.
−Removed: The purpose of any such transaction could be to (1) vote in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Business Combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial Business Combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would otherwise not be met.
−Removed: Any such purchases of our securities may result in the completion of our initial Business Combination that may not otherwise have been possible.
−Removed: In addition, if such purchases are made, the public “float” of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
−Removed: Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
−Removed: Business—Effecting Our Initial Business Combination—Permitted purchases and other transactions with respect to our securities” for a description of how our sponsor, directors, executive officers, advisors or their affiliates will select which shareholders to purchase securities from in any private transaction.
−Removed: If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
−Removed: We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial Business Combination.
−Removed: Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares.
−Removed: In addition, the proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial Business Combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares.
−Removed: In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
−Removed: Business—Effecting Our Initial Business Combination—Tendering share certificates in connection with a tender offer or redemption rights.”
−Removed: Because of our limited resources and the significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination.
−Removed: This could increase the costs associated with completing our initial Business Combination and may result in our inability to find a suitable target for our initial Business Combination.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
−Removed: Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
−Removed: Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
−Removed: While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the Public Offering and the sale of the Private Placement Warrants, if the proposed OmniAb Business Combination is not consummated, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
−Removed: This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
−Removed: Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial Business Combination in conjunction with a shareholder vote or via a tender offer.
−Removed: Target companies will be aware that this may reduce the resources available to us for our initial Business Combination.
−Removed: Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: See “—If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.25 per public share” and other risk factors herein.
−Removed: Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.
−Removed: The market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team.
−Removed: Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable.
−Removed: These trends may continue into the future.
−Removed: The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.
−Removed: In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-Business Combination entity might need to incur greater expense and/or accept less favorable terms.
−Removed: Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-Business Combination’s ability to attract and retain qualified officers and directors.
−Removed: In addition, after completion of any initial Business Combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial Business Combination.
−Removed: As a result, in order to protect our directors and officers, the post-Business Combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”).
−Removed: The need for run-off insurance would be an added expense for the post-Business Combination entity and could interfere with or frustrate our ability to consummate an initial Business Combination on terms favorable to our investors.
−Removed: If the net proceeds of the Public Offering and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for the 18 months following the IPO Closing Date, it could limit the amount available to fund our search for a target business or businesses and our ability to complete our initial Business Combination, and we will depend on loans from our sponsor, its affiliates or members of our management team to fund our search and to complete our initial Business Combination.
−Removed: As of December 31, 2021, we had $189,971available to us outside the Trust Account to fund our working capital requirements.
−Removed: We believe that the funds available to us outside of the Trust Account, together with funds available from loans from our sponsor, its affiliates or members of our management team will be sufficient to allow us to operate for at least the 18 months following the IPO Closing Date;
−Removed: however, we cannot be certain that our estimate is accurate, and our sponsor, its affiliates or members of our management team are under no obligation to advance funds to us in such circumstances.
−Removed: Of the funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
−Removed: We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed Business Combination, although we do not have any current intention to do so.
−Removed: If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
−Removed: If we are required to seek additional capital, we would need to borrow funds from our sponsor, its affiliates, members of our management team or other third parties to operate or may be forced to liquidate.
−Removed: Neither our sponsor, members of our management team nor their affiliates is under any obligation to us in such circumstances.
−Removed: Any such advances may be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our initial Business Combination.
−Removed: Up to $2,000,000 of such loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant at the option of the lender.
−Removed: The warrants would be identical to the Private Placement Warrants.
−Removed: Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other than our sponsor, its affiliates or members of our management team as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
−Removed: If we have not consummated our initial Business Combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.
−Removed: Consequently, our public shareholders may only receive an estimated $10.25 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
−Removed: See “—If third parties bring claims against us, the proceeds held in the Trust A ccount could be reduced and the per-share redemption amount received by shareholders may be less than $10.25 per public share” and other risk factors herein.
−Removed: Subsequent to our completion of our initial Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause public shareholders to lose some or all of their investments.
−Removed: Even if we conduct extensive due diligence on a target business with which we combine, we cannot ensure that this diligence will identify all material issues with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise.
−Removed: As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses.
−Removed: Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
−Removed: Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
−Removed: In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing.
−Removed: Accordingly, any holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
−Removed: Such holders are unlikely to have a remedy for such reduction in value.
−Removed: If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.25 per Public Share.
−Removed: Our placing of funds in the Trust Account may not protect those funds from third-party claims against us.
−Removed: Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account.
−Removed: If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
−Removed: Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
−Removed: In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason.
−Removed: Upon redemption of our public shares, if we have not consummated an initial Business Combination within 18 months from the IPO Closing Date, or upon the exercise of a redemption right in connection with our initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption.
−Removed: Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.25 per public share initially held in the Trust Account, due to claims of such creditors.
−Removed: Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.25 per Public S hare 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 our 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 our indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act.
−Removed: Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims.
−Removed: However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our sponsor’s only assets are securities of our company.
−Removed: Therefore, we cannot be certain that our sponsor would be able to satisfy those obligations.
−Removed: As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions could be reduced to less than $10.25 per Public Share.
−Removed: In such event, we may not be able to complete our initial Business Combination, and our public shareholders would receive such lesser amount per share in connection with any redemption of their public shares.
−Removed: None of our officers or directors will indemnify us for claims by third parties including, without limitation , claims by vendors and prospective target businesses.
−Removed: The securities in which we invest the proceeds held in the Trust Account could bear a negative rate of interest, which could reduce the interest income available for payment of taxes or reduce the value of the assets held in trust such that the per-share redemption amount received by shareholders may be less than $10.25 per share.
−Removed: The net proceeds of the Public Offering and certain proceeds from the sale of the Private Placement Warrants are held in an interest-bearing Trust Account.
−Removed: The proceeds held in the Trust Account may only be invested in direct U.S.
−Removed: Treasury obligations having a maturity of 185 days or less, or in certain money market funds which invest only in direct U.S.
−Removed: Treasury obligations.
−Removed: While short-term U.S.
−Removed: Treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years.
−Removed: Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States.
−Removed: In the event of very low or negative yields, the amount of interest income (which we may withdraw to pay income taxes, if any) would be reduced.
−Removed: In the event that we are unable to complete our initial Business Combination, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income.
−Removed: If the balance of the Trust Account is reduced below $235,750,000 as a result of negative interest rates, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.25 per share.
−Removed: Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.
−Removed: In the event that the proceeds in the Trust Account are reduced 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 our tax obligations, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
−Removed: While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance.
−Removed: If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.25 per public share.
−Removed: We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
−Removed: We have agreed to indemnify our officers and directors to the fullest extent permitted by law.
−Removed: However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of public shares).
−Removed: Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial Business Combination.
−Removed: Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty.
−Removed: These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders.
−Removed: Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
−Removed: If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
−Removed: If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders.
−Removed: In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public shareholders from the Trust Account prior to addressing the claims of creditors.
−Removed: If, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per- share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
−Removed: If, before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders.
−Removed: To the extent any bankruptcy or insolvency claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
−Removed: If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial Business Combination.
−Removed: If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
−Removed: restrictions on the nature of our investments;
−Removed: restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial Business Combination.
−Removed: In addition, we may have imposed upon us burdensome requirements, including:
−Removed: registration as an investment company with the SEC;
−Removed: adoption of a specific form of corporate structure;
−Removed: reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
−Removed: In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S.
−Removed: government securities and cash items) on an unconsolidated basis.
−Removed: Our business will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term.
−Removed: We do not plan to buy businesses or assets with a view to resale or profit from their resale.
−Removed: We do not plan to buy unrelated businesses or assets or to be a passive investor.
−Removed: We do not believe that our anticipated principal activities will subject us to the Investment Company Act.
−Removed: To this end, beginning in January 2022, the proceeds held in the Trust Account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.
−Removed: government treasury obligations.
−Removed: Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets.
−Removed: By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act.
−Removed: The Trust Account is intended as a holding place for funds pending the earliest to occur of either:
−Removed: (i) the completion of our initial Business Combination;
−Removed: (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares;
−Removed: or (iii) absent our completing an initial Business Combination within 18 months from the IPO Closing Date, our return of the funds held in the Trust Account to our public shareholders as part of our redemption of the public shares.
−Removed: If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.
−Removed: If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete an initial Business Combination.
−Removed: If we have not consummated our Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
−Removed: We are subject to laws and regulations enacted by national, regional and local governments.
−Removed: In particular, we will be required to comply with certain SEC and other legal requirements.
−Removed: Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
−Removed: Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations.
−Removed: In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
−Removed: If we have not consummated an initial Business Combination within 18 months of the IPO Closing Date, our public shareholders may be forced to wait beyond such 18 months before redemption from our Trust Account.
−Removed: If we have not consummated an initial Business Combination within 18 months of the IPO Closing Date, the proceeds then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein.
−Removed: Any redemption of public shareholders from the Trust Account will be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up.
−Removed: If we are required to wind up, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”).
−Removed: In that case, shareholders may be forced to wait beyond 18 months from the IPO Closing Date before the redemption proceeds of our Trust Account become available to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account.
−Removed: We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial Business Combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where investors have sought to redeem their Class A ordinary shares.
−Removed: Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we do not complete our initial Business Combination and do not amend certain provisions of our amended and restated memorandum and articles of association.
−Removed: Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the consummation of our initial Business Combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.
−Removed: We may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
−Removed: We will consider a Business Combination outside of our management’s area of expertise if a Business Combination target is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company.
−Removed: Although our management will endeavor to evaluate the risks inherent in any particular Business Combination target, we cannot be certain that we will adequately ascertain or assess all of the significant risk factors.
−Removed: We also cannot be certain that an investment in our ordinary shares will not ultimately prove to be less favorable to shareholders than a direct investment, if an opportunity were available, in a Business Combination target.
−Removed: In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this Annual Report on Form 10-K and the prospectus related to the Public Offering regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire.
−Removed: As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors.
−Removed: Accordingly, any holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
−Removed: Such holders are unlikely to have a remedy for such reduction in value.
−Removed: Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial Business Combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial Business Combination may not have attributes entirely consistent with our general criteria and guidelines.
−Removed: Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial Business Combination will not have all of these positive attributes.
−Removed: If we complete our initial Business Combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines.
−Removed: In addition, if we announce a prospective Business Combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash.
−Removed: In addition, if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial Business Combination if the target business does not meet our general criteria and guidelines.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, our public shareholders may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.
−Removed: Unless we complete our initial Business Combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from a financial point of view.
−Removed: If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
−Removed: Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial Business Combination.
−Removed: We may issue additional Class A ordinary shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination.
−Removed: We may also issue Class A ordinary shares upon the conversion of the founder shares at a ratio greater than one-to- one at the time of our initial Business Combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association.
−Removed: Any such issuances would dilute the interest of our shareholders and likely present other risks.
−Removed: Our amended and restated memorandum and articles of association authorizes the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share.
−Removed: As of March 25, 2022, there were 477,000,000 and 44,250,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class B ordinary shares.
−Removed: The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial Business Combination) at the time of our initial Business Combination as described herein and in our amended and restated memorandum and articles of association.
−Removed: As of March 25, 2022, there were no preference shares issued and outstanding.
−Removed: We may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination.
−Removed: We may also issue Class A ordinary shares in connection with our redeeming the warrants or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution provisions as set forth herein.
−Removed: However, our amended and restated memorandum and articles of association provides, among other things, that prior to or in connection with our initial Business Combination, we may not issue additional shares that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial Business Combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial Business Combination.
−Removed: These provisions of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote.
−Removed: The issuance of additional ordinary or preference shares:
−Removed: may significantly dilute the equity interest of public shareholders, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
−Removed: may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
−Removed: could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
−Removed: may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
−Removed: may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants ;
−Removed: may not result in adjustment to the exercise price of our warrants.
−Removed: Unlike some other similarly structured blank check companies, our sponsor will receive additional Class A ordinary shares if we issue shares to consummate an initial Business Combination.
−Removed: The founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial Business Combination) at the time of our initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination (including the forward purchase shares, but not the forward purchase warrants), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the Business Combination and any Private Placement Warrants issued to our sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans.
−Removed: In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
−Removed: This is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial Business Combination.
−Removed: Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
−Removed: If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
−Removed: Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial Business Combination for any number of reasons including those beyond our control.
−Removed: Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: We may only be able to complete one Business Combination with the proceeds of the Public Offering and the sale of the Private Placement Warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services.
−Removed: This lack of diversification may negatively impact our operations and profitability.
−Removed: The net proceeds from the Public Offering and the sale of the Private Placement Warrants provided us $227,700,000 that we may use to complete our initial Business Combination (which excludes up to approximately $8,050,000, after taking into account the deferred underwriting commissions being held in the Trust Account).
−Removed: In addition , we entered into a forward purchase agreement with our 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 a private placement to occur concurrently with the closing of our initial Business Combination.
−Removed: The forward purchase securities will be issued only in connection with the closing of the initial Business Combination.
−Removed: The proceeds from the sale of forward purchase securities may be used as part of the consideration to the sellers in our initial Business Combination, expenses in connection with our initial Business Combination or for working capital in the post-transaction company.
−Removed: There can be no assurance that the forward purchase will close.
−Removed: We may effectuate our initial Business Combination with a single target business or multiple target businesses simultaneously or within a short period of time.
−Removed: However, we may not be able to effectuate our initial Business Combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
−Removed: By completing our initial Business Combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments.
−Removed: Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.
−Removed: Accordingly, the prospects for our success may be:
−Removed: solely dependent upon the performance of a single business, property or asset;
−Removed: dependent upon the development or market acceptance of a single or limited number of products, processes or services.
−Removed: This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial Business Combination.
−Removed: We may face risks related to companies in the healthcare industry.
−Removed: Business combinations with businesses in the healthcare industry entail special considerations and risks.
−Removed: If we are successful in completing a Business Combination with a target business in the healthcare industry, we will be subject to, and possibly adversely affected by, the following risks:
−Removed: Competition could reduce profit margins.
−Removed: Our inability to comply with governmental regulations affecting the healthcare industry could negatively affect our operations.
−Removed: An inability to license or enforce intellectual property rights on which our business may depend.
−Removed: The success of our planned business following consummation of our initial Business Combination may depend on maintaining a well-secured business and technology infrastructure.
−Removed: If we are required to obtain governmental approval of our products, the production of our products could be delayed and we could be required to engage in a lengthy and expensive approval process that may not ultimately be successful.
−Removed: Changes in the healthcare related wellness industry and markets for such products affecting our customers or retailing practices could negatively impact customer relationships and our results of operations.
−Removed: The healthcare industry is susceptible to significant liability exposure.
−Removed: If liability claims are brought against us following a Business Combination, it could materially adversely affect our operations.
−Removed: Dependence of our operations upon third-party suppliers, manufacturers or contractors whose failure to perform adequately could disrupt our business.
−Removed: A disruption in supply could adversely impact our business.
−Removed: Any of the foregoing could have an adverse impact on our operations following a Business Combination.
−Removed: However, our efforts in identifying prospective target businesses will not be limited to the healthcare sector.
−Removed: Accordingly, if we acquire a target business in another industry, the risks will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.
−Removed: We may attempt to simultaneously complete Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
−Removed: If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other Business Combinations, which may make it more difficult for us, and delay our ability, to complete our initial Business Combination.
−Removed: With multiple Business Combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
−Removed: If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
−Removed: We may attempt to complete our initial Business Combination with a private company about which little information is available, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all.
−Removed: In pursuing our acquisition strategy, we may seek to effectuate our initial Business Combination with a privately held company.
−Removed: Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential Business Combination on the basis of limited information, which may result in an initial Business Combination with a company that is not as profitable as we suspected, if at all.
−Removed: Our management may not be able to maintain control of a target business after our initial Business Combination.
−Removed: Upon the loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
−Removed: We may structure our initial Business Combination so that the post-Business Combination company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act.
−Removed: We will not consider any transaction that does not meet such criteria.
−Removed: Even if the post-Business Combination company owns 50% or more of the voting securities of the target, our shareholders prior to our initial Business Combination may collectively own a minority interest in the post-Business Combination company, depending on valuations ascribed to the target and us in the Business Combination.
−Removed: For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the outstanding stock, shares or other equity interests of a target.
−Removed: In this case, we would acquire a 100% interest in the target.
−Removed: However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction.
−Removed: In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired.
−Removed: Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
−Removed: We may seek Business Combination opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our desired results.
−Removed: We may seek Business Combination opportunities with large, highly complex companies that we believe would benefit from operational improvements.
−Removed: While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the Business Combination may not be as successful as we anticipate.
−Removed: To the extent we complete our initial Business Combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy.
−Removed: Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our Business Combination.
−Removed: If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that we anticipate.
−Removed: Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business.
−Removed: Such combination may not be as successful as a combination with a smaller, less complex organization.
−Removed: We do not have a specified maximum redemption threshold.
−Removed: The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination with which a substantial majority of our shareholders do not agree.
−Removed: Our amended and restated memorandum and articles of association does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 either prior to or upon consummation of an initial Business Combination (so that we do not then become subject to the SEC’s “penny stock” rules).
−Removed: As a result, we may be able to complete our initial Business Combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial Business Combination and do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates.
−Removed: In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
−Removed: In order to effectuate an initial Business Combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements.
−Removed: We cannot be certain that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial Business Combination that our shareholders may not support.
−Removed: In order to effectuate a Business Combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments, including their warrant agreements.
−Removed: For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial Business Combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities.
−Removed: Amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and amending our warrant agreement will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants, 50% of the number of the then outstanding Private Placement Warrants.
−Removed: In addition, our amended and restated memorandum and articles o f association requires us to provide our public shareholders with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 18 months of the IPO Closing Date or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
−Removed: To the extent any of such amendments would be deemed to fundamentally change the nature of any of the securities offered in the Public Offering, we would register, or seek an exemption from registration for, the affected securities.
−Removed: The provisions of our amended and restated memorandum and articles of association that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the agreement governing the release of funds from our Trust Account) may be amended with the approval of a special resolution which requires the approval of the holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, which is a lower amendment threshold than that of some other blank check companies.
−Removed: It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association to facilitate the completion of an initial Business Combination that some of our shareholders may not support.
−Removed: Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to the rights of a company’s shareholders, without approval by a certain percentage of the company’s shareholders.
−Removed: In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company’s shareholders.
−Removed: Our amended and restated memorandum and articles of association provides that any of its provisions related to the rights of holders of our Class A ordinary shares (including the requirement to deposit the proceeds of the Public Offering and the Private Placement Warrants into the Trust Account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein), may be amended if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of at least 65% of our ordinary shares;
−Removed: provided that the provisions of our amended and restated memorandum and articles of association governing (i) the appointment or removal of directors and (ii) continuation of the company in a jurisdiction outside the Cayman Islands, in each case prior to our initial Business Combination, may only be amended by a special resolution passed by not less than two-thirds of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares.
−Removed: Our sponsor and its permitted transferees, if any, who collectively beneficially own, on an as-converted basis, 20% of our Class A ordinary shares as of March 25, 2022, will participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose.
−Removed: As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-Business Combination behavior more easily than some other blank check companies, and this may increase our ability to complete a Business Combination with which the majority of our public shareholders do not agree.
−Removed: Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
−Removed: Our sponsor, executive officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, if any, divided by the number of the then-outstanding public shares.
−Removed: Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers or directors for any breach of these agreements.
−Removed: As a result, in the event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
−Removed: We may be unable to obtain additional financing to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular Business Combination.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: Although we believe that the net proceeds of the Public Offering and the sale of the Private Placement Warrants will be sufficient to allow us to complete our initial Business Combination, because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular transaction.
−Removed: If the net proceeds of the Public Offering and the sale of the Private Placement Warrants prove to be insufficient, either because of the size of our initial Business Combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial Business Combination or the terms of negotiated transactions to purchase shares in connection with our initial Business Combination, we may be required to seek additional financing or to abandon the proposed Business Combination.
−Removed: We cannot be certain that such financing will be available on acceptable terms, if at all.
−Removed: The current economic environment may make it difficult for companies to obtain acquisition financing.
−Removed: To the extent that additional financing proves to be unavailable when needed to complete our initial Business Combination, we would be compelled to either restructure the transaction or abandon that particular Business Combination and seek an alternative target business candidate.
−Removed: If we have not consummated our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.25 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
−Removed: In addition, even if we do not need additional financing to complete our initial Business Combination, we may require such financing to fund the operations or growth of the target business.
−Removed: The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
−Removed: None of our officers, directors or shareholders is required to provide any financing to us in connection with or after our initial Business Combination.
−Removed: Risks Relating to Our Securities
−Removed: Our public shareholders do not have any rights or interests in funds from the Trust Account, except under certain limited circumstances.
−Removed: Therefore, to liquidate their investments, our public shareholders may be forced to sell their public shares or warrants, potentially at a loss.
−Removed: Our public shareholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of:
−Removed: (i) our completion of an initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 18 months from the IPO Closing Date or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, and (i) the redemption of our public shares if we have not consummated an initial Business Combination within 18 months from the IPO Closing Date, subject to applicable law and as further described herein.
−Removed: Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if we have not consummated an initial Business Combination within 18 months from the IPO Closing Date, with respect to such Class A ordinary shares so redeemed.
−Removed: In no other circumstances will a public shareholder have any right or interest of any kind in the Trust Account.
−Removed: Holders of warrants will not have any right to the proceeds held in the Trust Account with respect to the warrants.
−Removed: Accordingly, to liquidate their investment, our public shareholders may be forced to sell their public shares or warrants, potentially at a loss.
−Removed: Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
−Removed: We cannot be certain that our securities will continue to be listed on Nasdaq in the future or prior to our initial Business Combination.
−Removed: In order to continue listing our securities on Nasdaq prior to our initial Business Combination, we must maintain certain financial, distribution and share price levels.
−Removed: Generally, we must maintain a minimum amount in shareholders’ equity and a minimum number of holders of our securities (generally 300 public holders).
−Removed: Additionally, in connection with our initial Business Combination, we will be required to demonstrate compliance with Nasdaq initial listing requirements, which are more rigorous than Nasdaq continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq.
−Removed: For instance, our share price would generally be required to be at least $4.00 per share, our shareholders’ equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities.
−Removed: We cannot be certain that we will be able to meet those initial listing requirements at that time.
−Removed: If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
−Removed: If this were to occur, we could face significant material adverse consequences, including:
−Removed: a limited availability of market quotations for our securities;
−Removed: reduced liquidity for our securities;
−Removed: a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
−Removed: a limited amount of news and analyst coverage;
−Removed: a decreased ability to issue additional securities or obtain additional financing in the future.
−Removed: The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A ordinary shares and warrants will be listed on Nasdaq, our units, Class A ordinary shares and warrants will qualify as covered securities under the statute.
−Removed: Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
−Removed: While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
−Removed: Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
−Removed: Our public shareholders are not entitled to protections normally afforded to investors of many other blank check companies.
−Removed: Since the net proceeds of the Public Offering and the sale of the Private Placement Warrants are intended to be used to complete an initial Business Combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws.
−Removed: However, because we had net tangible assets in excess of $5,000,000 upon the completion of the Public Offering and the sale of the Private Placement Warrants and filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419.
−Removed: Accordingly, investors will not be afforded the benefits or protections of those rules.
−Removed: Among other things, this means our units were immediately tradable and we will have a longer period of time to complete our initial Business Combination than do companies subject to Rule 419.
−Removed: Moreover, if the Public Offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial Business Combination.
−Removed: If we seek shareholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if any shareholder or a “group” of shareholders are deemed to hold Excess Shares, they will lose the ability to redeem all such Excess Shares.
−Removed: If we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent.
−Removed: However, we are not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial Business Combination.
−Removed: Shareholders or groups holding Excess Shares inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial Business Combination and they could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions.
−Removed: Additionally, they will not receive redemption distributions with respect to the Excess Shares if we complete our initial Business Combination.
−Removed: And as a result, such shareholder or group will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell their shares in open market transactions, potentially at a loss.
−Removed: Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
−Removed: If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business.
−Removed: As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
−Removed: Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or as having acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors.
−Removed: We cannot be certain that claims will not be brought against us for these reasons.
−Removed: We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for five years in the Cayman Islands.
−Removed: We may not hold an annual general meeting until after the consummation of our initial Business Combination.
−Removed: In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq.
−Removed: There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint directors.
−Removed: Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to appoint directors and to discuss company affairs with management.
−Removed: Holders of our Class A ordinary shares are not entitled to vote on any appointment of directors we hold prior to our initial Business Combination.
−Removed: Prior to our initial Business Combination, only holders of our founder shares will have the right to vote on the appointment of directors.
−Removed: Holders of our public shares will not be entitled to vote on the appointment of directors during such time.
−Removed: In addition, prior to our initial Business Combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason.
−Removed: Accordingly, public shareholders may not have any say in the management of our company prior to the consummation of an initial Business Combination.
−Removed: Holders of our warrants will not be permitted to exercise their warrants unless we register and qualify the issuance of the Class A ordinary shares or certain other exemptions are available.
−Removed: If the issuance of the Class A ordinary shares upon the exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire worthless.
−Removed: While we have registered the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act in the registration statement of which the prospectus associated with our Public Offering forms a part, we do not plan on keeping a prospectus current until required to do so pursuant to the terms of the warrant agreement.
−Removed: Pursuant to under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days after the closing of our initial Business Combination, we will use our 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 prospectus associated with our Public Offering forms a part or any other applicable registration statement) covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our 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.
−Removed: We cannot be certain that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues a stop order.
−Removed: If the shares issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of Class A ordinary shares that such holder will receive upon cashless exercise will be the number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (as defined below) less the exercise price of the warrants by (y) the fair market value.
−Removed: The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
−Removed: However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
−Removed: Notwithstanding the above, if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
−Removed: Exercising the warrants on a cashless basis could have the effect of reducing the potential “upside” of the holder’s investment in our company because the warrant holder will hold a smaller number of Class A ordinary shares upon a cashless exercise of the warrants they hold.
−Removed: In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available.
−Removed: If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
−Removed: In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units.
−Removed: There may be a circumstance where an exemption from registration exists for holders of our Private Placement Warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in the Public Offering.
−Removed: In such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise their warrants and sell the underlying ordinary shares.
−Removed: If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable state securities laws.
−Removed: As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
−Removed: The warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and holders of public warrants will not have any information regarding such other security at this time.
−Removed: In certain situations, including if we are not the surviving entity in our initial Business Combination, the warrants may become exercisable for a security other than the Class A ordinary shares.
−Removed: As a result, if the surviving company redeems public warrants for securities pursuant to the warrant agreement, holders of public warrants may receive a security in a company of which such holders do not have information at this time.
−Removed: Pursuant to the warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within 20 business days of the closing of an initial Business Combination.
−Removed: The grant of registration rights to our sponsor may make it more difficult to complete our initial Business Combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
−Removed: Pursuant to the registration rights agreement entered into concurrently with the closing of the Public Offering, our sponsor and its permitted transferees can demand that we register the resale of the Class A ordinary shares into which founder shares are convertible, the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants, and warrants that may be issued upon conversion of working capital loans and the Class A ordinary shares issuable upon conversion of such warrants.
−Removed: The registration rights are exercisable with respect to the founder shares and the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of such Private Placement Warrants.
−Removed: Pursuant to the forward purchase agreement, we have agreed to use reasonable best efforts (i) to file within 30 days after the closing of the initial Business Combination a registration statement with the SEC for a secondary offering of the forward purchase securities, (ii) to cause such registration statement to be declared effective promptly thereafter but in no event later than sixty (60) days after the initial filing, (iii) to maintain the effectiveness of such registration statement until the earliest of (A) the date on which our sponsor or its assignees cease to hold the securities covered thereby, and (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (iv) after such registration statement is declared effective, cause us to conduct firm commitment underwritten offerings, subject to certain limitations.
−Removed: In addition, the forward purchase agreement provides for certain “piggy-back” registration rights to the holders of forward purchase securities to include their securities in other registration statements filed by us.
−Removed: We will bear the cost of registering these securities.
−Removed: The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares.
−Removed: In addition, the existence of the registration rights may make our initial Business Combination more costly or difficult to conclude.
−Removed: This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our securities that is expected when the securities owned by our sponsor or its permitted transferees are registered for resale.
−Removed: Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial Business Combination, Public shareholders will be unable to ascertain the merits or risks of any particular target business’s operations.
−Removed: While we intend to focus our efforts for an initial Business Combination within healthcare sector, we may pursue Business Combination opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial Business Combination solely with another blank check company or similar company with nominal operations.
−Removed: Because we have not yet selected any specific target business with respect to a Business Combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects.
−Removed: To the extent we complete our initial Business Combination, we may be affected by numerous risks inherent in the business operations with which we combine.
−Removed: For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity.
−Removed: Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot be certain that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
−Removed: Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
−Removed: We also cannot be certain that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a Business Combination target.
−Removed: Accordingly, any holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
−Removed: Such holders are unlikely to have a remedy for such reduction in value.
−Removed: We may reincorporate in another jurisdiction in connection with our initial Business Combination and such reincorporation may result in taxes imposed on shareholders.
−Removed: We may, in connection with our initial Business Combination and subject to requisite shareholder approval under the Companies Act, reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction.
−Removed: The transaction may cause a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident or in any other jurisdictions in which the shareholder or warrant holder is subject to tax.
−Removed: We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes.
−Removed: Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.
−Removed: We may change our place of incorporation to a U.S.
−Removed: tax jurisdiction (the “Domestication”) and such Domestication may result in adverse tax consequences for holders of our Class A ordinary shares or warrants.
−Removed: Holders (as defined below) of our Class A ordinary shares or warrants may be subject to U.S.
−Removed: federal income tax as a result of a Domestication.
−Removed: Additionally, non-U.S.
−Removed: Holders (as defined below) of our Class A ordinary shares may become subject to withholding tax on any dividends (including deemed dividends) paid on our New Class A ordinary shares subsequent to the Domestication.
−Removed: federal income tax consequences of a Domestication depend in part upon whether the Domestication qualifies as a “reorganization” within the meaning of Section 368 of the Code (as defined below).
−Removed: Assuming that the Domestication so qualifies, U.S.
−Removed: Holders of our Class A ordinary shares may nevertheless recognize gain or, upon election, income equal to the allocable “all earnings and profits” amount under Section 367(b) of the Code.
−Removed: Furthermore, if we are treated as a “passive foreign investment company,” or PFIC, a U.S.
−Removed: Holder of our Class A ordinary shares (or, if certain proposed Treasury Regulations are finalized in their current form, our warrants) may recognize full gain (but not loss) upon the Domestication under the PFIC rules of the Code.
−Removed: All holders are urged to consult their tax advisor for the tax consequences of the Domestication to their particular situation.
−Removed: For a more detailed description of the U.S.
−Removed: federal income tax consequences associated with the Domestication, see “Taxation—United States Federal Income Tax Considerations— Consequences of Domestication.”
−Removed: After our initial Business Combination, it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located outside the United States;
−Removed: therefore investors may not be able to enforce federal securities laws or their other legal rights.
−Removed: It is possible that after our initial Business Combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside of the United States.
−Removed: As a result, it may be difficult, or in some cases not possible , for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
−Removed: We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
−Removed: Although we have no commitments as of the date of this annual report to issue any notes or other debt securities, or to otherwise incur outstanding debt following the Public Offering, we may choose to incur substantial debt to complete our initial Business Combination .
−Removed: We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account.
−Removed: As such, no issuance of debt will affect the per-share amount available for redemption from the Trust Account.
−Removed: Nevertheless, the incurrence of debt could have a variety of negative effects, including:
−Removed: default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
−Removed: acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
−Removed: our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
−Removed: our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
−Removed: our inability to pay dividends on our Class A ordinary shares;
−Removed: using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
−Removed: limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
−Removed: increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
−Removed: limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
−Removed: Our sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that public shareholders do not support.
−Removed: Our sponsor owns, on an as-converted basis, 20% of our issued and outstanding ordinary shares.
−Removed: Accordingly, it may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that public shareholders do not support, including amendments to our amended and restated memorandum and articles of association.
−Removed: In addition, the founder shares, all of which are held by our initial shareholders, will (i) entitle the holders to elect all of our directors prior to our initial Business Combination and (ii) in a vote to continue the Company in a jurisdiction outside the Cayman Islands (which requires the approval of at least two-thirds of the votes of all ordinary shares), entitle the holders to ten votes for every founder share.
−Removed: Holders of our public shares will have no right to vote on the appointment of directors during such time.
−Removed: These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by not less than 90% of our ordinary shares who attend and vote at our general meeting which shall include the affirmative vote of a simple majority of our Class B ordinary shares.
−Removed: As a result, public shareholders will not have any influence over the appointment of directors or our continuation in a jurisdiction outside the Cayman Islands prior to our initial Business Combination.
−Removed: If our sponsor purchases any Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its control.
−Removed: Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus associated with our Public Offering.
−Removed: Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A ordinary shares.
−Removed: In addition, the founder shares, all of which are held by our initial shareholders, will entitle the holders to elect all of our directors prior to our initial Business Combination.
−Removed: We may not hold an annual general meeting to appoint new directors prior to the completion of our initial Business Combination, in which case all of the current directors will continue in office until at least the completion of the Business Combination.
−Removed: Accordingly, our sponsor will continue to exert control at least until the completion of our initial Business Combination.
−Removed: In addition, we have agreed not to enter into a definitive agreement regarding an initial Business Combination without the prior consent of our sponsor.
−Removed: We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then-outstanding public warrants.
−Removed: As a result, the exercise price of the warrants could be increased, the exercise period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all without the approval of the public warrant holders.
−Removed: Our warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.
−Removed: The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in the prospectus associated with our Public Offering, or defective provision or (ii) making any amendments that are necessary in the good faith determination of our board of directors (taking into account then existing market precedents for initial public offerings of special purpose acquisition companies underwritten by bulge bracket investment banks) to allow for the warrants to continue to be classified as equity in our financial statements;
−Removed: provided that no such amendment shall increase the exercise price of the warrants, shorten the exercise period or will, in the aggregate, materially affect the legal rights of registered holders of the then-outstanding public warrants under the warrant agreement, (iii) removing or reducing our ability to redeem the public warrants or (iv) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants, provided that in the case of this clause (iv) the approval by the holders of at least 50% of the then-outstanding public warrants is required to make any change that adversely affects the legal rights of the registered holders of public warrants under the warrant agreement.
−Removed: Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants approve of such amendment and, solely with respect to any amendment to the terms of the Private Placement Warrants or forward purchase warrants or any provision of the warrant agreement with respect to the Private Placement Warrants or forward purchase warrants, 50% of the number of the then outstanding Private Placement Warrants or forward purchase warrants;
−Removed: provided that the warrant agreement may be amended with the vote or written consent of holders of at least 50% of the then outstanding Private Placement Warrants or forward purchase warrants without the consent of any other holder to provide that the Private Placement Warrants or forward purchase warrants (a) will remain Private Placement Warrants or forward purchase warrants, as applicable, when transferred to any party, including parties that are not permitted transferees, or (b) have the same terms as the public warrants, subject to any applicable contractual restrictions or securities law restrictions.
−Removed: Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
−Removed: Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
−Removed: Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim.
−Removed: We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
−Removed: Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
−Removed: Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.
−Removed: If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to:
−Removed: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
−Removed: This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits.
−Removed: Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
−Removed: We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to such warrant holders, thereby making such warrants worthless.
−Removed: We have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described in the warrant agreement) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met.
−Removed: If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants.
−Removed: Redemption of the outstanding warrants could force holders of public warrants to (i) exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous for such holders to do so, (ii) sell their warrants at the then-current market price when such holders might otherwise wish to hold their warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of such holders’ warrants.
−Removed: The value received upon exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants.
−Removed: Our warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial Business Combination.
−Removed: We issued warrants to purchase 7,666,667 Class A ordinary shares as part of the Units sold in the Public Offering.
−Removed: Each Unit contains one-third of one redeemable warrant to purchase one Class A ordinary share at $11.50 per share, subject to adjustment as provided herein.
−Removed: On September 27, 2021, we announced that holders of the Units sold in the Public Offering may elect to separately trade the Class A ordinary shares and warrants comprising the Units commencing September 30, 2021.
−Removed: Additionally, we sold 8,233,333 Private Placement Warrants at a price of $1.50 per warrant, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment.
−Removed: In addition, if the sponsor, its affiliates or a member of our management team makes any working capital loans, it may convert up to $2,000,000 of such loans into up to an additional 1,333,333 Private Placement Warrants, at the price of $1.50 per warrant.
−Removed: We may also issue up to 3,333,333 forward purchase warrants pursuant to the forward purchase agreement.
−Removed: We may also issue Class A ordinary shares in connection with our redemption of our warrants.
−Removed: To the extent we issue ordinary shares for any reason, including to effectuate a Business Combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business.
−Removed: Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business transaction.
−Removed: Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
−Removed: Because each unit contains one-third of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
−Removed: Each unit contains one-third of one redeemable warrant.
−Removed: Pursuant to the warrant agreement, no fractional warrants were issued upon separation of the units, and only whole units trade.
−Removed: On September 27, 2021, we announced that holders of the Units included in the Public Offering may elect to separately trade the Class A ordinary shares and warrants comprising the Units commencing September 30, 2021.
−Removed: If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the warrant holder.
−Removed: This is different from other offerings similar to ours whose units include one ordinary share and one whole warrant to purchase one whole share.
−Removed: We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-third of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses.
−Removed: Nevertheless, this unit structure may cause our units to be worth less than if a unit included a warrant to purchase one whole share.
−Removed: A provision of our warrant agreement may make it more difficult for us to consummate an initial Business Combination.
−Removed: Unlike most blank check companies, if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial Business Combination at a Newly Issued Price of less than $9.20 per ordinary share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial Business Combination on the date of the consummation of our initial Business Combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described in the warrant agreeement will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
−Removed: This may make it more difficult for us to consummate an initial Business Combination with a target business.
−Removed: Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination with some prospective target businesses.
−Removed: The federal proxy rules require that a proxy statement with respect to a vote on a Business Combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports.
−Removed: We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
−Removed: These financial statements may be required to be prepared in accordance with, or be reconciled to GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB.
−Removed: These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial Business Combination within the prescribed time frame.
−Removed: Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a Business Combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
−Removed: Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2022.
−Removed: Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
−Removed: The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
−Removed: The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
−Removed: Because we are incorporated under the laws of the Cayman Islands, public shareholders may face difficulties in protecting their interests, and their ability to protect their rights through the U.S.
−Removed: federal courts may be limited.
−Removed: We are an exempted company incorporated under the laws of the Cayman Islands.
−Removed: As a result, it may be difficult for our shareholders to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
−Removed: Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands.
−Removed: We are also be subject to the federal securities laws of the United States.
−Removed: The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
−Removed: The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands.
−Removed: The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States.
−Removed: In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law.
−Removed: In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
−Removed: We have been advised by Maples and Calder (Cayman) LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;
−Removed: and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature.
−Removed: In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.
−Removed: For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
−Removed: A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
−Removed: As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
−Removed: Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
−Removed: Our amended and restated memorandum and articles of association contains provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.
−Removed: These provisions include a the ability of the board of directors to designate the terms of and issue new series of preference shares and the fact that prior to the completion of our initial Business Combination only holders of our Class B ordinary shares, which have been issued to our sponsor, are entitled to vote on the appointment of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
−Removed: Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
−Removed: We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
−Removed: Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data.
−Removed: As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
−Removed: We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
−Removed: It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
−Removed: Since only holders of our founder shares will have the right to vote on the appointment of directors, Nasdaq considers us to be a “controlled company” within the meaning of Nasdaq rules and, as a result, we qualify for exemptions from certain corporate governance requirements.
−Removed: Prior to the initial Business Combination, only holders of our founder shares will have the right to vote on the appointment of directors.
−Removed: As a result, Nasdaq considers us to be a “controlled company” within the meaning of the Nasdaq corporate governance standards.
−Removed: Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:
−Removed: we have a board that includes a majority of “independent directors,” as defined under the rules of Nasdaq;
−Removed: we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
−Removed: we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities .
−Removed: We do not intend to utilize these exemptions and are in compliance with the corporate governance requirements of Nasdaq, subject to applicable phase-in rules .
−Removed: However, if we determine in the future to utilize some or all of these exemptions, public shareholders will not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
−Removed: Risks Relating to Our Management Team
−Removed: We are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.
−Removed: Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors.
−Removed: We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial Business Combination.
−Removed: In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence.
−Removed: We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers.
−Removed: The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
−Removed: Our ability to successfully effect our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial Business Combination.
−Removed: The loss of key personnel could negatively impact the operations and profitability of our post- combination business.
−Removed: Our ability to successfully effect our initial Business Combination is dependent upon the efforts of our key personnel.
−Removed: We believe that our success depends on the continued service of our key personnel, at least until we have consummated our initial Business Combination.
−Removed: None of our officers are required to commit any specified amount of time to our affairs and, accordingly, they will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence.
−Removed: If our officers’ and directors’ other business affairs require them to devote more substantial amounts of time to their other business activities, it could limit their ability to devote time to our affairs and could have a negative impact on our ability to consummate our initial Business Combination.
−Removed: In addition, we do not have employment agreements with, or key-man insurance on the life of, any of our officers.
−Removed: The unexpected loss of the services of our key personnel could have a detrimental effect on us.
−Removed: The role of our key personnel after our initial Business Combination, however, remains to be determined.
−Removed: Although some of our key personnel serve in senior management or advisory positions following our initial Business Combination, it is likely that most, if not all, of the management of the target business will remain in place.
−Removed: These individuals may be unfamiliar with the requirements of operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements.
−Removed: This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
−Removed: Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination, and a particular Business Combination may be conditioned on the retention or resignation of such key personnel.
−Removed: These agreements may provide for them to receive compensation following our initial Business Combination and as a result, may cause them to have conflicts of interest in determining whether a particular Business Combination is the most advantageous.
−Removed: Our key personnel may be able to remain with our company after the completion of our initial Business Combination only if they are able to negotiate employment or consulting agreements in connection with the Business Combination.
−Removed: Such negotiations would take place simultaneously with the negotiation of the Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the Business Combination.
−Removed: Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement.
−Removed: The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business.
−Removed: In addition, pursuant to an agreement entered into substantially concurrently with the closing of the Public Offering, our sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for appointment to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
−Removed: We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial Business Combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
−Removed: When evaluating the desirability of effecting our initial Business Combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information.
−Removed: Our assessment of the capabilities of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
−Removed: Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
−Removed: Accordingly, any holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
−Removed: Such holders are unlikely to have a remedy for such reduction in value.
−Removed: The officers and directors of an acquisition candidate may resign upon completion of our initial Business Combination.
−Removed: The loss of a Business Combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: The role of an acquisition candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
−Removed: This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.
−Removed: Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a Business Combination and their other businesses.
−Removed: We do not intend to have any full-time employees prior to the completion of our initial Business Combination.
−Removed: Each of our executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to our affairs.
−Removed: Our independent directors also serve as officers and board members for other entities.
−Removed: If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial Business Combination.
−Removed: For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management—Officers and Directors.”
−Removed: Our officers and directors presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: Until we consummate our initial Business Combination, we intend to engage in the business of identifying and combining with one or more businesses or entities.
−Removed: Each of our officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law.
−Removed: Accordingly , they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
−Removed: For a complete discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that shareholders should be aware of, please see “Item 10.
−Removed: Directors, Executive Officers and Corporate Governance—Conflicts of Interest.”
−Removed: Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
−Removed: We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
−Removed: In fact, we may enter into a Business Combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so.
−Removed: Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us.
−Removed: Accordingly, such persons or entities may have a conflict between their interests and ours.
−Removed: The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a Business Combination.
−Removed: Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular Business Combination are appropriate and in our shareholders’ best interest.
−Removed: If this were the case, it would be a breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders’ rights.
−Removed: However, we might not ultimately be successful in any claim we may make against them for such reason.
−Removed: We may engage in a Business Combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers, directors or initial shareholders which may raise potential conflicts of interest.
−Removed: In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers, directors or initial shareholders.
−Removed: Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Item 10.
−Removed: Directors, Executive Officers and Corporate Governance.” Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial Business Combination with any entities with which they are affiliated, and there have been no substantive discussions concerning a Business Combination with any such entity or entities.
−Removed: Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a Business Combination as set forth in “Item 1.
−Removed: Business—Effecting Our Initial Business Combination—Evaluation of a Target Business and Structuring of Our Initial Business Combination” ” and such transaction was approved by a majority of our independent and disinterested directors.
−Removed: Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or another independent entity that commonly renders valuation opinions regarding the fairness to our company from a financial point of view of a Business Combination with one or more domestic or international businesses affiliated with our sponsor, executive officers, directors or initial shareholders, potential conflicts of interest still may exist and, as a result, the terms of the Business Combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
−Removed: Avista is not under any obligation to source any potential opportunities for our initial Business Combination.
−Removed: Avista has a duty to offer Business Combination opportunities to certain Avista funds before we have the opportunity to pursue such transactions, which could have otherwise been attractive Business Combination opportunities for us.
−Removed: Avista may become aware of a potential Business Combination opportunity that may be an attractive opportunity for our company.
−Removed: However, Avista is not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our company or provide any other services to our company.
−Removed: Avista’s role with respect to our company is expected to be primarily passive and advisory in nature.
−Removed: Avista has fiduciary and contractual duties to its investment vehicles and to certain companies in which Avista has invested.
−Removed: As a result, Avista has a duty to offer Business Combination opportunities to certain Avista funds before we have the opportunity to pursue such transactions, which could have otherwise been attractive Business Combination opportunities for us.
−Removed: Additionally, certain companies in which Avista has invested may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial Business Combination.
−Removed: Transactions of these types may present a conflict of interest because Avista may directly or indirectly receive a financial benefit as a result of such transaction.
−Removed: Since our sponsor, executive officers and directors will lose their entire investment in us if our initial Business Combination is not completed (other than with respect to public shares they may have acquired during after the Public Offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial Business Combination.
−Removed: On February 12, 2021, our sponsor paid $25,000 to cover certain expenses on our behalf in consideration for issuance of 5,750,000 Class B ordinary shares, or approximately $0.004 per share.
−Removed: Prior to the initial investment in the company of $25,000 by the sponsor, the company had no assets, tangible or intangible.
−Removed: Prior to the closing of the Public Offering, our sponsor transferred 35,000 Class B ordinary shares to each of William E.
−Removed: Klitgaard, Lâle White and Wendel Barr, each of whom serve on our board of directors.
−Removed: The per share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder shares issued.
−Removed: The founder shares will be worthless if we do not complete an initial Business Combination.
−Removed: In addition, our sponsor purchased an aggregate of 8,233,333 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment, at a price of $1.50 per warrant ($11,000,000 in the aggregate or $12,350,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that closed simultaneously with the closing of the Public Offering.
−Removed: If we do not consummate an initial Business Combination within 18 months from the closing of the Public Offering, the Private Placement Warrants will expire worthless.
−Removed: The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target Business Combination, completing an initial Business Combination and influencing the operation of the business following the initial Business Combination.
−Removed: This risk may become more acute as the 18-month anniversary of the closing of the Public Offering nears, which is the deadline for our consummation of an initial Business Combination.
−Removed: Members of our management team and board of directors have significant experience as founders, board members, officers, executives or employees of other companies.
−Removed: Certain of those persons have been, may be, or may become, involved in litigation, investigations or other proceedings, including related to those companies or otherwise.
−Removed: This may have an adverse effect on us, which may impede our ability to consummate an initial Business Combination.
−Removed: During the course of their careers, members of our management team and board of directors have had significant experience as founders, board members, officers, executives or employees of other companies.
−Removed: Certain of those persons have been, may be or may in the future become involved in litigation, investigations or other proceedings, including relating to the business affairs of such companies, transactions entered into by such companies, or otherwise.
−Removed: Any litigation, investigations or other proceedings may divert the attention and resources of our management team and board of directors away from identifying and selecting a target business or businesses for our initial Business Combination and may negatively affect our reputation, which may impede our ability to complete an initial Business Combination.
−Removed: Risks Associated with Acquiring and Operating a Business in Foreign Countries
−Removed: If we pursue a target company with operations or opportunities outside of the United States for our initial Business Combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial Business Combination, and if we effect such Business initial Combination, we would be subject to a variety of additional risks that may negatively impact our operations.
−Removed: If we pursue a target company with operations or opportunities outside of the United States for our initial Business Combination, we would be subject to risks associated with cross-border Business Combinations, including in connection with investigating, agreeing to and completing our initial Business Combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
−Removed: If we effect our initial Business Combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
−Removed: costs and difficulties inherent in managing cross-border business operations;
−Removed: rules and regulations regarding currency redemption;
−Removed: complex corporate withholding taxes on individuals;
−Removed: laws governing the manner in which future Business Combinations may be effected;
−Removed: exchange listing and/or delisting requirements;
−Removed: tariffs and trade barriers;
−Removed: regulations related to customs and import/export matters;
−Removed: local or regional economic policies and market conditions;
−Removed: unexpected changes in regulatory requirements;
−Removed: longer payment cycles;
−Removed: tax issues, such as tax law changes and variations in tax laws as compared to the United States;
−Removed: currency fluctuations and exchange controls;
−Removed: rates of inflation ;
−Removed: challenges in collecting accounts receivable;
−Removed: cultural and language differences;
−Removed: employment regulations ;
−Removed: underdeveloped or unpredictable legal or regulatory systems;
−Removed: protection of intellectual property;
−Removed: social unrest, crime , strikes, riots and civil disturbances;
−Removed: regime changes and political upheaval;
−Removed: terrorist attacks , natural disasters and wars;
−Removed: deterioration of political relations with the United States.
−Removed: We may not be able to adequately address these additional risks.
−Removed: If we were unable to do so, we may be unable to complete such initial Business Combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results of operations.
−Removed: If our management following our initial Business Combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
−Removed: Following our initial Business Combination, our management may resign from their positions as officers or directors of the company and the management of the target business at the time of the Business Combination will remain in place.
−Removed: Management of the target business may not be familiar with United States securities laws.
−Removed: If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws.
−Removed: This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
−Removed: After our initial Business Combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in any such country.
−Removed: Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and social conditions and government policies, developments and conditions in the country in which we operate.
−Removed: The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business.
−Removed: Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
−Removed: If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries.
−Removed: A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial Business Combination and if we effect our initial Business Combination, the ability of that target business to become profitable.
−Removed: Exchange rate fluctuations and currency policies may cause a target business’s ability to succeed in the international markets to be diminished.
−Removed: In the event we acquire a non-U.S.
−Removed: target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency.
−Removed: The value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic conditions.
−Removed: Any change in the relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial Business Combination, our financial condition and results of operations.
−Removed: Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial Business Combination, the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate such transaction.
−Removed: We may reincorporate in another jurisdiction in connection with our initial Business Combination, and the laws of such jurisdiction may govern some or all of our future material agreements and we may not be able to enforce our legal rights.
−Removed: In connection with our initial Business Combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction.
−Removed: If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements.
−Removed: The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States.
−Removed: The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
−Removed: We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
−Removed: We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law.
−Removed: Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from seeking a Business Combination target.
−Removed: Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
−Removed: This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.
−Removed: If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
+Added: You should carefully consider the risks and uncertainties described below, together with the other information in this Annual Report, including our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making an investment in our securities.
+Added: We cannot assure you that any of the events discussed in the risk factors below will not occur.
+Added: These risks could have a material and adverse impact on our business, results of operations, financial condition and growth prospects.
+Added: If that were to happen, the trading price of our securities could decline.
+Added: Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations or financial condition.
+Added: In this section, we first provide a summary of the principal risks and uncertainties we face and then provide a full set of risk factors and discuss them in greater detail.
+Added: Summary of Risks Related to our Business:
+Added: Our business is subject to numerous risks and uncertainties, including those described below.
+Added: The principal risks and uncertainties affecting our business include, but are not limited to, the following:
+Added: • We have incurred losses on an as-reported basis for the last three years, and we may not be able to generate sufficient revenue to achieve and maintain profitability.
+Added: • Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.
+Added: • Our commercial success depends on the quality of our antibody discovery platform and technological capabilities and their acceptance by new and existing partners in our market.
+Added: • Our future success is dependent on the eventual approval and commercialization of products developed by our partners for which we have no control over the clinical development plan, regulatory strategy or commercialization efforts.
+Added: • If we cannot maintain and expand current partnerships and enter into new partnerships, our future operating results would be adversely affected.
+Added: • Our partners may not achieve projected discovery and development milestones and other anticipated key events in the expected timelines or at all, which could have an adverse impact on our business and could cause the price of our common stock to decline.
+Added: • The life sciences and biotech platform technology market is highly competitive, and if we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue, or sustain profitability.
+Added: • We rely on third parties to host our mouse and rat colonies to supply laboratory equipment and materials.
+Added: • If we are unable to obtain and maintain sufficient intellectual property protection for our platform and technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technologies or a platform similar or identical to ours, and our ability to successfully sell our platform and services may be impaired.
+Added: • We rely on in-licenses from third parties.
+Added: If we lose these rights, our business may be materially and adversely affected, our ability to develop improvements to our technology platform and antibody discovery platform may be negatively and substantially impacted, and if disputes arise, we may be subjected to future litigation, as well as the potential loss of or limitations on our ability to incorporate the technology covered by these license agreements.
+Added: • Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price.
+Added: • The market price of our Common Stock and Warrants is likely to be highly volatile, and you may lose some or all of your investment.
+Added: • Sales of a substantial number of our securities in the public market by the Selling Securityholders and/or by our existing securityholders could cause the prices of our Common Stock and Warrants to fall.
+Added: Risks Related to Our Business
+Added: We have incurred losses on an as-reported basis for the last three years, and we may not be able to generate sufficient revenue to achieve and maintain profitability.
+Added: Historically, we have incurred net losses, as reported on a combined basis.
+Added: For the years ended December 31, 2022 and 2021, our revenue was $59.1 million and $34.7 million, respectively.
+Added: For the years ended December 31, 2022 and 2021, our net loss was $22.3 million and $27.0 million, respectively.
+Added: We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase substantially as we invest in research and development activities to improve our OmniAb technology platform, market and sell our technologies to existing and new partners, add operational, financial and management information systems and personnel to support our operations and incur additional costs associated with operating as a public company.
+Added: Our expenses could increase beyond expectations for a variety of reasons, including as a result of our growth strategy and the expansion of our operations.
+Added: We will need to generate significant additional revenue to achieve and sustain profitability and even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.
+Added: We may never be able to generate sufficient revenue to achieve or sustain profitability and our recent and historical growth should not be considered indicative of our future performance.
+Added: Our failure to become and remain profitable may have an adverse effect on the value of our company and could impair our ability to raise capital, expand our business and maintain our research and development efforts.
+Added: A decline in the value of our company could also cause you to lose all or part of your investment.
+Added: Our revenue has fluctuated from period to period, and our revenue for any historical period may not be indicative of results that may be expected for any future period.
+Added: Service and license revenue are generated by research activities that we perform for our partners and technology access fees, the timing and nature of which are dictated by the commencement of discovery campaigns selected by our partners.
+Added: We also generate milestone payments upon the achievement of development milestones by our partners with respect to the antibodies discovered using our platform and royalties based on the net sales of any products commercialized by our partners.
+Added: As a result, we will be prone to fluctuations in our revenue depending on the timing of our entry into license agreements with our partners, our partners initiating discovery programs, and our partners achieving development milestones or commercial sales with respect to therapeutic candidates utilizing antibodies discovered using our platform.
+Added: The timing and likelihood of payments to us under these agreements is dependent on our partners’ successful utilization of the antibodies discovered using our platform, which is outside of our control.
+Added: Because of these factors, our revenue could vary materially from quarter to quarter from our forecasts.
+Added: Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide.
+Added: Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results.
+Added: These fluctuations may occur due to a variety of factors, many of which are outside of our control, including, but not limited to:
+Added: • the level of demand for our technology platform and solutions, which may vary significantly;
+Added: • the timing and cost of, and level of investment in, research, development and commercialization activities relating to our platform and technology and any of our internal development programs, which may change from time to time;
+Added: • the start and completion of programs in which our platform is utilized;
+Added: • the timing of and the degree to which our partners successfully develop, secure marketing approvals for and commercialize any therapeutic candidates based on the antibodies discovered using our platform;
+Added: • the introduction of new technologies, platform features or software, by us or others in our industry;
+Added: • expenditures that we may incur to acquire, develop or commercialize additional platform technologies;
+Added: • the degree of competition in our industry and any change in the competitive landscape of our industry, including consolidation among our competitors or future partners;
+Added: • the level of demand for any products commercialized by our partners, which may vary significantly;
+Added: • natural disasters, outbreaks of disease or public health crises, such as the COVID-19 pandemic;
+Added: • the timing and nature of any future acquisitions or strategic partnerships;
+Added: • future accounting pronouncements or changes in our accounting policies;
+Added: • changes in general market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk.
+Added: The cumulative effects of these factors could result in large fluctuations and unpredictability in our quarterly and annual operating results and revenues.
+Added: This variability and unpredictability could result in our failing to meet the expectations of industry or financial analysts or investors for any period.
+Added: If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our common stock could decline substantially.
+Added: Such a stock price decline could occur even when we have met any previously publicly stated revenue or earnings guidance we may provide.
+Added: Our commercial success depends on the quality of our antibody discovery platform and technological capabilities and their acceptance by new and existing partners in our market.
+Added: We utilize our OmniAb technology platform to discover antibodies for further development and potential commercialization by our partners.
+Added: As a result, the quality and sophistication of our platform is critical to our ability to conduct our research discovery activities and to deliver more promising antibodies and other drugs and to accelerate and lower the costs of discovery as compared to traditional methods for our partnerships.
+Added: In particular, our business depends, among other things, on:
+Added: • our platform’s ability to successfully identify antibodies with therapeutic potential on the desired timeframes;
+Added: • our ability to execute on our strategy to enter into new partnerships with new or existing partners with economic terms that are acceptable to us;
+Added: • our ability to increase awareness of the capabilities of our technology and solutions;
+Added: • our partners’ and potential partners’ willingness to adopt new technologies;
+Added: • whether our platform reliably provides advantages over legacy and other alternative technologies and is perceived by partners to be cost effective;
+Added: • the rate of adoption of our technologies by pharmaceutical and biotechnology companies of all sizes and capabilities;
+Added: • the prices we charge for our technology access and the research services we perform;
+Added: • the relative reliability and robustness of our platform;
+Added: • our ability to develop new solutions for partners;
+Added: • whether competitors develop a platform that enables antibody discovery more effectively than our platform;
+Added: • the status of the market for next-generation biologics, which may become less attractive due to business, competitive or regulatory factors;
+Added: • the timing and scope of any approval that may be required by the U.S.
+Added: Food and Drug Administration (“FDA”), European Medicines Agency (“EMA”), comparable foreign authorities or any other regulatory body to commercialize therapeutic candidates that are developed based on antibodies or other drugs discovered using our platform;
+Added: • the impact of our investments in innovation and commercial growth;
+Added: • our ability to further validate our technology through research and accompanying publications.
+Added: There can be no assurance that we will successfully address any of these or other factors that may affect the market acceptance of our platform.
+Added: Failure of antibodies discovered using our platform can occur at any stage of discovery, preclinical or clinical development, and any such failures may reduce our partners’ confidence in our platform.
+Added: We also believe that pharmaceutical and biotechnology companies are likely to be particularly sensitive to defects and errors in the use of our platform, including if our platform fails to deliver meaningful acceleration of certain research timelines accompanied by results at least as good as the results generated using legacy or other alternative technologies.
+Added: There can be no guarantee that our platform will meet the expectations of pharmaceutical and biotechnology companies.
+Added: If we are unsuccessful in achieving and maintaining market acceptance of our platform, our business, financial condition, results of operations and prospects could be adversely affected.
+Added: Our future success is dependent on the eventual approval and commercialization of products developed by our partners for which we have no control over the clinical development plan, regulatory strategy or commercialization efforts.
+Added: Our business model is dependent on the eventual progression of therapeutic candidates discovered or initially developed utilizing our platform into clinical trials and commercialization.
+Added: This requires us to attract partners and enter into agreements with them that contain obligations for the partners to pay us milestone payments as well as royalties on sales of approved products for the therapeutic candidates they develop that are generated utilizing our platform.
+Added: Given the nature of our relationships with our partners, we do not control the progression, clinical development, regulatory strategy or eventual commercialization, if approved, of these therapeutic candidates.
+Added: As a result, our future success and the potential to receive milestones and royalties are entirely dependent on our partners’ efforts over which we have no control.
+Added: Additionally, unless publicly disclosed by our partners, we do not have access to information related to our partners’ clinical trial results, including serious adverse events, or ongoing communications with the FDA or other foreign regulatory authorities regarding our partners’
+Added: current clinical programs, which limits our visibility into how such programs may be progressing.
+Added: If our partners determine not to proceed with the future development of a drug candidate discovered or initially developed utilizing our platform, or if they implement clinical or regulatory strategies that ultimately do not result in the further development or approval of the therapeutic candidates, we will not receive the benefits of our partnerships, which may have a material and adverse effect on our operations.
+Added: In addition, biopharmaceutical development is inherently uncertain and very few therapeutic candidates ultimately progress through clinical development and receive approval for commercialization.
+Added: If our partners do not receive regulatory approval for a sufficient number of therapeutic candidates originating from our partnerships, we may not be able to sustain our business model.
+Added: Further, we have little control over how diversified our portfolio of potential milestone payments or royalties will end up being.
+Added: In addition, we do not control the timing of disclosure by our partners of any milestones or other information related to any therapeutic candidates generated using our platform.
+Added: Any disclosure by us or our partners of data or other information regarding any such therapeutic candidates that is perceived as negative may have a material adverse impact on our stock price or overall valuation.
+Added: Our stock price may also decline as a result of negative clinical trial results, including adverse safety events involving any drug candidate that is subject to one of our partnerships.
+Added: We may need to raise additional capital to fund our existing operations and achieve our goals.
+Added: If we are unable to raise additional capital when needed on acceptable terms or generate cash flows necessary to maintain or expand our operations, we may not be able to compete successfully, which would harm our business, results of operations, and financial condition.
+Added: Based on our current business plan, we believe our existing cash and cash equivalents, together with our anticipated cash flows from operations, will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months.
+Added: If such cash and cash equivalents, together with our anticipated cash flow from operations, are insufficient to satisfy our liquidity requirements including because of increased expenditures or lower demand for our platform, or the realization of other risks described in this report, we may be required to raise additional capital prior to such time through issuances of public or private equity or debt financings or other capital sources.
+Added: Such additional financing may not be available on terms acceptable to us or at all.
+Added: In any event, we may consider raising additional capital in the future to expand our business, to pursue strategic investments or acquisitions, to take advantage of favorable market conditions or financing opportunities or for other reasons, even if we believe we have sufficient funds for our current or future operating plans.
+Added: Our future capital requirements will depend on many factors, including, but not limited to:
+Added: • our ability to achieve revenue growth;
+Added: • the costs of expanding our operations, including our business development and marketing efforts;
+Added: • our rate of progress in selling access to our platform and marketing activities associated therewith;
+Added: • our rate of progress in, and cost of research and development activities associated with, our platform technologies and our internal development programs to the extent we pursue any such programs;
+Added: • the effect of competing technological and market developments;
+Added: • the impact of the COVID-19 pandemic or other epidemic diseases on global social, political and economic conditions;
+Added: • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company;
+Added: • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents and other intellectual property and proprietary rights;
+Added: • the costs associated with any technologies that we may in-license or acquire.
+Added: The various ways we could raise additional capital carry potential risks.
+Added: To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder.
+Added: Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
+Added: Such restrictions could adversely impact our ability to conduct our operations and execute our business plan.
+Added: If we are unable to obtain adequate financing, if we require it, when needed or on terms acceptable to us, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances could be significantly limited, and could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: If we cannot maintain and expand current partnerships and enter into new partnerships, our future operating results would be adversely affected.
+Added: We primarily focus our efforts on the discovery of antibodies for our partners, who can select a target and define the antibody properties needed for therapeutic development or use our technology directly in their own labs.
+Added: As a result, our success depends on our ability to maintain and expand the number and scope of our partnerships.
+Added: Many factors may impact the success of these partnerships, including our ability to perform our obligations, our partners’ satisfaction with our solutions and technologies, our partners’ ability to successfully develop, secure regulatory approval for and commercialize therapeutic candidates using antibodies discovered using our platform, our partners’ internal priorities (including fluctuations in research and developments budgets), our partners’ resource allocation decisions and competitive opportunities, disagreements with partners, the costs required of either party to the partnerships and related financing needs, and operating, legal and other risks in any relevant jurisdiction.
+Added: Our existing partners may cease to use our technologies depending on their own technological developments, availability of other competing technologies and internal decisions regarding allocation of time and resources to the discovery and development of therapeutic candidates, over which we have no control.
+Added: Our existing and future partners may have limited bandwidth to initiate new programs, which could limit their adoption or scale of application of our technologies.
+Added: We engage in conversations with companies regarding potential partnerships on an ongoing basis.
+Added: These conversations may not result in a commercial agreement.
+Added: Even if an agreement is reached, the resulting relationship may not be successful, including due to our inability to discover any usable antibodies for the selected targets or the antibodies that we do discover may not be successfully developed or commercialized by our partners.
+Added: In such circumstances, we would not generate any substantial revenues from such a partnership in the form of technology access fees, service fees, milestone payments, royalties or otherwise.
+Added: Speculation in the industry about our existing or potential partnerships may be a catalyst for adverse speculation about us, or our platform, which can adversely affect our reputation and our business.
+Added: We cannot assure investors that we will be able to maintain or expand our existing partnerships or that our technologies will achieve adequate market adoption among new partners.
+Added: Any failure to increase penetration in our existing markets or new markets would adversely affect our ability to improve our operating results.
+Added: In recent periods, we have depended on a limited number of partners for our revenue, the loss of any of which could have an adverse impact on our business.
+Added: In recent periods, a limited number of partners accounted for a significant portion of our revenue.
+Added: For the years ended December 31, 2022 and 2021, three of our partners accounted for 72% and 63% respectively, of our revenue, and 36 and 26 partners accounted for the remaining 28% and 37%, respectively, of our revenue.
+Added: While moving forward we expect to diversify the number of partners and programs, in the near term these partners represent a large portion of potential revenue.
+Added: Our license agreements are typically terminable by our partners without penalty with specified notice, which would terminate their access to our technology platform, although we would retain downstream economics on any OmniAb-derived antibody.
+Added: As a result, if we fail to maintain our relationships with these partners or if these partners discontinue their programs, our future results of operations could be materially and adversely affected.
+Added: Biopharmaceutical development is inherently uncertain, and it is possible that none of the therapeutic candidates discovered using our platform that are further developed by our partners will become viable commercial products, on a timely basis or at all.
+Added: We use our platform to offer antibody drug-discovery programs to partners who are engaged in drug discovery and development.
+Added: These partners include pharmaceutical and biotechnology companies of all sizes.
+Added: While we receive upfront payments generated through our receipt of service revenue and technology access fees, we expect that the vast majority of the economic value of the agreements we enter into with our partners is in the downstream payments that we may receive upon achievement of development milestones and royalties on sales of any approved products.
+Added: As a result, our future growth is dependent on the ability of our partners to successfully develop and commercialize therapies based on antibodies discovered using our platform.
+Added: Due to our reliance on our partners, the risks relating to product development, regulatory clearance, authorization or approval and commercialization apply to us derivatively through the activities of our partners.
+Added: While we believe our platform is capable of identifying high quality antibodies, there can be no assurance that our partners will successfully develop, secure marketing approvals for and commercialize any therapeutic candidates based on the antibodies discovered using our platform.
+Added: As a result, we may not realize the intended benefits of our partnerships.
+Added: Neither we nor our partners are permitted to market any therapeutic candidate until we or they receive regulatory approval of a New Drug Application (“NDA”) or Biologics License Application (“BLA”) from the FDA in the United States or until we or they receive regulatory approval from foreign regulatory authorities in other countries.
+Added: The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities.
+Added: In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a therapeutic candidate’s clinical development and may vary among jurisdictions.
+Added: For instance, the regulatory landscape related to clinical trials in the European Union (the “EU”) recently evolved.
+Added: The EU Clinical Trials Regulation (“CTR”) which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.
+Added: While the Clinical Trials Directive required a separate clinical trial application (“CTA”) to be submitted in each member state, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application to all member states concerned.
+Added: The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each member state, leading to a single decision per member state.
+Added: The assessment procedure of the CTA has been harmonized as well, including a joint assessment by all member states concerned, and a separate assessment by each member state with respect to specific requirements related to its own territory, including ethics rules.
+Added: Each member state’s decision is communicated to the sponsor via the centralized EU portal.
+Added: Once the CTA is approved, clinical study development may proceed.
+Added: The CTR foresees a three-year transition period.
+Added: The extent to which ongoing and new clinical trials will be governed by the CTR varies.
+Added: Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted for the application of the EU Clinical Trials Directive remain governed by said Directive until January 31, 2025.
+Added: After this date, all clinical trials (including those which are ongoing) will become subject to the provisions of the CTR.
+Added: It is currently unclear to what extent the United Kingdom (“UK”) will seek to align its regulations with the EU.
+Added: The UK regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation).
+Added: On January 17, 2022, the UK Medicines and Healthcare products Regulatory Agency (“MHRA”) launched an eight-week consultation on reframing the UK legislation for clinical trials.
+Added: The consultation closed on March 14, 2022 and aims to streamline clinical trials approvals, enable innovation, enhance clinical trials transparency, enable greater risk proportionality, and promote patient and public involvement in clinical trials.
+Added: The outcome of the consultation is being closely watched and will determine whether the UK chooses to align with the (EU) CTR or diverge from it to maintain regulatory flexibility.
+Added: Under the terms of the Protocol on Ireland/Northern Ireland, provisions of the CTR which relate to the manufacture and import of investigational medicinal products and auxiliary medicinal products apply in Northern Ireland.
+Added: A decision by the UK Government not to closely align its regulations with the new approach that has been adopted in the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other countries.
+Added: Further, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.
+Added: The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially revising the duration of regulatory exclusivity, eligibility for expedited pathways, etc.) is currently expected during the first quarter of 2023.
+Added: The proposed revisions, once they are agreed and adopted by the European Parliament and European Council (not expected before the end of 2024 or early of 2025) may have a significant impact on the biopharmaceutical industry in the long term.
+Added: If we or our partners are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, development plans may be impacted.
+Added: Prior to obtaining approval to commercialize a therapeutic candidate in the United States or abroad, our partners must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA, EMA or comparable foreign regulatory agencies, that such therapeutic candidates are safe and effective, or in the case of biologics in the U.S., safe, pure, and potent, for their intended uses.
+Added: Results from nonclinical studies and clinical trials can be interpreted in different ways.
+Added: Even if we or our partners believe the nonclinical or clinical data for any therapeutic candidates are promising, such data may not be sufficient to support approval by the FDA and other comparable regulatory authorities.
+Added: The FDA or comparable foreign regulatory bodies can delay, limit or deny approval of therapeutic candidates or could require our partners to conduct additional nonclinical or clinical testing or abandon a program for a number of reasons.
+Added: Due to the uncertain, time-consuming and costly clinical development and regulatory approval process, our partners may not successfully develop any therapeutic candidates with the antibodies discovered using our platform, or our partners may choose to discontinue the development of these therapeutic candidates for a variety of reasons, including due to safety, risk versus benefit profile, exclusivity, competitive landscape, commercialization potential, production limitations or prioritization of their resources.
+Added: It is possible that substantially all of these therapeutic candidates will never receive regulatory approval and, even if approved, such therapeutic candidates may never be successfully commercialized.
+Added: In addition, even if these therapeutic candidates receive regulatory approval in the United States, our partners may never obtain approval or commercialize such therapeutic candidates outside of the United States, which would limit their full market potential and therefore our ability to realize their potential downstream value.
+Added: Furthermore, approved therapeutic candidates may not achieve broad market acceptance among physicians, patients, the medical community and third-party payors, in which case revenue generated from their sales would be limited.
+Added: Likewise, our partners have to make decisions about which clinical stage and preclinical therapeutic candidates to develop and advance, and our partners may not have the resources to invest in all of the therapeutic candidates that contain antibodies discovered using our platform, or clinical data and other development considerations may not support the advancement of one or more therapeutic candidates.
+Added: Decision-making about which therapeutic candidates to prioritize involves inherent uncertainty, and our partners’ development program decision-making and resource prioritization decisions, which are outside of our control, may adversely affect the potential value of those partnerships.
+Added: Additionally, subject to its contractual obligations to us, if one more of our partners is involved in a business combination, the partner might deemphasize or terminate the development or commercialization of any drug candidate that utilizes an OmniAb-derived antibody.
+Added: If one of our strategic partners terminates its agreement with us, we may find it more difficult to attract new partners.
+Added: We are also subject to industry-wide FDA and other regulatory risk.
+Added: The number of BLAs and NDAs approved by the FDA varies significantly over time and if there were to be an extended reduction in the number of BLAs or NDAs approved by the FDA, the industry would contract and our business would be materially harmed.
+Added: Our partners’ failure to effectively advance, market and sell suitable therapeutic candidates with the antibodies that discovered using our platform could have a material adverse effect on our business, financial condition, results of operations and prospects, and cause the market price of our common stock to decline.
+Added: In addition to the inherent uncertainty in drug development addresses above, our ability to forecast our future revenues may be limited.
+Added: The failure of our partners to meet their contractual obligations to us could adversely affect our business.
+Added: Our reliance on our partners poses a number of additional risks, including the risk that they may not perform their contractual obligations to us, in compliance with applicable legal or contractual requirements, in a timely manner or at all;
+Added: they may not maintain the confidentiality of our proprietary information;
+Added: and disagreements or disputes could arise that could cause delays in, or termination of, the research, development or commercialization of products using our antibodies or result in litigation or arbitration.
+Added: In addition, certain of our partners are large, multinational organizations that run many programs concurrently, and we are dependent on their ability to accurately track and make milestone payments to us pursuant to the terms of our agreements with them.
+Added: Any failure by them to inform us when milestones are reached and make related payments to us could adversely affect our results of operations.
+Added: Moreover, some of our partners are located in markets subject to political and social risk, corruption, infrastructure problems and natural disasters, and are often subject to country-specific privacy and data security risk, as well as burdensome legal and regulatory requirements.
+Added: Any of these factors could adversely impact their financial condition and results of operations, which could impair their ability to meet their contractual obligations to us, which may have a material adverse effect on our business, financial condition and results of operations.
+Added: Our partners have significant discretion in determining when and whether to make announcements, if any, about the status of our partnerships, including about clinical developments and timelines for advancing collaborative programs, and the price of our common stock may decline as a result of announcements of unexpected results or developments.
+Added: Our partners have significant discretion in determining when and whether to make announcements about the status of our partnerships, including about preclinical and clinical developments and timelines for advancing antibodies discovered using our platform.
+Added: We do not plan to disclose the development status and progress of individual therapeutic candidates of our partners,
+Added: unless and until those partners do so first.
+Added: Our partners may wish to report such information more or less frequently than we desire to or may not wish to report such information at all, in which case we would not report that information either.
+Added: In addition, if partners choose to announce a collaboration with us, there is no guarantee that we will recognize research discovery fees in that quarter or even the following quarter, as such fees are not payable to us until our partner begins discovery activities.
+Added: The price of our common stock may decline as a result of the public announcement of unexpected results or developments in our partnerships, or as a result of our partners withholding such information.
+Added: Our partners may not achieve projected discovery and development milestones and other anticipated key events in the expected timelines or at all, which could have an adverse impact on our business and could cause the price of our common stock to decline.
+Added: From time to time, we may make public statements regarding the expected timing of certain milestones and key events, as well as regarding developments and milestones under our partnerships, to the extent that our partners have publicly disclosed such information or permit us to make such disclosures.
+Added: Our partners may from time to time make statements about their goals and expectations for partnerships with us.
+Added: The actual timing of these events can vary dramatically due to a number of factors such as delays or failures in our or our current and future partners’ discovery and development programs, the amount of time, effort, and resources committed by us and our current and future partners, and the numerous uncertainties inherent in the development of therapeutics.
+Added: As a result, there can be no assurance that our partners’ current and future programs will advance or be completed in the time frames we or they expect.
+Added: If our partners fail to achieve one or more of these milestones or other key events as planned, our business could be materially and adversely affected and the price of our common stock could decline.
+Added: We may be unable to manage our current and future growth effectively, which could make it difficult to execute our business strategy.
+Added: As we continue to execute on our business strategy, we anticipate further growth in our business operations.
+Added: This growth requires managing complexities across all aspects of our business, including complexities associated with increased research and development and business development and marketing operations.
+Added: As we seek to increase the number of our partnered programs, expand the scope of our existing partnerships and further develop our technological capabilities, we may need to incorporate new equipment, implement new technology systems and laboratory processes and hire new personnel with specialized qualifications.
+Added: Failure to manage this growth or transition could result in turnaround time delays, higher technology development costs, declining technology development quality, deteriorating program management success, and slower responses to competitive challenges.
+Added: A failure in any one of these areas could make it difficult for us to meet market expectations for our platform, and could damage our reputation and the prospects for our business.
+Added: To manage our anticipated growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.
+Added: Also, our management team may need to divert a disproportionate amount of its attention away from its day-to-day activities and devote a substantial amount of time to managing our growth.
+Added: If our management is unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy.
+Added: Our future financial performance, and our ability to develop and commercialize our platform and compete effectively, will depend, in part, on our ability to effectively manage increased program demand and the growth in our operations.
+Added: Our platform utilizes various species of animals that could contract disease or die and could otherwise subject us to controversy and adverse publicity, which may interrupt our business operations or harm our reputation.
+Added: Our platform utilizes animals to discover and produce antibodies.
+Added: We cannot completely eliminate the risks of animals contracting disease, or a natural or man-made disaster that could cause death to valuable production animals, in our vivarium facilities, or those of the contract research organizations (“CROs”) that maintain our mouse and rat colonies.
+Added: We cannot make any assurance that we or our CROs will be able to contain or reverse any such instance of disease.
+Added: Although we maintain backup colonies of our animals, disease or death on a broad scale could materially interrupt business operations as animals are a key part of our antibody discovery programs, which could have a material adverse effect on our results of operations and financial condition.
+Added: Further, genetic engineering and testing of animals has been the subject of controversy and adverse publicity.
+Added: Animal rights groups and other organizations and individuals in the United States, the EU and other jurisdictions have attempted to stop animal testing activities by pressing for legislation and regulation in these areas and by disrupting these activities through protests and other means.
+Added: To the extent the activities of these groups are successful, our research and development activities and the ability for us and our partners to use our technology platform could be interrupted or delayed, our costs could increase and our reputation could be harmed.
+Added: We have invested, and expect to continue to invest, in research and development efforts that further enhance our antibody discovery platform.
+Added: Such investments in technology are inherently risky and may affect our operating results.
+Added: If the return on these investments is lower or develops more slowly than we expect, our revenue and operating results may suffer.
+Added: We have historically dedicated a substantial portion of our resources on the development of our platform and the technology that it incorporates.
+Added: These investments may involve significant time, risks, and uncertainties, including the risk that the expenses associated with these investments may affect operating results and that such investments may not generate sufficient technological advantage relative to alternatives in the market which would, in turn, impact revenues to offset liabilities assumed and expenses associated with these new investments.
+Added: The industry in which we operate changes rapidly as a result of technological and drug developments, which may render our solutions less desirable.
+Added: We believe that we must continue to invest a significant amount of time and resources in our platform and technology to maintain and improve our competitive position.
+Added: If we do not achieve the benefits anticipated from these investments, if the achievement of these benefits is delayed, or if our technology platform is not able to accelerate the process of antibody drug discovery as quickly as we anticipate, our revenue and operating results may be adversely affected.
+Added: The life sciences and biotech platform technology market is highly competitive, and if we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue, or sustain profitability.
+Added: We face significant competition in the market for technologies that enable the discovery and development of therapeutic antibodies.
+Added: Our technologies address antibody therapeutic discovery challenges that are addressed by other platform technologies controlled by companies that have a variety of business models, including the development of internal pipelines of therapeutics, technology licensing, and the sale of instruments and devices.
+Added: Examples of technical competition at different steps of our technology platform include:
+Added: • in discovery using genetically engineered rodents, we face technical competition from companies that provide access to similar technologies, such as AbCellera Biologics Inc., Ablexis LLC, Alloy Therapeutics, Inc.
+Added: Crescendo Biologics Ltd., Harbour Antibodies BV, Merus N.V., Regeneron Pharmaceuticals, Inc.
+Added: and RenBio Inc.;
+Added: • in the field of single-cell screening, we face technical competition from companies that provide access to similar technologies, such as AbCellera Biologics Inc., Berkeley Lights Inc., HiFiBio Inc., and Sphere Fluidics Ltd.;
+Added: • in ion channel drug discovery, we face technical competition from companies that provide similar technologies, or biological expertise, such as Charles River Labs Inc., Evotec SE, Metrion Biosciences Ltd., and WuXi AppTec.
+Added: We also face direct business competition from companies that provide antibody discovery services using technologies, such as hybridoma and display.
+Added: Companies with discovery business models that include downstream payments include AbCellera Biologics Inc.
+Added: and Adimab LLC.
+Added: In addition, we compete with a variety of fee-for-service contract research organizations that provide services, in most cases using legacy technologies, that compete with one or more steps in our technology platform.
+Added: In addition, our partners may also elect to develop their workflows on legacy systems rather than rely on our platform.
+Added: Our competitors and potential competitors may enjoy a number of competitive advantages over us.
+Added: For example these may include longer operating histories, larger customer bases, greater brand recognition and market penetration, greater financial resources, greater technological and research and development resources, better system reliability and robustness, greater selling and marketing capabilities, and integrated manufacturing capabilities.
+Added: As a result, our competitors and potential competitors may be able to respond more quickly to changes in customer requirements, devote greater resources to the development, promotion and sale of their platforms or instruments than we can or sell their platforms or instruments, or offer solutions competitive with our platform and solutions at prices designed to win significant levels of market share.
+Added: In addition, we may encounter challenges in marketing our solutions with our pricing model, which is structured to capture the potential downstream revenues associated with therapeutic candidates that were discovered using our platform.
+Added: Our partners and potential partners may prefer one or more pricing models employed by our competitors that involve upfront payments rather than downstream revenues.
+Added: We may not be able to compete effectively against these organizations.
+Added: In addition, competitors may be acquired by, receive investments from or enter into other commercial relationships with larger, well-established and well-financed companies.
+Added: Certain of our competitors may be able to secure key inputs from vendors on more favorable terms, devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing policies and devote substantially more resources to technology and platform development than we can.
+Added: If we are unable to compete successfully against current and future competitors, we may be unable to increase market adoption and sales of our platform, which could prevent us from increasing our revenue or sustaining profitability.
+Added: Our management uses certain key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions and such metrics may not accurately reflect all of the aspects of our business needed to make such evaluations and decisions, in particular as our business continues to grow.
+Added: In addition to our financial results, our management regularly reviews a number of operating and financial metrics, including the number of active partners, the number of active programs, the number and progress of active clinical programs, and the number and commercial progress of approved products, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
+Added: We believe that these metrics are representative of our current business;
+Added: however, these metrics may not accurately reflect all aspects of our business, and we anticipate that these metrics may change or may be substituted for additional or different metrics as our business grows and as we introduce new solutions.
+Added: In addition, we are highly dependent on information provided by our partners as to the status of their development programs.
+Added: To the extent such information is later shown to be inaccurate, our metrics and forecasts could be materially and adversely affected.
+Added: If our management fails to review other relevant information or change or substitute the key business metrics they review as our business grows, or if our metrics prove inaccurate or unrepresentative based on information provided by our partners or otherwise, their ability to accurately formulate financial projections and make strategic decisions may be compromised and our business, financial results and future growth prospects may be adversely impacted.
+Added: We rely on third parties to host our mouse and rat colonies, and these third parties may not perform satisfactorily which could delay, prevent or impair our partnership programs and research and development efforts.
+Added: We do not own or operate vivarium facilities for our mouse and rat colonies and have no plans to expand our vivarium facilities beyond those that house our chickens.
+Added: We rely, and expect to continue to rely, on third-party CROs to host our mice and rats and to conduct certain research services for us and our partners, such as animal breeding, genotyping and animal distribution.
+Added: We have limited control over the performance by these third parties, including with respect to maintaining adequate quality control, quality assurance and qualified personnel, and to performing their services in compliance with applicable scientific and regulatory requirements.
+Added: If these third parties are unable to continue maintaining our mice and rats in accordance with our specifications or on commercially reasonable terms, or otherwise perform in a substandard manner, the discovery activities for our partners may be delayed.
+Added: If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms or at all.
+Added: Switching or adding additional vivarium facilities involves additional cost and requires our management’s time and focus.
+Added: In addition, there is a natural transition period when a new facility commences work.
+Added: As a result, delays may occur, which can materially impact our ability to meet our partners’ discovery timelines.
+Added: Though we carefully manage our relationships with these third parties, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, results of operations, financial condition and prospects.
+Added: We rely on a limited number of suppliers for laboratory equipment and materials and may not be able to find replacements or immediately transition to alternative suppliers.
+Added: We rely on a limited number of suppliers, or in some cases single suppliers, to provide certain consumables and equipment that we use in our laboratory operations, as well as reagents and other laboratory materials involved in the development of our technology.
+Added: Fluctuations in the availability and price of laboratory materials and equipment could have an adverse effect on our ability to meet our technology development goals with our partners and thus our results from operations as well as future
+Added: partnership opportunities.
+Added: An interruption in our laboratory operations or technology transfer could occur if we encounter delays, quality issues or other difficulties in securing these consumables, equipment, reagents or other materials, and if we cannot then obtain an acceptable substitute.
+Added: In addition, while we believe suitable additional or alternative suppliers are available to accommodate our operations, if needed, any transition to new or additional suppliers may cause delays in our processing of samples or development and commercialization of our technology.
+Added: Any such interruption could significantly affect our business, financial condition, results of operations and reputation.
+Added: The sizes of the markets and forecasts of market growth for the demand of our OmniAb technology platform and other of our key performance indicators are based on a number of complex assumptions and estimates, and may be inaccurate.
+Added: We estimate annual total addressable markets and forecasts of market growth for our platform and technologies and for antibody-based therapeutics generally.
+Added: We have also developed a standard set of key performance indicators in order to enable us to assess the performance of our business in and across multiple markets, and to forecast future revenue.
+Added: These estimates, forecasts and key performance indicators are based on a number of complex assumptions, internal and third party estimates and other business data, including assumptions and estimates relating to our ability to generate revenue from the development of new workflows.
+Added: While we believe our assumptions and the data underlying our estimates and key performance indicators are reasonable, there are inherent challenges in measuring or forecasting such information.
+Added: As a result, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors and indicators.
+Added: As a result, our estimates of the annual total addressable market and our forecasts of market growth and future revenue from technology access fees, service fees, milestone payments or royalties may prove to be incorrect, and our key business metrics may not reflect our actual performance.
+Added: For example, if the annual total addressable market or the potential market growth for our platform is smaller than we have estimated or if the key business metrics we utilize to forecast revenue are inaccurate, it may impair our sales growth and have an adverse impact on our business, financial condition, results of operations and prospects.
+Added: Third-party payor coverage and reimbursement status of newly approved therapeutics is uncertain.
+Added: Failure to obtain or maintain adequate coverage and reimbursement for current or future products and services could limit our partners’ ability to fully commercialize therapeutic candidates generated using our platform, which would decrease our ability to generate revenue.
+Added: The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford any therapeutics generated using our platform that our partners may develop and sell.
+Added: In addition, because the therapeutics we generate may represent new classes of treatments for diseases, we and our partners cannot accurately estimate how such therapeutics would be priced, whether reimbursement could be obtained or any potential revenue generated.
+Added: Sales of such therapeutics will depend substantially, both domestically and internationally, on the extent to which the costs of such therapeutics are paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.
+Added: If reimbursement is not available, or is available only to limited levels, our partners may not be able to successfully commercialize some therapeutics generated with our technology.
+Added: Even if coverage is provided, the approved reimbursement amount may not be high enough to allow our partners to establish or maintain pricing sufficient to realize a sufficient return on their investment in such therapeutics, and may lead to discontinuation or deprioritization of marketing and sales efforts for such products.
+Added: Changes in the reimbursement landscape may occur, which are outside of our control, and may impact the commercial viability of our technology development services and/or therapeutics generated using our technology.
+Added: There is significant uncertainty related to the insurance coverage and reimbursement of newly cleared, authorized or approved therapeutics in the United States, the EU and other jurisdictions.
+Added: Due to the trend toward value-based pricing and coverage, the increasing influence of health maintenance organizations and additional legislative changes, we expect our partners to experience pricing pressures on therapeutics generated using our platform that our partners may commercialize.
+Added: The downward pressure on healthcare costs in general, particularly novel therapeutics, has become very intense.
+Added: As a result, increasingly high barriers are being erected to the entry of new products, which would negatively impact our ability to generate revenues.
+Added: Healthcare reform efforts aimed at lowering the price of biopharmaceutical products may impact our ability to maintain sufficient profits.
+Added: Payors, whether domestic or foreign, or governmental or private, are developing increasingly sophisticated methods of controlling healthcare costs and those methods are not always specifically adapted for new technologies.
+Added: In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our ability to sell our products profitably.
+Added: In particular, in the United States, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (“ACA”), was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars;
+Added: addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
+Added: increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program;
+Added: extended the Medicaid rebate obligation to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations;
+Added: subjected manufacturers to new annual fees and taxes for certain branded prescription drugs;
+Added: and provided incentives to programs that increase the federal government’s comparative effectiveness research.
+Added: Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA.
+Added: On June 17, 2021, the U.S.
+Added: Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
+Added: Prior to the Supreme Court’s decision, President Biden issued an Executive Order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.
+Added: The Executive Order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.
+Added: In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
+Added: For example, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, beginning January 1, 2024.
+Added: Further, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers.
+Added: These reductions went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032, with the exception of a temporary suspension that lasted from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic.
+Added: Further, heightened governmental scrutiny is likely to continue over the manner in which product manufacturers set prices for their marketed products, which has already resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
+Added: On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law.
+Added: This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010.
+Added: Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
+Added: The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
+Added: For that and other reasons, it is currently unclear how the IRA will be effectuated, and while the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.
+Added: We expect that additional U.S.
+Added: federal or foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S.
+Added: federal government or foreign governments will pay for healthcare products and services, which could result in reduced demand for our products and therapeutic candidates, if approved, or additional pricing pressures.
+Added: If efforts to contain the price of biopharmaceutical products are successful, the magnitude of milestone payments and royalties we would expect to receive in connection with our partners’ future prioritization and investment in developing novel biologics may be impacted.
+Added: For instance, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment (“HTA”) amending Directive 2011/24/EU, was adopted in the EU.
+Added: While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim.
+Added: Once the Regulation becomes applicable, it will have a phased implementation depending on the concerned products.
+Added: This Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas.
+Added: The Regulation will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
+Added: Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.
+Added: We must adapt to rapid and significant technological change and respond to introductions of new products and technologies by competitors to remain competitive.
+Added: We provide our antibody discovery solutions and capabilities in industries that are characterized by significant enhancements and evolving industry standards.
+Added: As a result, our partners’ needs are rapidly evolving.
+Added: If we do not appropriately innovate and invest in new technologies, our platform may become less desirable in the markets we serve, and our partners could move to new technologies offered by our competitors, or engage in antibody discovery themselves.
+Added: Without the timely introduction of new solutions and technological enhancements, our offerings will likely become less competitive over time, in which case our competitive position and operating results could suffer.
+Added: Accordingly, we focus significant efforts and resources on the development and identification of new technologies and markets to further broaden and deepen our capabilities and expertise in antibody drug discovery and development.
+Added: To the extent we fail to timely introduce new and innovative technologies or solutions, adequately predict our partners’ needs or fail to obtain desired levels of market acceptance, our business may suffer and our operating results could be adversely affected.
+Added: We depend on our information technology systems, and any failure of these systems could harm our business.
+Added: We depend on information technology and telecommunications systems for significant elements of our operations, including our laboratory information management system, our computational biology system, our knowledge management system, our customer reporting, our platform, our advanced automation systems, and advanced application software.
+Added: We have installed, and expect to expand, a number of enterprise software systems that affect a broad range of business processes and functional areas, including for example, systems handling human resources, financial controls and reporting, contract management, regulatory compliance and other infrastructure operations.
+Added: These implementations were expensive and required a significant effort in terms of both time and effort.
+Added: In addition to the aforementioned business systems, we intend to extend the capabilities of both our preventative and detective security controls by augmenting the monitoring and alerting functions, the network design and the automatic countermeasure operations of our technical systems.
+Added: These information technology and telecommunications systems support a variety of functions, including laboratory operations, data analysis, quality control, customer service and support, billing, research and development activities, scientific and general administrative activities.
+Added: A significant risk in implementing these systems, for example, is the integration of separate information technology and telecommunications systems.
+Added: Information technology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or network failures, malicious software, bugs or viruses, human acts and natural disasters.
+Added: Moreover, despite network security and back-up measures, some of our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems.
+Added: Any disruption or loss of information technology or telecommunications systems on which critical aspects of our operations depend could have an adverse effect on our business and our reputation, and we may be unable to regain or repair our reputation in the future.
+Added: Our business development and marketing organizations are currently limited, and if we are unable to expand our personnel to reach our existing and potential partners, our business may be adversely affected.
+Added: Our business development and marketing functions are currently limited, with only two dedicated business development and two marketing employees, as of December 31, 2022.
+Added: We have supported these functions with research and development staff attending a variety of scientific conferences which has helped increase the business development pipeline.
+Added: We will need to expand our commercial organization in order to effectively market our solutions to existing and new partners.
+Added: Competition for employees capable of negotiating and entering into partnerships with pharmaceutical and biotechnology companies is intense.
+Added: We may not be able to attract and retain personnel or be able to build an efficient and effective sales organization, which could negatively impact sales and market acceptance of our platform and limit our revenue growth and potential profitability.
+Added: In addition, the time and cost of establishing a specialized sales, marketing and service force for a particular service may be difficult to justify in light of the revenue generated or projected.
+Added: Our expected future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees.
+Added: Our future financial performance and our ability to successfully sell our programs and to compete effectively will depend, in part, on our ability to manage this potential future growth effectively, without compromising quality.
+Added: Our success is dependent on our ability to attract and retain highly qualified management and other scientific and engineering personnel.
+Added: Our success depends in part on our continued ability to attract, retain, manage, and motivate highly qualified management,
+Added: scientific and engineering personnel, and we face significant competition for experienced personnel.
+Added: We are highly dependent upon our senior management, as well as our senior scientists and engineers and other members of our management team.
+Added: The individual and collective efforts of these employees will be important as we continue to develop and market our platform and technology.
+Added: The loss or incapacity of existing members of our senior management team could adversely affect our operations if we experience difficulties in hiring qualified successors.
+Added: Although we intend to execute employment agreements or offer letters with each member of our senior management team, these agreements will be terminable at will with or without notice and, therefore, we may not be able to retain their services as expected.
+Added: We do not currently maintain “key person” life insurance on the lives of our executives or any of our employees.
+Added: This lack of insurance means that we may not have adequate compensation for the loss of the services of these individuals.
+Added: We may not be able to attract or retain qualified scientists and engineers in the future due to the competition for qualified personnel among life science businesses.
+Added: We also face competition from universities and public and private research institutions in recruiting and retaining highly qualified scientific and engineering personnel.
+Added: We may have difficulties locating, recruiting or retaining qualified salespeople.
+Added: Recruiting and retention difficulties can limit our ability to support our research and development and sales programs.
+Added: A key risk in this area, for example, is that certain of our employees are at-will, which means that either we or the employee may terminate their employment at any time.
+Added: We have made technology acquisitions and expect to acquire businesses or assets or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership, or cause us to incur debt or significant expense.
+Added: Our business includes numerous acquisitions completed by our former parent Ligand, including the acquisition of Crystal Bioscience in October 2017, Ab Initio in July 2019, the Icagen ion channel platform through the acquisition of the core assets of Icagen in April 2020, xCella Biosciences in September 2020, and Taurus Biosciences in September 2020.
+Added: We expect to pursue additional acquisitions of businesses and assets in the future.
+Added: We may not be able to find suitable partners or acquisition or asset purchase candidates in the future, and we may not be able to complete such transactions on favorable terms, if at all.
+Added: The competition for strategic partners or acquisition candidates may be intense, and the negotiation process will be time-consuming and complex.
+Added: If we make any additional acquisitions, we may not be able to integrate these acquisitions successfully into our existing business, these acquisitions may not strengthen our competitive position, the transactions may be viewed negatively by partners or investors, we may be unable to retain key employees of any acquired business, relationships with key suppliers, manufacturers or partners of any acquired business may be impaired due to changes in management and ownership, and we could assume unknown or contingent liabilities.
+Added: In addition, we will likely experience significant charges to earnings in connection with our efforts, if any, to consummate acquisitions.
+Added: For transactions that are ultimately not consummated, these charges may include fees and expenses for investment bankers, attorneys, accountants and other advisors in connection with our efforts.
+Added: Even if our efforts are successful, we may incur, as part of a transaction, substantial charges for closure costs associated with elimination of duplicate operations and facilities and acquired in process research and development charges.
+Added: In either case, the incurrence of these charges could adversely affect our results of operations for particular quarterly or annual periods.
+Added: Any future acquisitions also could result in the incurrence of debt, contingent liabilities or future write-offs of intangible assets or goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: We cannot guarantee that we will be able to fully recover the costs of any acquisition.
+Added: Integration of an acquired company also may disrupt ongoing operations and require management resources that we would otherwise focus on developing our existing business.
+Added: We may not realize the anticipated benefits of any acquisition, technology license, strategic alliance or joint venture.
+Added: We also may experience losses related to investments in other companies, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: Acquisitions may also expose us to a variety of international and business related risks, including intellectual property, regulatory laws, local laws, tax and accounting.
+Added: To finance any acquisitions or asset purchase, we may choose to issue securities as consideration, which would dilute the ownership of our stockholders.
+Added: Additional funds may not be available on terms that are favorable to us, or at all.
+Added: If the price of our common stock is low or volatile, we may not be able to acquire companies or assets using our securities as consideration.
+Added: If our operating facilities become damaged or inoperable or if we move or are otherwise required to vacate our facilities, our ability to conduct and pursue our research and development efforts may be jeopardized.
+Added: Our scientific and engineering research and development and testing is conducted at our facilities located in Emeryville, California, Durham, North Carolina, and Tucson, Arizona.
+Added: Our facilities and equipment could be harmed or rendered inoperable or inaccessible by natural or man-made disasters or other circumstances beyond our control, including fire, earthquake, power loss, communications failure, war or terrorism, or another catastrophic event, such as a pandemic or similar
+Added: outbreak or public health crisis, which may render it difficult or impossible for us to support our partners and develop updates, upgrades and other improvements to our platform, advanced automation systems, and advanced application and workflow software for some period of time.
+Added: The inability to address system issues could develop if our facilities are inoperable or suffer a loss of utilization for even a short period of time, may result in the loss of partners or harm to our reputation, and we may be unable to regain those partners or repair our reputation in the future.
+Added: Furthermore, our facilities and the equipment we use to perform our research and development work could be unavailable or costly and time-consuming to repair or replace.
+Added: It would be difficult, time-consuming and expensive to rebuild our facilities, to locate and qualify a new facility or license or transfer our proprietary technology to a third party.
+Added: Even in the event we are able to find a third party to assist in research and development efforts, we may be unable to negotiate commercially reasonable terms to engage with the third party.
+Added: We carry insurance for damage to our property and the disruption of our business, but this insurance may not cover all of the risks associated with damage or disruption to our business, may not provide coverage in amounts sufficient to cover our potential losses and may not continue to be available to us on acceptable terms, if at all.
+Added: Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities.
+Added: We do not carry insurance for all categories of risk that our business may encounter and our policies have limits and significant deductibles.
+Added: Some of the policies we currently maintain include general liability, property, umbrella and directors’ and officers’ insurance.
+Added: Any additional insurance coverage we acquire in the future, may not be sufficient to reimburse us for any expenses or losses we may suffer.
+Added: Moreover, insurance coverage is becoming increasingly expensive and in the future we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses.
+Added: A successful liability claim or series of claims in which judgments exceed our insurance coverage could adversely affect our business, financial condition, results of operations and prospects, including preventing or limiting the use of our platform to discover antibodies.
+Added: We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
+Added: As a result, it may be more difficult for us to attract and retain qualified people to serve on our Board, our Board committees or as executive officers.
+Added: We do not know, however, if we will be able to maintain existing insurance with adequate levels of coverage.
+Added: Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, financial condition, results of operations and prospects.
+Added: Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.
+Added: In the ordinary course of our business, we generate and store sensitive data, including research data, intellectual property and proprietary business information owned or controlled by ourselves or our employees, partners and other parties.
+Added: We manage and maintain our applications and data utilizing a combination of on-site systems and cloud-based data centers.
+Added: We utilize external security and infrastructure vendors to manage parts of our data centers.
+Added: These applications and data encompass a wide variety of business-critical information, including research and development information, commercial information and business and financial information.
+Added: We face a number of risks relative to protecting this critical information, including loss of access risk, inappropriate use or disclosure, accidental exposure, unauthorized access, inappropriate modification and the risk of our being unable to adequately monitor and audit and modify our controls over our critical information.
+Added: This risk extends to the third party vendors and subcontractors we use to manage this sensitive data or otherwise process it on our behalf.
+Added: Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.
+Added: Further, to the extent our employees are working at home during the COVID-19 pandemic, or otherwise as a result of the continued hybrid working environment, additional risks may arise as a result of depending on the networking and security put into place by the employees.
+Added: Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
+Added: We may experience security breaches that may remain undetected for an extended period.
+Added: Our third-party service providers and partners are also subject to these heightened risks.
+Added: The secure processing, storage, maintenance and transmission of this critical information are vital to our operations and business strategy, and we devote significant resources to protecting such information.
+Added: Although we take reasonable measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack, damage and interruption from viruses or other malware (e.g.
+Added: ransomware), malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
+Added: We and certain of our service providers are from time to time subject to cyberattacks and security incidents.
+Added: While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations, whether due to a loss, corruption or unauthorized disclosure of our trade secrets, personal information or other proprietary or sensitive information or other similar disruptions.
+Added: It could also expose us to risks, including an inability to provide our services and fulfill contractual demands, and could cause management distraction and the obligation to devote significant financial and other resources to mitigate such problems, which would increase our future information security costs, including through organizational changes, deploying additional personnel, reinforcing administrative, physical and technical safeguards, further training of employees, changing third-party vendor control practices and engaging third-party subject matter experts and consultants and reduce the demand for our technology and services.
+Added: If a security breach or other incident were to result in the unauthorized access to or unauthorized use, disclosure, release or other processing of personal information, it may be necessary to notify individuals, governmental authorities, supervisory bodies, the media and other parties pursuant to privacy and security laws.
+Added: Any security compromise affecting us, our service providers, strategic partners, other contractors, consultants, or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures and lead to regulatory scrutiny.
+Added: To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary or personal information, we could incur liability, including litigation exposure, penalties and fines, we could become the subject of regulatory action or investigation, our competitive position could be harmed and the further development and commercialization of our products and services could be delayed.
+Added: If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our business.
+Added: Furthermore, federal, state and international laws and regulations can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties, fines and significant legal liability, if our information technology security efforts fail.
+Added: We may also be exposed to a risk of loss or litigation and potential liability, which could materially and adversely affect our business, results of operations or financial condition.
+Added: Additionally, although we maintain cybersecurity insurance coverage, we cannot be certain that such coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
+Added: The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation, business, financial condition and results of operations.
+Added: Our business could become subject to more extensive government regulation than we currently anticipate, and regulatory compliance obligations and the investigational exemption and approval processes to which our animals may become subject are expensive, time-consuming and uncertain both in timing and in outcome.
+Added: We believe our operations are currently subject to limited direct regulation by the FDA, comparable foreign authorities or other regulatory bodies.
+Added: However, our business could in future become subject to more direct oversight by the FDA, EMA or other comparable domestic or international agencies.
+Added: For example, we may be subject to evolving and variable regulations governing the production of genetically engineered organisms.
+Added: In particular, the FDA regulates animals whose genomes have been intentionally altered, and the FDA considers such alterations to be new animal drugs that may require approvals or exemptions in order to be commercially marketed or for investigational use in the United States.
+Added: For example, we have been in
+Added: communication with the FDA regarding the regulatory requirements applicable to our OmniChickens designed to produce human immunoglobulins, and the FDA has advised us that such approvals or exemptions are not required in light of the early stage of our research.
+Added: However, the FDA may determine that we are not in compliance with the conditions imposed upon us to avoid the requirement for such approvals or exemptions at present or we may later become subject to such approvals or exemptions.
+Added: Furthermore, while we have no active plans to operate a manufacturing facility designed to comply with current good manufacturing practices (“cGMPs”), future market pressures or the lack of available capacity at cGMP manufacturing facilities may necessitate our entry into this market.
+Added: Complying with such regulations may be expensive, time-consuming and uncertain, and if we fail to comply with any applicable requirements enforced by the FDA with respect to our intentionally genetically altered animals or otherwise, we may be subject to administratively or judicially imposed sanctions, including restrictions on our products or operations, warning or untitled letters, civil or criminal penalties, injunctions, product seizures, product detentions, import bans, product recalls, or adverse publicity requirements, any of which could have an adverse effect on our business, financial condition and operating results.
+Added: Our business operations and current and future relationships with investigators, healthcare professionals, and partners may be subject to applicable fraud and abuse and other healthcare laws and regulations, which could expose us and/or our partners to criminal sanctions, civil penalties, exclusion from government healthcare programs, contractual damages, reputational harm and diminished profits and future earnings.
+Added: Healthcare professionals, physicians and third-party payors will play a primary role in the recommendation and prescription of any therapeutic candidates generated by our platform for which our partners obtain marketing approval.
+Added: Our arrangements with our partners may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we conduct our business.
+Added: Restrictions under applicable federal, state and foreign healthcare laws and regulations, include the following:
+Added: federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
+Added: A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
+Added: federal False Claims Act and civil monetary penalties laws, which, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
+Added: The government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act;
+Added: federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or service.
+Added: Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
+Added: Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid or the Children’s Health Insurance Program to report to the Department of Health and Human Services information related to certain financial interactions with physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists, anesthesiology assistants and certified nurse midwives), and teaching hospitals, as well as the ownership and investment interests of physicians and their immediate family members;
+Added: • analogous state laws and regulations, such as state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers;
+Added: and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare professionals or marketing expenditures and pricing information;
+Added: • EU and other foreign law equivalents of each of the laws, including reporting requirements detailing interactions with and payments to healthcare providers.
+Added: Ensuring that our business arrangements with third parties comply with applicable healthcare laws and regulations may involve substantial costs.
+Added: It is possible that governmental authorities may conclude that our or our partners’ business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
+Added: If our or our partners’ operations were to be found to be in violation of any of these laws or any other governmental regulations that may apply, we and/or our partners may be subject to the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
+Added: Further, defending against any such actions can be costly, time consuming and may require significant personnel resources.
+Added: Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.
+Added: Changes in and actual or perceived failures to comply with applicable data privacy, security and protection laws, regulations, standards and contractual obligations may adversely affect our business, operations and financial performance.
+Added: We and our partners may be subject to federal, state, and foreign laws and regulations that govern data privacy and security.
+Added: The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues, which may affect our business and may increase our compliance costs and exposure to liability.
+Added: In the United States, numerous federal and state laws and regulations govern the collection, use, disclosure, and protection of personal information, including state data breach notification laws, federal and state health information privacy laws, and federal and state consumer protection laws.
+Added: Each of these laws is subject to varying interpretations by courts and government agencies, creating complex compliance issues.
+Added: If we fail to comply with applicable laws and regulations we could be subject to penalties or sanctions, including criminal penalties if we knowingly obtain or disclose individually identifiable health information from a covered entity in a manner that is not authorized or permitted by HIPAA or applicable state laws.
+Added: Certain states have also adopted comparable privacy and security laws and regulations, which govern the privacy, processing and protection of health-related and other personal information.
+Added: Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.
+Added: For example, the California Consumer Privacy Act of 2018 (“CCPA”) went into effect on January 1, 2020.
+Added: The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information.
+Added: The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation.
+Added: Further, the California Privacy Rights Act (“CPRA”) generally went into effect on January 1, 2023, and significantly amends the CCPA.
+Added: It imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.
+Added: It also creates a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
+Added: Additional compliance investment and potential business process changes may also be required.
+Added: Similar laws have passed in Virginia, Colorado, Connecticut and Utah, and have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
+Added: The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
+Added: In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
+Added: We are also or may become subject to rapidly evolving data protection laws, rules and regulations in foreign jurisdictions.
+Added: For example, the European Union General Data Protection Regulation (“GDPR”) governs certain collection and other processing activities involving personal data about individuals in the European Economic Area (“EEA”).
+Added: Among other things, the GDPR imposes requirements regarding the security of personal data, the rights of data subjects to access and delete personal data, requires having lawful bases on which personal data can be processed, includes requirements relating to the consent of individuals to whom the personal data relates, requires detailed notices for clinical trial participants and investigators and regulates transfers of personal data from the EEA to third countries that have not been found to provide adequate protection to such personal data, including the United States.
+Added: The GDPR imposes substantial fines for breaches and violations (up to the greater of €20.0 million or 4% of our annual global revenue).
+Added: The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR.
+Added: Further, from January 1, 2021, companies have been subject to the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
+Added: The UK GDPR mirrors the fines under the GDPR, e.g.
+Added: fines up to the greater of €20.0 million (£17.5 million) or 4% of global turnover.
+Added: As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
+Added: Compliance with applicable data privacy and security laws, rules and regulations could require us to take on more onerous obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our or our partners’ ability to operate in certain jurisdictions.
+Added: Each of these constantly evolving laws can be subject to varying interpretations.
+Added: If we fail to comply with any such laws, rules or regulations, we may face government investigations and/or enforcement actions, fines, civil or criminal penalties, private litigation or adverse publicity that could adversely affect our business, financial condition and results of operations.
+Added: Our business is subject to risks arising from COVID-19 and other epidemic diseases.
+Added: The COVID-19 pandemic continues to impact worldwide public health and economic activity.
+Added: A pandemic, including COVID-19 or other public health epidemic, poses the risk that we or our employees, contractors, including our CROs, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to spread of the disease within these groups or due to shutdowns that may be requested or mandated by governmental authorities.
+Added: Although we have since lifted most of the restrictions we previously imposed on in-person access to our facilities and currently do not believe the COVID-19 pandemic is having a material impact on our business, we cannot guarantee that the COVID-19 pandemic, including the emergence of variants, or a similar event, will not impact our operations or business in the future.
+Added: Such pandemic or other event could:
+Added: disrupt the supply chain and the manufacture or shipment of products and supplies for use by us in our discovery activities and by our partners for their discovery and development activities;
+Added: delay, limit or prevent us or our partners from continuing research and development activities;
+Added: impede our negotiations with partners and potential partners;
+Added: impede testing, monitoring, data collection and analysis and other related activities by us and our partners;
+Added: interrupt or delay the operations of the FDA, EMA, comparable foreign authorities or other regulatory bodies, which may impact review and approval timelines for initiation of clinical trials or marketing;
+Added: impede the launch or commercialization of any approved products;
+Added: any of which could delay our partnership programs, increase our operating costs, and have a material adverse effect on our business, financial condition and results of operations.
+Added: In addition, if COVID-19 or any other epidemic disease infects our genetically modified animals, which form the basis of our platform, or if there is an outbreak among our employees or our subcontractor’s employees who maintain and care for these animals, we and our partners may be unable to produce antibodies for development.
+Added: The COVID-19 pandemic and mitigation measures have had and may continue to have, and any future epidemic disease outbreak may have, an adverse impact on global economic conditions which could have an adverse effect on our business and financial condition and the trading price of shares of our common stock and could impair our ability to raise capital when needed.
+Added: The extent to which the COVID-19 pandemic impacts our results of operations will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the virus and new variants and the actions to contain its impact.
+Added: Further, to the extent the COVID-19 pandemic or any other outbreak of an epidemic disease adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this section.
+Added: Our portfolio of investments or bank deposits may be subject to market, interest and credit risk that may reduce their value and adversely affect our business, results of operations and financial condition.
+Added: The value of our investments may decline due to increases in interest rates, downgrades of the bonds and other securities included in our commercial money market account portfolio and instability in the global financial markets that reduces the liquidity of securities included in our portfolio.
+Added: In addition, the closure of Silicon Valley Bank (“SVB”) and Signature Bank and the appointment of the Federal Deposit Insurance Corporation (“FDIC”) as receiver created bank-specific and broader financial institution liquidity risk and concerns.
+Added: Although the Department of the Treasury, the Federal Reserve, and the FDIC jointly released a statement that depositors at SVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader financial services industry may impair our ability to access capital needed to support near-term working capital needs, whether from our existing investment and deposit accounts and credit facilities or otherwise, and may lead to market-wide liquidity shortages and create additional market and economic uncertainty.
+Added: Furthermore, a possible recession, rising inflation, and the ongoing COVID-19 pandemic has and may continue to adversely affect the financial markets in some or all countries worldwide.
+Added: Each of these events may cause us to record charges to reduce the carrying value of our investment portfolio or sell investments for less than our acquisition cost.
+Added: Although we attempt to mitigate these risks through diversification of our investments, the value of our investments may nevertheless decline, and our ability to fund our near-term
+Added: and long-term working capital needs to support our business and operating plans may be adversely affected.
+Added: In addition, any decline in available funding or access to our cash and liquidity resources could also result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws.
+Added: Risks Related to the Separation and Distribution and Our Relationship with Ligand
+Added: As a result of the Separation, we lost Ligand’s brand, reputation, capital base and other resources, and may experience difficulty operating as a standalone company.
+Added: We believe our association with Ligand has contributed to our building relationships with our customers due to Ligand’s globally recognized brand and reputation for innovation in drug discovery and development.
+Added: The Separation could adversely affect our ability to attract and retain customers, which could result in reduced sales of our products.
+Added: The loss of Ligand’s scale, capital base and financial strength may also prompt suppliers to reprice, modify or terminate their relationships with us.
+Added: In addition, Ligand’s elimination of its ownership of our company could potentially cause some of our existing agreements and licenses to be terminated.
+Added: We do not currently anticipate any material terminations in connection with the transactions.
+Added: Nevertheless, we cannot predict with certainty the effect that the Separation, Distribution or Merger will have on our business, our clients, vendors or other persons, or whether our OmniAb brand will be accepted in the marketplace.
+Added: Further, because we have not operated as a standalone company in the past, we may have difficulty doing so.
+Added: We may need to acquire assets and resources in addition to those provided by Ligand to our company, and in connection with the Separation and Merger, and may also face difficulty in separating our assets from Ligand’s assets and integrating newly acquired assets into our business.
+Added: Our business, financial condition and results of operations could be materially and adversely affected if we have difficulty operating as a standalone company, fail to acquire assets that prove to be important to our operations or incur unexpected costs in separating our assets from Ligand’s assets or integrating newly-acquired assets.
+Added: We incurred significant charges in connection with the Business Combination and will incur incremental costs as a standalone public company.
+Added: We incurred significant transaction costs in connection with the Business Combination, including accounting, legal, underwriting, financial and capital markets advisory and other fees and expenses.
+Added: These transaction costs are reflected in the consolidated and combined financial information contained elsewhere in this report.
+Added: In addition, we will need to replicate or replace certain arrangements, functions, systems and infrastructure to which we no longer have the same access after the Separation.
+Added: We expect to make investments and hire additional employees, or out-source certain functions, systems and infrastructure through contracts with third parties, to operate without access to Ligand’s existing operational and administrative infrastructure.
+Added: These initiatives may be costly to implement.
+Added: To the extent we implement any of these initiatives, we may incur additional operating costs beyond what is included in our historical and pro forma financial statements, and the amount and timing of such costs is uncertain.
+Added: Ligand performed or supported many important corporate functions for our company.
+Added: Our combined financial statements reflect charges for these services on an allocated basis.
+Added: Following the Separation, many of these services are governed by our Transition Services Agreement.
+Added: Under the Transition Services Agreement, we are able to use these Ligand services for a fixed term established on a service-by-service basis.
+Added: The Transition Services Agreement may be terminated by us with prior written notice, by either party in the event of an uncured material breach by the other party or its applicable affiliates, upon bankruptcy or insolvency of the other party, or by mutual agreement of the parties.
+Added: We pay Ligand fees for the transition services as a flat monthly fee and reimburse Ligand for all reasonable out-of-pocket expenses that it incurs in connection with providing the transition services.
+Added: In addition, while these services are being provided to us by Ligand, our operational flexibility to modify or implement changes with respect to such services or the amounts we pay for them is limited.
+Added: We may not be able to replace these services or enter into appropriate third-party arrangements on terms and conditions, including cost, comparable to those that we will receive from Ligand under our Transition Services Agreement.
+Added: Additionally, after the Transition Services Agreement terminates, we may be unable to sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from Ligand.
+Added: When we begin to operate these functions separately, if we do not have our own adequate systems and business functions in place, or are unable to obtain them from other providers, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline.
+Added: In addition, we have historically received informal support from Ligand, which may not be addressed in our Transition Services Agreement.
+Added: The level of this informal support will diminish or be eliminated following the Separation.
+Added: In addition, our historical combined financial statements include the attribution of certain assets and liabilities that historically have been held at the Ligand corporate level but which are specifically identifiable or attributable to the businesses transferred to us in connection with the Separation.
+Added: The value of the assets and liabilities we assumed in connection with the Separation could ultimately be materially different than such attributions, which could have a material adverse effect on our financial condition.
+Added: In connection with the Separation, we also entered into a second Transition Services Agreement under which we provide services relating to corporate functions, legal administration and other administrative functions to Ligand.
+Added: These are services that we historically provided to Ligand prior to the Separation.
+Added: Under this Transition Services Agreement, Ligand is able to use our services for a fixed term established on a service-by-service basis.
+Added: The Transition Services Agreement may be terminated by Ligand with prior written notice, by either party in the event of an uncured material breach by the other party or its applicable affiliates, upon bankruptcy or insolvency of the other party, or by mutual agreement of the parties.
+Added: Ligand pays us fees for the transition services as a flat monthly fee and reimburses us for all reasonable out-of-pocket expenses that we incur in connection with providing the transition services.
+Added: In addition, while these services are being provided to Ligand by us, our operational flexibility to modify or implement changes with respect to our capabilities to provide such services will be limited, and we may be obligated to maintain certain functions and capabilities solely to be able to meet our obligations to Ligand under the Transition Services Agreement.
+Added: Our historical combined financial data is not necessarily representative of the results we would have achieved as a standalone company and may not be a reliable indicator of our future results.
+Added: Our historical combined financial data included in this report does not reflect the financial condition, results of operations or cash flows we would have achieved as a standalone company during the periods presented or those we will achieve in the future.
+Added: This is primarily the result of the following factors:
+Added: • our historical combined financial data reflects expense allocations for certain support functions that are provided on a centralized basis within Ligand, such as expenses for executive oversight, treasury, legal, finance, human resources, tax, internal audit, financial reporting, information technology and investor relations that may be higher or lower than the comparable expenses we would have actually incurred, or will incur in the future, as a standalone company;
+Added: • our cost of debt and our capital structure will be different from that reflected in our historical combined financial statements;
+Added: • significant increases may occur in our cost structure as a result of the Business Combination, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);
+Added: • the Separation may have a material effect on our customers and other business relationships, including supplier relationships, and may result in the loss of preferred pricing available by virtue of our reduced relationship with Ligand.
+Added: As a result of the Business Combination, it may be difficult for investors to compare our future results to historical results or to evaluate our relative performance or trends in our business.
+Added: If the Distribution, together with certain related transactions, fails to qualify as a reorganization under Sections 355 and 368(a)(1)(D) of the Code, or the Merger causes Section 355(e) of the Code to apply to the Distribution, Ligand could incur significant tax liabilities, and OmniAb could be required to indemnify Ligand for taxes that could be material pursuant to indemnification obligations under the Tax Matters Agreement.
+Added: Ligand received a tax opinion from its outside tax counsel to the effect that the Distribution, together with certain related transactions, qualified as a reorganization under Sections 355 and 368(a)(1)(D) of the Code and that the Merger would not cause Section 355(e) of the Code to apply to the Distribution.
+Added: The tax opinion was delivered in connection with the closing of the Merger and was based on, among other things, certain facts, assumptions, representations and undertakings from Ligand and OmniAb, including those regarding the past and future conduct of the companies’ respective businesses and other matters.
+Added: If any of these facts, assumptions, representations, or undertakings are incorrect or not satisfied, Ligand may not be able to rely on the opinion, and Ligand could be subject to significant U.S.
+Added: federal income tax liabilities.
+Added: In addition, the opinion is not binding on the IRS or the courts.
+Added: Notwithstanding the opinion, the IRS could determine on audit that the Distribution, together with certain related transactions, does not qualify as a reorganization if it determines that any of the facts, assumptions, representations or undertakings on which the opinion is based are not correct or have been violated or that the Distribution, together with certain related transactions, should be taxable for other reasons, including as a result of a significant change in stock or asset ownership of Ligand or OmniAb after the Distribution.
+Added: If the Distribution, together with certain related transactions, is ultimately determined not to qualify as a reorganization, the Distribution could be treated as a taxable disposition of shares of OmniAb stock by Ligand.
+Added: In such case, Ligand could incur significant U.S.
+Added: federal income tax liabilities.
+Added: Under the Tax Matters Agreement that OmniAb entered into with Ligand OmniAb will generally be required to indemnify Ligand against certain taxes incurred by Ligand that arise in connection with the Distribution as a result of certain actions or omissions by OmniAb.
+Added: Further, even if OmniAb is not responsible for tax liabilities of Ligand under the Tax Matters Agreement, OmniAb nonetheless could be liable under applicable U.S.
+Added: federal tax law for such liabilities if Ligand were to fail to pay them.
+Added: If OmniAb is required to pay any liabilities under the circumstances set forth in the Tax Matters Agreement or pursuant to applicable tax law, the amounts may be significant.
+Added: We might not be able to engage in certain transactions and equity issuances as a result of the Distribution.
+Added: Our ability to engage in equity transactions could be limited or restricted in order to preserve, for U.S.
+Added: federal income tax purposes, the qualification of the Distribution, together with certain related transactions, as a generally tax-free reorganization under Sections 355 and 368(a)(1)(D) of the Code.
+Added: Even if the Distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, it may result in corporate-level taxable gain to Ligand if there is a 50% or greater change in ownership, by vote or value, of our shares of common stock, Ligand’s stock or the stock of a successor of any of the foregoing occurring as part of a plan or series of related transactions that includes the Distribution.
+Added: Any acquisitions or issuances of shares of our stock or Ligand’s stock within two years of the Distribution are generally presumed to be part of such a plan, although Ligand may be able to rebut that presumption.
+Added: Under the Tax Matters Agreement that we entered into with Ligand, we will be required to comply with the representations made in the materials submitted to legal counsel in connection with the tax opinion that Ligand received regarding the intended tax treatment of the Distribution and certain related transactions.
+Added: The Tax Matters Agreement also restricts our ability to take or fail to take any action if such action or failure to act could adversely affect the intended tax treatment of the Distribution, together with certain related transactions.
+Added: In particular, except in specific circumstances, in the two years following the Distribution, we will be restricted from, among other things, (i) entering into certain transactions pursuant to which all or a portion of shares of our common stock would be acquired, whether by merger, consolidation, certain stock issuances or otherwise, and (ii) ceasing to actively conduct certain of the OmniAb businesses.
+Added: These restrictions may limit for a period of time our ability to pursue certain transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business.
+Added: Potential indemnification obligations to Ligand pursuant to the Separation Agreement could materially and adversely affect our businesses, financial condition, results of operations and cash flows.
+Added: The Separation Agreement, among other things, provides for indemnification obligations (for uncapped amounts) designed to make us financially responsible for all liabilities that Ligand may incur or may exist relating to our business activities (as currently and historically conducted), whether incurred prior to or after the Separation.
+Added: Pursuant to the Separation Agreement and certain other agreements with Ligand, Ligand agreed to indemnify us for certain liabilities.
+Added: However, third parties could also seek to hold us responsible for any of the liabilities that Ligand has agreed to retain, and there can be no assurance that the indemnity from Ligand will be sufficient to protect us against the full amount of such liabilities, or that Ligand will be able to fully satisfy its indemnification obligations.
+Added: In addition, Ligand’s insurance will not necessarily be available to us for liabilities associated with occurrences of indemnified liabilities prior to the Separation, and in any event Ligand’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the Separation.
+Added: Moreover, even if we ultimately succeed in recovering from Ligand or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.
+Added: Each of these risks could negatively affect our businesses, financial position, results of operations and cash flows.
+Added: The Separation and Distribution may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.
+Added: The Separation and Distribution are subject to review under various state and federal fraudulent conveyance laws.
+Added: Fraudulent conveyance laws generally provide that an entity engages in a constructive fraudulent conveyance when (i) the entity transfers assets and does not receive fair consideration or reasonably equivalent value in return;
+Added: and (ii) the entity:
+Added: (a) is insolvent at the time of the transfer or is rendered insolvent by the transfer;
+Added: (b) has unreasonably small capital with which to carry on its business;
+Added: or (c) intends to incur or believes it will incur debts beyond its ability to repay its debts as they mature.
+Added: An unpaid creditor or an entity acting on behalf of a creditor (including without limitation a trustee or debtor-in-possession in a bankruptcy by us or Ligand or any of our respective subsidiaries) may bring an action alleging that the Separation or Distribution or any of the related transactions constituted a constructive fraudulent conveyance.
+Added: If a court accepts these allegations, it could impose a number of remedies, including without limitation, voiding our claims against Ligand, requiring our stockholders to return to Ligand some or all of the shares of our common stock issued in the Distribution, or providing Ligand with a claim for money damages against us in an amount equal to the difference between the consideration received by Ligand and our fair market value at the time of the Distribution.
+Added: The measure of insolvency for purposes of the fraudulent conveyance laws will vary depending on which jurisdiction’s law is applied.
+Added: Generally, an entity would be considered insolvent if (i) the present fair saleable value of its assets is less than the amount of its liabilities (including contingent liabilities);
+Added: (ii) the present fair saleable value of its assets is less than its probable liabilities on its debts as such debts become absolute and matured;
+Added: (iii) it cannot pay its debts and other liabilities (including contingent liabilities and other commitments) as they mature;
+Added: or (iv) it has unreasonably small capital for the business in which it is engaged.
+Added: We cannot assure you what standard a court would apply to determine insolvency or that a court would determine that we, Ligand or any of our respective subsidiaries were solvent at the time of or after giving effect to the Distribution.
+Added: The Distribution of our common stock is also subject to review under state corporate distribution statutes.
+Added: Under the DGCL, a corporation may only pay dividends to its stockholders either (i) out of its surplus (net assets minus capital) or (ii) if there is no such surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year.
+Added: Although Ligand intended to make the Distribution of our common stock entirely from surplus, we cannot assure you that a court will not later determine that some or all of the Distribution to Ligand stockholders was unlawful.
+Added: Risks Related to Our Intellectual Property
+Added: If we are unable to obtain and maintain sufficient intellectual property protection for our platform and technology, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technologies or a platform similar or identical to ours, and our ability to successfully sell our platform and services may be impaired.
+Added: We rely on patent protection, as well as trademark, copyright, trade secret and other intellectual property rights protection and contractual restrictions, to protect our proprietary technologies, all of which provide limited protection and may not adequately protect our rights or permit us to gain or keep a competitive advantage.
+Added: If we fail to protect our intellectual property, third parties may be able to compete more effectively against us.
+Added: In addition, we may incur substantial litigation costs in our attempts to recover or restrict the use of our intellectual property.
+Added: To the extent our intellectual property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct competition.
+Added: If our intellectual property does not provide adequate coverage to exclude our competitors from making products or providing services claimed in our patents, our competitive position could be adversely affected, as could our business.
+Added: Both the patent application process and the process of managing patent disputes can be time-consuming and expensive.
+Added: Our success depends in large part on our ability to obtain and maintain adequate protection of the intellectual property we may own solely and jointly with others or otherwise have rights to, particularly patents, in the United States and in other countries with respect to our platform, our software and our technologies, without infringing the intellectual property rights of others.
+Added: We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover our platform and related technologies and uses thereof, as we deem appropriate.
+Added: Certain of our patents and patent applications in the United States and certain foreign jurisdictions relate to our technology.
+Added: However, obtaining and enforcing patents in our industry is costly, time-consuming and complex, and we may fail to apply for patents on important products and technologies in a timely fashion or at all, or we may fail to apply for patents in potentially relevant jurisdictions.
+Added: There can be no assurance that the claims of our patents (or any patent application that issues as a patent), will exclude others from making, using, importing, offering for sale, or selling our products or services that are substantially similar to ours.
+Added: We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
+Added: In countries where we have not sought and do not seek patent protection, third parties may be able to manufacture and sell our technology without our permission, and we may not be able to stop them from doing so.
+Added: We may not be able to file and prosecute all necessary or desirable patent applications, or maintain, enforce and license any patents that may issue from such patent applications, at a reasonable cost or in a timely manner.
+Added: It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
+Added: We may not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to patents licensed to third parties.
+Added: Therefore, these patents and applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.
+Added: It is possible that none of our pending patent applications will result in issued patents in a timely fashion or at all, and even if patents are granted, they may not provide a basis for intellectual property protection of commercially viable products or services, may not provide us with any competitive advantages, or may be challenged and invalidated by third parties or deemed unenforceable by a court.
+Added: It is possible that others will design around our current or future patented technologies.
+Added: As a result, our owned and licensed patents and patent applications comprising our patent portfolio may not provide us with sufficient rights to exclude others from commercializing technology and products similar to any of our technology.
+Added: It is possible that in the future some of our patents, licensed patents or patent applications may be challenged in court in the United States or outside of the United States, at the United States Patent and Trademark Office (“USPTO”) or in proceedings before the patent offices of other jurisdictions.
+Added: We may not be successful in defending any such challenges made against our patents or patent applications.
+Added: Any successful third party challenge to our patents could result in loss of exclusivity, patent claims being narrowed, or the unenforceability or invalidity of such patents, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, limit the duration of the patent protection of our technology, and increase competition to our business.
+Added: We may have to challenge the patents or patent applications of third parties.
+Added: The outcome of patent litigation or other proceedings can be uncertain, and any attempt by us to enforce our patent rights against others or to challenge the patent rights of others may not be successful, or, if successful, may take substantial time and involve substantial cost, and may divert our efforts and attention from other aspects of our business.
+Added: Any changes we make to our technology, including changes that may be required for commercialization or that cause them to have what we view as more advantageous properties, may not be covered by our existing patent portfolio, and we may be required to file new applications and/or seek other forms of protection for any such alterations to our technology.
+Added: There can be no assurance that we would be able to secure patent protection that would adequately cover an alternative to our technology.
+Added: The patent positions of life sciences companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved.
+Added: No consistent policy regarding the breadth of claims allowed in such companies’ patents has emerged to date in the United States or elsewhere.
+Added: Courts frequently render opinions in the biotechnology field that may affect the patentability of certain inventions or discoveries.
+Added: Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our technology.
+Added: Changes in either the patent laws or in interpretations of patent laws in the United States or other countries or regions may diminish the value of our intellectual property.
+Added: We cannot predict the breadth of claims that may be allowed or enforced in our patents or in third party patents.
+Added: We may not develop additional proprietary platforms, methods and technologies that are patentable.
+Added: Assuming that other requirements for patentability are met, prior to March 16, 2013, in the United States, the first to invent the claimed invention was entitled to the patent, while outside the United States, the first to file a patent application was entitled to the patent.
+Added: On or after March 16, 2013, under the Leahy-Smith America Invents Act (the “America Invents Act”), the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.
+Added: A third party that files a patent application in the USPTO on or after March 16, 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party.
+Added: This will require us to be cognizant of the time from invention to filing of a patent application.
+Added: Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our technology or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
+Added: The America Invents Act also includes a number of significant changes that affect the way patent applications are now prosecuted and also may affect patent litigation.
+Added: These include allowing third party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings.
+Added: Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
+Added: Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action.
+Added: Therefore, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our owned or in-licensed patent applications and the enforcement or defense of our owned or in-licensed issued patents, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: In 2012, the European Patent Package regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court (the “UPC”) for litigation involving European patents.
+Added: The Unitary Patent system and UPC are expected to come into effect on June 1, 2023, after which a Unitary Patent may be requested for any European patent granted on or after the creation of the UPC in 2012.
+Added: The UPC will provide our competitors with a new forum to centrally revoke our European patents, and allow for the possibility of a competitor to obtain pan-European injunctions.
+Added: It will be several years before we will understand the scope of patent rights that will be recognized and the strength of patent remedies that will be provided by the UPC.
+Added: During the first seven years of the UPC’s existence, we have the right to opt our patents out of the UPC, but doing so may preclude us from realizing the benefits of the UPC.
+Added: In addition, the patent position of companies in the biotechnology field is particularly uncertain.
+Added: Various courts, including the United States Supreme Court, have rendered decisions that affect the scope of patentability of certain inventions or discoveries relating to biotechnology.
+Added: These decisions state, among other things, that a patent claim that recites an abstract idea, natural phenomenon or law of nature (for example, the relationship between particular genetic variants and cancer) are not themselves patentable.
+Added: Precisely what constitutes a law of nature or abstract idea is uncertain, and it is possible that certain aspects of our technology could be considered natural laws.
+Added: Accordingly, the evolving case law in the United States may adversely affect our and our licensors’ ability to obtain new patents or to enforce existing patents and may facilitate third party challenges to any owned or licensed patents.
+Added: Issued patents directed to our platform and technology could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad.
+Added: The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability.
+Added: Some of our patents or patent applications (including licensed patents) may be challenged at a future point in time in opposition, derivation, reexamination, inter partes review, post-grant review or interference.
+Added: Any successful third party challenge to our patents in this or any other proceeding could result in the unenforceability or invalidity of such patents or amendment to our patents in such a way that any resulting protection may lead to increased competition to our business, which could harm our business.
+Added: In addition, in patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
+Added: The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable.
+Added: If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on certain aspects of our platform technologies.
+Added: In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future products.
+Added: We may not be aware of all third party intellectual property rights potentially relating to our platform or technology.
+Added: Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until approximately 18 months after filing or, in some cases, not until such patent applications issue as patents.
+Added: We or our licensors might not have been the first to make the inventions included in each of our pending patent applications and we or our licensors might not have been the first to file patent applications for these inventions.
+Added: There is also no assurance that all of the potentially relevant prior art relating to our patents and patent applications or licensed patents and patent applications has been found, which could be used by a third party to challenge their validity, or prevent a patent from issuing from a pending patent application.
+Added: To determine the priority of these inventions, we may have to participate in interference proceedings, derivation proceedings or other post-grant proceedings declared by the USPTO that could result in substantial cost to us.
+Added: The outcome of such proceedings is uncertain.
+Added: No assurance can be given that other patent applications will not have priority over our patent applications.
+Added: In addition, changes to the patent laws of the United States allow for various post-grant opposition proceedings that have not been extensively tested, and their outcome is therefore uncertain.
+Added: Furthermore, if third parties bring these proceedings against our patents, we could experience significant costs and management distraction.
+Added: We rely on in-licenses from third parties.
+Added: If we lose these rights, our business may be materially and adversely affected, our ability to develop improvements to our technology platform and antibody discovery platform may be negatively and substantially impacted, and if disputes arise, we may be subjected to future litigation, as well as the potential loss of or limitations on our ability to incorporate the technology covered by these license agreements.
+Added: We are party to royalty-bearing license agreements that grant us rights to practice certain patent rights that are related to our systems, including our microcapillary assay technology, methods for selecting agents that bind to transmembrane receptors in a conformationally selective manner, and bovine antibody humanization technology.
+Added: We may need to obtain additional licenses from others to advance our research, development and commercialization activities.
+Added: Some of our license agreements impose, and we expect that any future in-license agreements will impose, various development, diligence, commercialization and other obligations on us.
+Added: We may enter into engagements in the future, with other licensors or other third parties under which we obtain certain intellectual property rights relating to our platform and technology.
+Added: These engagements may take the form of an exclusive license or purchase of intellectual property rights or technology from third parties.
+Added: Our rights to use the technology we license are subject to the continuation of and compliance with the terms of those agreements.
+Added: In some cases, we may not control the prosecution, maintenance or filing of the patents to which we hold licenses, or the enforcement of those patents against third parties.
+Added: Moreover, disputes may arise with respect to our licensing or other upstream agreements, including:
+Added: • the scope of rights granted under the agreements and other interpretation-related issues;
+Added: • the extent to which our systems and consumables, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
+Added: • the sublicensing of patent and other rights under our license agreements with our partners;
+Added: • our diligence obligations under the license agreements and what activities satisfy those diligence obligations;
+Added: • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners;
+Added: • the priority of invention of patented technology.
+Added: In spite of our efforts to comply with our obligations under our in-license agreements, our licensors might conclude that we have materially breached our obligations under our license agreements and might therefore, including in connection with any aforementioned disputes, terminate the relevant license agreement, thereby removing or limiting our ability to develop and commercialize technology covered by these license agreements.
+Added: If any such in-license is terminated, or if the licensed patents fail to provide the intended exclusivity, competitors or other third parties might have the freedom to market or develop technologies similar to ours.
+Added: In addition, absent the rights granted to us under our license agreements, we may infringe the intellectual property rights that are the subject of those agreements, we may be subject to litigation by the licensor, and if such litigation by the licensor is successful we may be required to pay damages to our licensor, or we may be required to cease our development and commercialization activities that are deemed infringing, and in such event we may ultimately need to modify our activities or technologies to design around such infringement, which may be time- and resource-consuming, and which ultimately may not be successful.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: In addition, our rights to certain components of our technology platform, are licensed to us on a non-exclusive basis.
+Added: The owners of these non-exclusively licensed technologies are therefore free to license them to third parties, including our competitors, on terms that may be superior to those offered to us, which could place us at a competitive disadvantage.
+Added: Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.
+Added: In addition, certain of our agreements with third parties may provide that intellectual property arising under these agreements, such as data that could be valuable to our business, will be owned by the third party, in which case, we may not have adequate rights to use such data or have exclusivity with respect to the use of such data, which could result in third parties, including our competitors, being able to use such data to compete with us.
+Added: If we cannot acquire or license rights to use technologies on reasonable terms or if we fail to comply with our obligations under such agreements, we may not be able to commercialize new technologies or services in the future and our business could be harmed.
+Added: In the future, we may identify third party intellectual property and technology we may need to acquire or license in order to engage in our business, including to develop or commercialize new technologies or services, and the growth of our business may depend in part on our ability to acquire, in-license or use this technology.
+Added: However, such licenses may not be available to us on acceptable terms or at all.
+Added: The licensing or acquisition of third party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third party intellectual property rights that we may consider attractive or necessary.
+Added: These established companies may have a competitive advantage over us due to their size, capital resources and greater development or commercialization capabilities.
+Added: In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
+Added: Even if such licenses are available, we may be required to pay the licensor in return for the use of such licensor’s technology, lump-sum payments, payments based on certain milestones such as sales volumes, or royalties based on sales of our platform.
+Added: In addition, such licenses may be non-exclusive, which could give our competitors access to the same intellectual property licensed to us.
+Added: In spite of our best efforts, our licensors might conclude that we have materially breached our license agreements and might therefore terminate the license agreements, thereby removing our ability to develop and commercialize technology covered by these license agreements.
+Added: If these licenses are terminated, or if the underlying intellectual property fails to provide the intended exclusivity, competitors would have the freedom to seek regulatory approval of, and to market, technologies identical to ours.
+Added: This could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.
+Added: Additionally, termination of these license agreements or reduction or elimination of our rights under these agreements, or restrictions on our ability to freely assign or sublicense our rights under such agreements when it is in the interest of our business to do so, may result in our having to negotiate new or reinstated agreements with less favorable terms, or cause us to lose our rights under these agreements, including our rights to important intellectual property or technology or impede, or delay or prohibit the further development or commercialization of one or more technologies that rely on such agreements.
+Added: We cannot prevent third parties from also accessing those technologies.
+Added: In addition, our licenses may place restrictions on our future business opportunities.
+Added: In addition to the above risks, intellectual property rights that we license in the future may include sublicenses under intellectual property owned by third parties, in some cases through multiple tiers.
+Added: The actions of our licensors may therefore affect our rights to use our sublicensed intellectual property, even if we are in compliance with all of the obligations under our license agreements.
+Added: Should our licensors or any of the upstream licensors fail to comply with their obligations under the agreements pursuant to which they obtain the rights that are sublicensed to us, or should such agreements be terminated or amended, our or our partners’ ability to further commercialize our technology or products generated using our technology may be materially harmed.
+Added: Further, we may not have the right to control the prosecution, maintenance and enforcement of all of our licensed and sublicensed intellectual property, and even when we do have such rights, we may require the cooperation of our licensors and upstream licensors, which may not be forthcoming.
+Added: Our business could be adversely affected if we or our licensors are unable to prosecute, maintain and enforce our licensed and sublicensed intellectual property effectively.
+Added: Our licensors may have relied on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents and patent applications we in-license.
+Added: If other third parties have ownership rights to patents or patent applications we in-license, they may be able to license such patents to our competitors, and our competitors could market competing technology and services.
+Added: This could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.
+Added: Our business, financial condition, results of operations and prospects could be materially and adversely affected if we are unable to enter into necessary agreements on acceptable terms or at all, if any necessary licenses are subsequently terminated, if the licensors fail to abide by the terms of the licenses or fail to prevent infringement by third parties, or if the acquired or licensed patents or other rights are found to be invalid or unenforceable.
+Added: Moreover, we could encounter delays in the introduction of new technology or services while we attempt to develop alternatives.
+Added: Defense of any lawsuit or failure to obtain any of these licenses on favorable terms could prevent us from commercializing our platform and technology and advancing partnerships, which could harm our business, financial condition, results of operations and prospects.
+Added: We may not be able to protect our intellectual property rights throughout the world.
+Added: Filing, prosecuting and defending patents on our platform, technology, software, systems, workflows and processes in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.
+Added: In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States, and even where such protection is nominally available, judicial and governmental enforcement of such intellectual property rights may be lacking.
+Added: Whether filed in the United States or abroad, our patent applications may be challenged or may fail to result in issued patents.
+Added: Further, we may encounter difficulties in protecting and defending such rights in foreign jurisdictions.
+Added: Consequently, we may not be able to prevent third parties from practicing our inventions in some or all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
+Added: Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own platform or technologies and may also sell their products or services to territories where we have patent protection, but enforcement is not as strong as that in the United States.
+Added: These platforms and technologies may compete with ours.
+Added: Our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
+Added: In addition, certain countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to other parties.
+Added: Furthermore, many countries limit the enforceability of patents against other parties, including government agencies or government contractors.
+Added: In these countries, the patent owner may have limited remedies, which could materially diminish the value of any patents.
+Added: In many foreign countries, patent applications and/or issued patents, or parts thereof, must be translated into the native language.
+Added: If our patent applications or issued patents are translated incorrectly, they may not adequately cover our technologies;
+Added: in some countries, it may not be possible to rectify an incorrect translation, which may result in patent protection that does not adequately cover our technologies in those countries.
+Added: Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
+Added: The legal systems of many other countries do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biotechnology, which could make it difficult for us to stop the misappropriation or other violations of our intellectual property rights including infringement of our patents in such countries.
+Added: Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.
+Added: We may not prevail in any lawsuits that we initiate, or that are initiated against us, and the damages or other remedies awarded, if any, may not be commercially meaningful.
+Added: In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technologies and the enforcement of intellectual property.
+Added: Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
+Added: Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
+Added: The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage.
+Added: • others may be able to make products that are similar to any therapeutic candidates generated by our platform that our partners may develop but that are not covered by the claims of the patents that we or our partners have or license or may own or license in the future;
+Added: • we, or our current or future partners, might not have been the first to make the inventions covered by the issued patents and pending patent applications that we or our partners have or license or may have or license in the future;
+Added: • we, or our current or future partners, might not have been the first to file patent applications covering certain of our or their inventions;
+Added: • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights;
+Added: • it is possible that our pending patent applications or those that we may hold in the future will not lead to issued patents;
+Added: • issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;
+Added: • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
+Added: • we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable technology or therapeutic candidates of our partners or will provide us or our partners with any competitive advantages;
+Added: • we cannot ensure that our commercial activities or partners’ therapeutic candidates will not infringe the patents of others;
+Added: • we cannot ensure that we will be able to further commercialize our technology on a substantial scale, if approved, before the relevant patents that we hold or license expire;
+Added: • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our technology;
+Added: • we may not develop additional proprietary technologies that are patentable;
+Added: • the patents or intellectual property rights of others may harm our business;
+Added: • we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
+Added: Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: If we are unable to protect the confidentiality of our information and our trade secrets, the value of our technology could be materially and adversely affected and our business could be harmed.
+Added: We rely on trade secrets and confidentiality agreements to protect our unpatented know-how, technology and other proprietary information, including parts of our technology platform, and to maintain our competitive position.
+Added: However, trade secrets and know-how can be difficult to protect.
+Added: In addition to pursuing patents on our technology, we take steps to protect our intellectual property and proprietary technology by entering into agreements, including confidentiality agreements, non-disclosure agreements and intellectual property assignment agreements, with our employees, consultants, academic institutions, corporate partners and, when needed, our advisers.
+Added: However, we cannot be certain that such agreements have been entered into with all relevant parties, and we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
+Added: For example, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.
+Added: Such agreements may not be enforceable or may not provide meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements, and we may not be able to prevent such unauthorized disclosure, which could adversely impact our ability to establish or maintain a competitive advantage in the market.
+Added: If we are required to assert our rights against such party, it could result in significant cost and distraction.
+Added: Monitoring unauthorized disclosure and detection of unauthorized disclosure is difficult, and we do not know whether the steps we have taken to prevent such disclosure are, or will be, adequate.
+Added: If we were to enforce a claim that a third party had illegally obtained and was using our trade secrets, it would be expensive and time-consuming, and the outcome would be unpredictable.
+Added: In addition, some courts both within and outside the United States may be less willing, or unwilling, to protect trade secrets.
+Added: Further, we may need to share our trade secrets and confidential know-how with current or future partners, collaborators, contractors and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.
+Added: We also seek to preserve the integrity and confidentiality of our confidential proprietary information by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached.
+Added: If any of our confidential proprietary information were to be lawfully obtained or independently developed by a competitor or other third party, absent patent protection, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.
+Added: If any of our trade secrets were to be disclosed to or independently discovered by a competitor or other third party, it could harm our business, financial condition, results of operations and prospects.
+Added: We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
+Added: We have employed and expect to employ individuals who were previously employed at universities or other companies.
+Added: Although we try to ensure that our employees, consultants, advisors and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that our employees, advisors, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information of their former employers or other third parties, or to claims that we have improperly used or obtained such trade secrets.
+Added: Litigation may be necessary to defend against these claims.
+Added: If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights and face increased competition to our business.
+Added: A loss of key research personnel work product could hamper or prevent our ability to commercialize potential technologies and solutions, which could harm our business.
+Added: Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
+Added: In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.
+Added: The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property.
+Added: Any of the foregoing could harm our business, financial condition, results of operations and prospects.
+Added: We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position.
+Added: The registered or unregistered trademarks or trade names that we own may be challenged, infringed, circumvented, declared generic, lapsed or determined to be infringing on or dilutive of other marks.
+Added: We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition.
+Added: In addition, third parties may in the future file for registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion.
+Added: If they succeed in registering or developing common law rights in such trademarks, and if we are not successful in challenging such rights, we may not be able to use these trademarks to develop brand recognition of our technologies or platform.
+Added: In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.
+Added: Further, we have and may in the future enter into agreements with owners of such third party trade names or trademarks to avoid potential trademark litigation which may limit our ability to use our trade names or trademarks in certain fields of business.
+Added: We have not yet registered certain of our trademarks in all of our potential markets.
+Added: If we apply to register these trademarks in other countries, and/or other trademarks in the United States and other countries, our applications may not be allowed for registration in a timely fashion or at all;
+Added: and further, our registered trademarks may not be maintained or enforced.
+Added: In addition, opposition or cancellation proceedings may in the future be filed against our trademark applications and registrations, and our trademarks may not survive such proceedings.
+Added: In addition, third parties may file first for our trademarks in certain countries.
+Added: If they succeed in registering such trademarks, and if we are not successful in challenging such third party rights, we may not be able to use these trademarks to market our technologies in those countries.
+Added: If we do not secure registrations for our trademarks, we may encounter more difficulty in enforcing them against third parties than we otherwise would.
+Added: If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, which could harm our business, financial condition, results of operations and prospects.
+Added: And, over the long-term, if we are unable to establish name recognition based on our trademarks, then our marketing abilities may be materially and adversely impacted.
+Added: We may be subject to claims challenging the inventorship of our patents and other intellectual property.
+Added: We or our licensors may be subject to claims that former employees, partners or other third parties have an interest in our or our in-licensed patents, trade secrets or other intellectual property as an inventor or co-inventor.
+Added: Litigation may be necessary to defend against these and other claims challenging inventorship of our or our licensors’ ownership of our owned or in-licensed patents, trade secrets or other intellectual property.
+Added: If we or our licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our systems, including our software, workflows, consumables, reagents, and transgenic animals.
+Added: Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees, and certain partners or partners may defer engaging with us until the particular dispute is resolved.
+Added: Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: We may from time to time become involved in litigation and other proceedings related to intellectual property, which could be time-intensive and costly and may adversely affect our business, financial condition, results of operations and prospects.
+Added: There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology, pharmaceutical and drug discovery industries, including patent infringement lawsuits, declaratory judgment litigation and adversarial proceedings before the USPTO, including interferences, derivation proceedings, ex parte reexaminations, post-grant review and inter partes review, as well as corresponding proceedings in foreign courts and foreign patent offices.
+Added: We are, and may, in the future, become involved with litigation or actions at the USPTO or foreign patent offices with various third parties.
+Added: We expect that the number of such claims may increase as our business, visibility and partnership base expands, and as the level of competition in our industry increases.
+Added: Any infringement claim, regardless of its validity, could harm our business by, among other things, resulting in time-consuming and costly litigation, diverting management’s time and attention from the development of the business, requiring the payment of monetary damages (including treble damages, attorneys’ fees, costs and expenses) or royalty payments, or result in potential or existing partners delaying entering into engagements with us pending resolution of the dispute.
+Added: It may be necessary for us to pursue litigation or adversarial proceedings before the patent office in order to enforce our patent and proprietary rights or to determine the scope, coverage and validity of the proprietary rights of others.
+Added: The outcome of any such litigation might not be favorable to us, and even if we were to prevail, such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on our business, operating results or financial condition.
+Added: Third parties may assert that we are employing their proprietary technology without authorization.
+Added: Given that the therapeutics discovery field is a highly competitive areas, there may be third-party intellectual property rights that others believe could relate to our technologies.
+Added: The legal threshold for initiating litigation or contested proceedings is low, so that even lawsuits or proceedings with a low probability of success might be initiated and require significant resources to defend.
+Added: An unfavorable outcome in any such proceeding could require us to cease using the related technology or developing or commercializing our technology, or to attempt to license rights to it from the prevailing party, which may not be available on commercially reasonable terms, or at all.
+Added: Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our current or future products, technologies and services may infringe.
+Added: We cannot be certain that we have identified or addressed all potentially significant third-party patents in advance of an infringement claim being made against us.
+Added: In addition, similar to what other companies in our industry have experienced, we expect our competitors and others may have patents or may in the future obtain patents and claim that making, having made, using, selling, offering to sell or importing our technologies infringes these patents.
+Added: Defense of infringement and other claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of management and employee resources from our business.
+Added: Parties making claims against us may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources.
+Added: Parties making claims against us may be able to obtain injunctive or other relief, which could block our ability to develop, commercialize and sell products or services and could result in the award of substantial damages against us, including treble damages, attorney’s fees, costs and expenses if we are found to have willfully infringed.
+Added: In the event of a successful claim of infringement against us, we may be required to pay damages and ongoing royalties and obtain one or more licenses from third parties, or be prohibited from selling certain products or services.
+Added: We may not be able to obtain these licenses on acceptable or commercially reasonable terms, if at all, or these licenses may be non-exclusive, which could result in our competitors gaining access to the same intellectual property.
+Added: In addition, we could encounter delays in product or service introductions while we attempt to develop alternative products or services to avoid
+Added: infringing third-party patents or proprietary rights.
+Added: Defense of any lawsuit or failure to obtain any of these licenses could prevent us from commercializing products or services, and the prohibition of sale of any of our technologies could materially affect our business and our ability to gain market acceptance for our technology.
+Added: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
+Added: In addition, during the course of this kind of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
+Added: If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
+Added: In addition, our agreements with some of our partners, suppliers or other entities with whom we do business require us to defend or indemnify these parties to the extent they become involved in infringement claims, including the types of claims described above.
+Added: We could also voluntarily agree to defend or indemnify third parties in instances where we are not obligated to do so if we determine it would be important to our business relationships.
+Added: If we are required or agree to defend or indemnify third parties in connection with any infringement claims, we could incur significant costs and expenses that could adversely affect our business, financial condition, results of operations and prospects.
+Added: Any uncertainties resulting from the initiation and continuation of any litigation or administrative proceeding could have a material adverse effect on our ability to raise additional funds or otherwise have a material adverse effect on our business, results of operations, financial condition and prospects.
+Added: Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
+Added: Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on issued United States and most foreign patents and/or applications will be due to be paid to the USPTO and various governmental patent agencies outside of the United States at several stages over the lifetime of the patents and/or applications in order to maintain such patents and patent applications.
+Added: We have systems in place to remind us to pay these fees, and we engage an outside service and rely on those services and our outside counsel to pay these fees.
+Added: The USPTO and various non-U.S.
+Added: governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
+Added: We employ reputable law firms and other professionals and services to help us comply, and in many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules.
+Added: However, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
+Added: Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
+Added: In such an event, if we or our licensors fail to maintain the patents and patent applications covering our technology and products, our competitors may be able to enter the market with similar or identical technology or products without infringing our patents and this circumstance would have a material adverse effect on our business, financial condition, results of operations and prospects.
+Added: Patent terms may be inadequate to protect our competitive position on our technology for an adequate amount of time.
+Added: Patents have a limited lifespan.
+Added: In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.
+Added: non-provisional filing date.
+Added: This term can be reduced by the filing of a terminal disclaimer.
+Added: Some of our patents have terminal disclaimers.
+Added: Various extensions may be available, but the life of a patent, and the protection it affords, is limited.
+Added: Even if patents covering our platform or technology are obtained, once the patent life has expired, we may be open to competition from others.
+Added: If our platform or technologies require extended development and/or regulatory review, patents protecting our platform or technologies might expire before or shortly after we are able to successfully commercialize them.
+Added: As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing processes or technologies similar or identical to ours.
+Added: Our use of open source software could compromise our ability to offer our data packages and subject us to possible litigation.
+Added: We use open source software in connection with our technology and computational engine of our platform.
+Added: Companies that incorporate open source software into their technologies and services have, from time to time, faced claims challenging their use of open source software and compliance with open source license terms.
+Added: As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source
+Added: licensing terms.
+Added: Some open source software licenses require users who distribute software containing open source software to publicly disclose all or part of the source code to the licensee’s software that incorporates, links or uses such open source software, and make available to third parties for no cost, any derivative works of the open source code created by the licensee, which could include the licensee’s own valuable proprietary code.
+Added: While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open source agreement, such use could inadvertently occur, or could be claimed to have occurred, in part because open source license terms are often ambiguous.
+Added: There is little legal precedent in this area and any actual or claimed requirement to disclose our proprietary source code or pay damages for breach of contract could harm our business and could help third parties, including our competitors, develop technologies that are similar to or better than ours.
+Added: Any of the foregoing could harm our business, financial condition, results of operations and prospects.
+Added: Some of our intellectual property rights may have been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S.-based companies.
+Added: Compliance with such regulations may limit our exclusive rights, and limit our ability to contract with non-U.S.
+Added: manufacturers.
+Added: Some of our intellectual property rights may have been generated through the use of U.S.
+Added: government funding and are therefore subject to certain federal regulations.
+Added: As a result, the U.S.
+Added: government may have certain rights to intellectual property embodied in our technology pursuant to the Bayh-Dole Act of 1980 (the “Bayh-Dole Act”), and implementing regulations.
+Added: government rights in certain inventions developed under a government-funded program include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose.
+Added: In addition, the U.S.
+Added: government has the right to require us or our licensors to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that:
+Added: (i) adequate steps have not been taken to commercialize the invention;
+Added: (ii) government action is necessary to meet public health or safety needs;
+Added: or (iii) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).
+Added: government also has the right to take title to these inventions if we, or the applicable licensor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.
+Added: These time limits have recently been changed by regulation, and may change in the future.
+Added: Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us or the applicable licensor to expend substantial resources.
+Added: In addition, the U.S.
+Added: government requires that any products embodying the subject invention or produced through the use of the subject invention be manufactured substantially in the United States.
+Added: The manufacturing preference requirement can be waived if the owner of the intellectual property can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible.
+Added: This preference for U.S.
+Added: manufacturers may limit our ability to contract with non-U.S.
+Added: product manufacturers for products covered by such intellectual property.
+Added: To the extent any of our future intellectual property is generated through the use of U.S.
+Added: government funding, the provisions of the Bayh-Dole Act may similarly apply.
General Risk Factors
−Removed: We are an exempted company with no operating history and no revenues, and potential investors have no basis on which to evaluate our ability to achieve our business objective.
−Removed: We are an exempted company, incorporated under the laws of the Cayman Islands.
−Removed: Because we lack an operating history , potential investors have no basis upon which to evaluate our ability to achieve our business objective of completing our initial Business Combination with one or more target businesses.
−Removed: We have no plans, arrangements or understandings with any prospective target business concerning a Business Combination and may be unable to complete our initial Business Combination.
−Removed: If we fail to complete our initial Business Combination, we will never generate any operating revenues.
−Removed: Past performance by our management team or their respective affiliates may not be indicative of future performance of an investment in us.
−Removed: Information regarding performance is presented for informational purposes only.
−Removed: Any past experience or performance of our management team and their respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success with respect to any Business Combination that we may consummate.
−Removed: Public shareholders should not rely on the historical record of our management team or their respective affiliates as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
−Removed: Our management has no experience in operating special purpose acquisition companies.
−Removed: We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S.
−Removed: federal income tax consequences to U.S.
−Removed: If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a beneficial owner of our units, Class A ordinary shares or warrants who or that is for U.S.
−Removed: federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity taxable as a corporation for U.S.
−Removed: federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia or (iii) an estate or trust the income of which is includible in gross income for U.S.
−Removed: federal income tax purposes regardless of its source (a “U.S.
−Removed: Holder”), such U.S Holder may be subject to certain adverse U.S.
−Removed: federal income tax consequences and may be subject to additional reporting requirements.
−Removed: Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception and the timing of our initial Business Combination which generally provides that a corporation will not be a PFIC for the first taxable year the corporation has gross income (the “Start-Up Year”), if (i) no predecessor of the corporation was a PFIC, (ii) the corporation satisfies the Internal Revenue Service (the “IRS”) that it will not be a PFIC for either of the first two taxable years following the Start-Up Year and (iii) the corporation is not in fact a PFIC for either of those years.
−Removed: Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception.
−Removed: Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year and our status as a PFIC for any taxable year will not be determinable until after the end of such taxable year.
−Removed: Moreover, if we determine we are a PFIC for any taxable year we will endeavor to provide, upon written request, to a U.S.
−Removed: Holder such information as the IRS may require, including a PFIC Annual Information Statement, in order to enable the U.S.
−Removed: Holder to make and maintain a qualified electing fund (“QEF”) election in respect of our Class A ordinary shares, but there can be no assurance that we will timely provide such required information, and such election would be unavailable with respect to our warrants in all cases.
−Removed: investors to consult their tax advisors regarding the possible application of the PFIC rules, including the potential unavailability of the start-up exception and the making of a protective QEF election.
−Removed: We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
−Removed: We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
−Removed: As a result, our shareholders may not have access to certain information they may deem important.
−Removed: We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A ordinary shares held by non-affiliates equals or exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31.
−Removed: We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
−Removed: If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
−Removed: Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
−Removed: The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
−Removed: We have 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, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
−Removed: This may make comparison of our 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.
−Removed: Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
−Removed: Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
−Removed: We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates equals or exceeds $250 million as of the prior June 30, or (2) our annual revenues equal or exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates equals or exceeds $700 million as of the prior June 30.
−Removed: To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
−Removed: We have identified a material weakness in our internal control over financial reporting as of September 30, 2021.
−Removed: If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
−Removed: Our management had previously determined that its Class A ordinary shares subject to redemption included certain provisions that require classification of the Class A ordinary shares as temporary equity.
−Removed: As a result, management corrected the error contained in its financial statements as of August 12, 2021 by including a revision to its previously reported financial statements in Note 2 in our Quarterly Report on Form 10-Q as of September 30, 2021, for the three months ended September 30, 2021, and for the period from February 5, 2021 (inception) through September 30, 2021, as filed with the SEC on November 10, 2021 (the “Original Form 10-Q”).
−Removed: Following the filing of the Company’s Original Form 10-Q the Company reevaluated the materiality of its misstatement.
−Removed: After discussion and evaluation, the Company concluded that the misstatement related to classification of Class A shares subject to possible redemption are material on a quantitative basis to a degree that a revision to its previously issued financial statements is not appropriate.
−Removed: Accordingly, our financial statements and other financial data as of August 12, 2021 and as of and for the three months ended September 30, 2021 and the period from February 5, 2021 (inception) through September 30, 2021 should be restated.
−Removed: As part of such process, we identified a material weakness in our internal control over financial reporting related to our accounting and reporting of complex financial instruments and application of ASC 480-10-S99-3A to our accounting classification of Class A ordinary shares subject to possible redemption.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
−Removed: As a result of this material weakness, our management has concluded that our disclosure controls and procedures were not effective as of September 30, 2021.
−Removed: If we are unable to remediate our material weaknesses in a timely manner, or if we identify additional material weaknesses, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information.
−Removed: We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.
−Removed: Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
−Removed: We continue to evaluate steps to remediate the material weakness.
−Removed: These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
−Removed: A material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.
−Removed: In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline and we may face litigation as a result.
−Removed: We cannot be certain that any measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
−Removed: There have been and may in the future be changes to current accounting practices for SPACs, which could result in further changes to our financial statements and disclosures, and which could have a material adverse impact.
−Removed: Recently, there have been changes to the accepted accounting for SPACs.
−Removed: For example, on April 12, 2021, the staff of the SEC issued the SEC Staff Statement, which resulted in the warrants and other related instruments issued by many SPACs, including us, being classified as liabilities rather than equity.
−Removed: Further changes in the accepted accounting treatment of features related to SPACs may occur in the future.
−Removed: Changes or differing interpretations in the accepted accounting practices related to SPACs could result in the recognition of additional accounting errors in previously issued financial statements, further restatements of previously issued audited financial statements, the filing of notices that previously issued financial statements may not be relied upon, and additional findings of material weaknesses and significant deficiencies in internal controls over financial reporting, all or any of which could have a material adverse impact on us.
+Added: Our employees, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, and insider trading.
+Added: We are exposed to the risk of fraud or other misconduct by our employees, consultants and commercial partners.
+Added: Misconduct by these parties could include intentional failures to comply with the applicable laws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us.
+Added: These laws and regulations may restrict or prohibit a wide range of pricing, discounting and other business arrangements.
+Added: Such misconduct could result in legal or regulatory sanctions and cause serious harm to our reputation.
+Added: It is not always possible to identify and deter employee misconduct, and any other precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
+Added: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant civil, criminal and administrative penalties, which could have a significant impact on our business.
+Added: Whether or not we are successful in defending against such actions or investigations, we could incur substantial costs, including legal fees and divert the attention of management in defending ourselves against any of these claims or investigations.
+Added: We use biological and hazardous materials that require considerable expertise and expense for handling, storage and disposal and may result in claims against us.
+Added: We work with materials, including chemicals, biological agents and compounds that could be hazardous to human health and safety or the environment.
+Added: Our operations also produce hazardous and biological waste products.
+Added: Federal, state and local laws and regulations govern the use, generation, manufacture, storage, handling and disposal of these materials and wastes.
+Added: We are subject to periodic inspections by state and federal authorities to ensure compliance with applicable laws.
+Added: Compliance with applicable environmental laws and regulations is expensive, and current or future environmental laws and regulations may restrict our operations.
+Added: If we do not comply with applicable regulations, we may be subject to fines and penalties.
+Added: In addition, we cannot eliminate the risk of accidental injury or contamination from these materials or wastes, which could cause an interruption of our commercialization efforts, research and development programs and business operations, as well as environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations.
+Added: In the event of contamination or injury, we could be liable for damages or penalized with fines in an amount exceeding our resources and our operations could be suspended or otherwise adversely affected.
+Added: Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent.
+Added: We cannot predict the impact of such changes and cannot be certain of our future compliance.
+Added: We are subject to U.S.
+Added: and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws and anti-money laundering laws and regulations.
+Added: We could face criminal liability and other serious consequences for violations, which could harm our business.
+Added: We are subject to export control and import laws and regulations, including the U.S.
+Added: Export Administration Regulations, U.S.
+Added: Customs regulations, and various economic and trade sanctions regulations administered by the U.S.
+Added: Treasury Department’s Office of Foreign Assets Controls, and anti-corruption and anti-money laundering laws and regulations, including the US Foreign Corrupt Practices Act of 1977, as amended, the U.S.
+Added: domestic bribery statute contained in 18 U.S.C.
+Added: § 201, the US Travel Act, the USA PATRIOT Act and other state and national anti-bribery and anti-money laundering laws in the countries in which we conduct activities.
+Added: Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, CROs, contractors and other collaborators and partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, improper payments or anything else of value to or from recipients in the public or private sector.
+Added: We may engage third parties for clinical trials outside of the United States, to sell our products abroad once we enter a commercialization phase, and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals.
+Added: We have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations.
+Added: We can be held liable for the corrupt or other illegal activities of our employees, agents, CROs, contractors and other collaborators and partners, even if we do not explicitly authorize or have actual knowledge of such activities.
+Added: We are also subject to other U.S.
+Added: laws and regulations governing export controls, as well as economic sanctions and embargoes on certain countries and persons.
+Added: Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.
+Added: Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price.
+Added: From time to time, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, inflation, increases in unemployment rates and interest rates and uncertainty about economic stability.
+Added: There can be no assurance that future deterioration in credit and financial markets and confidence in economic conditions will not occur.
+Added: Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or continued unpredictable and unstable market conditions.
+Added: The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict, including the war between Russia and Ukraine, terrorism or other geopolitical events.
+Added: Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine, may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or others could exacerbate market and economic instability.
+Added: More recently, the closures of SVB and Signature Bank and their placement into receivership with the FDIC created bank-specific and broader financial institution liquidity risk and concerns.
+Added: Although the Department of the Treasury, the Federal Reserve, and the FDIC jointly released a statement that depositors at SVB and Signature Bank would have access to their funds, even those in excess of the standard FDIC insurance limits, under a systemic risk exception, future adverse developments with respect to specific financial institutions or the broader
+Added: financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty.
+Added: There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.
+Added: Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.
+Added: If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly, more onerous with respect to financial and operating covenants and more dilutive.
+Added: Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price.
+Added: In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.
+Added: We incur significant costs as a result of operating as a standalone public company, and our management is required to devote substantial time to new compliance initiatives.
+Added: As a standalone public company, we incur significant legal, accounting, insurance and other expenses that we did not incur as a private company.
+Added: We are subject to the reporting requirements of the Exchange Act, which will require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition.
+Added: In addition, Sarbanes-Oxley, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of Sarbanes-Oxley, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
+Added: Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC has adopted additional rules and regulations in these areas, such as mandatory “say on pay” voting requirements that will apply to us when we cease to be an emerging growth company.
+Added: Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.
+Added: We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.
+Added: If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations.
+Added: The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services.
+Added: For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.
+Added: We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.
+Added: The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board, our Board committees or as executive officers.
+Added: If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
+Added: The trading market for our Common Stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
+Added: If one or more of the analysts who cover us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.
+Added: If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our shares could decrease, which might cause our stock price and trading volume to decline.
+Added: Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
+Added: We are subject to certain reporting requirements of the Exchange Act.
+Added: Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC.
+Added: We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
+Added: These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
+Added: Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
+Added: Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
+Added: Our failure to meet the continued listing requirements of the Nasdaq Global Market or the Nasdaq Capital Market, as applicable, could result in a delisting of our Common Stock or Warrants.
+Added: If we fail to satisfy the continued listing requirements of the Nasdaq Global Market or the Nasdaq Capital Market, as applicable, such as the minimum closing bid price, stockholders’ equity or round lot holders requirements or the corporate governance requirements, Nasdaq may take steps to delist our Common Stock or Warrants.
+Added: Such a delisting would likely have a negative effect on the price of our Common Stock and Warrants and would impair your ability to sell or purchase our securities when you wish to do so.
+Added: Such a delisting could also result in a limited amount of news and analyst coverage for the Company;
+Added: and a decreased ability for us to issue additional securities or obtain additional financing in the future.
+Added: In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, or prevent future non-compliance with Nasdaq’s listing requirements.
+Added: Risks Related to Our Common Stock and Warrants
+Added: The market price of our Common Stock and Warrants is likely to be highly volatile, and you may lose some or all of your investment.
+Added: The market price of our Common Stock and Warrants may fluctuate significantly due to a number of factors, some of which may be beyond our control, including those factors discussed in this “Risk Factors” section and many others, such as:
+Added: • actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in its quarterly and annual results;
+Added: • our inability to establish additional partnerships, the termination of license agreements by our existing partners or announcements by our partners regarding therapeutic candidates generated using our platform;
+Added: • the introduction of new technologies or enhancements to existing technology by us or others in the industry;
+Added: • departures of key scientific or management personnel;
+Added: • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
+Added: • our failure to meet the estimates and projections of the investment community or that it may otherwise provide to the public;
+Added: • publication of research reports about us or the industry, or antibody discovery in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts;
+Added: • changes in the market valuations of similar companies;
+Added: • overall performance of the equity markets;
+Added: • announcements or actions taken by Ligand as our previous principal stockholder;
+Added: • sales of our Common Stock by us or sales or shorting of our Common Stock by our stockholders in the future;
+Added: • trading volume of our Common Stock;
+Added: • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
+Added: • significant lawsuits, including patent or stockholder litigation;
+Added: • the impact of any natural disasters or public health emergencies, such as the COVID-19 pandemic;
+Added: • general economic, industry and market conditions other events or factors, many of which are beyond our control;
+Added: • changes in accounting standards, policies, guidelines, interpretations or principles.
+Added: In addition, the stock markets have experienced extreme price and volume fluctuations that affected and continue to affect the market prices of equity securities of many companies.
+Added: These fluctuations have often been unrelated or disproportionate to the operating performance of those companies.
+Added: Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of our Common Stock and Warrants, regardless of our actual operating performance.
+Added: Volatility in our share price could subject us to securities class action litigation.
+Added: In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
+Added: If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
+Added: Affiliates of Avista Capital Partners own a significant equity interest in the Company and may take actions that conflict with the interests of our public shareholders.
+Added: Following the consummation of the Business Combination, the liquidation and dissolution of the Sponsor resulted in the distribution of all its assets, including our securities, to its limited partners, which are ultimately controlled by affiliates of Avista Capital Partners.
+Added: Affiliates of Avista Capital Partners own 15,817,934 shares including earnout shares, or 13.7% of our outstanding Common Stock as of December 31, 2022.
+Added: In addition, affiliates of Avista Capital Partners own Warrants to purchase 11,345,489 shares of our Common Stock at an exercise price of $11.50 per share.
+Added: The interests of such holders may not align with the interests of our public shareholders in the future.
+Added: Avista Capital Partners and its affiliates are in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us.
+Added: In addition, Avista Capital Partners may have an interest in us pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to us and our public shareholders.
+Added: If securities or industry analysts do not publish research or reports about us, or publish negative reports, our stock price and trading volume could decline.
+Added: The trading market for our Common Stock and Warrants will depend, in part, on the research and reports that securities or industry analysts publish about us.
+Added: We do not have any control over these analysts.
+Added: If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our Common Stock or Warrants or change their opinion, the trading price of our Common Stock and Warrants would likely decline.
+Added: If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, it could lose visibility in the financial markets, which could cause the trading price or trading volume of our Common Stock and Warrants to decline.
+Added: We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our Common Stock.
+Added: We have never declared or paid any cash dividend on our Common Stock.
+Added: We currently anticipate that we will retain future earnings for the development, operation and expansion of the business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
+Added: Any return to stockholders will therefore be limited to the appreciation of their stock.
+Added: There is no guarantee that shares of Common Stock will appreciate in value or even maintain the price at which stockholders have purchased their shares.
+Added: Sales of a substantial number of our securities in the public market by the Selling Securityholders and/or by our existing securityholders could cause the prices of our Common Stock and Warrants to fall.
+Added: Under a registration statement on Form S-1, Registration No.
+Added: 333- 268613 (the “Resale S-1”), that we filed the with SEC on February 7, 2023, the Selling Securityholders (as defined in the Resale S-1) may sell (a) up to 36,450,645 Total Resale Shares (as defined in the Resale S-1 and which represented approximately 31.6% of our total outstanding Common Stock as of December 31, 2022, assuming no exercise of the Warrants and options, or approximately 28.8% of our outstanding Common Stock if the Warrants were exercised in full), which consist of (i) up to 3,920,440 shares of Common Stock issued in connection with the Business Combination at an equity consideration value of $10.00 per share, including 843,736 shares of Common Stock that may become tradeable upon the achievement of certain stock price-based vesting conditions in accordance with the terms of the Merger Agreement (“Earnout Shares”), (ii) 15,922,934 shares of Common Stock issued to the Sponsor and related parties in private placements, which includes 5,750,000 shares of Founder Shares (as defined in the Resale S-1) issued in connection with APAC’s initial public offering (the “IPO”) at a purchase price of approximately $0.004 per share, including 1,293,299 Sponsor Earnout Shares, and an aggregate of 10,172,934 shares issued in the Redemption Backstop and the Forward Purchase (each as defined in the Resale S-1) at a purchase price of $10.00 per share, (iii) 11,345,489 shares of Common Stock that are issuable upon the exercise of 11,345,489 Private Placement Warrants (as defined in the Resale S-1) at an exercise price of $11.50 per share, which includes 8,233,333 warrants originally issued by APAC in connection with the IPO at a price of $1.50 per Private Placement Warrant and an aggregate of 3,112,156 warrants issued to the Sponsor in the Redemption Backstop and the Forward Purchase, which warrants were issued as part of the overall share purchase price of $10.00 per share in such transactions, (iv) 5,261,782 shares of Common Stock issued or issuable upon the exercise of options to purchase Common Stock at a weighted average exercise price of $10.83 and the vesting of restricted stock units and performance stock units, and (b) up to 11,345,489 of the Private Placement Warrants (which represented approximately 9.0% of our total outstanding Common Stock as of December 31, 2022, assuming the Warrants were exercised in full).
+Added: Subject to certain exceptions, our Amended and Restated Registration and Stockholder Rights Agreement, dated November 1, 2022, between us, the Sponsor and other parties named therein (the “A&R Registration Rights Agreement”) provides for certain restrictions on transfer with respect to our securities, including Founder Shares, Private Placement Warrants, and securities held by former directors and officers of APAC and certain directors and officers of OmniAb and Ligand.
+Added: Such restrictions began on the Closing Date and will end (i) with respect to the Founder Shares, at the earliest of (A) one year after the Closing Date and (B) the first date on which (x) the last reported sale price of a share of Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date or (y) we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property;
+Added: (ii) with respect to the Private Placement Warrants that are held by the initial purchasers of such warrants (or permitted transferees under the A&R Registration Rights Agreement), and any of the shares of Common Stock issued or issuable upon the exercise or conversion of such warrants and that are held by the initial purchasers of the applicable warrants being converted (or permitted transferees under the A&R Registration Rights Agreement), the period ending 30 days after the Closing;
+Added: and (iii) with respect to the shares of Common Stock issued to the New Holders (as defined in the A&R Registration Rights Agreement), each of whom are the directors and officers of Ligand and/or OmniAb, in connection with the consummation of the Merger and held by the New Holders (or their permitted transferees under the A&R Registration Rights Agreement), the period ending on the earliest of (A) three months after the Closing and (B) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.
+Added: However, following the expiration of the applicable lock-up period, such equityholders will not be restricted from selling shares of Common Stock held by them, other than by applicable securities laws.
+Added: As such, sales of a substantial number of shares of Common Stock in the public market could occur at any time.
+Added: These sales by us, the Selling Securityholders and/or by our other existing securityholders, or the perception that those sales might occur, could reduce the market price of our Common Stock and Warrants and could impair our ability to raise capital through the sale of additional equity securities.
+Added: As restrictions on resale end and registration statements (filed after the Closing to provide for the resale of such shares from time to time) become available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in our share price, or the market price of our Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
+Added: We are unable to predict the effect that such sales may have on the prevailing market prices of our Common Stock and Warrants.
+Added: Certain existing shareholders purchased our shares at a price below the current trading price of such shares, and may experience a positive rate of return based on the current trading price.
+Added: Our future investors may not experience a similar rate of return.
+Added: The sale of all the securities being offered in the Resale S-1 could result in a significant decline in the public trading price of our securities.
+Added: Despite such a decline in the public trading price, some of the Selling Securityholders may still experience a positive rate of return on the securities they purchased due to the differences in the purchase prices described in the Resale S-1.
+Added: Additionally, even if the current trading price of our Common Stock is at or significantly below the price at which the units were issued in the IPO, some of the Selling Securityholders may still have an incentive to sell because they could still profit on sales due to the lower price at which they purchased their shares compared to the public investors.
+Added: For example, the 5,750,000 Founder Shares were initially purchased by the Sponsor at a price of $0.004 per share.
+Added: Based on the closing price of our Common Stock on March 1, 2023 of $4.15 per share, the holders of the Founder Shares, including affiliates of the Sponsor, would experience a potential profit of up to approximately $4.146 per share, or approximately $23.9 million in the aggregate.
+Added: Public securityholders may not be able to experience the same positive rates of return on securities they purchase due to the low price at which the Sponsor initially purchased the Founder Shares.
+Added: Provisions in our certificate of incorporation and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
+Added: Our certificate of incorporation and bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our Board.
+Added: The provisions in our charter documents include the following:
+Added: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our Board;
+Added: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
+Added: • the exclusive right of our Board, unless the Board grants such a right to the holders of any series of preferred stock, to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board;
+Added: • the required approval of at least 66-2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause;
+Added: • the ability of our Board to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;
+Added: • the ability of our Board to alter our bylaws without obtaining stockholder approval;
+Added: • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend or repeal our bylaws or repeal the provisions of our certificate of incorporation regarding the election and removal of directors;
+Added: • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
+Added: • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings;
+Added: • the requirement that a special meeting of stockholders may be called only by the Board, the chair of the Board, the chief executive officer or the president, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
+Added: • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
+Added: We are also subject to the anti-takeover provisions contained in Section 203 of the DGCL.
+Added: Under Section 203, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the Board has approved the transaction.
+Added: Our certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and that the federal district courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees or the underwriters or any offering giving rise to such claim.
+Added: Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our certificate of incorporation or our bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine;
+Added: provided that this provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act.
+Added: In addition, our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
+Added: For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
+Added: We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
+Added: Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
+Added: These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors and officers, which may discourage such lawsuits against us and our directors and officers.
+Added: If a court were to find the choice of forum provisions in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect its business and financial condition.
+Added: The exclusive forum clause set forth in the Warrant Agreement may have the effect of limiting an investor’s rights to bring legal action against us and could limit the investor’s ability to obtain a favorable judicial forum for disputes with us.
+Added: The Warrant Agreement, dated August 9, 2022, between APAC and Continental Stock Transfer & Trust Company (“Continental”), as warrant agent, as amended by the Assignment, Assumption and Amendment Agreement, dated November 1, 2022, by and among us, Continental and Computershare Trust Company, N.A.
+Added: (collectively, the “Warrant Agreement”) provides that (i) any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York and (ii) we irrevocably submit to such jurisdiction, which jurisdiction will be exclusive.
+Added: We have waived or will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
+Added: We note, however, that there is uncertainty as to whether a court would enforce these provisions and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
+Added: Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
+Added: Notwithstanding the foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.
+Added: Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
+Added: Any person or entity purchasing or otherwise acquiring any interest in any of our Warrants shall be deemed to have notice of and to have consented to the forum provisions in the Warrant Agreement.
+Added: If any action, the subject matter of which is within the scope of the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “ foreign action”) in the name of any holder of the Warrants, such holder shall be deemed to have consented to:
+Added: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
+Added: This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits.
+Added: Alternatively, if a court were to find this provision of the Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and Board.
+Added: We are an emerging growth company and smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our shares less attractive to investors.
+Added: We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).
+Added: For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
+Added: We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the IPO (December 31, 2026), (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of shares of Common Stock that are held by non-affiliates exceeds $700.0 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
+Added: In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies.
+Added: We have elected to use this extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
+Added: We are also a smaller reporting company as defined in the Exchange Act.
+Added: Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in this Annual Report and our other periodic reports and proxy statements.
+Added: We will be able to take advantage of these scaled disclosures for so long as our voting and non-voting Common Stock held by non-affiliates is less than $250.0 million measured on the last business day of its second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting Common Stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
+Added: We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions.
+Added: If some investors find our Common Stock less attractive as a result, there may be a less active trading market for the Common Stock and our market price may be more volatile.
+Added: If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected.
+Added: The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
+Added: We will base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, as provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
+Added: Significant assumptions and estimates used in preparing our financial statements include the estimated variable consideration included in the transaction price in our contracts with customers, stock-based compensation, and valuation of our equity investments in early-stage biotechnology companies.
+Added: Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Common Stock.
+Added: Additionally, the combined company will regularly monitor its compliance with applicable financial reporting standards and review new pronouncements and drafts thereof that are relevant to it.
+Added: As a result of new standards, changes to existing standards and changes in their interpretation, the combined company might be required to change its accounting policies, alter its operational policies, and implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or the combined company may be required to restate its published financial statements.
+Added: Such changes to existing standards or changes in their interpretation may have an adverse effect on its reputation, business, financial position, and profit.
+Added: If securityholders exercise their Public Warrants on a “cashless basis,” they will receive fewer shares of Common Stock from such exercise than if such securityholders were to exercise such Warrants for cash.
+Added: There are circumstances in which the exercise of the warrants issued in the IPO (the “Public Warrants”) may be required or permitted to be made on a cashless basis.
+Added: First, since a registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants was not effective by the 60th business day after the closing of the Merger, warrantholders could, until such time as there was an effective registration statement (which occurred when the Resale S-1 became effective on February 10, 2023), exercise Warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.
+Added: Second, if our Common Stock is at any time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of Public Warrants who exercise their Warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
+Added: Third, if we call the Public Warrants for redemption, our management will have the option to require all holders that wish to exercise Warrants to do so on a cashless basis.
+Added: In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrants and the “fair market value” (as defined in the next sentence) by (y) the fair market value.
+Added: The “fair market value” is the average reported last sale price of the Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of Warrants, as applicable.
+Added: As a result, you would receive fewer shares of Common Stock from such exercise than if you were to exercise such Warrants for cash.
+Added: There is no guarantee that the exercise price of the Public Warrants will ever be less than the trading price of our Common Stock on Nasdaq, and they may expire worthless, and the terms of the Public Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.
+Added: As of the date of this Annual Report, the Public Warrants are “out-of-the money,” which means that the trading price of the shares of our Common Stock underlying the Public Warrants is below the $11.50 exercise price of the Public Warrants.
+Added: For so long as the Public Warrants remain “out-of-the money,” we do not expect warrant holders to exercise their Public Warrants.
+Added: Therefore, any cash proceeds that we may receive in relation to the exercise of such securities will be dependent on the trading price of our Common Stock.
+Added: If the market price for our Common Stock is less than the exercise price of the Public Warrants, warrant holders will be unlikely to exercise such securities.
+Added: There is no guarantee that our Public Warrants will be in the money prior to their expiration and, as such, our Public Warrants may expire worthless.
+Added: The Public Warrants were issued in registered form under a Warrant Agreement.
+Added: The Warrant Agreement provides that the terms of the Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
+Added: Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.
+Added: Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon exercise of a Public Warrant.
+Added: Warrants are exercisable for shares of Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders.
+Added: Warrants to purchase an aggregate of 19,012,156 shares of Common Stock are exercisable in accordance with the terms of the warrant agreement governing those securities.
+Added: The exercise price of the Warrants is $11.50 per share.
+Added: To the extent such warrants are exercised, additional shares of Common Stock will be issued, which will result in dilution to the holders of our Common Stock and increase the number of shares eligible for resale in the public market.
+Added: Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our Common Stock.
+Added: We may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to securityholders, thereby making such Public Warrants worthless.
+Added: We have the ability to redeem outstanding Public Warrants prior to their expiration at $0.01 per warrant, provided that the last reported sales price (or the closing bid price of our Common Stock in the event the shares of Common Stock are not traded on any specific trading day) of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send proper notice of such redemption, provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the Public Warrants, we have an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available.
+Added: If and when the Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
+Added: Redemption of the outstanding Public Warrants could force securityholders:
+Added: (i) to exercise Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so, (ii) to sell Public Warrants at the then-current market price when they might otherwise wish to hold Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of such Public Warrants.
Unresolved Staff Comments
−Removed: We currently maintain our executive offices at 65 East 55th St., 18th Floor, New York, NY 10022.
−Removed: The cost for this space is included in the $10,000 per month fee that we will pay an affiliate of our sponsor for office space, administrative and support services.
−Removed: We consider our current office space adequate for our current operations.
−Removed: Legal Proceedings.
−Removed: We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.
−Removed: Mine Safety Disclosures.
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.