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Item 2. Management’s Discussion and Analysis

2023-08-02 compared with 2023-05-12 · 50 added, 37 removed, 126 unchanged (41% of the section changed)

29 unchanged sentences

We are a blank check company formed under the laws of the State of Delaware on September 11, 2020 for the purpose of effecting an initial business combination.

We intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering ( the “Initial Public Offering”) and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans.

5 unchanged sentences

The termination of the Memic Business Combination Agreement became effective as of March 9, 2022.

As a result of the termination of the Memic Business Combination Agreement, the Memic Business Combination Agreement, along with any Transaction Agreement (as defined in the Memic Business Combination Agreement) entered into in connection therewith, are void and there is no liability under either of the Memic Business Combination Agreement or any Transaction Agreement on the part of any party thereto (including, without limitation, under the SPAC Sponsor Letter Agreement by and among Memic, the Sponsor, and the other parties signatory thereto dated August 12, 2021).

As a result of the termination of the Memic Business Combination Agreement, the Memic Business Combination Agreement, along with any Transaction Agreement (as defined in the Memic Business Combination Agreement) entered into in connection therewith, are void and there is no liability under either of the Memic Business Combination Agreement or any Transaction Agreement on the part of any party thereto (including, without limitation, under the sponsor letter agreement by and among Memic, the Sponsor, and the other parties signatory thereto dated August 12, 2021).

Pursuant to the Termination Agreement, subject to certain exceptions, the Company, Memic and Memic Merger Sub have also agreed, on behalf of themselves and their respective related parties, to a release of claims relating to the proposed business combination.

3 unchanged sentences

Upon consummation of the TriSalus Business Combination, the Company will be renamed “TriSalus Life Sciences, Inc.”

On April 4, 2023, the Company, MTAC Merger Sub, and TriSalus amended the TriSalus Merger Agreement (the “TriSalus Amendment”) to, among other matters, provide for the assumption by the Company of any restricted stock unit awards under TriSalus’ existing equity plan that are outstanding as of immediately prior to the closing of the TriSalus Business Combination, which will be converted into restricted stock unit awards covering shares of Common Stock.

The TriSalus Merger Agreement was amended on April 4, 2023 (the “First Amendment”), May 13, 2023 (the “Second Amendment”), and July 5, 2023 (the “Third Amendment”), which were entered into by the Company, MTAC Merger Sub, and TriSalus, to make certain amendments to the TriSalus Merger Agreement.

The amendments under the First Amendment included, among other matters, (i) the assumption by the Company of any restricted stock unit awards under TriSalus’ existing equity plan that are outstanding as of immediately prior to the closing of the TriSalus Business Combination, which will be converted into restricted stock unit awards covering shares of Common Stock and (ii) removing the right for either party to terminate the TriSalus Merger Agreement if the Company has not obtained by March 31, 2023 commitments for private financing of at least $40 million in support of the TriSalus Business Combination.

The amendments under the Second Amendment included, among other matters, (i) permitting the Company to seek the necessary stockholder approval to file an amendment to its Amended and Restated Certificate of Incorporation to extend the period to consummate a Business Combination to a date no later than September 22, 2023, (ii) clarifying that no greenshoe or other investor-held options to purchase the Company’s securities will count towards the Available Closing Acquiror Cash (as defined in the TriSalus Merger Agreement), (iii) reducing the Available Closing Acquiror Cash condition to TriSalus’ obligations under the TriSalus

Merger Agreement from $60 million to $35 million.

The amendments under the Third Amendment included, among other matters, updating the Bylaws for the Company that will become effective immediately prior to the consummation of the TriSalus Merger Agreement

For a full description of the TriSalus Merger Agreement and the proposed TriSalus Business Combination, please see “Item 1.

Financial Statements.” For additional information of the TriSalus Amendment, please see the Company’s Current Report on Form 8-K, as filed with the SEC on April 5, 2023.

Financial Statements.” For additional information on the First Amendment, Second Amendment, and Third Amendment, please see the Company’s Current Reports on Form 8-K, as filed with the SEC on April 5, 2023, May 15, 2023, and July 6, 2023, respectively.

Preferred Stock PIPE

On June 7, 2023 and July 4, 2023, the Company and certain investors (the “Preferred Stock PIPE Investors”) entered into subscription agreements (the “Subscription Agreements”) pursuant to, and on the terms and subject to the conditions of which, the Preferred Stock PIPE Investors collectively subscribed for and agreed to purchase in private placements an aggregate of 4,015,002 shares of a to-be-authorized class of preferred stock, par value $0.0001 per share that will be designated as Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”) at a purchase price of $10.00 per share, resulting in an aggregate purchase price of $40,150,020.

Upon issuance, each share of Series A Convertible Preferred Stock will be initially convertible into one share of Common Stock.

The closing of the purchase and sale of the Series A Convertible Preferred Stock will occur concurrently with the closing of the TriSalus Business Combination and is subject to the conditions in the Subscription Agreements, including the filing of the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (the “Certificate of Designations”), specifying the terms of the Series A Convertible Preferred Stock, with the Secretary of State of the State of Delaware.

The Subscription Agreements contain customary representations, warranties, and covenants of the Company and the Preferred Stock PIPE Investors.

On June 7, 2023, the Sponsor and the Company entered into a letter agreement (the “Backstop Letter Agreement”), pursuant to which the Sponsor agreed that, to the extent that the Sponsor’s members, or their respective affiliates, related parties or designees, did not collectively subscribe to purchase an aggregate of $2 million worth of Series A Convertible Preferred Stock (any such shortfall, the “Sponsor Commitment Amount”), the Sponsor would execute and deliver to the Company a Subscription Agreement providing for a subscription by the Sponsor in an amount equal to the Sponsor Commitment Amount to purchase shares of Series A Convertible Preferred Stock.

On July 4, 2023, the Company and the Sponsor formalized the termination of the Backstop Letter Agreement in a letter agreement to confirm that the Backstop Letter Agreement terminated in accordance with its terms on such date.

For a full description of the Subscription Agreement, Certificate of Designations, and the Backstop Letter Agreement, please see “Item 1.

Financial Statements.”

Results of Operations

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

Our only activities from September 11, 2020 (inception) through March 31, 2023 were organizational activities, those necessary to prepare for the Initial Public Offering, and identifying a target

company for an initial business combination, including the terminated business combination with Memic and Memic Merger Sub and the TriSalus Business Combination.

Our only activities from September 11, 2020 (inception) through June 30, 2023 were organizational activities, for the Initial Public Offering, and identifying a target company for an initial business combination, including the terminated business combination with Memic and Memic Merger Sub and the TriSalus Business Combination.

We do not expect to generate any operating revenues until after the completion of our initial business combination.

1 unchanged sentence

We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance) as well as identifying and evaluating targets for an initial business combination.

For the three months ended March 31, 2023, we had a net loss of $448,097, which consists of general and administrative expenses of $843,346 and provision for income taxes of $27,118, offset by a change in fair value of warrant liabilities of $265,334 and interest earned on marketable securities held in the trust account of $157,033.

For the three months ended March 31, 2022, we had a net income of $2,836,725, which consists of a change in fair value of warrant liabilities of $3,449,332 and interest earned on marketable securities held in the trust account of $57,200, offset by general and administrative expenses of $669,807.

For the three months ended June 30, 2023, we had a net loss of $995,039, which consists of general and administrative expenses of $1,429,989 and provision for income taxes of $42,722, offset by a change in fair value of warrant liabilities of $265,334 and interest earned on marketable securities held in the trust account of $212,338.

For the six months ended June 30, 2023, we had a net loss of $1,443,136, which consists of general and administrative expenses of $2,273,335 and provision for income taxes of $69,840, offset by a change in fair value of warrant liabilities of $530,668 and interest earned on marketable securities held in the trust account of $369,371.

For the three months ended June 30, 2022, we had a net income of $2,386,239, which consists of a change in fair value of warrant liabilities of $2,388,000 and interest earned on marketable securities held in the Trust Account of $314,714, offset by general and administrative expenses of $288,273 and provision for income taxes of $28,202.

For the six months ended June 30, 2022, we had a net income of $5,222,964, which consists of a change in fair value of warrant liabilities of $5,837,332 and interest earned on marketable securities held in the Trust Account of $371,914, offset by general and administrative expenses of $958,080 and provision for income taxes of $28,202.

Liquidity and Going Concern

On December 22, 2020, we consummated the Initial Public Offering of 25,000,000 Units at $10.00 per unit, generating gross proceeds of $250,000,000.

On December 22, 2020, we consummated the Initial Public Offering of 25,000,000 units at $10.00 per unit (the “Units”), generating gross proceeds of $250,000,000.

Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 4,933,333 private placement warrants at a price of $1.50 per private placement warrant in the private placement, generating gross proceeds of $7,400,000.

1 unchanged sentence

We incurred $14,161,525 in Initial Public Offering related costs, including $5,000,000 of underwriting fees and $8,750,000 of deferred underwriting fees and $411,525 of other offering costs.

For the three months ended March 31, 2023, cash used in operating activities was $698,415.

For the six months ended June 30, 2023, cash used in operating activities was $1,012,320.

Net loss of $1,443,136 was affected by a change in fair value of warrant liabilities of $530,668 and interest earned on marketable securities held in the trust account of $369,371.

Changes in operating assets and liabilities provided $1,330,855 of cash for operating activities.

For the three months ended March 31, 2022, cash used in operating activities was $425,954.

For the six months ended June 30, 2022, cash used in operating activities was $1,122,702.

Net income of $5,222,964 was affected by a change in fair value of warrant liabilities of $5,837,332 and interest earned on marketable securities held in the Trust Account of $371,914.

Changes in operating assets and liabilities provided $243,853 of cash for operating activities.

As of March 31, 2023, we had investments held in the trust account of $20,219,328.

Changes in operating assets and liabilities used $136,420 of cash for operating activities.

As of June 30, 2023, we had investments held in the trust account of $12,076,340.

Interest income on the balance in the trust account may be used by us to pay taxes.

During the period ended March 31, 2023, the Company did not withdraw any of interest income from the trust account.

During the six months ended June 30, 2023, the Company withdrew an amount of $67,000 of interest income from the trust account in connection with redemption and to pay tax obligations.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less income taxes payable), to complete our business combination.

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

As of March 31, 2023, we had cash of $136,798.

We intend to use the funds held outside the trust account primarily to perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete an initial business combination, including the TriSalus Business Combination.

As of June 30, 2023, we had cash of $103,975 and $370,778 available to be drawn on the 2022 Promissory Note III.

We intend to use the funds held outside the trust account primarily to structure, negotiate and complete an initial business combination, including the TriSalus Business Combination.

The Company plans to consummate the TriSalus Business Combination during the third quarter of 2023.

Promissory note – related party

1 unchanged sentence

The 2021 Promissory Note is non-interest bearing and matures upon the closing of our initial business combination.

As of March 31, 2023 and December 31, 2022, there was $544,000 outstanding under the 2021 Promissory Note.

As of June 30, 2023 and December 31, 2022, there was $544,000 outstanding under the 2021 Promissory Note.

On January 28, 2022, we issued an unsecured promissory note in the principal amount of up to $400,000 to the Sponsor (the “2022 Promissory Note I”), of which $400,000 was funded by the Sponsor during the year ended December 31, 2022.

The 2022 Promissory Note does not bear interest and matures upon closing of our initial business combination.

As of March 31, 2023 and December 31, 2022, there was $400,000 outstanding under the 2022 Promissory Note I.

As of June 30, 2023 and December 31, 2022, there was $400,000 outstanding under the 2022 Promissory Note I.

On December 16, 2022, the Company issued an unsecured promissory note in the principal amount of up to $1,000,000 to the Sponsor (the “2022 Promissory Note III”).

1 unchanged sentence

Financial Statements,”, does not bear interest and matures upon closing of the Company’s initial business combination.

As of March 31, 2023 and December 31, 2022, there was $415,222 and $0 outstanding under the 2022 Promissory Note III, respectively.

As of June 30, 2023 and December 31, 2022, there was $629,222 and $0 outstanding under the 2022 Promissory Note III, respectively.

Convertible Promissory Note – related party

On May 24, 2022, we issued the a promissory note in the principal amount of up to $1,500,000 to the Sponsor for working capital requirements and payment of certain expenses in connection with our initial business combination (the “2022 Convertible Promissory Note”).

On May 24, 2022, we issued a promissory note in the principal amount of up to $1,500,000 to the Sponsor for working capital requirements and payment of certain expenses in connection with our initial business combination (the “2022 Convertible Promissory Note”).

The 2022 Convertible Promissory Note is non-interest bearing and matures upon the closing of a business combination (in which case we will repay the 2022 Convertible Promissory Note out of the proceeds of the trust account released to us) or upon our liquidation (in which case we may only repay the 2022 Convertible Promissory Note out of working capital funds held outside the trust account).

At the election of the Sponsor, all or a portion of the unpaid principal amount of the 2022 Convertible Promissory Note may be converted into that number of warrants at a price of $1.50 per warrant, each exercisable for one share of Class A common stock.

As of March 31, 2023 and December 31, 2022, there was $1,500,000 and $1,341,000 outstanding under the 2022 Convertible Promissory Note, respectively.

As of June 30, 2023 and December 31, 2022, there was $1,500,000 and $1,341,000 outstanding under the 2022 Convertible Promissory Note, respectively.

Extension Note

On December 16, 2022, we issued a promissory note in the aggregate principal amount of up to $468,821 to the Sponsor (the “Extension Note”), pursuant to which the Sponsor agreed to loan to us and deposit into the trust account the extension funds for the public shares that were not redeemed in connection with the extension of our termination date from December 22, 2022 to June 22, 2023 (or such earlier date as determined by the Board).

The 2022 Extension Note does not bear interest and is repayable in full upon the date of the consummation of an initial business combination.

As of March 31, 2023 and December 31, 2022, there was $156,274 and $39,068 outstanding under the 2022 Extension Note, respectively.

In connection with our assessment of going concern considerations in accordance with the Financial Accounting Standard Board’s (the “FASB”) Accounting Standards Update (“ASU”) Topic 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have until June 22, 2023, to consummate an initial business combination.

On December 16, 2022, we issued a promissory note in the aggregate principal amount of up to $468,821 to the Sponsor (the “First Extension Note”), pursuant to which the Sponsor agreed to loan to us and deposit into the trust account the First Extension Funds for shares of Class A common stock included in the Units (the “Public Shares,” whether they were purchased in the Initial Public Offering or thereafter in the open market) that were not redeemed in connection with the extension of our termination date from December 22, 2022 to June 22, 2023 (or such earlier date as determined by the Board).

The First Extension Note does not bear interest and is repayable in full upon the consummation of an initial business combination.

As of June 30, 2023 and December 31, 2022, there was $234,411 and $39,068 outstanding under the First Extension Note, respectively.

On June 15, 2023, we issued a promissory note in the aggregate principal amount of up to $137,375 to the Sponsor (the “Second Extension Note”), pursuant to which the Sponsor agreed to loan to us and deposit into the trust account the Second Extension Funds for the Public Shares.

For the avoidance of doubt, the Public Shares exclude the shares of Class A common stock held by the Sponsor after its conversion of 6,249,999 shares of our Class B common stock on June 26, 2023) that were not redeemed in connection with the extension of the Company’s termination date from June 22, 2023 to September 22, 2023 (or such earlier date as determined by the Board).

The Second Extension Note, as described in Note 5, does not bear interest and is repayable in full upon the consummation of an initial business combination.

As of June 30, 2023, there was $22,896 outstanding under the Second Extension Note.

In connection with our assessment of going concern considerations in accordance with the Financial Accounting Standard Board’s (the “FASB”) Accounting Standards Update (“ASU”) Topic 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have until September 22, 2023, to consummate an initial business combination.

It is uncertain that we will be able to consummate an initial business combination by this time.

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Management plans to consummate a business combination prior to the mandatory liquidation date.

No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after June 22, 2023.

No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after September 22, 2023.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2023.

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2023.

We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

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Upon completion of an initial business combination or our liquidation, we will cease paying these monthly fees.

For the three months ended March 31, 2023, we incurred $30,000 in fees for these services.

For the three months ended March 31, 2022, we incurred $30,000 in fees for these

As of March 31, 2023 and December 31, 2022, there were $270,000 and $240,000 included in accounts payable and accrued expenses in the condensed consolidated balance sheets to the financial statements and the notes thereto contained elsewhere in this Report, respectively.

For the three and six months ended June 30, 2023, we incurred $30,000 and $60,000 in fees for these services.

For the three and six months ended June 30, 2022, the Company incurred $30,000 and $60,000 in fees for these services, respectively.

As of June 30, 2023 and December 31, 2022, there were $300,000 and $240,000 included in accounts payable and accrued expenses in the condensed consolidated balance sheets to the financial statements and the notes thereto contained elsewhere in this Report, respectively.

The underwriters of the Initial Public Offering are entitled to a deferred fee of $0.35 per unit, or $8,750,000 in the aggregate.

10 unchanged sentences

We have identified the following critical accounting estimates:

Use of Estimates

The preparation of the financial statements in conformity with the accounting principles generally accepted in the United States of America requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

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

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

Warrant Liabilities

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

The Company has not adopted this guidance as of March 31, 2023.

The Company has not adopted this guidance as of June 30, 2023.

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

6 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis