As filed with the U.S. Securities and Exchange
Commission on September 7, 2021.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MONTEREY
BIO ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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6770
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85-2204842
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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17 State Street
21st Floor
New
York, NY 10004
(917) 267-0216
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive
offices)
Sanjeev Satyal
Chief Executive Officer
17 State Street
21st Floor
New
York, NY 10004
(917) 267-0216
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Alan I. Annex
Jason T. Simon
Greenberg Traurig, LLP
1750 Tysons Blvd., Suite 1000
McLean, VA 22102
(703) 749-1386
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Ari Edelman
Edward P. Bromley III
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
(212) 521-5400
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Approximate
date of commencement of proposed sale to the public: As soon as practicable after the effective date of this offering.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, as amended (the “Securities Act”) check the following box. ¨
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
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Smaller reporting company
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x
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Emerging growth company
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x
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
CALCULATION OF REGISTRATION FEE
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Title
of Each Class of Security being registered
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Amount
Being
Registered
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Proposed
Maximum
Offering
Price per
Security(1)
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Proposed
Maximum
Aggregate
Offering
Price(1)(2)
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Amount
of
Registration
Fee
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Units,
each consisting of one share of common stock, $0.0001 par value, and one warrant entitling the holder to purchase one share of common
stock(2)
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11,500,000
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$
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10.00
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$
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115,000,000
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$
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12,546.50
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Shares
of common stock, $0.0001 par value, included as part of the units
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11,500,000
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—
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—
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—
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(3)
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Warrants included as part of the units
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11,500,000
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—
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—
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—
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(3)
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Total
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$
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115,000,000
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$
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12,546.50
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(1)
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Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
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(2)
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Includes (A) the
aggregate of 10,000,000 units to be issued to public stockholders in the public offering,
and 1,500,000 units which may be issued upon exercise of a 45-day option granted to the Underwriters
to cover over-allotments, if any; and (B) shares of common stock and warrants underlying
such units.
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(3)
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No fee pursuant to Rule 457(g).
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The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange
Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
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PRELIMINARY
PROSPECTUS
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SUBJECT TO COMPLETION, DATED SEPTEMBER
7, 2021
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$100,000,000
MONTEREY BIO ACQUISITION CORPORATION
10,000,000 UNITS
Monterey Bio Acquisition Corporation, which
we refer to as “we,” “us” or “our company,” is a blank check company incorporated in Delaware whose
business purpose is to enter into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other
similar business combination with one or more businesses or entities, which we refer to throughout this prospectus as our “initial
business combination.” While we may pursue an initial business combination in any region or sector, we intend to focus our efforts
on a biotech company that has demonstrated success and is primed to thrive in the rapidly evolving biotech industry for our initial business
combination.
This is an initial public
offering of our securities. We are offering 10,000,000 units at an offering price of $10.00 per unit. Each unit consists of one share
of common stock, par value $0.0001, and one warrant, which we refer to throughout this prospectus as “warrants” or the “public
warrants.” Each warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50 per whole share,
subject to adjustment as described in the prospectus. We will not issue fractional shares. Each public warrant will become exercisable
on the later of one year after the closing of this offering or the consummation of an initial business combination, and will expire five
years after the completion of an initial business combination, or earlier upon redemption.
We have granted Chardan
Capital Markets LLC, the representative of the underwriters (“Chardan”), a 45-day option to purchase up to an additional
1,500,000 units (over and above the 10,000,000 units referred to above) solely to cover over-allotments, if any.
We will provide the holders of our outstanding
shares of common stock that were sold as part of the units in this offering with the opportunity to redeem their shares of common stock
upon the consummation of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account described below, including interest (net of taxes payable), divided by the number of then outstanding shares
of common stock that were sold as part of the units in this offering, which we refer to as our “public shares.”
We will have 12 months from
the closing of this offering to consummate an initial business combination. However, if we anticipate that we may not be able to consummate
our initial business combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period
of time to consummate a business combination up to three times by an additional three months each time (for a total of up to 21 months
to complete a business combination) by depositing into the trust account maintained by Continental Stock Transfer & Trust Company,
acting as trustee, an amount of $0.10 per unit sold to the public in this offering for each such three-month extension (resulting in
a total deposit of $10.40 per unit sold to the public in the event all three extensions are elected), as described in more detail in
this prospectus. Public stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such
extension. If we are unable to consummate our initial business combination within the above time period, we will distribute the aggregate
amount then on deposit in the trust account, pro rata to our public stockholders, by way of the redemption of their shares and thereafter
cease all operations except for the purposes of winding up of our affairs, as further described herein. In such event, the warrants will
expire and be worthless.
NorthStar Bio Ventures, LLC (“NorthStar”),
our co-sponsor and an affiliate of certain of our directors and officers, has committed to purchase from us 3,750,000 warrants (or 4,087,500
warrants if the over-allotment option is exercised in full) and Chardan Monterey Investments, LLC, our co-sponsor and an affiliate of
Chardan (“Chardan Monterey”), has committed to purchase from us 1,250,000 warrants (or 1,362,500 warrants if the over-allotment
option is exercised in full), in each case, at a price of $1.00 per warrant, for an aggregate purchase price of $5,000,000 (or $5,450,000
if the over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering.
We refer to these warrants, collectively, as the “private warrants” throughout this prospectus. Each private warrant is exercisable
for one share of common stock at an exercise price of $11.50 per share. Of the $5,000,000 (or $5,450,000 if the over-allotment option
is exercised in full) we will receive from the sale of the private warrants, $2,500,000 (or $2,800,000 if the over-allotment option is
exercised in full) will be used for offering expenses and $1,500,000 will be used for working capital.
As of the date hereof, our initial stockholders
hold an aggregate of 2,875,000 shares of our common stock. We refer to these shares held by our initial stockholders as “founder
shares” or “insider shares.” The founder shares include an aggregate of up to 375,000 shares that are subject to forfeiture
to the extent that the underwriters’ over-allotment option is not exercised in full or in part.
There is presently no public market for our units,
common stock, or warrants. We intend to apply to have our units listed on the Nasdaq Capital Market, or Nasdaq, under the symbol “MTRYU”
on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. Once
the securities comprising the units begin separate trading as described in this prospectus, the shares of common stock and warrants will
be traded on Nasdaq under the symbols “MTRY” and “MTRYW,” respectively. We cannot assure you that our securities
will continue to be listed on Nasdaq after this offering.
We are an “emerging growth company”
and “smaller reporting company” under applicable federal securities laws and we will therefore be subject to reduced public
company reporting requirements.
Investing in our securities involves a high
degree of risk. See “Risk Factors” beginning on page 23 of this prospectus for a discussion of information that should
be considered in connection with an investment in our securities.
Neither the Securities and Exchange Commission
(also referred to as the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Price
to
Public
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Underwriting
Discount and
Commissions(1)
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Proceeds,
Before
Expenses, to us
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Per unit
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$
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10.00
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$
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0.20
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$
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9.80
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Total
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$
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100,000,000
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$
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2,000,000
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$
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98,000,000
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(1)
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Includes: (i) $0.20 per share, or $2,000,000 in the aggregate (or up to $2,300,000 if the underwriters’
over-allotment option is exercised in full), payable upon the closing of this offering and (ii) a $100,000 fee payable to B.
Riley Securities, Inc. in consideration for its services and expenses incurred as a “qualified independent underwriter.”
This excludes: (a) the 637,500 founder shares acquired by Chardan Monterey (93,750 of which are subject to forfeiture if the
over-allotment is not exercised) and the 1,250,000 private warrants (or 1,362,500 private warrants if the over-allotment option is
exercised in full) that Chardan Monterey has agreed to purchase, which will be deemed to be compensation for Chardan under FINRA
Rule 5110 and (b) the Marketing Fee payable to Chardan of $3,500,000 (or $4,025,000 if the underwriters’ over-allotment
option is exercised in full). The private warrants and underlying securities will not be exercisable more than five years from the
effective date of the registration statement of which this prospectus forms a part in accordance with FINRA Rule 5110(g)(8)(A).
See also “Underwriting (Conflicts of Interest)” for a description of compensation and other items of value payable to
the underwriters.
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Upon consummation of the offering, $10.10
per unit sold to the public in this offering (whether or not the over-allotment option has been exercised in full or part) will be deposited
into a United States-based trust account maintained by Continental Stock Transfer & Trust Company acting as trustee. Except
as described in this prospectus, these funds will not be released to us until the earlier of the completion of our initial business combination
and our redemption of the public shares upon our failure to consummate a business combination within the required period.
The underwriters are offering the units on a firm
commitment basis. Chardan Capital Markets LLC, acting as the representative of the underwriters, expects to deliver the units to purchasers
on or about ___________, 2021.
Sole Book-Running Manager
Chardan
___________, 2021
MONTEREY BIO ACQUISITION CORPORATION
TABLE OF CONTENTS
SUMMARY
This summary only highlights the more detailed
information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider
in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors”
and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in
this prospectus:
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“certificate of incorporation” refers to our
amended and restated certificate of incorporation, to be in effect upon completion of this offering;
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“Chardan” or “Chardan Capital Markets
LLC” refers to Chardan Capital Markets LLC, the representative of the underwriters;
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“Chardan Monterey” refers to Chardan Monterey
Investments LLC, an affiliate of Chardan;
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“co-sponsors” refers to NorthStar and Chardan
Monterey;
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“founder
shares” or “insider shares” refers to the 2,875,000 shares of common stock
held by our initial stockholders prior to this offering (including up to an aggregate of
375,000 shares of common stock subject to forfeiture to the extent that the underwriters’
over-allotment option is not exercised in full or in part);
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“initial
stockholders” refers to all of our stockholders immediately prior to the date of the
final prospectus relating to this offering, including the co-sponsors, officers, directors
and director nominees, to the extent they hold such shares;
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“insiders”
refers to our initial stockholders;
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“Monterey Bio,” “we,” “us”
“our” or “our company” refers to Monterey Bio Acquisition Corporation;
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“NorthStar” refers to NorthStar Bio Ventures,
LLC, an affiliate of certain of our officers and directors;
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“private warrants” refers to the warrants
issued to our co-sponsors in a private placement simultaneously with the closing of this offering;
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“public
stockholders” means the holders of shares of common stock which are being sold as part
of the units in this public offering, or “public shares,” whether they are purchased
in the public offering or in the aftermarket, including any of our initial stockholders to
the extent that they purchase such public shares (except that our initial stockholders will
not have redemption or tender rights with respect to any public shares they own).
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The information in this prospectus assumes
that the underwriters will not exercise their over-allotment option (unless otherwise indicated).
Certain financial information contained in
this prospectus has been rounded and, as a result, certain totals shown in this prospectus may not equal the arithmetic sum of the figures
that should otherwise aggregate to those totals. You should rely only on the information contained in this prospectus. We have not, and
the underwriters have not, authorized anyone to provide you with different information. We are not, and the underwriters are not, making
an offer of these securities in any jurisdiction where the offer is not permitted.
General
We are a blank
check company incorporated as a Delaware corporation whose business purpose is to effect a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses. Throughout this prospectus, we refer to this
as our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on
our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target. We have generated
no revenues to date and we do not expect that we will generate operating revenues at the earliest until we consummate our initial business
combination. We will seek to identify, through the experience and expertise of our management team and board of directors, a biotech
company that has demonstrated success and is primed to thrive in the rapidly evolving biotech industry.
1
Our Competitive Advantage - Strong team of Management, Board
and Co-Sponsors
Our business target selection process will leverage
the insights, extensive biotech network, knowledge and access of our board, co-sponsors, management team and advisors.
Scientific discoveries and the management of biotechnology
companies are getting increasingly complex. Finding, developing and launching new drugs are particularly challenging and expensive. As
a result, companies are turning to a multidisciplinary approach with selecting a management team. In addition, companies are looking for
individuals with proven experience and a track record of success. Our company believes that a similar approach is necessary with regard
to creating our special purpose acquisition company (“special purpose acquisition company” or SPAC”).
We have built our management team around the concept
of combining individuals with extensive experience, varied backgrounds and skill sets. Our Chief Executive Officer, Sanjeev Satyal, has
a proven and successful track record in the biotech industry and has robust operational experience. William McKeever, Chief Financial
Officer, also brings a robust skill set that will complement those of our Chief Executive Officer. Mr. McKeever has more than twenty years
of significant experience in the healthcare industry and has successfully held key positions in equity research, portfolio management
and investment banking. As a result, Mr. McKeever, has broad experience in identifying attractive companies.
In addition to our Chief Executive Officer and
Chief Financial Officer, we believe that our company has also assembled a board of directors with wide-ranging knowledge and proven business
experience. Their capabilities, concomitant with those of our Chief Executive Officer and Chief Financial Officer, create a robust management
team that brings technical expertise in biotechnology, financial knowledge and keen business acumen. As a result, we are positioned to
identify robust biotechnology platforms with superior growth opportunities.
Our board members have long-standing and personal
relationships with senior executives, founders and investors across the biotech, pharmaceutical and financial industries. We believe this
extensive network will provide significant access to assets and acquisition opportunities. Our board members also have an extensive track
record and history of executing licensing deals, mergers and acquisitions, and other transactions. Furthermore, our board members have
significant executive management and board level experience on both the public company and private company levels. They bring a breadth
of experience in the life science industry, and throughout their respective careers have developed a network of additional resources such
as investment banks, investment market participants, entrepreneurs, consultants and legal and accounting firms. We plan to leverage these
relationships to source further acquisition opportunities. Finally, our board of directors harbors strong credibility amongst the biotech
investor community and boasts a proven ability to help companies navigate the capital markets, particularly in the marketing and executing
of private to public transactions for growth companies.
Our
co-sponsor, Chardan Monterey, is affiliated with Chardan Capital Markets, LLC, or Chardan,
an investment firm and a provider of investment banking services, primarily focused on private
and public emerging companies in the healthcare industry. Since its inception, Chardan has
executed more than 500 equity capital markets transactions, raising approximately $26 billion
of capital in both public and private markets. Chardan is a leading SPAC underwriter, SPAC
sponsor (or co-sponsor) and SPAC M&A advisor, providing a highly competitive position
as SPACs have become more accepted in the financial industry. Since 2004, Chardan has been
the lead or co-lead underwriter on over 90 SPAC initial public offerings, as of September 2021. Chardan
has sponsored or co-sponsored 13 SPACs with 7 successfully closed across multiple industries,
1 announced merger, 4 still in market, and 1 publicly filed. Chardan-advised SPACs have targeted
a wide range of industries, including life sciences, healthcare services, technology hardware
and software. No SPAC that has either been advised by Chardan or for which Chardan served
as the lead underwriter has liquidated to date. Chardan has underwritten or advised over
a dozen biotech focused SPACs. Since 2015, Chardan has met with private healthcare companies
and has earned a reputation for partnering with innovative healthcare platforms to develop
and deploy disruptive technologies.
Together, our management team, board, and co-sponsors
have significant operational experience in drug discovery, research, clinical development, and management within the healthcare and financial
industry. Upon successful completion of our initial business combination, our management team and independent directors may be available,
and are willing, to help govern and/or guide continued success of operations. Examples of further contributions may include, but are not
limited to, providing counsel on future strategic needs such as acquisitions, financing strategy and general business activities.
Following an initial business combination, the team may also offer, as needed, an extensive operating network of relationships to help
the business grow and achieve success.
2
Our management team and board consist of the following persons:
Sanjeev
Satyal, Ph.D. has served as our Chief Executive Officer since April 2021.
From 2018 to February 2021, Dr. Satyal served as Chief Executive Officer of pH Pharma
Co. Inc. (“pH Pharma”), a clinical-stage biopharmaceutical company focused on
developing innovative healthcare products for unmet clinical and patient needs. From 2015
to February 2021, he also served as Vice President of Research & Development at
pH Pharma. While at pH Pharma, Dr. Satyal assembled a portfolio of in-licensed clinical stage
programs, and was responsible for further clinical development and the discovery of a proprietary
oncology therapeutic platform. Previously, Dr. Satyal served as Vice President, Biology
at StemGuard Therapeutics, as a Director of Research at StemPar Sciences and as a Director
of Cancer Biology at OncoMed Pharmaceuticals. Dr. Satyal was a postdoctoral fellow at
Genentech. Dr. Satyal is the inventor of over 30 U.S. issued or pending patents, and
their foreign counterparts, in various pharmaceutical areas and has co-authored several scientific
publications. Dr. Satyal earned a B.Sc. in Life Sciences at St. Xavier’s College,
University of Bombay, an M.Sc. in Biotechnology at the University of Poona and a Ph.D. in
Biochemistry at Northwestern University.
William
McKeever has served as our Chief Financial Officer since May 2021. Mr. McKeever has more than 20 years of experience
in the healthcare industry encompassing various roles in equity research, portfolio management and investment banking. Since 2017, Mr. McKeever
has worked as a consultant to various companies that are creating breakthrough technologies to treat diseases in the healthcare industry.
From 2010 to 2016, Mr. McKeever was Managing Director of First Bridgehouse Securities, a boutique investment firm. Prior to that,
Mr. McKeever was a sell-side equity analyst covering the managed care industry at firms including PaineWebber from 1997 to 2000
and UBS from 2000 to 2005. While at PaineWebber and UBS, he was a managing director and was ranked for several year as an All-American
Analyst by Institutional Investor magazine based on its poll of analysts around the country. While at UBS, he was involved in
several initial public offerings of managed care companies. From 2005 to 2009, Mr. McKeever was a Managing Director managing all health
care investments including pharmaceuticals, medical devices, services and biotechnology in the Principal Credit Group (PCG) of Merrill
Lynch. PCG was an internal fund that managed debt and equity investments in all sectors globally. Mr. McKeever earned his B.A. in
Economics from Denison University and his M.B.A. in Finance from the Wharton School of the University of Pennsylvania.
James
R. Neal has more than twenty years of experience in the biotechnology industry encompassing roles in research and development
(R&D), business development, financing and general management. Mr. Neal currently serves as Chief Executive Officer and member
of the board of XOMA (Nasdaq: XOMA). He joined XOMA in 2009 and was appointed to the Chief Executive Officer role in late 2016. In early
2017, Mr. Neal led XOMA through a dramatic strategic pivot taking the company from a traditional R&D heavy biotech company and
transforming it to a successful royalty monetization and aggregation company. In the years prior to becoming Chief Executive Officer
of XOMA, he was instrumental in leading the company’s licensing and business development activities focused on maximizing the value
of XOMA’s foundational antibody IP and knowhow. In addition to his role at XOMA, Mr. Neal currently serves as Chairman of
the board of directors of Palisade Bio, Inc. (Nasdaq: PALI), a clinical-stage biopharmaceutical company, following the merger of
Leading Biosciences, Inc. and Seneca Biopharma, Inc. in April 2021. Prior to XOMA, Mr. Neal was Acting Chief Executive
Officer of Entelos, Inc., a leading bio-simulation company that acquired Iconix Biosciences, a privately held company where Mr. Neal
also served as Chief Executive Officer. At Iconix, Mr. Neal established multi-year collaborations with Bristol-Myers Squibb, Abbott
Labs (now AbbVie), Eli Lilly and the U.S. Food and Drug Administration. From 1999 to 2002, he was Executive Vice President of Incyte
Genomics, leading global commercial activities with pharmaceutical company collaborators and partners including Pfizer, GSK and others.
Earlier in his career, he was an executive with Monsanto Company in positions of increasing responsibility. Mr. Neal earned his
B.Sc. in Agriculture and his M.Sc. in Genetics and Plant Breeding, each from the University of Manitoba, Canada, and holds an MBA degree
from Washington University in St. Louis, MO.
Jonas
Grossman has served as Managing Partner and Head of Capital Markets for Chardan
since December 2003, and has additionally served as President of Chardan since September 2015.
With nearly two decades of transactional and special purpose acquisition company expertise,
Mr. Grossman has led or managed more than 500 transactions, including providing underwriting
and business combination advisory services to more than 85 special purpose acquisition companies
in a variety of industries. Mr. Grossman has been a founder and/or a member of the board
of seven special purpose acquisition companies, of which on four he also has served as Chief
Executive Officer and President. Since April 2020, Mr. Grossman has served as the
President and Chief Executive Officer of Chardan Healthcare Acquisition 2 Corp which announced
its merger with Renovacor, Inc in March 2021. He also served as President and Chief
Executive Officer of Chardan Healthcare Acquisition Corp. from March 2018 until its
merger in October 2019 with BiomX Ltd. (NYSE: PHGE). He is currently a director of BiomX.
Mr. Grossman also serves as the President and Chief Executive Officer of Chardan NexTech
Acquisition Corp. and Chardan NexTech Acquisition 2 Corp., each, a special purpose acquisition
company. Mr. Grossman was a founder and director of LifeSci Acquisition Corp. from March 2020
until the close of its business combination with Vincera Pharma, Inc. in December 2020.
He has served as a director to Ventoux CCM Acquisition Corp. since December 2020 and
CleanTech Acquisition Corp since July 2021. Previously, from 2001 to 2003, Mr. Grossman
worked at Ramius Capital Group, LLC, a global multi-strategy hedge fund where he served as
Vice President and Head Trader. Mr. Grossman holds a B.A. in Economics from Cornell
University and an M.B.A. from New York University’s Stern School of Business. He has
served on the board of directors for UNICEF since December 2016.
3
Sandip
I. Patel, Esq. has been involved in the formation, acquisition, development, growth, and liquidity events related
to companies in the healthcare, insurance and financial services fields. Mr. Patel currently holds public and private investments
in a wide range of industries with a focus on medical devices, biotechnology, healthcare services and related technologies, as well as
FinTech and related services. He currently serves as a director for Quantum FinTech Acquisition Corporation, a special purpose acquisition
company focused on financial technology. Mr. Patel is also a co-founding shareholder of AtlasBanc, and was a co-founding shareholder,
and board member of Anderen Bank. He served on the board of directors for Avatar Property and Casualty Insurance Company, a Florida-based homeowners
insurance company. Mr. Patel was the Founder, President and Chief Executive Officer of the Orion group of companies, a full-service real
estate development company concentrating on high end waterfront multi-family and commercial developments with a number of successful
projects developed in the Tampa Bay area. Previously, Mr. Patel served as Head of the New Business Development and Mergers and Acquisitions
(“M&A”) team to national health insurance companies. Mr. Patel oversaw all legal, regulatory and governmental affairs
on behalf of the WellCare group of companies which included, WellCare HMO of Florida, WellCare of New York, WellCare of Connecticut,
StayWell and HealthEase HMO (“WellCare”), while serving as its General Counsel and as a partner in the company. Mr. Patel
successfully negotiated the sale of a majority of WellCare to a large private equity fund. Mr. Patel received his JD degree from
the Stetson University College of Law, and a B.B.A. in Finance from the University of Georgia.
Frances
K. Heller has over 25 years of experience in the pharmaceutical and biotech industries in business development, licensing
and legal affairs. Ms. Heller is the Founder, and has served as the Chief Executive Officer and Chair of Good2Go, Inc., an IoT
technology company, since its formation in 2015. She also serves on the board of Affinivax, Inc. a private early-stage vaccine company
and co-chairs the LavaMaeˣ board, a nonprofit that teaches people around the world to bring mobile showers and other services that
promote well-being to people experiencing homelessness. Previously she was Senior Vice President of business development at Bristol-Myers
Squibb, a Trustee of the Bristol-Myers Squibb Foundation, a Trustee at Dana Farber Cancer Institute, and an adviser to GoFundMe’s
Impact Fund. Prior to joining Bristol-Myers Squibb, Ms. Heller was Executive Vice President of business development at Exelixis Pharmaceuticals
and prior to joining Exelixis, Ms. Heller was head of strategic alliances at Novartis Pharmaceuticals. Ms. Heller is a member
of the California State Bar and licensed by the U.S. Patent and Trademark Office. She holds a B.S. in biology from Tulane University,
an M.A. in biology from American University and a J.D. from Golden Gate University School of Law.
From time to time, Chardan acts as an underwriter for the initial
public offering of special purpose acquisition companies and in addition to cash fees, Chardan receives equity in the form of private
placement securities. Some of those special purpose acquisition companies may be competitive with our company as they look for targets
in the same industries and geographies.
4
Strategic Advisors
In addition to the members of our management
team, we are in the process of establishing a strategic advisory group for the purpose of assisting our executive officers with sourcing
and evaluating business combination opportunities.
Our strategic advisory group currently consists
of the following person:
David V. Smith
has over 35 years of leadership experience in healthcare, serving at companies such as Syntex, Chiron, Thoratec, and more. He
has held a number of C-level positions for more than 20 years. Mr. Smith started his career as a Director of Finance and Administration
for Genentech Europe in Switzerland. While there, he directed both the start-up and continuing operations of five European operating
entities for finance, accounting, and human resources. Mr. Smith’s first Chief Financial Officer role was with Anergen, Inc., where
he was responsible for finance and investor and public relations. He also served as the Chief Operating Officer for IntegenX, Inc., where
he oversaw the company’s corporate development, manufacturing, customer service, and administrative functions. The company was
later acquired by Thermo Fisher Scientific in 2018. After the sale of IntegenX, Mr. Smith served as the Chief Financial Officer for Five
Prime Therapeutics, Inc., leading the finance, accounting, investor relations, and corporate communications functions. Mr. Smith also
co-led the effort to develop and implement strategies to grow the company’s drug bemarituzumab, later acquired by Amgen. Mr. Smith
received his B.A. from the Willamette University and an M.B.A. from Golden Gate University. In addition, he is the Co-Founder of the
Bay Area CFO’s Network in conjunction with Deloitte & Touche.
We
may add additional members to the strategic advisory group from time to time. Unlike our
management team, members of our strategic advisory group are not responsible for managing
our day-to-day affairs and have no authority to engage in substantive discussions with business
combination targets on our behalf. Pursuant to a Strategic Advisor Agreement between us and
each member of our strategic advisory group, each strategic advisor will receive a cash payment
of $50,000 upon, and subject to, consummation of our initial business combination, and will
be reimbursed for out-of-pocket expenses incurred by them in connection with our search for
an acquisition target and consummation of our initial business combination. In addition,
subject to the agreement of the target company in our initial business combination, each
strategic advisor will receive a grant of options to purchase up to 20,000 shares of common
stock of the combined company, at an exercise price of $11.50 per share, following the initial
business combination pursuant to an option agreement to be entered into between us (or the
successor entity in our initial business combination) and the strategic advisor.
We believe that the
combination of our management team and strategic advisory group is an innovative approach to identifying potential high quality business
combination targets and aligns incentives with our stockholders, providing us with distinctive and differentiated capabilities to create
stockholder value.
With respect to the foregoing descriptions,
the past performance of Chardan and its affiliates, our management team and board of directors and our strategic advisory group is not
a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of
success with respect to any business combination we may consummate. As described in this prospectus, Messrs. Grossman and Patel
have had management and/or board experience with blank check companies. None of our other officers or directors has had management experience
with blank check companies or special purpose acquisition corporations in the past. You should not rely on their respective historical
records or the performance of Chardan, its affiliates, our management team or board of directors or our strategic advisory group as indicative
of our future performance. Our officers and directors may have conflicts of interest with other entities to which they owe fiduciary
or contractual obligations with respect to initial business combination opportunities, including for Mr. Patel, with respect to
Quantum FinTech Acquisition Corporation and for Mr. Grossman, with respect to Ventoux CCM Acquisition Corp., Chardan NexTech Acquisition
Corp. and Chardan NexTech Acquisition 2 Corp., which we collectively refer to as the “Affiliated SPACs.” For a list of our
officers and directors and entities for which a conflict of interest may or does exist between such officers or directors and the company,
as well as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities
to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.
Acquisition Sourcing and Strategy - Approach
and Focus
Our
acquisition strategy is to leverage our expertise and network relationships to identify,
negotiate and acquire one or more business targets (i.e. companies), and/or in-license one
or more assets, or combine business targets with in-licensed assets with the ultimate objective
of building a public clinical stage biotech enterprise. It is our goal to evaluate business
targets that are developing or enabling development of pre-commercial therapeutic candidates
across a broad array of therapeutic areas, with an initial focus on oncology and immunology.
Approach – Leverage Team Network
We expect our business target sourcing and acquisition
process to leverage the insights, extensive biotech network, knowledge and access of our Board, management team and advisors. We
believe our team is well-positioned to identify compelling therapeutic candidate opportunities. We also anticipate that the networking
and regular interactions of the Board and our management team in the healthcare ecosystem, including at financial institutions, investment
funds, venture capital firms and consultants, will be a robust resource to identify potential business targets. We plan to employ a proactive,
thematic sourcing strategy and to identify and prioritize business targets or assets where we believe the combination of the relationships,
capital, capital markets expertise and operating experience of our co-sponsors and board, will accelerate the target business growth and
performance.
The
overarching thesis that drives our approach is our belief that therapeutic candidates
with strong scientific data and rationale can generate meaningful outcomes for patients and
therefore have the potential to generate meaningful commercial impact and financial return.
We will view potential acquisition candidates, initially focused on small molecule and biologics,
through a lens that integrates potential patient benefit and anticipated clinical and regulatory
development pathways, with the goal of identifying assets that have the potential to yield
early but clear proof of concept clinical data leveraging innovation in genomic and biomarker
and other technologies exploiting genetic underpinning of the disease.
With the expertise of the team, in the pursuit
of an initial business combination, particular emphasis will be placed on identifying superior management teams with novel technology
platforms.
While we will use the above guidelines to generally
guide our approach, we will also be opportunistic in assessing assets or companies that come to our attention. For example, this could
include opportunities affiliated with our co-sponsors, executive officers or directors, or completing the business combination through
a joint venture or other form of shared ownership with our co-sponsors, executive officers or directors.
Market Opportunity
The
therapeutics sector of the global healthcare market represents an attractive and expanding
market opportunity with a substantial list of target acquisition opportunities. We believe
current macro-economic trends will continue to support the growth of the therapeutics sector,
and the biotechnology sub-sector in particular. More specifically we believe there is substantial
opportunity to find attractive targets in oncology and immunology, as there are more than
1,800 oncology assets in development, representing the therapeutic areas with most assets,
and 400 immunology assets currently in development.
Demand for healthcare products is increasing globally
due to demographic shifts, rising middle class and prosperity trends, in addition to increased allocation of resources to healthcare and
wellbeing. Total healthcare spending in the United States reached $3.8 trillion in 2019 and is expected to grow by an average 5.4 percent
annually from 2019 to 2028, reaching nearly $6.2 trillion by 2028, according to a report by The Centers for Medicare & Medicaid
Services (“CMS”). Furthermore, total healthcare expenditures are expected rise to almost 20 percent of the US Gross Domestic
Product by 2028. In addition, increased financial and in-kind contributions in less developed economies are driving unprecedented expansion
of healthcare insurance and infrastructure.
Despite a substantial level of spending on healthcare,
the United States does not achieve commensurate health outcomes, with several contributing factors, one such factor being that decision
making processes regarding healthcare spending are not guided by an alignment of cost and expected outcomes. We believe the global healthcare
market is poised to shift from paying for activities and inputs to paying for results and outcomes. As a result, the healthcare industry
is positioned for new innovative technologies and business models to address the prevailing challenges associated with increasing costs,
lack of adequate access to care and most importantly, patient outcomes.
We believe the biotech market creates a unique
investment opportunity. Over the past ten years, venture capital funding has increased from approximately $3 billion to over $25 billion.
This industry dynamic creates a favorable target pool, as VC funds seek liquidity events. Additionally, biotech M&A activity has
more than doubled over the past decade, indicating a strong transaction appetite amongst the industry. Since 2018, there have been more
than 25 biotech SPAC mergers announced or closed. The median enterprise value of these biotech SPAC targets was over $500 million. Given
the favorable market factors, we believe Monterey Bio is well positioned within the biotech ecosystem.
5
Fundamental scientific discovery and innovation
in biomedical sciences has led to the development of countless medicines for serious diseases and improved quality of life for patients.
Sustained investments over decades in biomedical sciences by both government and industry have recently borne fruit, and the resulting
scientific advances have yielded innovative medicines and new therapeutic modalities including cell and gene therapies. In the past decade,
conventional therapeutic modalities, small molecule compounds and biologics, have also resulted in significant advances in treatments
of diseases. Paradigm shifts in development of next generation cell and gene therapies products have potential to transform clinical outcomes
for previously untreatable diseases and patient populations. Development of these breakthrough medicines are actively supported by regulatory
agencies around the world, allowing companies to accelerate drug development processes and availability of treatments to patients. The
US FDA and further national regulatory authorities are adjusting and streamlining their respective approval processes to accelerate and
optimize the efficiency of bringing products to market. The number of novel drugs approved by the FDA’s Center for Drug Evaluation
and Review has increased substantially over the last ten years from 30 in 2011 to 53 in 2020.
The pace of innovation in drug discovery and development
is also accelerating due to concurrent advancements in precision medicine, computational chemistry, structural biology and machine learning
tools. These advances are enabling the industry to capitalize on insights of basic science and disease pathophysiology, and human genetic
discoveries to develop drugs against disease mechanisms previously considered intractable or “undruggable”. Advances in precision
medicine are similarly improving the design of clinical studies and leading to a better selection process of patients most likely to benefit
from treatment. These converging trends of innovation are likely to enhance productivity in drug development leading to effective and
accurate treatment options for patients while delivering cost savings.
Given the aforementioned
growth and evolution within the healthcare and biotech industries, a broad universe of private companies, and by extension target acquisition
companies, exists. Furthermore, this universe presents an attractive opportunity for a SPAC transaction, creating value not only for investors,
but for the target company as well. At the core of industry growth lies disruptive innovation and by nature of the industry, a need for
capital. A SPAC transaction can alleviate this need, providing a company with means to succeed. Monterey Bio’s team of management,
board of directors, and co-sponsors are well suited to identify a target with a promising and proven product, primed for strong performance
in the public markets.
Initial Business Combination
We will have 12 months from the closing of this offering
to consummate an initial business combination. In addition, if we anticipate that we may not be able to consummate our initial business
combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate
a business combination up to three times by an additional three months each time (for a total of up to 21 months to complete a business
combination); provided that, pursuant to the terms of our certificate of incorporation and the trust agreement to be entered into between
us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend the time available for us
to consummate our initial business combination is for our insiders or their affiliates or designees, upon five days’ advance notice
prior to each applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if the over-allotment option is exercised
in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or $3,450,000 if the over-allotment option is exercised in full,
if the time to consummate a business combination is extended to a full 21 months), on or prior to the date of the applicable deadline.
Public stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension. In the
event that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money into
trust, the insiders would receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will
not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account
to do so. In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to effect
an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition,
we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited.
Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our
initial business combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to consummate
our initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount required. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private warrants
will expire and will be worthless.
Nasdaq rules require that we must complete one or more
business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding
the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive
agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market
value of our initial business combination. If our board of directors is not able to independently determine the fair market value of
our initial business combination, we may obtain an opinion from an independent investment banking or accounting firm as to the fair market
value of the target business. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority
of our independent directors.
We may, at our option, pursue a business combination
opportunity jointly with Chardan or one or more entities affiliated with Chardan, which we refer to as an “Affiliated Joint Acquisition.”
We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any such parties would co-invest only if (i) permitted
by applicable regulatory and other legal limitations; (ii) we and Chardan considered a transaction to be mutually beneficial to us
as well as the affiliated entity; and (iii) other business reasons exist to do so, such as the strategic merits of including such
co-investors, the need for additional capital beyond the amount held in our trust account to fund the initial business combination and/or
the desire to obtain committed capital for closing the initial business combination.
We anticipate structuring our initial business
combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or
acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or stockholders, or for other reasons. However, we will only complete our initial business combination if
the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act of 1940, as amended, or the “Investment Company Act.” Even if the post-transaction
company owns 50% or more of the voting securities of the target, our stockholders prior to the 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
transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test, provided
that in the event that the business combination involves more than one target business, the 80% test will be based on the aggregate value
of all of the target businesses.
6
Chardan will be the beneficial owner of founder
shares or private warrants following this offering by virtue of its ownership of Chardan Monterey and members of our management team may
indirectly own such securities. In May 2021, NorthStar transferred an aggregate of 325,000 founder shares to our officers, directors
and director nominees. Because of such ownership and interests, Chardan and our officers and directors may have a conflict of interest
in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination
if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement
with respect to our initial business combination.
Our co-sponsors, officers, directors, Chardan
and their respective affiliates may participate in the formation of, or become an officer or director of, any other blank check company
prior to completion of our initial business combination. In particular, certain of our directors also serve as officers or directors of
an Affiliated SPAC, which is focused on searching for businesses that may provide significant opportunities for attractive investor returns
in industries similar to the industries in which our search is focused. As a result, our co-sponsors, officers or directors could have
conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with
which they may become involved.
Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities
pursuant to which such officer or director is or will be required to present a business combination opportunity, including an Affiliated
SPAC. Our certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director
or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company,
such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and
to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. Accordingly,
if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to
which he or she has fiduciary, contractual or other obligations or duties, including an Affiliated SPAC, he or she will honor these obligations
and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject
the opportunity and he or she determines to present the opportunity to us.
Private Placements
On September 18, 2020, Chardan Monterey
purchased 5,000,000 shares of common stock from us for $25,000, or $0.005 per share. On May 20, 2021, Chardan Monterey transferred 687,500
founder shares back to us for no consideration, which shares were cancelled. On May 21, 2021, Chardan Monterey transferred 3,315,625
founder shares to NorthStar at a price of $0.006 per share. On May 21, 2021, NorthStar transferred 150,000 founder shares to Dr. Satyal,
our chief executive officer, and transferred 35,000 founder shares to each of our directors and director nominees at a price of $0.006
per share. On September 1, 2021, NorthStar transferred 1,078,125 founder shares back to us and Chardan Monterey transferred 359,375 founder
shares back to us, in each case for no consideration, which shares were cancelled. As a result, NorthStar holds a balance of 1,912,500
founder shares and Chardan Monterey holds a balance of 637,500 founder shares. The founder shares include an aggregate of up to 375,000
shares that are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in
part, so that our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (excluding
the sale of the private warrants and assuming our initial stockholders do not purchase units in this offering). None of our initial stockholders
has indicated any intention to purchase units in this offering.
The founder shares are identical to the public
shares. However, our initial stockholders have agreed (A) to vote their founder shares and any public shares held by them in favor
of any proposed business combination, (B) not to propose, or vote in favor of, prior to and unrelated to an initial business combination,
an amendment to our certificate of incorporation that would affect the substance or timing of our redemption obligation to redeem all
public shares if we cannot complete an initial business combination within 12 months (or up to 21 months, as applicable) of the closing
of this offering, unless we provide public stockholders an opportunity to redeem their public shares in conjunction with any such amendment,
(C) not to redeem any shares, including founder shares in connection with a stockholder vote to approve our proposed initial business
combination or sell any shares to us in any tender offer in connection with our proposed initial business combination, and (D) that
the founder shares shall not participate in any liquidating distribution upon winding up if a business combination is not consummated.
7
On the date of closing of this offering, the founder shares
will be placed into an escrow account maintained by Continental Stock Transfer & Trust Company acting as escrow agent. 50% of
these shares will not be transferred, assigned, sold or released from escrow until the earlier of (i) six months after the date
of the consummation of our initial business combination or (ii) the date on which the closing price of our shares of common stock
equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20
trading days within any 30-trading day period commencing after our initial business combination, and the remaining 50% of the founder
shares will not be transferred, assigned, sold or released from escrow until six months after the date of the consummation of our initial
business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent liquidation,
merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares
of common stock for cash, securities or other property. During the escrow period, the holders of these shares will not be able to sell
or transfer their securities except (1) to any persons (including their affiliates and stockholders) participating in the private
placement of the private warrants, officers, directors, stockholders, employees and members of the co-sponsors and their affiliates,
(2) amongst initial stockholders or to our officers, directors and employees, (3) if a holder is an entity, as a distribution
to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the holder’s immediate
family or to a trust, the beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning purposes,
(5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations order, (7) by
certain pledges to secure obligations incurred in connection with purchases of our securities, (8) by private sales at prices no
greater than the price at which the shares were originally purchased or (9) for the cancellation of up to 375,000 shares of common
stock subject to forfeiture to the extent that the underwriters’ over-allotment is not exercised in full or in part or in connection
with the consummation of our initial business combination, in each case (except for clause 9 or with our prior consent) where the transferee
agrees to the terms of the escrow agreement and the insider letter.
The private warrants and any shares of common stock issued
upon exercise thereof are subject to transfer restrictions pursuant to lock-up provisions in a letter agreement with us to be entered
into by the co-sponsors and our officers and directors. Those lock-up provisions provide that such securities are not transferable or
saleable until 30 days after the completion of our initial business combination, except (a) to our officers or directors, any
affiliates or family members of any of our officers or directors and any members or affiliates of the co-sponsors; (b) in the case
of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member
of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual,
by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified
domestic relations order; (e) by private sales or transfers made in connection with the consummation of an initial business combination
at prices no greater than the price at which the shares or warrants were originally purchased; (f) in the event of our liquidation
prior to the completion of our initial business combination; or (g) by virtue of the laws of Delaware or the applicable limited
liability company agreement upon dissolution of the co-sponsors, provided, however, that in the case of clauses (a) through (e) or
(g), these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other
restrictions contained in the letter agreements and by the same agreements entered into by the co-sponsors, officers and directors, as
the case may be, with respect to such securities (including provisions relating to voting, the trust account and liquidation distributions
described elsewhere in this prospectus).
NorthStar has committed to purchase from us 3,750,000
warrants (or 4,087,500 warrants if the over-allotment option is exercised in full) and Chardan Monterey has committed to purchase from
us 1,250,000 warrants (or 1,362,500 warrants if the over-allotment option is exercised in full), in each case, at a price of $1.00 per
warrant, for an aggregate purchase price of $5,000,000 (or $5,450,000 if the over-allotment option is exercised in full) in a private
placement that will close simultaneously with the closing of this offering. We refer to these warrants, collectively, as the “private
warrants” throughout this prospectus.
Each private warrant is exercisable for one
share of common stock at an exercise price of $11.50 per share. Of the $5,000,000 (or $5,450,000 if the over-allotment option is exercised
in full) we will receive from the sale of the private warrants, $2,500,000 (or $2,800,000 if the over-allotment option is exercised in
full) will be used for offering expenses and $1,500,000 will be used for working capital.
The proceeds from the private placement of
the private warrants will be added to the proceeds of this offering and placed in a trust account in the United States maintained
by Continental Stock Transfer & Trust Company, as trustee. If we do not complete our initial business combination within 12
months (or up to 21 months, as applicable), the proceeds from the sale of the private warrants will be included in the liquidating distribution
to the holders of our public shares.
8
The
private warrants are identical to the warrants sold as part of the units in this offering
except that each private warrant is exercisable for one share of common stock at an exercise
price of $11.50 per share.
If units or shares of common stock are purchased by any of
our directors, officers or initial stockholders, they will be entitled to funds from the trust account to the same extent as any public
stockholder upon our liquidation but will not have redemption rights related thereto.
Corporate Information
Our executive offices are located at 17 State
Street, 21st Floor, New York, NY 10004, and our telephone number is (917) 267-0216.
We qualify as an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the
Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to 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 of 2002 (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 non-binding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result,
there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take
advantage of the benefits of this extended transition period.
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 completion of this offering, (b) in
which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our shares of common stock that are held by non-affiliates exceeds $700 million as of the end of that
year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with
it in the JOBS Act.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates
exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during
such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that
year’s second fiscal quarter.
9
The Offering
In making your decision on
whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team,
but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance
with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in
Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled
“Risk Factors” beginning on page 23 of this prospectus.
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Securities
offered
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10,000,000 units, at $10.00 per unit, each unit consisting of one share
of common stock and one warrant. Each warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50
per whole share, subject to adjustment as described in this prospectus.
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Listing of our securities and proposed symbols
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We anticipate the units and the shares of common stock and the warrants, once they begin separate trading, will be listed on Nasdaq under the symbols “MTRYU,” “MTRY,” and “MTRYW,” respectively.
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Each of the shares of common stock and warrants comprising the units may trade separately on the 90th day after the date of this prospectus (or, if such date is not a business day, the following business day) unless Chardan determines that an earlier date is acceptable (based upon, among other things, its assessment of the relative strengths of the securities markets and small capitalization companies in general, and the trading pattern of, and demand for, our securities in particular). In no event will Chardan allow separate trading of the shares of common stock and warrants until we file a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering.
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Once the shares of common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into shares of common stock and warrants. Holders will need to have their brokers contact our transfer agent, Continental Stock Transfer & Trust Company, in order to separate the units into separately trading shares of common stock and warrants.
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We
will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly upon the consummation of this offering,
which is anticipated to take place two business days from the date the units commence trading. The audited balance sheet will reflect
our receipt of the proceeds from the exercise of the over-allotment option if the over-allotment option is exercised on the date of this
prospectus. If the over-allotment option is exercised after the date of this prospectus, we will file an amendment to the Form 8-K
or a new Form 8-K to provide updated financial information to reflect the exercise of the over-allotment option. We will also include
in the Form 8-K, or amendment thereto, or in a subsequent Form 8-K, information indicating if Chardan has allowed separate trading
of the shares of common stock and warrants prior to the 90th day after the date
of this prospectus.
In connection with the completion of our initial business combination,
we may, at our discretion, mandatorily separate all issued and outstanding units into shares of common stock and warrants.
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Shares of common stock:
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Number
issued and outstanding before this offering
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2,875,000
shares(1)
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Number
to be issued and outstanding after this offering
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12,500,000 shares(2)
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10
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Redeemable Warrants:
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Number issued and outstanding before this offering
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0 warrants
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Number
to be issued and outstanding after this offering and sale of private warrants
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10,000,000
public warrants and 5,000,000 private warrants(3)
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Exercisability
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Each
redeemable public warrant entitles the holder thereof to purchase one share of common stock, and each private warrant entitles the
holder thereof to purchase one share of common stock.
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Exercise price
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$11.50 per whole share, subject to adjustment as described herein.
If (x) we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection with the
closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with
such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance
to our initial stockholders or their affiliates, without taking into account any founder shares or private warrants held by them, as applicable,
prior to such issuance) (the “newly issued price”), (y) the aggregate gross proceeds from such issuances represent more
than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date
of the completion of our initial business combination (net of redemptions), and (z) the volume-weighted average trading price of
our common stock during the 20 trading day period starting on the trading day prior to the day on which we complete our initial business
combination (such price, the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted
(to the nearest cent) to be equal to 115% of the higher of the Market Value and the newly issued price and the $16.50 per share redemption
trigger price described below under “— Redemption” will be adjusted (to the nearest cent) to be equal to 165% of the
higher of the Market Value and the newly issued price.
No warrants will be exercisable for cash unless we have an
effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current
prospectus relating to such shares of common stock. It is our current intention to have an effective and current registration statement
covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common
stock in effect promptly following consummation of an initial business combination. Notwithstanding the foregoing, if a registration
statement covering the shares of common stock issuable upon exercise of the warrants is not effective within 120 days following
the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a
cashless basis pursuant to an available exemption from registration under the Securities Act. In such event, each holder would pay
the exercise price by surrendering the whole 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” by (y) the fair market value. The “fair market
value” shall mean the average reported last sale price of the shares of common stock for the ten trading days ending on the
day prior to the date of exercise. For example, if a holder held 300 warrants to purchase 150 shares and the fair market value on
the date prior to exercise was $15.00, that holder would receive 35 shares without the payment of any additional cash consideration.
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(1)
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This number includes an aggregate of up to 375,000 shares of common
stock held by our initial stockholders that are subject to forfeiture if the over-allotment
option is not fully exercised by the underwriters.
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(2)
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Assumes the over-allotment option has not been exercised and an aggregate
of 375,000 shares of common stock held by our initial stockholders have been forfeited. If
the over-allotment option is exercised in full, there will be a total of 14,375,000 shares
of common stock issued and outstanding.
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(3)
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Assumes the over-allotment option has not been exercised. If the over-allotment
option is exercised, there would be 11,500,000 public warrants outstanding and 5,450,000
private warrants outstanding.
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11
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Exercise period
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The warrants will become exercisable on the later of one year after the closing of this offering or the consummation of an initial business combination. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business combination, or earlier upon redemption.
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Redemption
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We may redeem the outstanding warrants, in whole and not in
part, at a price of $0.01 per warrant:
• at any time while
the warrants are exercisable,
• upon a minimum
of 30 days’ prior written notice of redemption,
• if, and only if,
the last sales price of our common stock equals or exceeds $16.50 per share for any 20 trading days within a 30 trading day period ending
three business days before we send the notice of redemption, and
• if, and only if,
there is a current registration statement in effect with respect to the shares of common stock underlying such warrants at the time of
redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
If the foregoing conditions are satisfied and we issue a notice of
redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption date. However, the price of our
common stock may fall below the $16.50 trigger price, as well as the $11.50 warrant exercise price, after the redemption notice is issued.
The redemption criteria for our warrants have been established at a
price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential
between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of our redemption
call, the redemption will not cause the share price to drop below the exercise price of the warrants.
If we call the warrants for redemption as described above, our
management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In
such event, each holder would pay the exercise price by surrendering the whole 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” by (y) the fair market value.
The “fair market value” shall mean the average reported last sale price of the shares of common stock for the ten trading
days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether
we will exercise our option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety
of factors including the price of our shares of common stock at the time the warrants are called for redemption, our cash needs at such
time and concerns regarding dilutive share issuances.
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12
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Offering proceeds to be held in trust
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The Nasdaq rules provide that at least 90% of the gross
proceeds from this offering and the sales of the private warrants be deposited in a trust account. Of the proceeds we will receive
from this offering and the sales of the private warrants described in this prospectus, $101,000,000, or $116,150,000 if the over-allotment
option is exercised in full ($10.10 per unit), will be placed in a trust account maintained in the United States by Continental
Stock Transfer & Trust Company, acting as trustee pursuant to an agreement to be signed on the date of this prospectus.
Of the $5,000,000 we will receive from the sale of the private warrants, $2,500,000 will be used for offering expenses and $1,500,000
will be used for working capital.
Except as set forth below, the proceeds in the trust account will not
be released until the earlier of: (1) the completion of an initial business combination within the required time period and (2) our
redemption of 100% of the outstanding public shares if we have not completed a business combination in the required time period. Therefore,
unless and until our initial business combination is consummated, the proceeds held in the trust account will not be available for our
use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a target business
and the negotiation of an agreement to acquire a target business.
Notwithstanding the foregoing, there can be released to us, from time
to time, any interest earned on the funds in the trust account that we may need to pay our tax obligations. With this exception, expenses
incurred by us may be paid prior to a business combination only from the net proceeds of this offering not held in the trust account of
approximately $1,500,000 provided, however, that in order to meet our working capital needs following the consummation of this offering
if the funds not held in the trust account are insufficient, our initial stockholders, officers and directors or their affiliates may,
but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion.
Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination,
without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon consummation of our business
combination into additional private warrants to purchase shares of common stock at a conversion price of $1.00 per private warrant. Such
private warrants will be identical to the private warrants to be issued at the closing of this offering, except that each private warrant
is exercisable for one share of common stock at an exercise price of $11.50 per share. Our stockholders have approved the issuance of
the private warrants (and underlying securities) upon conversion of such notes, to the extent the holder wishes to so convert them at
the time of the consummation of our initial business combination. If we do not complete a business combination, the loans will only be
repaid with funds not held in the trust account, to the extent available.
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13
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Limited payments to insiders
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Prior to the consummation of a business combination, there will be
no fees, reimbursements or other cash payments paid to our initial stockholders, officers, directors or their affiliates prior to, or
for any services they render in order to effectuate, the consummation of a business combination (regardless of the type of transaction
that it is) other than:
• repayment of loans
of up to $300,000 made to us by NorthStar;
• payment of $10,000
per month to an affiliate of one or more of the insiders for office space and related services, subject to deferral as described herein;
• reimbursement
of out-of-pocket expenses incurred by them in connection with certain activities on our behalf, such as identifying and investigating
possible business targets and business combinations;
• payment
to Chardan of its underwriting discount, Marketing Fee in an amount equal to 3.5% of the gross proceeds of this offering (or $3,500,000),
including any proceeds from the full or partial exercise of the over-allotment option (up to $4,025,000 if the over-allotment option
is exercised in full). The Marketing Fee will not be due to Chardan if we do not complete an initial business combination. Chardan
Monterey is an affiliate of Chardan, the representative of the underwriters in this offering. As a result, Chardan is deemed to have
a “conflict of interest” within the meaning of Rule 5121, as described in more detail in this prospectus under the
heading “Underwriting (Conflicts of Interest)—Conflicts of Interest;”
• payment to Chardan of fees for
any financial advisory, placement agency or other similar investment banking services Chardan may provide to our company in the future,
and reimbursement of Chardan for any out-of-pocket expenses incurred by it in connection with the performance of such services;
• payment
to strategic advisors of $50,000 upon, and subject to, consummation of our initial business
combination, and reimbursement for out-of-pocket expenses incurred by them in connection
with our search for an acquisition target and consummation of our initial business combination.
In addition, subject to the agreement of the target company in our initial business combination,
each strategic advisor will receive a grant of options to purchase up to 20,000 shares of
common stock of the combined company, at an exercise price of $11.50 per share, following
the initial business combination pursuant to an option agreement to be entered into between
us (or the successor entity in our initial business combination) and the strategic advisor;
and
• repayment
upon consummation of our initial business combination of any loans which may be made by our initial stockholders or their affiliates
or our officers and directors to finance transaction costs in connection with an intended initial business combination.
There is no limit on the amount of out-of-pocket expenses reimbursable
by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest
income earned on the amounts held in the trust account available to us, such expenses would not be reimbursed by us unless we consummate
an initial business combination. Our audit committee will review and approve all reimbursements and payments made to any initial stockholder
or member of our management team, or their respective affiliates, and any reimbursements and payments made to members of our audit committee
will be reviewed and approved by our board of directors, with any interested director abstaining from such review and approval.
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Potential revisions to agreements with insiders
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We could seek to amend certain agreements made by our management team disclosed in this prospectus without the approval of stockholders, although we have no intention to do so. For example, restrictions on our executives relating to the voting of securities owned by them, the agreement of our management team to remain with us until the closing of a business combination, the obligation of our management team to not propose certain changes to our organizational documents or the obligation of the management team and its affiliates to not receive any compensation in connection with a business combination could be modified without obtaining stockholder approval. Although stockholders would not be given the opportunity to redeem their shares in connection with such changes, in no event would we be able to modify the redemption or liquidation rights of our stockholders without permitting our stockholders the right to redeem their shares in connection with any such change. We will not agree to any such changes unless we believed that such changes were in the best interests of our stockholders (for example, if such a modification were necessary to complete a business combination).
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14
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Redemption
rights for public stockholders upon completion of our initial business combination
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We
will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of
our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account, calculated as of two business days prior to the consummation of our initial business combination, including interest earned
on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding
public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.10 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by
the deferred underwriting commissions we will pay to the representative of the underwriters in this offering. The redemption rights
may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no
redemption rights upon the completion of our initial business combination with respect to our warrants. Notwithstanding the foregoing,
our initial stockholders have agreed, pursuant to written letter agreements with us, not to redeem any public shares held by them.
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Our
initial stockholders have agreed (A) to vote their founder shares and any public shares
in favor of any proposed business combination, (B) not to propose, or vote in favor
of, prior to and unrelated to an initial business combination, an amendment to our certificate
of incorporation that would affect the substance or timing of our redemption obligation to
redeem all public shares if we cannot complete an initial business combination within 12
months (or up to 21 months, as applicable) unless we provide public stockholders an opportunity
to redeem their public shares in conjunction with any such amendment, (C) not to redeem
any shares (including the founder shares) in connection with a stockholder vote to approve
our proposed initial business combination or sell any shares to us in a tender offer in connection
with our proposed initial business combination, and (D) that the founder shares shall
not participate in any liquidating distribution upon winding up if a business combination
is not consummated. None of our initial stockholders or their affiliates has indicated any
intention to purchase units in this offering or any units or shares of common stock in the
open market or in private transactions. However, if a significant number of stockholders
vote, or indicate an intention to vote, against a proposed business combination, our initial
stockholders, officers, directors or their affiliates could make such purchases in the open
market or in private transactions in order to influence the vote. Our initial stockholders,
officers, directors and their affiliates could purchase sufficient shares so that the initial
business combination may be approved without the majority vote of public shares held by non-affiliates.
Notwithstanding the foregoing, our officers, directors, initial stockholders and their affiliates
will not make purchases of shares of common stock if the purchases would violate Section 9(a)(2) or
Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation
of a company’s stock or purchasing shares when the buyer is in possession of material
non-public information about our company.
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Manner of conducting redemptions
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We will provide our public stockholders
with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either
(i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer.
Except as required by applicable law, the decision as to whether we will seek stockholder approval of a proposed business combination
or conduct 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 stockholder approval under stock exchange
listing requirements. Asset acquisitions and stock purchases would not typically require stockholder approval, while direct mergers
with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek
to amend our certificate of incorporation would typically require stockholder approval.
If a stockholder vote is not required
and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our certificate of incorporation:
· conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender
offers, and
· file tender offer documents with the SEC prior to completing our initial business combination which contain substantially
the same financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial
business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our initial stockholders will
terminate any plan established in accordance with Rule 10b5-1 under the Exchange Act to purchase shares of our common
stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event that we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares, which number will be based on the requirement that we will only redeem our public shares so long as (after such redemption)
our net tangible assets will be at least $5,000,001 either immediately 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) or any greater net tangible asset or cash
requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more
shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination, and
instead may search for an alternative business combination.
If, however, stockholder approval of the
transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for
business or other reasons, we will:
· conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which
regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
· file proxy materials with the SEC.
If we seek stockholder approval, we will
complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of
the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding
capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company
entitled to vote at such meeting. Our initial stockholders will count towards this quorum and have agreed to vote any founder shares
and any public shares held by them in favor of our initial business combination. As a result, in addition to their founder shares,
we would need only 3,750,001, or 37.5% (assuming all outstanding shares are voted), of the 10,000,000 public shares sold in this
offering to be voted in favor of a transaction in order to have our initial business combination approved (assuming the underwriters’
over-allotment option is not exercised).
Pursuant to Delaware law, we will not
give less than 10 days nor more than 60 days prior written notice of any such meeting, if required, at which a vote shall be taken
to approve our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders,
may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its
public shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.
We may require our public stockholders
seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to
either tender their certificates to our transfer agent prior to the date set forth in the proxy materials mailed to such holders,
or up to two business days prior to the vote on the proposal to approve the business combination, or to deliver their shares to the
transfer agent electronically. The proxy materials that we will furnish to holders of our public shares in connection with our initial
business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. If the proposed
business combination is not approved and we continue to search for a target company, we will promptly return any certificates delivered,
or shares tendered electronically, by public stockholders who elected to redeem their shares.
Our certificate of incorporation provides
that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either
immediately 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) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid
to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or
(iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the
event the aggregate cash consideration we would be required to pay for all shares of common stock 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, and all shares of common stock submitted
for redemption will be returned to the holders thereof, and instead may search for an alternative business combination.
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Limitation on redemption rights
of stockholders holding more than 20% of the shares sold in this offering if we hold stockholder vote
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Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we
do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our certificate of incorporation
provides that a public stockholder, individually or together with any affiliate of such stockholder or any other person with whom
such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted
from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in this offering. Absent this provision,
a public stockholder holding more than an aggregate of 20% of the shares sold in this offering could threaten to exercise its redemption
rights against a business combination if such holder’s shares are not purchased by us or our management at a premium to the
then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than
20% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt
to block our ability to complete our initial business combination, particularly in connection with a business combination with a
target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be
restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold
more than 20% of the shares sold in this offering) for or against our initial business combination.
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Conditions to completing our initial business combination
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There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Our
initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least
80% of the value of the trust account (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust
account) at the time of the agreement to enter into the initial business combination. If we are no longer listed on Nasdaq, we will not
be required to satisfy the 80% test.
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If our board is not able to independently determine the fair market
value of the target business or businesses, we may obtain an opinion from an independent investment banking or accounting firm as to the
fair market value of the target business. We will complete our initial business combination only if the post-transaction company in which
our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the 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 transaction. If less than 100% of the equity interests or assets of a target business or businesses
are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will
be valued for purposes of the 80% test, provided that in the event that the business combination involves more than one target business,
the 80% test will be based on the aggregate value of all of the target businesses.
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16
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Release
of funds in trust account upon closing of our initial business combination
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On the completion of our initial business combination, all amounts held in the trust account will be released to us. We will use
these funds to pay amounts due to any public stockholders who exercise their redemption rights as described above under “—Redemption
rights for public stockholders upon completion of our initial business combination” to pay all or a portion of the consideration
payable to the target or targets or owners of the target or targets of our initial business combination and to pay other expenses
associated with our initial business combination, including the fee payable to Chardan pursuant to the Business Combination Marketing
Agreement described under “Underwriting (Conflicts of Interest) — Business Combination Marketing Agreement,”
which fee we refer to throughout this prospectus as the “Marketing Fee.” If our initial business combination is paid
for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for
general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal
or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies
or for working capital.
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17
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Liquidation if no business combination
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If we are unable to complete our initial business combination
within 12 months (or up to 21 months, as applicable) from the closing of this offering, we will (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem
100% of the outstanding public shares (including any units in this offering or any units or shares that our initial stockholders
or their affiliates purchased in this offering or later acquired in the open market or in private transactions), which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably practicable following such redemption,
subject to the approval of our remaining holders of common stock and our board of directors, proceed to commence a voluntary liquidation
and thereby a formal dissolution of the Company, subject (in the case of (ii) and (iii) above) to our obligations to provide
for claims of creditors and the requirements of applicable law.
In connection with our redemption of 100% of our outstanding public
shares for a portion of the funds held in the trust account, each holder will receive a pro rata portion of the amount then in the trust
account, plus any pro rata interest earned on the funds held in the trust account and not necessary to pay our taxes payable on such funds.
Holders of warrants will receive no proceeds in connection with the liquidation with respect to such warrants, which will expire worthless.
We may not have funds sufficient to pay or provide for all creditors’
claims. Although we will seek to have all third parties (including any vendors or other entities we engage after this offering) and any
prospective target businesses enter into valid and enforceable agreements with us waiving any right, title, interest or claim of any kind
in or to any monies held in the trust account, there is no guarantee that they will execute such agreements. There is also no guarantee
that the third parties would not challenge the enforceability of these waivers and bring claims against the trust account for monies owed
them.
The holders of the founder shares and private warrants will not participate
in any redemption distribution with respect to their founder shares and private warrants, but may have any public shares redeemed upon
liquidation.
If we are unable to conclude our initial business combination
and we expend all of the net proceeds of this offering not deposited in the trust account, without taking into account any interest
earned on the trust account, we expect that the initial per-share redemption price will be approximately $10.10. The proceeds deposited
in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of our stockholders.
Furthermore, our underwriters may seek recourse against the proceeds in the trust account relating to any future claims they may
have against us. In addition, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us that
is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our
bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. Therefore, the actual
per-share redemption price may be less than the estimated $10.10. We will pay the costs of any subsequent liquidation from our remaining
assets outside of the trust account. If such funds are insufficient, NorthStar has agreed to pay the funds necessary to complete
such liquidation and has agreed not to seek repayment for such expenses. We currently do not anticipate that such funds will be insufficient.
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Ability to extend time to complete business combination
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We will have 12 months from the closing of this offering to complete an initial business
combination. However, if we anticipate that we may not be able to consummate our initial business combination within 12 months,
we may, by resolution of our board, extend the period of time to consummate a business combination up to three times, each by an
additional three months (for a total of up to 21 months to complete a business combination), subject to the insiders or
their affiliates or designees depositing additional funds into the trust account as set out below. Pursuant to the terms of our certificate
of incorporation and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the
date of this prospectus, in order for the time available for us to consummate our initial business combination to be extended, our
insiders or their affiliates, upon five days advance notice prior to the applicable deadline, must deposit into the trust account
$1,000,000, or $1,150,000 if the underwriters’ over-allotment option is exercised in full ($0.10 per unit in either case),
on or prior to the date of the applicable deadline, for each of the available three month extensions providing a total possible business
combination period of 21 months at a total payment value of $3,000,000, or $3,450,000 if the underwriters’ over-allotment option
is exercised in full. Any such payments would be made in the form of non-interest bearing loans, evidenced by an unsecured promissory
note equal to the amount of any such deposit, which will not be repaid in the event that we are unable to close a business combination
unless there are funds available outside the trust account to do so. Our sponsor and its affiliates or designees are not obligated
to fund the trust account to extend the time for us to complete our initial business combination. Our public stockholders will not
be entitled to vote or redeem their shares in connection with any such extension. As a result, we may conduct such an extension even
though a majority of our public stockholders do not support such an extension and will not be able to redeem their shares in connection
therewith.
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18
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Conflicts of Interest
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Chardan Monterey, an affiliate of Chardan, beneficially owns in
excess of 10% of our issued and outstanding common stock. Because Chardan is an underwriter in this offering and its affiliate owns in
excess of 10% of our issued and outstanding common stock, Chardan is deemed to have a “conflict of interest” under Rule 5121
(“Rule 5121”) of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Accordingly, this offering
is being made in compliance with the requirements of Rule 5121, which requires, among other things, that a qualified independent
underwriter participate in the preparation of, and exercise the usual standards of due diligence with respect to, the registration statement
and this prospectus. B. Riley Securities, Inc. has agreed to act as a qualified independent underwriter for this offering and to undertake
the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including those inherent in Section 11
thereof. B. Riley Securities, Inc. will receive $100,000 from the total underwriting discount for serving as a qualified independent
underwriter in connection with this offering. We have agreed to indemnify B. Riley Securities, Inc. against liabilities incurred in connection
with acting as a qualified independent underwriter, including liabilities under the Securities Act. See “Underwriting (Conflicts
of Interest).”
Our co-sponsors, officers, directors, Chardan and their respective
affiliates may participate in the formation of, or become an officer or director of, any other blank check company prior to completion
of our initial business combination. In particular, certain of our directors also serve as officers or directors of an Affiliated SPAC,
which is focused on searching for businesses that may provide significant opportunities for attractive investor returns in industries
similar to the industries in which our search is focused. As a result, our co-sponsors, officers or directors could have conflicts of
interest in determining whether to present business combination opportunities to us or to any other blank check company with which they
may become involved.
As described herein, each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities
pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities, including
an Affiliated SPAC. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable
for one or more entities to which he or she has fiduciary, contractual or other obligations or duties, including an Affiliated SPAC, he
or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present
it to us if such entities reject the opportunity and he or she determines to present the opportunity to us (including as described above).
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.
In addition, we may, at our option, pursue an Affiliated Joint Acquisition.
We do not expect that we would pursue any such opportunity with an Affiliated SPAC. This would only occur, though, if (i) permitted
by applicable regulatory and other legal limitations; (ii) we and Chardan considered a transaction to be mutually beneficial to us
as well as the affiliated entity; and (iii) other business reasons exist to do so, such as the strategic merits of including such
co-investors, the need for additional capital beyond the amount held in our trust account to fund the initial business combination and/or
the desire to obtain committed capital for closing the initial business combination. An Affiliated Joint Acquisition could involve a co-investment
with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the
initial business combination.
The potential conflicts described above may limit our ability to enter
into a business combination or other transactions. These circumstances could give rise to numerous situations where interests may conflict.
There can be no assurance that these or other conflicts of interest with the potential for adverse effects on the Company and investors
will not arise.
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19
RISKS
We have conducted no operations and have generated
no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In
making your decision on whether to invest in our securities, you should take into account not only the background of our management team,
but also the special risks we face as a blank check company, as well as the fact that this offering is not being conducted in compliance
with Rule 419 promulgated under the Securities Act, and, therefore, you will not be entitled to protections normally afforded to
investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ
from this offering, please see “Proposed Business — Comparison to Offerings of Blank Check Companies Subject to Rule 419.”
You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” beginning on page 23
of this prospectus.
Summary of Risk Factors
An investment in our securities involves a high
degree of risk. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,”
alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating
results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. Such risks
include, but are not limited to:
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•
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We are a blank check company with no operating history and no revenues, and you have no basis on which
to evaluate our ability to achieve our business objective.
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•
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Our independent registered public accounting firm’s report contains an explanatory paragraph that
expresses substantial doubt about our ability to continue as a “going concern.”
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•
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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 recent coronavirus (COVID-19) outbreak and the status of debt and equity markets.
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•
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Our public stockholders may not be afforded an opportunity to vote on our proposed business combination,
which means we may consummate our initial business combination even though a majority of our stockholders do not support such a combination.
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•
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Your only opportunity to affect the investment decision regarding a potential business combination may
be limited to the exercise of your right to redeem your shares from us for cash.
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•
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Management’s flexibility in identifying and selecting a prospective acquisition candidate, along
with our management’s financial interest in consummating our initial business combination, may lead management to enter into an
acquisition agreement that is not in the best interest of our stockholders.
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20
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•
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Certain of our officers and directors are affiliated with entities engaged in business activities similar
to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which
entity a particular business opportunity should be presented.
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•
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The ability of our public stockholders 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 a business combination with a
target.
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•
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If we seek stockholder approval of our business combination, our co-sponsors, directors, officers and
their affiliates may elect to purchase shares from stockholders, in which case they may influence a vote in favor of a proposed business
combination that you do not support.
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•
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The ability of our public stockholders to exercise their redemption rights may not allow us to effectuate
the most desirable business combination or optimize our capital structure.
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•
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The requirement that we complete
our initial business combination within 12 months (or up to 21 months, as applicable) from
the closing of this offering may give potential target businesses leverage over us in negotiating
our initial business combination.
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•
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If we seek stockholder approval of our business combination, our co-sponsors, directors, officers and
their affiliates may elect to purchase shares from stockholders, in which case they may influence a vote in favor of a proposed business
combination that you do not support.
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•
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You will not have any rights or interests in funds from the trust account, except under certain limited
circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
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•
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Once initially listed on Nasdaq, our securities may not continue to be listed on Nasdaq in the future,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
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•
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You will not be entitled to protections normally afforded to investors of many other blank check companies.
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•
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If the net proceeds of this offering
not being held in the trust account are insufficient to allow us to operate for at least
the next 12 months (or up to 21 months, as applicable), 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 NorthStar, its affiliates or members
of our management team to fund our search and to complete our initial business combination.
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•
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If we are unable to complete our
initial business combination, our public stockholders may be forced to wait up to 12 months
(or up to 21 months, as applicable) or longer before redemption from our trust account. In
addition, our public stockholders may only receive a pro rata portion of the amount then
in the trust account (which may be less than $10.10 per share) (whether or not the underwriters’
over-allotment option is exercised in full) on our redemption, and our warrants will expire
worthless.
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21
SUMMARY
FINANCIAL DATA
The following table summarizes
the relevant financial data for our business and should be read with our financial statements, which are included in this
prospectus. We have not had any significant operations to date, so only balance sheet data are presented.
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December 31,
2020
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June
30, 2021
(Unaudited)
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Actual
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Actual
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As Adjusted
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Balance Sheet Data:
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Working
capital (deficit)(1)
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$
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24,000
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$
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(192,400
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)
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$
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102,523,975
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Total
assets(1)
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25,000
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245,680
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102,523,975
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Total liabilities
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1,000
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221,705
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—
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Value
of shares subject to possible redemption(2)
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—
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—
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97,523,970
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Stockholder’s equity(3)
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24,000
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23,975
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5,000,005
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(1)
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The “as adjusted” calculation includes $101,000,000
cash held in trust from the proceeds of this offering and the sale of the private placement
units, plus $1,500,000 of cash held outside the trust account, plus $23,975 of actual stockholder’s
equity at June 30, 2021.
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(2)
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The “as adjusted” calculation equals the “as
adjusted” total assets, less the “as adjusted” total liabilities, less
the “as adjusted” stockholders’ equity, which is set to approximate the
minimum net tangible assets threshold of at least $5,000,005.
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(3)
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Excludes
9,655,839 shares of common stock purchased in the public market which are subject to redemption
in connection with our initial business combination. However, there may be redemptions above
such number of shares as long as our net tangible assets will be greater than $5,000,005
either immediately prior to or upon the consummation of our initial business combination.
The “as adjusted” calculation equals the “as adjusted” total assets,
less the “as adjusted” total liabilities, less the value of the shares of common
stock that may be converted in connection with our initial business combination ($10.10 per
share).
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The “as adjusted” information gives
effect to the sale of the units we are offering, including the application of the related gross proceeds and the payment of the estimated
remaining costs from such sale and the repayment of the accrued and other liabilities required to be repaid.
The “as adjusted” working capital
and total assets amounts include the $101,000,000 to be held in the trust account, which, except for limited situations described in
this prospectus, will be available to us only upon the consummation of a business combination within the time period described in this
prospectus.
If no business combination is completed
within 12 months (or up to 21 months, as applicable) from the closing of this offering, 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 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. Our initial stockholders
have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them
if we fail to complete our initial business combination within such time period. However, if our initial stockholders acquire public
shares in, or subsequent to, this offering, it will be entitled to liquidating distributions from the trust account with respect to such
public shares.
22
RISK
FACTORS
An investment in our securities involves a high
degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this
prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and
operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could
lose all or part of your investment.
RISKS RELATING TO OUR SEARCH FOR, CONSUMMATION OF, OR INABILITY
TO CONSUMMATE, A BUSINESS COMBINATION AND POST-BUSINESS COMBINATION RISKS
We are a blank check company with no operating history and no revenues,
and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company with no operating
results, and we will not commence operations until obtaining funding through this offering and consummating our initial business combination.
Because we lack an operating history, you 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. We have no plans, arrangements or understandings with any prospective
target business concerning our initial business combination, and may be unable to complete our initial business combination. If we fail
to complete our initial business combination, we will never generate any operating revenues.
Our independent registered public accounting firm’s report
contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
At June 30, 2021, we had $29,180 in cash
and a working capital deficit of $192,400. Further, we have incurred and expect to continue to incur significant costs in pursuit
of our financing and acquisition plans. Management’s plans to address this need for capital through this offering are
discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and
Results of Operations.” Our plans to raise capital and to consummate our initial business combination may not be successful.
These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements
contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this
offering or our inability to continue as a going concern.
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 recent coronavirus (COVID-19) outbreak
and the status of debt and equity markets.
In March 2020, the World Health Organization
declared novel coronavirus disease 2019 (COVID-19) a global pandemic. The COVID-19 pandemic has negatively impacted the global economy,
disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets,
and increased unemployment levels, all of which may become heightened concerns upon a further wave of infection or future developments.
In addition, the pandemic has resulted in temporary closures of many businesses.
The COVID-19 outbreak has resulted, and a significant
outbreak of other infectious diseases could result, in a widespread health crisis that has affected, or 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. Furthermore, we may be unable to complete a business combination if concerns relating to COVID-19
continue 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. 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.
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. 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 and
third-party financing being unavailable on terms acceptable to us or at all.
As the number of special purpose acquisition companies increases,
there will be more competition to find attractive targets for an initial business combination. This could increase the cost associated
with completing an initial business combination and could even result in our inability to find a suitable target or to consummate an initial
business combination.
In recent years, the number of special purpose
acquisition companies that have been formed has increased substantially. Many companies have already entered into an initial business
combination with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets
for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As
a result, at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify
a suitable target and to consummate an initial business combination.
In addition, because there are more special purpose
acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets
with attractive fundamentals or business models may increase, which could cause targets companies to demand improved financial terms.
Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, or
increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could
increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial business combination, and
may result in our inability to consummate an initial business combination on terms favorable to our investors altogether.
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.
In recent months, the market for directors
and officers liability insurance for special purpose acquisition companies has changed. 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. There can be no assurance that these trends will not continue. The increased
cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us
to negotiate an initial business combination. 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, accept less
favorable terms or both. However, 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.
In addition, even after we were to complete an
initial business combination, our directors and officers could still be subject to potential liability from claims arising from conduct
alleged to have occurred prior to the initial business combination. 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”). 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.
The requirement that the target business or businesses that we acquire
must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any deferred
underwriters’ fees and taxes payable on the income earned on the trust account) at the time of the execution of a definitive agreement
for our initial business combination may limit the type and number of companies with which we may complete such a business combination.
Pursuant to Nasdaq listing rules, the target
business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in
the trust account (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account) at the
time of the execution of a definitive agreement for our initial business combination. This restriction may limit the type and number
of companies that we may complete a business combination with. If we are unable to locate a target business or businesses that satisfy
this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds
in the trust account, which may be less than $10.10 per share.
Our public stockholders may not be afforded an
opportunity to vote on our proposed business combination, which means we may consummate our initial business combination even though a
majority of our public stockholders do not support such a combination.
If a stockholder vote is not required, we may
conduct redemptions via a tender offer. Accordingly, we may consummate our initial business combination even if holders of a majority
of our public shares do not approve the business combination.
Your only opportunity to affect the investment decision regarding
a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Because our board of directors
may consummate our initial business combination without seeking stockholder approval, public stockholders may not have the right or opportunity
to vote on the business combination. Accordingly, your only opportunity to affect the investment decision regarding a potential business
combination may be limited to exercising your 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 stockholders in which we describe our business combination.
The ability of our public stockholders 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 our initial business combination with a target.
We may enter into a 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. If too many public
stockholders exercise their redemption rights, we may not be able to meet such closing condition, and, as a result, would not be able
to proceed with the business combination. 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. Consequently, if accepting all properly submitted redemption requests would cause our
net tangible assets to be less than $5,000,001, 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.
Prospective targets would be aware of these risks and, thus, may be reluctant to enter into our initial business combination transaction
with us.
The ability of a large number of our stockholders to exercise redemption
rights may not allow us to consummate the most desirable business combination or optimize our capital structure.
In connection with the consummation of our business
combination, we may redeem up to that number of shares of common stock that would permit us to maintain net tangible assets of $5,000,001.
If our business combination requires us to use substantially all of our cash to pay the purchase price, the redemption threshold may be
further limited. Alternatively, we may need to arrange third party financing to help fund our business combination in case a larger percentage
of stockholders exercises its redemption rights than we expect. If the acquisition involves the issuance of our shares as consideration,
we may be required to issue a higher percentage of our shares to the target or its stockholders to make up for the failure to satisfy
a minimum cash requirement. Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness
at higher than desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.
The requirement that we maintain a minimum net worth or retain a
certain amount of cash could increase the probability that we cannot consummate our business combination and that you would have to wait
for liquidation in order to redeem your shares.
If, pursuant to the terms of our proposed business
combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order to consummate the business
combination, regardless of whether we proceed with redemptions under the tender offer or proxy rules, the probability that we cannot consummate
our business combination is increased. If we do not consummate our business combination, you would not receive your pro rata portion of
the trust account until we liquidate. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
however, at such time our shares may trade at a discount to the pro rata amount in our trust account. In either situation, you may suffer
a material loss on your investment or lose the benefit of funds expected in connection with a redemption until we liquidate or you are
able to sell your shares in the open market.
The requirement that we complete our initial business combination
within 12 months (or up to 21 months, as applicable) from the closing of this offering may give potential target businesses leverage
over us in negotiating our initial business combination.
Any potential target business with which we
enter into negotiations concerning our initial business combination will be aware that we must consummate our initial business combination
within 12 months (or up to 21 months, as applicable) from the closing of this offering. Consequently, such target business may obtain
leverage over us in negotiating our initial business combination, knowing that if we do not complete our initial business combination
with that particular target business, we may be unable to complete our initial business combination with any target business. This risk
will increase as we get closer to the timeframe described above. 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.
We
may not be able to consummate our initial business combination within the required time period, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders
may only receive $10.10 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our
co-sponsors and our officers and directors have agreed that we must consummate our initial business combination within 12 months from
the closing of this offering. If we anticipate that we may not be able to consummate our initial business combination within 12 months,
our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate a business combination up to
three times by an additional three months each time (for a total of up to 21 months), as described in more detail in this prospectus.
We may not be able to find a suitable target business and consummate our initial business combination within such time period. 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. 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 outbreak 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. Additionally, the continued outbreak of COVID-19 may negatively
impact businesses we may seek to acquire. If we have not completed our initial business combination within such time period, we
will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than
ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of 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 taxes (less up to $100,000 of interest to pay dissolution expenses), divided
by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve
and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of
other applicable law, in which case our public stockholders may only receive $10.10 per share, or less than such amount in certain circumstances,
and our warrants will expire worthless. 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 stockholders may be less than $10.10 per share” and
other risk factors herein.
If we seek stockholder approval of our business combination, our
co-sponsors, directors, officers and their affiliates may elect to purchase shares from stockholders, in which case they may influence
a vote in favor of a proposed business combination that you do not support.
If we seek stockholder approval of our business
combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our co-sponsors,
directors, officers or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation
of our initial business combination. Such purchases will not be made if our co-sponsors, directors, officers or their affiliates are
in possession of any material non-public information that has not been disclosed to the selling stockholder. Such a purchase would include
a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner
thereof and therefore agrees not to exercise its redemption rights. In the event that our co-sponsors, directors, officers or their affiliates
purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights,
such selling stockholders would be required to revoke their prior elections to redeem their shares. It is intended that, if Rule 10b-18
under the Exchange Act would apply to purchases by our initial stockholders, directors, officers or their affiliates, then such purchases
will comply with Rule 10b-18, to the extent it applies, which provides a safe harbor for purchased made under certain conditions,
including with respect to timing, pricing and volume of purchases.
The purpose of such purchases would be to (1) increase
the likelihood of obtaining stockholder approval of the business combination or (2) 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 the business combination, where
it appears that such requirement would otherwise not be met. This may result in the consummation of an initial business combination that
may not otherwise have been possible.
Purchases of shares of common stock in the open market or in privately
negotiated transactions by our co-sponsors, directors, officers or their affiliates may make it difficult for us to maintain the listing
of our shares on a national securities exchange following the consummation of an initial business combination.
If our co-sponsors, directors, officers or their
affiliates purchase shares of common stock in the open market or in privately negotiated transactions, the public “float”
of our shares of common stock and the number of beneficial holders of our securities would both be reduced, possibly making it difficult
to maintain the listing or trading of our securities on a national securities exchange following consummation of the business combination.
You will not have any rights or interests in funds from the trust
account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares,
potentially at a loss.
Our public stockholders are entitled to receive
funds from the trust account only in the event of a redemption to public stockholders prior to any winding up in the event we do not
consummate our initial business combination or our liquidation, if they redeem their shares in connection with an initial business combination
that we consummate, or if we seek to amend our certificate of incorporation to affect the substance or timing of our redemption obligation
to redeem all public shares if we cannot complete an initial business combination within 12 months (or up to 21 months, as applicable)
of the closing of this offering. In no other circumstances will a stockholder have any right or interest of any kind to the funds in
the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
You will not be entitled to protections normally afforded to investors
of many other blank check companies.
Because the net proceeds of this offering are
intended to be used to complete our initial business combination with a target business that has not been identified, we may be deemed
to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets
in excess of $5,000,000 upon the consummation of this offering and will file 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. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means
our units will be immediately tradable, and we will have a longer period of time to complete our initial business combination than companies
have that are subject to Rule 419. Moreover, offerings subject to Rule 419 would prohibit the release of any interest earned
on funds held in the trust account to us. For a more detailed comparison of our offering to offerings that comply with Rule 419,
please see “Proposed Business — Comparison to Offerings of Blank Check Companies Subject to Rule 419.”
If the net proceeds of this offering not being held in the trust
account are insufficient to allow us to operate for at least the next 12 months (or up to 21 months, as applicable), we may be unable
to complete our initial business combination.
The funds available to us outside of the trust
account may not be sufficient to allow us to operate for at least the next 12 months (or up to 21 months, as applicable), assuming that
our initial business combination is not consummated during that time. Of the funds available to us, we could use a portion of the funds
available to us to pay fees to consultants to assist us with our search for a target business. 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 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. If we are unable to fund such down
payments or “no shop” provisions, our ability to close a contemplated transaction could be impaired. Furthermore, 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. If we are unable to complete our initial business combination, our public stockholders
may only receive a pro rata portion of the amount then in the trust account (which may be less than $10.10 per share) (whether or not
the underwriters’ over-allotment option is exercised in full) on our redemption, and our warrants will expire worthless.
We may issue our shares to investors in connection with our initial
business combination at a price that is less than the prevailing market price of our shares at that time.
In connection with our initial business combination,
we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price of $10.10 per share or which
approximates the per-share amounts in our trust account at such time, which is generally approximately $10.10. The purpose of such issuances
will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may therefore
be less, and potentially significantly less, than the market price for our shares at such time.
Subsequent to our consummation of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges.
Even if we conduct thorough due diligence on a
target business with which we combine, this diligence may not surface all material issues that may be present inside a particular target
business. Even with thorough due diligence, we may not be able to uncover all material issues, and there may be factors outside of the
target business and outside of our control that may arise. 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. 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. 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. 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.
If third parties bring claims against us, the proceeds held
in the trust account could be reduced and the per-share redemption price received by stockholders may be less than $10.10.
Our placing of funds in the trust account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (excluding
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 stockholders, 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. 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. 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. 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. Upon redemption of our public shares, if we are unable to consummate
an initial business combination within 12 months (or up to 21 months, as applicable) from the closing of this offering, 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. Accordingly, the per-share redemption
amount received by public stockholders could be less than the $10.10 per public share initially held in the trust account, due to claims
of such creditors. Pursuant to the letter agreement the form of which is filed as an exhibit to the registration statement of which this
prospectus forms a part, our co-sponsors have agreed that they will be liable to us if and to the extent any claims by a third-party
(excluding 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) $10.10
per public share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account
if less than $10.10 per share due to reductions in the value of the trust assets, in each case less taxes payable, provided that such
liability will not apply to any claims by a third-party who 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 this offering against certain liabilities, including liabilities
under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our co-sponsors
will not be responsible to the extent of any liability for such third-party claims. However, we have not asked our co-sponsors to reserve
for such indemnification obligations, nor have we independently verified whether our co-sponsors have sufficient funds to satisfy their
indemnity obligations and we believe that our co-sponsors’ only assets are securities of our company. Therefore, we cannot assure
you that our co-sponsors would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by
third parties, including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce indemnification obligations
against our co-sponsors, resulting in a reduction in the amount of funds in the trust account available for distribution to our public
stockholders.
In the event that the proceeds in the trust
account are reduced below $10.10 per share (whether or not the underwriters’ overallotment option is exercised in full) and our
co-sponsors assert that they are unable to satisfy their obligations or that they have no indemnification obligations related to a particular
claim, our independent directors would determine on our behalf whether to take legal action against our co-sponsors to enforce their
indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our
co-sponsors to enforce their indemnification obligations to us, it is possible that our independent directors in exercising their business
judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification
obligations on our behalf, the amount of funds in the trust account available for distribution to our public stockholders may be reduced
below $10.10 per share.
If, after we distribute the proceeds in the trust account to our
public stockholders, 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.
If, after we distribute the proceeds in the trust
account to our public stockholders, 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 stockholders 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 stockholders. 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 stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our
public stockholders, 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 stockholders and the per-share
amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust
account to our public stockholders, 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 estate and subject to the claims of third parties with priority over the claims of our stockholders.
To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders
in connection with our liquidation may be reduced.
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.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including restrictions on the nature of our investments and restrictions
on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition,
we may have imposed upon us burdensome requirements, including registration as an investment company, adoption of a specific form of
corporate structure and reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that
we are not subject to.
Certain plaintiffs have recently brought claims
alleging that SPACs qualify as investment companies because, among other assertions, the proceeds of their initial public offerings are
invested in U.S. government securities and money market mutual funds. If the asserted claims are successful, it could have a materially
adverse effect on the SPAC industry in general, including us, as we could become subject to the burdensome requirements of the Investment
Company Act. 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 consummate our initial business combination.
If we are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the
funds in the trust account that are available for distribution to public stockholders, and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any
laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments and agencies, in particular, the Securities Exchange and Commission. Compliance with, and
monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation
and application also may change from time to time and those changes could have a material adverse effect on our business, investments
and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have
a material adverse effect on our business and results of operations.
If we are unable to consummate our initial business combination,
our public stockholders may be forced to wait up to 12 months (or up to 21 months, as applicable) or longer before redemption from our
trust account.
If we are unable to consummate our initial
business combination within 12 months (or up to 21 months, as applicable) from the closing of this offering, we will, as promptly as
reasonably possible but not more than five business days thereafter (subject to our certificate of incorporation and applicable law),
distribute the aggregate amount then on deposit in the trust account (net of taxes payable), pro rata to our public stockholders by way
of redemption and cease all operations except for the purposes of winding up of our affairs by way of a voluntary liquidation, as further
described herein. Any redemption of public stockholders from the trust account shall be effected as required by our certificate of incorporation
prior to our commencing any voluntary liquidation. Except as otherwise described herein, we have no obligation to return funds to investors
prior to the date of any redemption required as a result of our failure to consummate our initial business combination within the period
described above or our liquidation, unless we consummate our initial business combination prior thereto and only then in cases where
investors have sought to redeem their shares of common stock. Only upon any such redemption of public shares as we are required to effect
or any liquidation will public stockholders be entitled to distributions if we are unable to complete our initial business combination.
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 and 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.
We are an “emerging growth company,”
as defined in the JOBS Act. We will remain an “emerging growth company” for up to five years. However, if our non-convertible
debt issued within a three-year period or revenues exceeds $1.07 billion, or the market value of our shares of common stock that are held
by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an
emerging growth company as of the following fiscal year. As an emerging growth company, we are not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and we are exempt from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The 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. We have elected not to opt out of such extended transition period which
means that when a new accounting standard is issued or revised and it has different application dates for public or private companies,
we, as an emerging growth company, will not adopt the new or revised standard until the time private companies are required to adopt
the new or revised standard. 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. As such, our financial statements may not be comparable to companies that
comply with public company effective dates. We cannot predict if investors will find our shares less attractive because we may rely on
the provisions of the JOBS Act. If some investors find our shares less attractive as a result of, there may be a less active trading
market for our shares and our share price may be more volatile.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates
exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during
such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that
year’s second fiscal quarter. 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.
Because we have not selected any specific target businesses with
which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’
operations.
We may pursue acquisition opportunities in any
geographic region. While we may pursue an acquisition opportunity in any business industry or sector, we intend to focus our efforts on
a biotech company that has demonstrated success and is primed to thrive in the rapidly evolving biotech industry for our initial business
combination. Except for the limitations that a target business have a fair market value of at least 80% of the value of the trust account
(excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account) and that we are not permitted
to effectuate our initial business combination with another blank check company or similar company with nominal operations, we will have
flexibility in identifying and selecting a prospective acquisition candidate. Because we have not yet identified or approached any specific
target business with respect to our initial 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. To the extent we consummate
our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. 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. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all
of the significant risk factors, or we may not have adequate time to complete due diligence with respect to the target business and its
industry. 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. In addition, investors will be relying on the business judgment of our board
of directors, which will have significant discretion in choosing the standard used to establish the fair market value of a particular
target business. An investment in our units may not ultimately prove to be more favorable to investors than a direct investment, if such
opportunity were available, in an acquisition target.
We may seek investment opportunities outside our management’s
area of expertise and our management may not be able to adequately ascertain or assess all significant risks associated with the target
company.
There is no limitation on the industry or business
sector we may consider when contemplating our initial business combination. We may therefore be presented with a business combination
candidate in an industry unfamiliar to our management team, but determine that such candidate offers an attractive investment opportunity
for our company. In the event we elect to pursue an investment outside of our management’s expertise, our management’s experience
may not be directly applicable to the target business or the evaluation of its operations.
Although we 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.
Although we have identified specific 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 attributes. If we consummate 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. In addition, if we announce our initial business combination with a target that does not meet
our general criteria and guidelines, a greater number of stockholders may exercise its 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.
In addition, if stockholder approval of the transaction is required by law or Nasdaq, or we decide to obtain stockholder approval for
business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if
the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination,
our public stockholders may only receive $10.10 per share or even less (whether or not the underwriters’ over-allotment option
is exercised in full) on our redemption, and our warrants will expire worthless.
We are not required to obtain an opinion from an independent investment
banking firm in connection with a business combination, and consequently, an independent source may not confirm that the price we are
paying for the business is fair to our public stockholders from a financial point of view.
Unless we consummate our initial business combination
with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that the price we are
paying is fair to our public stockholders from a financial point of view. If no opinion is obtained, our stockholders 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. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related
to our initial business combination.
Resources could be wasted in researching acquisitions that are not
consummated.
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. 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. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate our initial business
combination for any number of reasons including those beyond our control. 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. If we are
unable to complete our initial business combination, our public stockholders may only receive $10.10 per share or even less (whether
or not the underwriters’ over-allotment option is exercised in full) on our redemption, and our warrants will expire worthless.
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. If we are unable to complete our initial business combination, our public stockholders may only receive
$10.10 per share or even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption,
and the warrants will expire worthless.
Although we believe that the net proceeds
of this offering will be sufficient to allow us to consummate our initial business combination, because we have not yet identified any
prospective target business we cannot ascertain the capital requirements for any particular transaction or our costs to operate or locate
a transaction. If the net proceeds of this offering 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 repurchase for cash a significant number
of shares from stockholders 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. Financing may not be available on acceptable terms, if at all. The current economic environment, including
due to the effects of the COVID-19 pandemic, has made it especially difficult for companies to obtain acquisition financing. To the extent
that additional financing proves to be unavailable when needed to consummate our initial business combination, we would be compelled
to either restructure the transaction or abandon that particular initial business combination and seek an alternative target business
candidate. If we are unable to complete our initial business combination, our public stockholders may only receive $10.10 per share or
even less (whether or not the underwriters’ over-allotment option is exercised in full) on our redemption, and the warrants will
expire worthless. In addition, even if we do not need additional financing to consummate our initial business combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required
to provide any financing to us in connection with or after our initial business combination.
We may only be able to complete one business combination with the
proceeds of this offering, which will cause us to be solely dependent on a single business, which may have a limited number of products
or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering together
with the funds we will receive from the sale of the private warrants (excluding $1,500,000 of net proceeds that will not be held in the
trust account) will provide us with approximately $100,000,000 (or approximately $115,000,000 if the underwriters’ over-allotment
option is exercised in full) after payment of the Marketing Fee of $3,500,000 (or $4,025,000 if the underwriters’ over-allotment
option is exercised in full) that we may use to complete our initial business combination.
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously. 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. By consummating our initial business combination with only
a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. 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.
Accordingly, the prospects for our success may be solely dependent upon the performance of a single business, property or asset, or dependent
upon the development or market acceptance of a single or limited number of products or services. This lack of diversification may subject
us to numerous economic, competitive and regulatory developments, 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.
We may attempt to simultaneously consummate business combinations
with multiple prospective targets, which may hinder our ability to consummate our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
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
the initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (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. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to consummate our initial business combination with
a private company about which little information is available.
In pursuing our acquisition strategy, we may seek
to effectuate our initial business combination with a privately held company. By definition, very little public information exists about
private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the
basis of limited information, which may result in our initial business combination with a company that is not as profitable as we suspected,
if at all.
We may not be able to maintain control of a target business after
our initial business combination.
We may structure our initial business combination
to acquire less than 100% of the equity interests or assets of a target business, but we will only consummate such business combination
if we will become the majority stockholder of the target (or control the target through contractual arrangements in limited circumstances
for regulatory compliance purposes) or are otherwise not required to register as an investment company under the Investment Company Act,
or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than a majority of
the voting rights in such entity, but in which we are the primary beneficiary. Even though we may own a majority interest in the target,
our stockholders prior to the 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 transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we
acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders
immediately prior to such transaction could own less than a majority of our outstanding shares subsequent to such transaction. In addition,
other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of
the company’s stock than we initially acquired. Accordingly, this may make it more likely that we will not be able to maintain our
control of the target business.
Because of our structure, other companies may have a competitive
advantage and we may not be able to consummate an attractive business combination.
We expect to encounter intense competition from
entities other than blank check companies having a business objective similar to ours, including venture capital funds, leveraged buyout
funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in
identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human
and other resources than we do, and our financial resources will be relatively limited when contrasted with those of many of these competitors.
Therefore, our ability to compete in acquiring certain sizable target businesses may be limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore,
seeking stockholder approval of our initial business combination may delay the consummation of a transaction. Any of the foregoing may
place us at a competitive disadvantage in successfully negotiating our initial business combination.
Cyber incidents or attacks directed at us could result in information
theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. 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. As an early
stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
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.
Because we must furnish our stockholders with target business financial
statements prepared in accordance with United States generally accepted accounting principles or international financial reporting
standards, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules, which 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. These financial statements may be required to be prepared in accordance
with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial
reporting standards, or IFRS as issued by the International Accounting Standards Board or the IASB, depending on the circumstances, and
the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight
Board (United States), or PCAOB. We will include substantially the same financial statement disclosure in connection with any tender
offer documents we use, whether or not they are required under the tender offer rules. These financial statement requirements may limit
the pool of potential target businesses we may consummate our initial business combination with 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.
Compliance obligations under the Sarbanes-Oxley Act may make it
more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase
the time and costs of completing an acquisition.
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. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly
burdensome on us because a target company 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. The development of the internal controls of any
such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
RISKS RELATING TO OUR CO-SPONSORS AND MANAGEMENT TEAM
Management’s flexibility in identifying and selecting a prospective
acquisition candidate, along with our management’s financial interest in consummating our initial business combination, may lead
management to enter into an acquisition agreement that is not in the best interest of our stockholders.
Subject to the requirement that our initial business
combination must be with one or more target businesses or assets having an aggregate fair market value of at least 80% of the value of
the trust account (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account) at the
time of the agreement to enter into such initial business combination, we will have virtually unrestricted flexibility in identifying
and selecting a prospective acquisition candidate. Investors will be relying on management’s ability to identify business combinations,
evaluate their merits, conduct or monitor diligence and conduct negotiations. Management’s flexibility in identifying and selecting
a prospective acquisition candidate, along with management’s financial interest in consummating our initial business combination,
may lead management to enter into an acquisition agreement that is not in the best interest of our stockholders, which would be the case
if the trading price of our shares of common stock after giving effect to such business combination was less than the per-share trust
liquidation value that our stockholders would have received if we had dissolved without consummating our initial business combination.
Our ability to successfully effect our initial business combination
and to be successful thereafter will be largely dependent upon the efforts of our officers, directors and key personnel, some of whom
may join us following our initial business combination.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our officers and directors. We believe that our success depends on the continued service
of our officers and directors, at least until we have consummated our initial business combination. In addition, our 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
management time among various business activities, including identifying potential business combinations and monitoring the related due
diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected
loss of the services of one or more of our directors or officers could have a detrimental effect on us.
The role of such persons in the target business,
however, cannot presently be ascertained. Although some of such persons may remain with the target business in senior management or advisory
positions following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, our assessment of these
individuals may not prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by
the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment or consulting agreements
with a target business in connection with a particular business combination. 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.
Our key personnel may be able to remain with us
after the consummation of our initial business combination only if they are able to negotiate employment or consulting agreements in connection
with the business combination. 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 consummation of the business combination. The personal and financial interests of such individuals may influence
their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us
after the consummation of our initial business combination will not be the determining factor in our decision as to whether or not we
will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us
after the consummation of our initial business combination. Our key personnel may not remain in senior management or advisory positions
with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business
combination.
We may have a limited ability to assess the management of a prospective
target business and, as a result, may effectuate our initial business combination with a target business whose management may not have
the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’ management may be
limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore,
may prove to be incorrect, and such management may lack the expected skills, qualifications or abilities. Should the target’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.
Unlike other blank check companies, we may extend the time to
complete a business combination by up to nine months without a stockholder vote or your ability to redeem your shares.
We will have until 12 months from the closing
of this offering to consummate an initial business combination. However, unlike other similarly structured blank check companies, if
we anticipate that we may not be able to consummate our initial business combination within 12 months, our insiders or their affiliates
may, but are not obligated to, extend the period of time to consummate a business combination up to three times by an additional three
months each time (for a total of up to 21 months to complete a business combination); provided that, pursuant to the terms of our certificate
of incorporation and the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date
of this prospectus, the only way to extend the time available for us to consummate our initial business combination is for our insiders
or their affiliates or designees, upon five days’ advance notice prior to each applicable deadline, to deposit into the trust account
$1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000,
or $3,450,000 if the over-allotment option is exercised in full, if the time to consummate a business combination is extended to a full
21 months), on or prior to the date of the applicable deadline. Public stockholders will not be offered the opportunity to vote on or
redeem their shares in connection with any such extension. Our insiders or their affiliates or designees or designees are not obligated
to fund the trust account to extend the time for us to complete our initial business combination. If we are unable to consummate our
initial business combination within the applicable time period, we will, promptly redeem the public shares for a pro rata portion of
the funds held in the trust account and promptly following such redemption, subject to the approval of our remaining stockholders and
our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. In such event, the warrants will be worthless.
The officers and directors of an acquisition candidate may resign
upon consummation of our initial business combination. The loss of an acquisition target’s key personnel could negatively impact
the operations and profitability of our post-combination business.
The role of an acquisition candidate’s key
personnel upon the consummation of our initial business combination cannot be ascertained at this time. 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 some members of the management team of an acquisition candidate will not wish to remain in place.
Past performance by our management team, members of our strategic
advisory group, or their respective affiliates may not be indicative of future performance of an investment in us.
Information regarding performance is presented
for informational purposes only. Any past experience or performance of our management team, members of our strategic advisory group 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. You should not rely on the historical record of our management team,
members of our strategic advisory group 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.
Certain of our officers and directors are affiliated with entities
engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating
their time and determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and
until we consummate our business combination, we intend to engage in the business of identifying and combining with one or more businesses.
Certain of our officers and directors are affiliated with entities that are engaged in a similar business, including Affiliated SPACs.
In particular, Mr. Grossman is a director and/or officer of Ventoux CCM Acquisition Corp., Chardan NexTech Acquisition Corp. and
Chardan NexTech Acquisition 2 Corp. and Mr. Patel is a director of Quantum FinTech Acquisition Corporation, each of which Affiliated
SPACs are blank check companies incorporated for the purpose of effecting their own respective initial business combinations. Each of
Messrs. Grossman and Patel owes fiduciary duties or contractual obligations to such Affiliated SPACs.
Certain of our officers and directors presently
have, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities
pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities, including
an Affiliated SPAC. Our officers and directors may become aware of business opportunities which may be appropriate for presentation to
us and the other entities to which they owe certain fiduciary duties, including an Affiliated SPAC. Accordingly, they may have conflicts
of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved
in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject to our directors’
and officers’ fiduciary duties under the Delaware General Corporation Law. Our certificate of incorporation will provide that we
renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to
such person solely in his or her capacity as a director or officer of the company and such opportunity is one we are legally and contractually
permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to
refer that opportunity to us without violating another legal obligation.
In addition, Mr. Grossman, our director,
is affiliated with Chardan, which is also the underwriter in this offering. Mr. Grossman owes a pre-existing fiduciary duty to Chardan,
meaning that he may present opportunities to Chardan prior to presenting them to us, if, for example, a potential target company is open
to either raising funds in an offering or engaging in a transaction with a blank check company. This may limit the number of potential
targets Mr. Grossman presents to us for purposes of completing a business combination. Any conflict of interest may not be resolved
in our favor, and potential target businesses may be presented to another entity prior to their presentation to us.
Our co-sponsors and directors and officers are
also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies similar to ours, including
in connection with their initial business combinations, or may pursue other business or investment ventures during the period in which
we are seeking an initial business combination. Any such companies, businesses or ventures may present additional conflicts of interest
in pursuing an initial business combination. However, we do not believe that any such potential conflicts would materially affect our
ability to complete our initial business combination.
For further discussion of our executive
officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of,
please see “Management-Officers, Directors and Director Nominees,” “Management-Conflicts of Interest” and
“Certain Relationships and Related Party Transactions.”
Certain shares beneficially owned by our officers and directors
will not participate in liquidation distributions and, therefore, our officers and directors may have a conflict of interest in determining
whether a particular target business is appropriate for our initial business combination.
Our officers and directors have waived their right
to redeem any shares in connection with our initial business combination, or to receive distributions with respect to their founder shares
upon our liquidation if we are unable to consummate our initial business combination. Accordingly, these securities will be worthless
if we do not consummate our initial business combination. Any warrants they hold, like those held by the public, will also be worthless
if we do not consummate an initial business combination. 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. 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 stockholders’ best interest.
We may engage in our initial business combination with one or more
target businesses that have relationships with entities that may be affiliated with our executive officers, directors or existing holders,
which may raise potential conflicts of interest.
In light of the involvement of our co-sponsors,
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our co-sponsors, officers
and directors. Our directors also serve as officers and board members for other entities. Our co-sponsors, officers and directors are
not currently aware of any specific opportunities for us to consummate our initial business combination with any entities with which they
are affiliated, and there have been no preliminary discussions concerning a business combination with any entity or entities. 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 for our initial business combination and such transaction was approved by
a majority of our disinterested directors. Despite our agreement to obtain an opinion in connection with such transaction from an independent
investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we seek
to acquire, regarding the fairness to our stockholders from a financial point of view of a business combination with one or more domestic
or international businesses affiliated with our executive officers, directors or existing holders, 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 stockholders as they would
be absent any conflicts of interest. Our directors have a fiduciary duty to act in the best interests of our stockholders, whether or
not a conflict of interest may exist.
We may acquire a target business through an
Affiliated Joint Acquisition with one or more affiliates of Chardan. This may result in conflicts of interest as well as dilutive issuances
of our securities.
We may, at our option,
pursue a business combination opportunity jointly with Chardan or one or more entities affiliated with Chardan, which we refer to as
an “Affiliated Joint Acquisition.” We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any
such parties would co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we and Chardan
considered a transaction to be mutually beneficial to us as well as the affiliated entity; and (iii) other business reasons exist
to do so, such as the strategic merits of including such co-investors, the need for additional capital beyond the amount held in our
trust account to fund the initial business combination and/or the desire to obtain committed capital for closing the initial business
combination. An Affiliated Joint Acquisition may be effected through a co-investment with us in the target business at the time of our
initial business combination, or we could raise additional proceeds to complete the initial business combination by issuing to such parties
a class of equity or equity-linked securities. Accordingly, such persons or entities may have a conflict between their interests and
ours.
We may engage Chardan, an affiliate of Chardan Monterey, as our
lead financial advisor on our business combination and a lead placement agent in connection with any associated private investment in
public equity financing. Any fee in connection with such engagement may be conditioned upon the completion of such transactions. Prior
to consummation of this offering, we will engage Chardan to act as our advisor in connection with the marketing of our business combination
and we will agree to pay Chardan the Marketing Fee upon consummation of our business combination. In addition, upon the completion of
this offering, we will grant to Chardan a right of first refusal to act as book running manager for our debt and equity offerings for
a certain period of time. Financial interests in the completion of such transactions may influence the advice such affiliate provides.
In the future, we may engage Chardan, an affiliate
of Chardan Monterey as a financial advisor in connection with our initial business combination, and a lead placement agent in connection
with any associated investment in public equity financing. In connection with such engagement, we may pay Chardan or any other affiliate
a customary financial advisory fee in an amount that constitutes a market financial advisory fee for comparable transactions. Pursuant
to any such engagement, the affiliate may earn its fee upon closing of the initial business combination. The payment of such fee would
likely be conditioned upon the completion of the initial business combination. See “Underwriting (Conflicts of Interest)”
for more information.
Prior to consummation of this offering, we will
engage Chardan to act as our advisor in connection with the marketing of our business combination and pay to Chardan a fee for such services
upon consummation of our initial business combination as described under “Underwriting (Conflicts of Interest)—Business
Combination Marketing Agreement.” Therefore, affiliates of Chardan Monterey will have additional financial interests in the
completion of the initial business combination. The fact that the underwriter or its affiliates’ financial interests are tied to
the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional
services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.
For instance, these financial interests may influence the advice any such affiliate provides us as our financial advisor, which advice
would contribute to our decision on whether to pursue a business combination with any particular target. In addition, upon the completion
of this offering, we will grant to Chardan a right of first refusal to act as book running manager for any and all of our future public
and private equity and debt offerings for a period of 15 months from the closing of an initial business combination.
Because our co-sponsors will lose their entire initial investment
in us if our initial business combination is not consummated and our officers and directors have significant financial interests in us,
a conflict of interest may arise in determining whether a particular acquisition target is appropriate for our initial business combination.
On
September 18, 2020, Chardan Monterey purchased 5,000,000 shares of common stock from
us for $25,000, or $0.005 per share. On May 20, 2021, Chardan Monterey transferred 687,500
founder shares back to us for no consideration, which shares were cancelled. On May 21, 2021,
Chardan Monterey transferred 3,315,625 founder shares to NorthStar at a price of $0.006 per
share. On May 21, 2021, NorthStar transferred 150,000 founder shares to Dr. Satyal,
our chief executive officer, and transferred 35,000 founder shares to each of our directors
and director nominees at a price of $0.006 per share. On September 1, 2021, NorthStar transferred
1,078,125 founder shares back to us and Chardan Monterey transferred 359,375 founder shares
back to us, in each case for no consideration, which shares were cancelled. As a result,
NorthStar holds a balance of 1,912,500 founder shares and Chardan Monterey holds a balance
of 637,500 founder shares. The founder shares include an aggregate of up to 375,000 shares
that are subject to forfeiture to the extent that the underwriters’ over-allotment
option is not exercised in full or in part. The founder shares will be worthless if we do
not consummate an initial business combination. In addition, NorthStar has committed to purchase
from us 3,750,000 private warrants (or 4,087,500 private warrants if the over-allotment option
is exercised in full) and Chardan Monterey has committed to purchase from us 1,250,000 private
warrants (or 1,362,500 private warrants if the over-allotment option is exercised in full),
in each case, at a price of $1.00 per warrant, for an aggregate purchase price of $5,000,000
(or $5,450,000 if the over-allotment option is exercised in full) in a private placement
that will close simultaneously with the closing of this offering. The founder shares and
private warrants will be worthless if we do not consummate an initial business combination.
Members of our management team and board of directors have significant
experience as founders, board members, officers or executives of other companies. As a result, certain of those persons have been, or
may become, involved in proceedings, investigations and litigation relating to the business affairs of the companies with which they were,
are, or may be in the future be, affiliated. These activities may have an adverse effect on us, which may impeded our ability to consummate
an initial business combination.
During the course of their careers, members of
our management team and board of directors have had significant experience as founders, board members, officers or executives of other
companies. As a result of their involvement and positions in these companies, certain of those persons , are now, or may in the future
become, involved in litigation, investigations or other proceedings relating to the business affairs of such companies or transactions
entered into by such companies. Any such litigation, investigations or other proceedings may divert the attention and resources of the
members of both our management team and our 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.
RISKS RELATING TO OUR SECURITIES
The securities in which we invest the funds 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 public stockholders may be less than $10.10 per share.
The net proceeds of this offering and certain
proceeds from the sale of the private warrants, in the amount of $101,000,000, will be held in an interest-bearing trust account. The
proceeds held in the trust account may only be invested only in U.S. government treasury bills with a maturity of 185 days or less or
in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S.
government treasury obligations. While short-term U.S. treasury obligations currently yield a positive rate of interest, they have briefly
yielded negative interest rates in recent years. 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. In the event of very low or negative yields, the amount of interest income (which we may use to pay our taxes,
if any) would be reduced. In the event that we are unable to complete our initial business combination, our public stockholders are entitled
to receive their pro-rata share of the proceeds then held in the trust account, plus any interest income (less up to $100,000 of interest
to pay dissolution expenses). If the balance of the trust account is reduced below $101,000,000 as a result of negative interest rates,
the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.10 per share.
Our warrant agreement will designate 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.
Our warrant agreement will provide 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. We will waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum.
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. 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. 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, or a foreign action, in the name of any holder of our warrants, such holder shall be deemed to have consented to:
(x) the personal jurisdiction of the state and federal courts located in 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, or 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.
The choice-of-forum provision in our warrant agreement
may (1) result in increased costs for investors to bring a claim or (2) 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. 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. We note 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. 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. 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.
We may issue notes or other debt securities, or otherwise incur
substantial debt, to complete our initial business combination, which may adversely affect our financial condition and thus negatively
impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date
of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our initial business combination. If we incur any indebtedness without a waiver from any lender of any right, title,
interest or claim of any kind in or to any monies held in the trust account, the incurrence of debt could have a variety of negative effects,
including:
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default and foreclosure on our assets if our operating revenues
after our initial business combination are insufficient to repay our debt obligations;
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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;
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our immediate payment of all principal and accrued interest,
if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the
debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
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our inability to pay dividends on our shares of common stock;
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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 shares of common stock if declared, expenses, capital
expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning for and reacting
to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; and
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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.
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If we seek stockholder approval of our business combination and
we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold
in excess of 20% of our shares of common stock, you will lose the ability to redeem all such shares in excess of 20% of our shares of
common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules,
our certificate of incorporation provides that a public stockholder, individually or together with any affiliate of such stockholder or
any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the
Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in this
offering. Your inability to redeem more than an aggregate of 20% of the shares sold in this offering will reduce your influence over our
ability to consummate our initial business combination and you could suffer a material loss on your investment in us if you sell such
excess shares in open market transactions. As a result, you will continue to hold that number of shares exceeding 20% and, in order to
dispose of such shares, you would be required to sell your shares in open market transaction, potentially at a loss.
Holders of warrants will not participate in liquidating distributions
if we are unable to complete an initial business combination within the required time period.
If we are unable to complete an initial business
combination within the required time period and we liquidate the funds held in the trust account, the warrants will expire and holders
will not receive any of such proceeds with respect to the warrants. The foregoing may provide a financial incentive to public stockholders
to vote in favor of any proposed initial business combination as each of their warrants would entitle the holder to receive or purchase
additional shares of common stock, resulting in an increase in their overall economic stake in us. If a business combination is not approved,
the warrants will expire and be worthless.
If we do not maintain a current and effective prospectus relating
to the shares of common stock issuable upon exercise of the warrants, public holders will only be able to exercise such warrants on a
“cashless basis” which would result in a fewer number of shares being issued to the holder had such holder exercised the warrants
for cash.
If we do not maintain a current and effective
prospectus relating to the shares of common stock issuable upon exercise of the warrants at the time that holders wish to exercise such
warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available.
As a result, the number of shares of common stock that a holder will receive upon exercise of its warrants will be fewer than it would
have been had such holder exercised its warrant for cash. Further, if an exemption from registration is not available, holders would
not be able to exercise their warrants on a cashless basis and would only be able to exercise their warrants for cash if a current and
effective prospectus relating to the shares of common stock issuable upon exercise of the warrants is available. Under the terms of the
warrant agreement, we have agreed to use our best efforts to meet these conditions and to maintain a current and effective prospectus
relating to the shares of common stock issuable upon exercise of the warrants until the expiration of the warrants. However, we cannot
assure you that we will be able to do so. If we are unable to do so, the potential benefit of the holder’s investment in us may
be reduced or the warrants may expire worthless.
An investor will only be able to exercise a warrant for cash if
the issuance of common stock upon such exercise has been registered or qualified or is deemed exempt under the securities laws of the
state of residence of the holder of the warrants.
No warrants will be exercisable for cash,
and we will not be obligated to issue shares of common stock unless the shares of common stock issuable upon such exercise has been registered
or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. At the time that
the warrants become exercisable, we expect to continue to be listed on a national securities exchange, which would provide an exemption
from registration in every state. However, we cannot assure you of this fact. If the common shares issuable upon exercise of the warrants
are not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside, the warrants may be
deprived of any value, the market for the warrants may be limited and they may expire worthless if they cannot be sold.
Our management’s ability to require holders of our warrants
to exercise such warrants on a cashless basis will cause holders to receive fewer shares of common stock upon their exercise of the warrants
than they would have received had they been able to exercise their warrants for cash.
If we call our warrants for redemption after
the redemption criteria described elsewhere in this prospectus have been satisfied, our management will have the option to require any
holder that wishes to exercise his warrant (including any warrants held by our co-sponsors and/or their permitted transferees) to do
so on a “cashless basis.” If our management chooses to require holders to exercise their warrants on a cashless basis, the
number of shares of common stock received by a holder upon exercise will be fewer than it would have been had such holder exercised his
warrant for cash. This will have the effect of reducing the potential benefit of the holder’s investment in our company.
We may amend the terms of the warrants in a way that may be adverse
to holders with the approval by the holders of a majority of the then outstanding warrants.
Our warrants will be issued in registered form
under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder (i) to cure 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 this prospectus, or to cure, correct or supplement any defective provision, (ii) to make any amendments that
are necessary in the good faith determination of our board of directors (taking into account then existing market precedents) to allow
for the warrants to be classified as equity in our financial statements or (iii) to add or change any other 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 interests of the registered holders of the warrants. The warrant agreement requires
the approval by the holders of a majority of the then outstanding warrants (including the private warrants) in order to make any change
that adversely affects the interests of the registered holders; provided that, solely with respect to any amendment to the terms of the
private warrants or any provision of the warrant agreement with respect to the private warrants that does not adversely affect any of
the terms of the public warrants, such amendment will require only the written consent or vote of the registered holders of at least a
majority of the then outstanding private warrants.
We have no obligation to net cash settle the warrants.
In no event will we have any obligation to net
cash settle the warrants. Accordingly, the warrants may expire worthless.
A public stockholder who fails to vote either in favor of or against
a proposed business combination may not be able to have his, her or its shares redeemed for cash.
In order for a public stockholder to have his,
her or its shares redeemed for cash in connection with any proposed business combination, we may require that the public stockholder vote
either in favor of or against a proposed business combination. If required to vote pursuant to the procedures specified in our proxy statement
to stockholders relating to the business combination, and such public stockholder fails to vote in favor of or against the proposed business
combination, whether that stockholder abstains from the vote or simply does not vote, that stockholder would not be able to have his,
her or its shares of common stock redeemed for cash in connection with such business combination.
We will require public stockholders who wish to redeem their shares
of common stock in connection with a proposed business combination or amendment to our certificate of incorporation to effect the substance
or timing of their redemption obligation, if we fail to timely complete a business combination to comply with specific requirements for
redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.
We will require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the expiration date set forth in the tender offer documents mailed to such holders,
or in the event we distribute proxy materials, up to two business days prior to the vote on the proposal to approve the business combination
or amendment to our certificate of incorporation to affect the substance or timing of our redemption obligation to redeem all public shares
if we cannot complete an initial business combination, or to deliver their shares to the transfer agent electronically using Depository
Trust Company’s DWAC System, at the holder’s option. In order to obtain a physical stock certificate, a stockholder’s
broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders
should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any
control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate.
While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under Delaware
law, we are required to provide at least ten days’ advance notice of any stockholder meeting, which would be the minimum amount
of time a stockholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than we anticipate
for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption
rights and thus may be unable to redeem their shares.
Redeeming stockholders may be unable to sell their securities when
they wish to in the event that the proposed business combination is not approved.
We will require public stockholders who wish to
redeem their shares of common stock in connection with any proposed business combination to comply with the delivery requirements discussed
above for redemption. If such proposed business combination is not consummated, we will promptly return such certificates to the tendering
public stockholders. Accordingly, investors who attempted to redeem their shares in such a circumstance will be unable to sell their securities
after the failed acquisition until we have returned their securities to them. The market price for our shares of common stock may decline
during this time, and you may not be able to sell your securities when you wish, even while other stockholders that did not seek redemption
may be able to sell their securities.
Our certificate of incorporation contains provisions that prohibit
our engaging in business combinations with interested stockholders in certain circumstances.
We have opted out of Section 203 of the Delaware
General Corporate Law (the “DGCL”). However, our certificate of incorporation contains similar provisions providing that we
may not engage in certain “business combinations” with any “interested stockholder” for a three-year period following
the time that the stockholder became an interested stockholder, unless
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prior to such time, our board of directors approved either the
business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction
commenced, excluding certain shares; or
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at or subsequent
to that time, the business combination is approved by our board of directors and by the affirmative
vote of holders of at least 66 2/3% of the outstanding voting stock that is not owned by
the interested stockholder.
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Generally, a “business combination”
includes a merger, asset or stock sale or certain other transactions with the interested stockholder. Subject to certain exceptions, an
“interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the
previous three years owned, 20% or more of our voting stock.
Under certain circumstances, this provision will
make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with
a corporation for a three-year period. This provision may encourage companies interested in acquiring our company to negotiate in advance
with our board of directors because the stockholder approval requirement would be avoided if our board of directors approves either the
business combination or the transaction which results in the stockholder becoming an interested stockholder. These provisions also may
have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions which stockholders
may otherwise deem to be in their best interests.
Our certificate of incorporation provides that
our co-sponsors, and their respective affiliates, any of their respective direct or indirect transferees of at least 20% of our outstanding
common stock and any group as to which such persons are party to, do not constitute “interested stockholders” for purposes
of this provision.
Our initial stockholders control a substantial interest in us and
thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon closing of this offering, our initial stockholders,
including our co-sponsors (and/or their designees) collectively will own 20% of our issued and outstanding shares of common stock (assuming
they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a stockholder
vote, potentially in a manner that you do not support, including amendments to our certificate of incorporation. If our initial stockholders,
including our co-sponsors (and/or their designees) purchase any units in this offering or if our any of the foregoing persons purchases
any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither
of our co-sponsors nor, to our knowledge, any of our officers or directors, has any current intention to purchase additional securities.
Factors that would be considered in making such additional purchases would include consideration of the current trading price of our shares
of common stock.
The grant of registration rights to our initial stockholders 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 shares of common stock.
Pursuant to an agreement to be entered into on
the date of this prospectus, our initial stockholders, including our co-sponsors and their permitted transferees can demand that we register
the founder shares and the private warrants and the underlying securities. We will bear the cost of registering these securities. 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 shares of common stock. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the stockholder 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 shares of common stock
that is expected when the securities owned by our initial stockholders, including our co-sponsors and their permitted transferees are
registered.
Our initial stockholders paid an aggregate of $25,000, or approximately
$0.006 or $0.005 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our
shares of common stock.
The difference between the public offering
price per share (allocating all of the unit purchase price to the shares of common stock included in a unit and none to the warrants
included in a unit) and the pro forma net tangible book value per share after this offering constitutes the dilution to you and the other
investors in this offering. Our initial stockholders acquired the founder shares at a nominal price, significantly contributing to this
dilution. Upon closing of this offering, you and the other public stockholders will incur an immediate and substantial dilution of approximately
82.4% or $8.24 per share (the difference between the pro forma net tangible book value per share of $1.76 and the initial offering price
of $10.00 per share immediately upon the closing of this offering), or approximately 84.5% dilution or $8.45 per share (the difference
between the pro forma net tangible book value per share of $1.55 and the initial offering price of $10.00 per share) if the over-allotment
is fully exercised.
Since NorthStar paid only approximately $0.006 per share and Chardan
Monterey paid only $0.005 per share for the founder shares, certain of our officers and directors could potentially make a substantial
profit even if we acquire a target business that subsequently declines in value.
The founder shares held by our co-sponsors were
issued in exchange for a capital contribution of $25,000, or approximately $0.006 per share, in the case of NorthStar, and $0.005 per
share, in the case of Chardan Monterey. An aggregate of 325,000 founder shares were distributed to our officers and directors, who therefore
have a significant economic interest. As a result, the low acquisition cost of the founder shares creates an economic incentive whereby
our officers and directors could potentially make a substantial profit even if we complete a business combination with a target business
that subsequently declines in value and is unprofitable for public investors.
The nominal purchase price paid by our co-sponsors for the founder
shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination.
We are offering our units at an offering price
of $10.00 per unit, implying an initial value of $10.10 per public share. However, prior to this offering, our co-sponsors paid a nominal
aggregate purchase price of $25,000 for the founder shares, or approximately $0.006 per share, in the case of NorthStar, and $0.005 per
share, in the case of Chardan Monterey. As a result, the value of your public shares may be significantly diluted upon the consummation
of our initial business combination, when the founder shares are converted into public shares. For example, the following table shows
the dilutive effect of the founder shares on the implied value of the public shares upon the consummation of our initial business combination,
assuming that our equity value at that time is $97,500,000, which is the amount we would have for our initial business combination in
the trust account after payment of a Marketing Fee of $3,500,000, assuming the underwriters’ over-allotment option is not exercised,
no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business
combination, and without taking into account any other potential impacts on our valuation at such time, such as the trading price of
our public shares, the business combination transaction costs, any equity issued or cash paid to the target’s sellers or other
third parties, or the target’s business itself, including its assets, liabilities, management and prospects, as well as the value
of our public and private warrants. At such valuation, each of our shares of common stock would have an implied value of $7.80 per share
upon consummation of our initial business combination, which would be a 22.8% decrease as compared to the initial implied value per public
share of $10.10 (the price per unit in this offering, assuming no value to the public warrants).
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Public shares
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10,000,000
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Founder shares
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2,500,000
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Total shares
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12,500,000
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Total funds in trust available for initial business
combination (less Marketing Fee)
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$
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97,500,000
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Initial implied value per public share
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$
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10.10
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Implied value per share upon consummation of initial
business combination
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$
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7.80
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The value of the founder shares following completion of our initial
business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common
stock at such time is substantially less than $10.00 per share.
Upon the closing of this offering, assuming
no exercise of the underwriters’ over-allotment option, our co-sponsors will have invested in us an aggregate of $5,025,000, comprised
of the $25,000 purchase price for the founder shares and the $5,000,000 purchase price for the private warrants. Assuming a trading price
of $10.00 per share upon consummation of our initial business combination, the 2,500,000 founder shares would have an aggregate implied
value of $25,000,000. Even if the trading price of our common stock was as low as $2.01 per share, and the private warrants were worthless,
the value of the founder shares would be equal to the co-sponsors’ initial investment in us. As a result, our co-sponsors are likely
to be able to recoup their investment in us and make a substantial profit on that investment, even if our public shares have lost significant
value. Accordingly, our management team, which owns interests in either of our co-sponsors and/or founder shares, may have an economic
incentive that differs from that of the public stockholders to pursue and consummate an initial business combination rather than to liquidate
and to return all of the cash in the trust to the public stockholders, even if that business combination were with a riskier or less-established
target business. For the foregoing reasons, you should consider our management team’s financial incentive to complete an initial
business combination when evaluating whether to redeem your shares prior to or in connection with the initial business combination.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
Unlike most blank check companies, if we issue
additional shares of common stock 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 share of common stock, then the exercise price of the warrants will
be adjusted to be equal to 115% of higher of the Market Value and the newly issued price and the $16.50 per share redemption trigger price
will be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the newly issued price. This may make
it more difficult for us to consummate an initial business combination with a target business.
The determination of the offering price of our units and the size
of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry.
Prior to this offering there has been no public
market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and
the underwriters. In determining the size of this offering, management held customary organizational meetings with the underwriters, both
prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed
they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units,
including the shares of common stock and warrants underlying the units, include:
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the history and prospects of companies whose principal business
is the acquisition of other companies;
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prior offerings of those companies;
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our prospects for acquiring an operating business at attractive
values;
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a review of debt to equity ratios in leveraged transactions;
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an assessment of our management and their experience in identifying
operating companies;
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general conditions of the securities markets at the time
of this offering including with respect to the impact from the COVID-19 pandemic; and
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other factors as were deemed relevant.
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Although these factors were considered, the determination
of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have
no historical operations or financial results.
There is currently no market for our securities and a market for
our securities may not develop, which would adversely affect the liquidity and price of our securities.
As of the date of this prospectus there is currently
no market for our securities. Prospective stockholders therefore have no access to information about prior market history on which to
base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential
business combinations and general market or economic conditions. Once listed on Nasdaq, an active trading market for our securities may
never develop or, if developed, it may not be sustained. Additionally, if our securities become delisted from Nasdaq for any reason, and
are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities not listed on a national exchange,
the liquidity and price of our securities may be more limited than if we were listed on Nasdaq or another national exchange. You may be
unable to sell your securities unless a market can be established and sustained.
Once initially listed on Nasdaq, our securities may not continue
to be listed on Nasdaq in the future, which could limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
We anticipate that our securities will be initially
listed on Nasdaq upon consummation of this offering. However, we cannot assure you of this or that our securities will continue to be
listed on Nasdaq in the future. Additionally, in connection with our business combination, Nasdaq may require us to file a new initial
listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot
assure you that we will be able to meet those initial listing requirements at that time. If Nasdaq delists our securities from trading
on its exchange, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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a reduced liquidity with respect to our securities;
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a determination that our shares of common stock are a “penny
stock,” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly resulting
in a reduced level of trading activity in the secondary trading market for our shares of common stock;
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a limited amount of news and analyst coverage for our company;
and
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a decreased ability to issue additional securities or obtain
additional financing in the future.
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Our certificate of incorporation designates the Court of Chancery
of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders,
which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s
directors, officers or other employees.
Our certificate of incorporation provides that,
unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest
extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of our company,
(2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company to our
company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a claim against our
company or any director or officer of our company arising pursuant to any provision of the DGCL or our certificate of incorporation or
our bylaws, or (4) action asserting a claim against us or any director or officer of our company governed by the internal affairs
doctrine except for, as to each of (1) through (4) above, any claim (a) as to which the Court of Chancery determines that
there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent
to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested in the exclusive
jurisdiction of a court or forum other than the Court of Chancery, or (c) arising under the federal securities laws, including the
Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall concurrently be the
sole and exclusive forums. Notwithstanding the foregoing, the inclusion of such provision in our certificate of incorporation is not be
deemed to be a waiver by our stockholders of our obligation to comply with federal securities laws, rules and regulations, and the
provisions of this paragraph in our certificate of incorporation 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 shall be the sole and
exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed
to have notice of and to have consented to the forum provisions in our certificate of incorporation. If any action the subject matter
of which is within the scope the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign
action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction
of the state and federal courts located within the State of Delaware 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 stockholder in any such
enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.
This choice-of-forum provision may limit a stockholder’s
ability to bring a claim in a judicial forum that it finds favorable for disputes with our company or its directors, officers or other
employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our certificate of incorporation
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.
RISKS RELATING TO ACQUIRING AND OPERATING A BUSINESS OUTSIDE OF
THE UNITED STATES
We may effect our initial business combination with a company located
outside of the United States.
If we effect our initial business combination
with a company located outside of the United States, we would be subject to any special considerations or risks associated with companies
operating in the target business’ home jurisdiction, including any of the following:
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rules and regulations or currency redemption or corporate
withholding taxes on individuals;
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laws governing the manner in which future business combinations
may be effected;
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exchange listing and/or delisting requirements;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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tax issues, such as tax law changes and variations in tax
laws as compared to the United States;
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currency fluctuations and exchange controls;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks
and wars; and
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deterioration of political relations with the United States.
We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.
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There are costs and difficulties inherent in managing cross-border
business operations.
Managing a business, operations, personnel or
assets in another country is challenging and costly. Any management that we may have (whether based abroad or in the United States)
may be inexperienced in cross-border business practices and unaware of significant differences in accounting rules, legal regimes and
labor practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border business
operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively impact our
financial and operational performance.
Social unrest, acts of terrorism, regime changes, changes in laws
and regulations, political upheaval, or policy changes or enactments may occur in a country in which we may operate after we effect our
initial business combination.
Political events in another country may significantly
affect our business, assets or operations. Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political
upheaval, and policy changes or enactments could negatively impact our business in a particular country.
Many countries have difficult and unpredictable legal systems and
underdeveloped laws and regulations that are unclear and subject to corruption and inexperience.
Our ability to seek and enforce legal protections,
including with respect to intellectual property and other property rights, or to defend ourselves with regard to legal actions taken against
us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial condition.
Rules and regulations in many countries are
often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal
levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the enforcement of particular
rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption to operations
abroad and negatively impact our results.
If relations between the United States and foreign governments
deteriorate, it could cause potential target businesses or their goods and services to become less attractive.
The relationship between the United States
and foreign governments could be subject to sudden fluctuation and periodic tension. For instance, the United States may announce
its intention to impose quotas on certain imports or become involved in trade wars with other nations. Such import quotas or trade wars
may adversely affect political relations between the two countries and result in retaliatory countermeasures by the foreign government
in industries that may affect our ultimate target business. Changes in political conditions in foreign countries and changes in the state
of U.S. relations with such countries are difficult to predict and could adversely affect our operations or cause potential target businesses
or their goods and services to become less attractive. Because we are not limited to any specific industry, there is no basis for investors
in this offering to evaluate the possible extent of any impact on our ultimate operations if relations are strained between the United States
and a foreign country in which we acquire a target business or move our principal manufacturing or service operations.
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.
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. Management of the target business may not be familiar with United States securities
laws. If new management is unfamiliar with our laws, they may have to expend time and resources becoming familiar with such laws. This
could be expensive and time-consuming, and could lead to various regulatory issues, which may adversely affect our operations.
Currency policies may cause a target business’ ability to
succeed in the international markets to be diminished.
In the event we acquire a non-U.S. 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. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. 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. 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.
Because foreign law could govern our material agreements, we may
not be able to enforce our rights within such jurisdiction or elsewhere.
Foreign law could govern our material agreements.
The target business may not be able to enforce any of its material agreements or remedies may not be available outside of such foreign
jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts in such jurisdiction may not
be as certain in implementation and interpretation as in the United States. The judiciaries in certain foreign countries may be relatively
inexperienced in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty as to the outcome of any
litigation, any such jurisdictions may not favor outsiders or could be corrupt. As a result, the inability to enforce or obtain a remedy
under any of our future agreements could result in a significant loss of business and business opportunities.
RISKS RELATING TO TAXATION
Our initial business combination and our structure thereafter may
not be tax-efficient to our stockholders and warrant holders. As a result of our initial business combination, our tax obligations may
be more complex, burdensome and uncertain.
Although we will attempt to structure our initial
business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and
may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial
business combination and subject to requisite stockholder approval, we may structure our business combination in a manner that requires
stockholders and/or warrant holders to recognize gain or income for tax purposes. We do not intend to make any cash distributions to stockholders
or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a stockholder or a warrant holder
may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a
portion of such holder’s shares or warrants. In addition, we may effect a business combination with a target company in another
jurisdiction or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company
or business is located). As a result, stockholders and warrant holders may be subject to additional income, withholding or other taxes
with respect to their ownership of us after our initial business combination.
Furthermore, we may effect a business combination
with a target company that has business operations outside of the United States, and, possibly, business operations in multiple jurisdictions.
If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number
of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations
and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by taxing authorities. This additional
complexity and risk could have an adverse effect on our after-tax profitability and financial condition.
An investment in this offering may result in uncertain or adverse
U.S. federal income tax consequences.
An investment in this offering may result
in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar
to the units we are issuing in this offering, the allocation an investor makes of the purchase price of a unit between the share of our
common stock and the warrant to purchase one share of our common stock included in each unit could be challenged by the Internal Revenue
Service or the courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants is unclear under current
law. Finally, it is unclear whether the redemption rights with respect to our shares of common stock suspend the running of a U.S. Holder’s
holding period for purposes of determining whether any gain or loss realized by such holder on the sale or exchange of common stock is
long-term capital gain or loss and for determining whether any dividend we pay would be considered “qualified dividend income”
for U.S. federal income tax purposes. See “U.S. Federal Income Tax Considerations” below for a summary of the principal U.S.
federal income tax consequences of an investment in our securities. Each prospective investor is urged to consult its own tax advisors
with respect to these and other tax consequences when purchasing, holding or disposing of our securities.
We would be subject to a second level of U.S. federal income tax
on a portion of our income if we are determined to be a personal holding company for U.S. federal income tax purposes.
We could be subject to a second level of U.S.
federal income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”) for U.S. federal
income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable
year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship
or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds and
charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation
by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax
purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities
and, under certain circumstances, rents).
Depending on the date and size of our initial
business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income. In addition, depending
on the concentration of our stock in the hands of individuals, including the members of our initial stockholders and certain tax-exempt
organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed owned (pursuant
to the constructive ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will
not be a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject
to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain
adjustments.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this prospectus,
which reflect our current views with respect to future events and financial performance, and any other statements of a future or forward-looking
nature, constitute “forward-looking statements” for the purpose of the federal securities laws. Our forward-looking statements
include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies
regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,”
“plan,” “possible,” “potential,” “predict,” “project,” “should,”
“will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements
about:
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our ability to complete our initial business combination,
particularly in light of disruption that may result from limitations imposed by the COVID-19 pandemic;
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our success in retaining or recruiting, or changes required
in, our officers, key employees or directors following our initial business combination;
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our officers and directors allocating their time to other
businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result
of which they would then receive expense reimbursements;
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our potential ability to obtain additional financing to complete
our initial business combination;
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our pool of prospective target businesses;
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the ability of our officers and directors to generate a number
of potential investment opportunities;
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the delisting of our securities from Nasdaq or an inability
to have our securities listed on Nasdaq following a business combination;
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our public securities’ potential liquidity and trading;
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the lack of a market for our securities; or
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our financial performance following this offering.
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The forward-looking statements contained in this
prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future
developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties
(some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors
described under the heading “Risk Factors” beginning on page 23. Should one or more of these risks or uncertainties materialize,
or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking
statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required under applicable securities laws.
USE
OF PROCEEDS
We are offering 10,000,000 units at a price
of $10.00 per unit. We estimate that the net proceeds of this offering, together with the funds we receive from the sale of the private
warrants (all of which will be deposited into the trust account), will be used as set forth in the following table:
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Without
Over-Allotment
Option
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Over-Allotment
Option
Exercised
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Gross
proceeds
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From
offering
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$
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100,000,000
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$
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115,000,000
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From
sale of private warrants
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5,000,000
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5,450,000
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Total
gross proceeds
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105,000,000
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120,450,000
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Offering
expenses(1)
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Underwriting
commissions (excluding deferred portion)
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2,000,000
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2,300,000
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Initial
Trustee fee
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6,500
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6,500
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Legal
fees and expenses
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250,000
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250,000
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Nasdaq
listing and filing fees
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75,000
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75,000
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Printing
and filing expenses
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30,000
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30,000
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Accounting
fees and expenses
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40,000
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40,000
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FINRA
filing fee
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17,750
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17,750
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SEC
registration fee
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12,547
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12,547
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Miscellaneous
expenses
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68,203
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68,203
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Total
offering expenses
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2,500,000
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2,800,000
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Net
proceeds
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Held
in trust
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101,000,000
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(3)
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116,150,000
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(2)
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Not
held in trust
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1,500,000
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(4)
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1,500,000
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(3)
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Total
net proceeds
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$
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102,500,000
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$
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117,650,000
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Use
of net proceeds not held in the trust account(3)(4)
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Legal,
accounting and other third party expenses attendant to the search for target businesses and to the due diligence investigation, structuring
and negotiation of a business combination
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$
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120,000
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8.0
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%
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Due
diligence of prospective target businesses by officers, directors and initial stockholders
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70,000
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4.7
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%
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Director
and officer liability insurance premiums(5)
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500,000
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33.3
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%
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Legal
and accounting fees relating to SEC reporting obligations
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60,000
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4.0
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%
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Payment
for administrative support services ($10,000 per month for up to 12 months (or up to 21 months, as applicable)), subject to deferral
as described herein
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120,000
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8.0
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%
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Working
capital to cover miscellaneous expenses, Nasdaq continued listing fees, general corporate purposes, liquidation obligations and reserves
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630,000
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|
42.0
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%
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Total
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$
|
1,500,000
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100.0
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%
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(1)
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A portion of the offering expenses, including the SEC registration
fee, the FINRA filing fee, the non-refundable portion of the Nasdaq listing fee and a portion of the legal and audit fees, have been
paid from the funds we borrowed from NorthStar. These funds will be repaid out of the proceeds of this offering available to us.
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(2)
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The funds held in the trust account will be used
to acquire a target business, to pay holders who wish to redeem their shares and potentially
to pay our expenses relating thereto. Our expenses relating to the acquisition of a target
business would either come from the funds held in the trust account or additional funds otherwise
available to us outside of the trust account, including cash held by the target business.
Any remaining funds will be disbursed to the combined company and be used as working capital
to finance the operations of the target business.
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(3)
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The amount of proceeds not held in trust will remain constant
at $1,500,000 even if the over-allotment is exercised.
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(4)
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These are estimates only. Our actual expenditures for some or
all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than
our current estimates in connection with negotiating and structuring our initial business combination based upon the level of complexity
of that business combination. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current
categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses,
would be deducted from our excess working capital.
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(5)
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This amount represents the approximate amount of annual director
and officer liability insurance premiums we anticipate paying following the completion of this offering and until we complete our initial
business combination.
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The payment to an affiliate of one or more of
the insiders of a monthly fee of $10,000 is for general and administrative services including office space, utilities and secretarial
support. However, pursuant to the terms of such agreement, we may delay payment of such monthly fee upon a determination by our audit
committee that we lack sufficient funds held outside the trust to pay actual or anticipated expenses in connection with our initial business
combination. Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of
our initial business combination. This arrangement will terminate upon completion of our initial business combination or the distribution
of the trust account to our public stockholders. Other than the $10,000 per month fee, no compensation of any kind (including finder’s
fees, consulting fees or other similar compensation) will be paid to our insiders, members of our management team or any of our or their
respective affiliates, for services rendered to us prior to or in connection with the consummation of our initial business combination
(regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket expenses
incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business due
diligence on suitable target businesses and business combinations, as well as traveling to and from the offices, plants or similar locations
of prospective target businesses to examine their operations. Since the role of present management after our initial business combination
is uncertain, we have no ability to determine what remuneration, if any, will be paid to those persons after our initial business combination.
A total of $10.10 per unit (whether or not
the underwriters’ over-allotment option is exercised in full) of the net proceeds from this offering and the sale of the private
warrants described in this prospectus will be placed in a trust account in the United States maintained by Continental Stock Transfer &
Trust Company acting as trustee and will be invested only in U.S. government treasury bills, notes and bonds with a maturity of 185 days
or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act and which invest solely
in U.S. Treasuries. Except for all interest income that may be released to us to pay our tax obligations, as discussed below, none of
the funds held in the trust account will be released from the trust account until the earlier of: (i) the consummation of our initial
business combination within 12 months (or up to 21 months, as applicable) from the closing of this offering and (ii) a redemption
to public stockholders prior to any voluntary winding-up in the event we do not consummate our initial business combination within the
applicable period.
The net proceeds held in the trust account may
be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination. If
our initial business combination is paid for using shares or debt securities, or not all of the funds released from the trust account
are used for payment of the purchase price in connection with our business combination, we may apply the cash released from the trust
account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion of operations
of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating the initial business combination,
to fund the purchase of other companies or for working capital.
We believe that amounts not held in trust will
be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin
preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence,
depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or
other preliminary agreement that addresses the terms of our initial business combination. However, if our estimate of the costs of undertaking
in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount
of interest available to use from the trust account is minimal as a result of the current interest rate environment, we may be required
to raise additional capital, the amount, availability and cost of which is currently unascertainable. In this event, we could seek such
additional capital through loans or additional investments from members of our management team, but such members of our management team
are not under any obligation to advance funds to, or invest in, us.
On April 28, 2021, we issued an unsecured
promissory note to NorthStar, pursuant to which we may borrow up to an aggregate principal amount of $300,000. The promissory note is
non-interest bearing and will be payable at the closing of a business combination.
In addition, in order to finance transaction
costs in connection with an intended initial business combination, NorthStar or an affiliate of NorthStar or our officers and directors
may, but are not obligated to, loan us funds as may be required. If we consummate our initial business combination, we would repay such
loaned amounts. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender’s
discretion, up to $1,500,000 of the notes may be converted upon consummation of our business combination into additional private warrants
to purchase shares of common stock at a conversion price of $1.00 per private warrant. Such private warrants will be identical to the
private warrants to be issued at the closing of this offering, except that each private warrant is exercisable for one share of common
stock at an exercise price of $11.50 per share.
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. Furthermore, the redemption threshold may be further limited
by the terms and conditions of our initial business combination. In such case, we would not proceed with the redemption of our public
shares or the business combination, and instead may search for an alternate business combination.
A public stockholder will be entitled to receive
funds from the trust account only upon the earlier to occur of: (i) our consummation of our initial business combination, and then
only in connection with those shares of common stock that such stockholder properly elected to redeem, subject to the limitations described
herein, (ii) the redemption of our public shares if we are unable to consummate our initial business combination within 12 months
(or up to 21 months, as applicable) following the closing of this offering, subject to applicable law, or (iii) if we seek to amend
our certificate of incorporation to affect the substance or timing of our obligation to redeem all public shares if we cannot complete
an initial business combination within 12 months (or up to 21 months, as applicable) of the closing of this offering and such amendment
is duly approved. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.
Our initial stockholders have agreed to waive
their redemption rights with respect to any shares they own in connection with the consummation of our initial business combination,
including their founder shares and public shares that they have purchased during or after the offering, if any. In addition, our initial
stockholders have agreed to waive their rights to liquidating distributions with respect to its founder shares if we fail to consummate
our initial business combination within 12 months (or up to 21 months, as applicable) from the closing of this offering. However, if
our initial stockholders acquire public shares in or after this offering, they will be entitled to receive liquidating distributions
with respect to such public shares if we fail to consummate our initial business combination within the required time period.
DIVIDEND
POLICY
We have not paid any cash dividends on our shares
of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment
of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition
subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination
will be within the discretion of our board of directors at such time and subject to Delaware law. In addition, our board of directors
is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future, except if we increase
the size of the offering pursuant to Rule 462(b) under the Securities Act, in which case we will effect a share dividend immediately
prior to the consummation of the offering in such amount as to maintain our initial stockholders’ ownership at 20% of the issued
and outstanding shares of common stock upon the consummation of this offering (assuming no purchase in this offering and not taking into
account ownership of the private warrants). Further, if we incur any indebtedness in connection with our initial business combination,
our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
DILUTION
The difference between the public offering price
per share, assuming no value is attributed to the warrants included in the units we are offering by this prospectus, and the pro forma
net tangible book value per share after this offering constitutes the dilution to investors in this offering. Such calculation does not
reflect any dilution associated with the sale and exercise of warrants, including the private warrants. Net tangible book value per share
is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value
of shares of common stock which may be redeemed for cash), by the number of outstanding shares of common stock.
At June 30, 2021, our net tangible book value
was $(192,400) or approximately $(0.07) per share. After giving effect to the sale of 10,000,000 shares of common stock included in the
units we are offering by this prospectus and the proceeds received from the sale of the private warrants, the deduction of underwriting
discounts and estimated expenses of this offering, our pro forma net tangible book value at June 30, 2021 would have been $5,000,005
or $1.76 per share, representing an immediate increase in net tangible book value of $1.83 per share to the initial stockholders and
an immediate dilution of 82.40% per share or $8.24 to new investors not exercising their redemption/tender rights. For purposes of presentation,
our pro forma net tangible book value after this offering is $5,000,005 less than it otherwise would have been because, if we effect
a business combination, the ability of public stockholders to exercise redemption rights or sell their shares to us in any tender offer
may result in the redemption or tender of up to 9,655,839 shares sold in this offering.
The following table illustrates the dilution to
the new investors on a per-share basis, assuming no value is attributed to the redeemable warrants, including the private warrants:
|
Public offering price
|
|
|
|
|
|
$
|
10.00
|
|
|
Net tangible book
value before this offering
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
Increase
attributable to new investors, private sales and capital contribution
|
|
|
1.83
|
|
|
|
|
|
|
Pro
forma net tangible book value after this offering
|
|
|
|
|
|
|
1.76
|
|
|
Dilution
to new investors
|
|
|
|
|
|
$
|
8.24
|
|
|
Percentage of dilution
to new investors
|
|
|
|
|
|
|
82.40
|
%
|
The following table sets forth information with
respect to our initial stockholders and the new investors:
|
|
|
Shares
Purchased
|
|
|
Total
Consideration
|
|
|
Average
Price
|
|
|
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Per
Share
|
|
|
Initial stockholders(1)
|
|
|
2,500,000
|
|
|
|
20.00
|
%
|
|
$
|
25,000
|
|
|
|
0.02
|
%
|
|
$
|
0.01
|
|
|
New investors
|
|
|
10,000,000
|
|
|
|
80.00
|
%
|
|
|
100,000,000
|
|
|
|
99.98
|
%
|
|
|
10.000
|
|
|
|
|
|
12,500,000
|
|
|
|
100.00
|
%
|
|
$
|
100,025,000
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
(1)
|
Assumes the over-allotment option has not been exercised
and an aggregate of 375,000 shares of common stock held by our initial stockholders have
been forfeited as a result thereof.
|
The pro forma net tangible book value after the
offering is calculated as follows:
|
Numerator:(1)
|
|
|
|
|
|
Net tangible book value before
this offering
|
|
$
|
(192,400
|
)
|
|
Net proceeds from this offering and private placement
of private warrants
|
|
|
102,500,000
|
|
|
Offering costs accrued for and paid in advance,
excluded from net tangible book value before this offering
|
|
|
216,375
|
|
|
Less: Proceeds held
in trust subject to redemption/tender
|
|
|
(97,523,970
|
)
|
|
|
|
$
|
5,000,005
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
Shares of common stock issued and outstanding prior
to this offering(1)
|
|
|
2,875,000
|
|
|
Shares forfeited if over-allotment is not exercised
|
|
|
(375,000)
|
|
|
Shares of common stock to be sold in this offering
|
|
|
10,000,000
|
|
|
Less: Shares subject
to redemption/tender
|
|
|
(9,655,839
|
)
|
|
|
|
|
2,844,161
|
|
|
|
(1)
|
Assumes the over-allotment option has not been
exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders
have been forfeited by us as a result thereof.
|
CAPITALIZATION
The following table sets forth our capitalization
at June 30, 2021 and as adjusted to give effect to the sale of our units and the private warrants and the application of the estimated
net proceeds derived from the sale of such securities.
|
|
|
June
30, 2021
|
|
|
|
|
Actual
|
|
|
As
Adjusted(1)
|
|
|
Promissory
note – related party
|
|
$
|
150,405
|
|
|
|
—
|
|
|
Shares
of common stock, $0.0001 par value, none and 9,655,839 shares are subject to possible redemption/tender, respectively
|
|
|
—
|
|
|
|
97,523,970
|
|
|
Shares
of common stock, $0.0001 par value, 100,000,000 shares authorized, actual and as adjusted, 2,875,000 shares issued and outstanding,
actual; 2,844,161 shares issued and outstanding(2) (excluding 9,655,839 shares subject to possible
redemption/tender), as adjusted
|
|
|
288
|
|
|
|
284
|
|
|
Additional
paid-in capital
|
|
|
24,712
|
|
|
|
5,000,746
|
|
|
Accumulated
deficit
|
|
|
(1,025
|
)
|
|
|
(1,025)
|
)
|
|
Total
stockholder’s equity
|
|
|
23,975
|
|
|
|
5,000,005
|
|
|
Total
capitalization
|
|
$
|
174,380
|
|
|
$
|
102,523,975
|
|
|
|
(1)
|
Includes the $5,000,000 we will receive from the sale of
the private warrants (assumes the over-allotment option has not been exercised).
|
|
|
(2)
|
Assumes the over-allotment option has not been
exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders
have been forfeited as a result thereof.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We were incorporated as a Delaware corporation
and our purpose is to serve as a vehicle to effect a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization
or similar business combination with one or more target businesses. Our efforts to identify a prospective target business will not be
limited to a particular industry or geographic location. We intend to utilize cash derived from the proceeds of this offering, our securities,
debt or a combination of cash, securities and debt, in effecting a business combination. The issuance of additional shares in our business
combination:
|
|
•
|
may significantly reduce the equity interest of our stockholders;
|
|
|
•
|
may subordinate the rights of holders of common stock if
we issue preferred shares with rights senior to those afforded to our shares of common stock;
|
|
|
•
|
will likely cause a change in control if a substantial number
of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and most likely will also result in the resignation or removal of our present officers and directors; and
|
|
|
•
|
may adversely affect prevailing market prices for our securities.
|
Similarly, if we issue debt securities, it could
result in:
|
|
•
|
default and foreclosure on our assets if our operating revenues
after a business combination are insufficient to pay our debt obligations;
|
|
|
•
|
acceleration of our obligations to repay the indebtedness
even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance
of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant;
|
|
|
•
|
our immediate payment of all principal and accrued interest,
if any, if the debt security is payable on demand; and
|
|
|
•
|
our inability to obtain additional financing, if necessary,
if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding.
|
As indicated in the accompanying financial
statements, at June 30, 2021, we had $29,180 in cash and $216,375 in deferred offering costs. Further, we expect to continue to incur
significant costs in the pursuit of our acquisition plans. Our plans to raise capital or to consummate our initial business combination
may not be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor
generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare
for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business
combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There
has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our
audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially
after the closing of this offering.
Liquidity and Capital Resources
As indicated in the accompanying financial
statements, at June 30, 2021, we had $29,180 in cash and $216,375 in deferred offering costs. Further, we have incurred and expect to
continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this uncertainty
through this offering are discussed above. Our plans to raise capital or to consummate our initial business combination may not be successful.
These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Our liquidity needs have been satisfied to
date through receipt of $25,000 from the sale of the founder shares. We estimate that the net proceeds from (1) the sale of the
units in this offering, after deducting offering expenses of approximately $2,500,000 (or $2,800,000 if the over-allotment option is
exercised in full) including non-deferred underwriting fees and qualified independent underwriter fees of $2,000,000 (or $2,300,000 if
the over-allotment option is exercised in full) and (2) the sale of the private warrants for a purchase price of $5,000,000 will
be $102,500,000 (or $117,650,000 if the over-allotment option is exercised in full). Of this amount, $101,000,000 (or $116,150,000 if
the over-allotment option is exercised in full), or “the net offering proceeds,” will be held in the trust account. The remaining
$1,500,000 (whether or not the over-allotment option is exercised in full) will not be held in the trust account.
We intend to use substantially all of the net
proceeds of this offering, including the funds held in the trust account, to acquire a target business or businesses and to pay our expenses
relating thereto. To the extent that our share capital is used in whole or in part as consideration to effect our initial business combination,
the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance
the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding
the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products.
Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of
our initial business combination if the funds available to us outside of the trust account were insufficient to cover such expenses.
Over the next 12 months (or up to 21 months,
as applicable) (assuming a business combination is not consummated prior thereto), we will be using the funds held outside of the trust
account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses,
traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material
agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the
business combination. Out of the funds available outside the trust account, we anticipate that we will incur approximately:
|
|
•
|
$120,000 of expenses for the search for target businesses
and for the legal, accounting and other third-party expenses attendant to the due diligence investigations, structuring and negotiating
of a business combination;
|
|
|
•
|
$70,000 of expenses for the due diligence and investigation
of a target business by our officers, directors and initial stockholders;
|
|
|
•
|
$500,000 for director and officer liability insurance premiums;
|
|
|
•
|
$60,000 of expenses in legal and accounting fees relating
to our SEC reporting obligations;
|
|
|
•
|
$120,000 for the payment of the administrative
fee to an affiliate of one or more of the insiders (of $10,000 per month for up to 12 months
(or up to 21 months, as applicable)), subject to deferral as described herein; and
|
|
|
•
|
$630,000 for general working capital that
will be used for miscellaneous expenses, including Nasdaq continued listing fees, general
corporate purposes, liquidation obligations and reserves.
|
If our estimates of the costs of undertaking in-depth
due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, we may have insufficient
funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing
either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares
upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with
such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously
with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient,
we may need to obtain additional financing in order to meet our obligations.
Controls and Procedures
We are not currently required to maintain an effective
system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal
control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. As of the date of this prospectus, we
have not completed an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls
of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test
additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target
business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Target businesses
we may consider for our initial business combination may have internal controls that need improvement in areas such as:
|
|
•
|
staffing for financial, accounting and external reporting
areas, including segregation of duties;
|
|
|
•
|
reconciliation of accounts;
|
|
|
•
|
proper recording of expenses and liabilities in the period
to which they relate;
|
|
|
•
|
evidence of internal review and approval of accounting transactions;
|
|
|
•
|
documentation of processes, assumptions and conclusions underlying
significant estimates; and
|
|
|
•
|
documentation of accounting policies and procedures.
|
Because it will take time, management involvement
and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and
market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting responsibilities,
particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take
longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal
controls is complete, we will retain our independent auditors to audit and render an opinion on such report when, or if, required by Section 404.
The independent auditors may identify additional issues concerning a target business’s internal controls while performing their
audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering, including amounts
in the trust account, will be invested in United States government treasury bills, bonds or notes having a maturity of 185 days
or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act
and that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material
exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations;
Quarterly Results
As of June 30, 2021, we did not have any off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.
No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date.
JOBS Act
On April 5, 2012, the JOBS Act was signed
into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.
We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and, as a result, we may not comply with new or revised accounting standards on the relevant dates on which
adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies
that comply with public company effective dates.
PROPOSED
BUSINESS
General
We are a blank check
company incorporated as a Delaware corporation whose business purpose is to effect a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses. Throughout this prospectus, we refer to this as
our initial business combination. We have not selected any potential business combination target and we have not, nor has anyone on our
behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target. We have generated
no revenues to date and we do not expect that we will generate operating revenues at the earliest until we consummate our initial business
combination. We will seek to identify, through the experience and expertise of our management team and board of directors, a biotech
company that has demonstrated success and is primed to thrive in the rapidly evolving biotech industry.
Our Competitive Advantage - Strong team of Management, Board and
Co-Sponsors
Our business target selection
process will leverage the insights, extensive biotech network, knowledge and access of our board, co-sponsors, management team and advisors.
Scientific discoveries and the management of biotechnology
companies are getting increasingly complex. Finding, developing and launching new drugs are particularly challenging and expensive. As
a result, companies are turning to a multidisciplinary approach with selecting a management team. In addition, companies are looking for
individuals with proven experience and a track record of success. Our company believes that a similar approach is necessary with regard
to creating our special purpose acquisition company.
We have built our management team around the concept
of combining individuals with extensive experience, varied backgrounds and skill sets. Our Chief Executive Officer, Sanjeev Satyal, has
a proven and successful track record in the biotech industry and has robust operational experience. William McKeever, Chief Financial
Officer, also brings a robust skill set that will complement those of our Chief Executive Officer. Mr. McKeever has more than twenty years
of significant experience in the healthcare industry and has successfully held key positions in equity research, portfolio management
and investment banking. As a result, Mr. McKeever, has broad experience in identifying attractive companies.
In addition to our Chief Executive Officer and
Chief Financial Officer, we believe that our company has also assembled a board of directors with wide-ranging knowledge and proven business
experience. Their capabilities, concomitant with those of our Chief Executive Officer and Chief Financial Officer, create a robust management
team that brings technical expertise in biotechnology, financial knowledge and keen business acumen. As a result, we are positioned to
identify robust biotechnology platforms with superior growth opportunities.
Our board members have long-standing
and personal relationships with senior executives, founders and investors across the biotech, pharmaceutical and financial industries.
We believe this extensive network will provide significant access to assets and acquisition opportunities. Our board members also have
an extensive track record and history of executing licensing deals, mergers and acquisitions, and other transactions. Furthermore, our
board members have significant executive management and board level experience on both the public company and private company levels.
They bring a breadth of experience in the life science industry, and throughout their respective careers have developed a network of additional
resources such as investment banks, investment market participants, entrepreneurs, consultants and legal and accounting firms. We plan
to leverage these relationships to source further acquisition opportunities. Finally, our board of directors harbors strong credibility
amongst the biotech investor community and boasts a proven ability to help companies navigate the capital markets, particularly in the
marketing and executing of private to public transactions for growth companies.
Our
co-sponsor, Chardan Monterey, is affiliated with Chardan, an investment firm and a provider
of investment banking services, primarily focused on private and public emerging companies
in the healthcare industry. Since its inception, Chardan has executed more than 500 equity
capital markets transactions, raising approximately $26 billion of capital in both public
and private markets. Chardan is a leading SPAC underwriter, SPAC sponsor (or co-sponsor)
and SPAC M&A advisor, providing a highly competitive position as SPACs have become more
accepted in the financial industry. Since 2004, Chardan has been the lead or co-lead underwriter
on over 90 SPAC initial public offerings, as of September 2021. Chardan has sponsored or co-sponsored
13 SPACs with 7 successfully closed across multiple industries, 1 announced merger, 4 still
in market, and 1 publicly filed. Chardan-advised SPACs have targeted a wide range of industries,
including life sciences, healthcare services, technology hardware and software. No SPAC that
has either been advised by Chardan or for which Chardan served as the lead underwriter has
liquidated to date. Chardan has underwritten or advised over a dozen biotech focused SPACs.
Since 2015, Chardan has met with private healthcare companies and has earned a reputation
for partnering with innovative healthcare platforms to develop and deploy disruptive technologies.
Together, our management team, board, and co-sponsors
have significant operational experience in drug discovery, research, clinical development, and management within the healthcare and financial
industry. Upon successful completion of our initial business combination, our management team and independent directors may be available,
and are willing, to help govern and/or guide continued success of operations. Examples of further contributions may include, but are not
limited to, providing counsel on future strategic needs such as acquisitions, financing strategy and general business activities.
Following an initial business combination, the team may also offer, as needed, an extensive operating network of relationships to help
the business grow and achieve success.
Our management team and board consist of the following
persons:
Sanjeev
Satyal, Ph.D. has served as our Chief Executive Officer since April 2021. From
2018 to February 2021, Dr. Satyal served as Chief Executive Officer of pH Pharma Co.
Inc., a clinical-stage biopharmaceutical company focused on developing innovative healthcare
products for unmet clinical and patient needs. From 2015 to February 2021, he also served
as Vice President of Research & Development at pH Pharma. While at pH Pharma, Dr.
Satyal assembled a portfolio of in-licensed clinical stage programs, and was responsible
for further clinical development and the discovery of a proprietary oncology therapeutic
platform. Previously, Dr. Satyal served as Vice President, Biology at StemGuard Therapeutics,
as a Director of Research at StemPar Sciences and as a Director of Cancer Biology at OncoMed
Pharmaceuticals. Dr. Satyal was a postdoctoral fellow at Genentech. Dr. Satyal
is the inventor of over 30 U.S. issued or pending patents, and their foreign counterparts,
in various pharmaceutical areas and has co-authored several scientific publications. Dr. Satyal
earned a B.Sc. in Life Sciences at St. Xavier’s College, University of Bombay, an M.Sc.
in Biotechnology at the University of Poona and a Ph.D. in Biochemistry at Northwestern University.
William
McKeever has served as our Chief Financial Officer since May 2021. Mr. McKeever has more than 20 years of experience
in the healthcare industry encompassing various roles in equity research, portfolio management and investment banking. Since 2017, Mr. McKeever
has worked as a consultant to various companies that are creating breakthrough technologies to treat diseases in the healthcare industry.
From 2010 to 2016, Mr. McKeever was Managing Director of First Bridgehouse Securities, a boutique investment firm. Prior to that,
Mr. McKeever was a sell-side equity analyst covering the managed care industry at firms including PaineWebber from 1997 to 2000
and UBS from 2000 to 2005. While at PaineWebber and UBS, he was a managing director and was ranked for several year as an All-American
Analyst by Institutional Investor magazine based on its poll of analysts around the country. While at UBS, he was involved in
several initial public offerings of managed care companies. From 2005 to 2009, Mr. McKeever was a Managing Director
managing all health care investments including pharmaceuticals, medical devices, services and biotechnology in the Principal Credit Group
(PCG) of Merrill Lynch. PCG was an internal fund that managed debt and equity investments in all sectors globally. Mr. McKeever
earned his B.A. in Economics from Denison University and his M.B.A. in Finance from the Wharton School of the University of Pennsylvania.
James
R. Neal has more than twenty years of experience in the biotechnology industry encompassing roles in research and development
(R&D), business development, financing and general management. Mr. Neal currently serves as Chief Executive Officer and member
of the board of XOMA (Nasdaq: XOMA). He joined XOMA in 2009 and was appointed to the Chief Executive Officer role in late 2016. In early
2017, Mr. Neal led XOMA through a dramatic strategic pivot taking the company from a traditional R&D heavy biotech company and
transforming it to a successful royalty monetization and aggregation company. In the years prior to becoming Chief Executive Officer of
XOMA, he was instrumental in leading the company’s licensing and business development activities focused on maximizing the value
of XOMA’s foundational antibody IP and knowhow. In addition to his role at XOMA, Mr. Neal currently serves as Chairman of the
board of directors of Palisade Bio, Inc. (Nasdaq: PALI), a clinical-stage biopharmaceutical company, following the merger of Leading
Biosciences, Inc. and Seneca Biopharma, Inc. in April 2021. Prior to XOMA, Mr. Neal was Acting Chief Executive Officer
of Entelos, Inc., a leading bio-simulation company that acquired Iconix Biosciences, a privately held company where Mr. Neal
also served as Chief Executive Officer. At Iconix, Mr. Neal established multi-year collaborations with Bristol-Myers Squibb, Abbott
Labs (now AbbVie), Eli Lilly and the U.S. Food and Drug Administration. From 1999 to 2002, he was Executive Vice President of Incyte Genomics,
leading global commercial activities with pharmaceutical company collaborators and partners including Pfizer, GSK and others. Earlier
in his career, he was an executive with Monsanto Company in positions of increasing responsibility. Mr. Neal earned his B.Sc. in
Agriculture and his M.Sc. in Genetics and Plant Breeding, each from the University of Manitoba, Canada, and holds an MBA degree from Washington
University in St. Louis, MO.
Jonas
Grossman has served as Managing Partner and Head of Capital Markets for Chardan since
December 2003, and has additionally served as President of Chardan since September 2015.
With nearly two decades of transactional and special purpose acquisition company expertise,
Mr. Grossman has led or managed more than 500 transactions, including providing underwriting
and business combination advisory services to more than 85 special purpose acquisition companies
in a variety of industries. Mr. Grossman has been a founder and/or a member of the board
of seven special purpose acquisition companies, of which on four he also has served as Chief
Executive Officer and President. Since April 2020, Mr. Grossman has served as the
President and Chief Executive Officer of Chardan Healthcare Acquisition 2 Corp which announced
its merger with Renovacor, Inc in March 2021. He also served as President and Chief
Executive Officer of Chardan Healthcare Acquisition Corp. from March 2018 until its
merger in October 2019 with BiomX Ltd. (NYSE: PHGE). He is currently a director of BiomX.
Mr. Grossman also serves as the President and Chief Executive Officer of Chardan NexTech
Acquisition Corp. and Chardan NexTech Acquisition 2 Corp., each, a special purpose acquisition
company. Mr. Grossman was a founder and director of LifeSci Acquisition Corp. from March 2020
until the close of its business combination with Vincera Pharma, Inc. in December 2020.
He has served as a director to Ventoux CCM Acquisition Corp. since December 2020 and
CleanTech Acquisition Corp since July 2021. Previously, from 2001 to 2003, Mr. Grossman
worked at Ramius Capital Group, LLC, a global multi-strategy hedge fund where he served as
Vice President and Head Trader. Mr. Grossman holds a B.A. in Economics from Cornell
University and an M.B.A. from New York University’s Stern School of Business. He has
served on the board of directors for UNICEF since December 2016.
Sandip
I. Patel, Esq. has been involved in the formation, acquisition, development, growth, and liquidity events related
to companies in the healthcare, insurance and financial services fields. Mr. Patel currently holds public and private investments
in a wide range of industries with a focus on medical devices, biotechnology, healthcare services and related technologies, as well as
FinTech and related services. He currently serves as a director for Quantum FinTech Acquisition Corporation, a special purpose acquisition
company focused on financial technology. Mr. Patel is also a co-founding shareholder of AtlasBanc, and was a co-founding shareholder,
and board member of Anderen Bank. He served on the board of directors for Avatar Property and Casualty Insurance Company, a Florida-based homeowners
insurance company. Mr. Patel was the Founder, President and Chief Executive Officer of the Orion group of companies, a full-service real
estate development company concentrating on high end waterfront multi-family and commercial developments with a number of successful
projects developed in the Tampa Bay area. Previously, Mr. Patel served as Head of the New Business Development and M&A team to
national health insurance companies. Mr. Patel oversaw all legal, regulatory and governmental affairs on behalf of the WellCare group
of companies which included, WellCare HMO of Florida, WellCare of New York, WellCare of Connecticut, StayWell and HealthEase HMO, while
serving as its General Counsel and as a partner in the company. Mr. Patel successfully negotiated the sale of a majority of WellCare
to a large private equity fund. Mr. Patel received his JD degree from the Stetson University College of Law, and a B.B.A. in Finance
from the University of Georgia.
Frances
K. Heller has over 25 years of experience in the pharmaceutical and biotech industries in business development, licensing
and legal affairs. Ms. Heller is the Founder, and has served as the Chief Executive Officer and Chair of Good2Go, Inc., an IoT
technology company, since its formation in 2015. She also serves on the board of Affinivax, Inc. a private early-stage vaccine company
and co-chairs the LavaMaeˣ board, a nonprofit that teaches people around the world to bring mobile showers and other services that
promote well-being to people experiencing homelessness. Previously she was Senior Vice President of business development at Bristol-Myers
Squibb, a Trustee of the Bristol-Myers Squibb Foundation, a Trustee at Dana Farber Cancer Institute, and an adviser to GoFundMe’s
Impact Fund. Prior to joining Bristol-Myers Squibb, Ms. Heller was Executive Vice President of business development at Exelixis Pharmaceuticals
and prior to joining Exelixis, Ms. Heller was head of strategic alliances at Novartis Pharmaceuticals. Ms. Heller is a member
of the California State Bar and licensed by the U.S. Patent and Trademark Office. She holds a B.S. in biology from Tulane University,
an M.A. in biology from American University and a J.D. from Golden Gate University School of Law.
From time to time, Chardan acts as an underwriter
for the initial public offering of special purpose acquisition companies and in addition to cash fees, Chardan receives equity in the form
of private placement securities. Some of those special purpose acquisition companies may be competitive with our company as they look
for targets in the same industries and geographies.
Strategic Advisors
In addition to the members of our management
team, we are in the process of establishing a strategic advisory group for the purpose of assisting our executive officers with sourcing
and evaluating business combination opportunities.
Our strategic advisory group currently consists
of the following person:
David V. Smith has over 35 years
of leadership experience in healthcare, serving at companies such as Syntex, Chiron, Thoratec, and more. He has held a number of C-level
positions for more than 20 years. Mr. Smith started his career as a Director of Finance and Administration for Genentech Europe in Switzerland.
While there, he directed both the start-up and continuing operations of five European operating entities for finance, accounting, and
human resources. Mr. Smith’s first Chief Financial Officer role was with Anergen, Inc., where he was responsible for finance and
investor and public relations. He also served as the Chief Operating Officer for IntegenX, Inc., where he oversaw the company’s
corporate development, manufacturing, customer service, and administrative functions. The company was later acquired by Thermo Fisher
Scientific in 2018. After the sale of IntegenX, Mr. Smith served as the Chief Financial Officer for Five Prime Therapeutics, Inc., leading
the finance, accounting, investor relations, and corporate communications functions. Mr. Smith also co-led the effort to develop and
implement strategies to grow the company’s drug bemarituzumab, later acquired by Amgen. Mr. Smith received his B.A. from the Willamette
University and an M.B.A. from Golden Gate University. In addition, he is the Co-Founder of the Bay Area CFO’s Network in conjunction
with Deloitte & Touche.
We may add additional
members to the strategic advisory group from time to time. Unlike our management team, members of our strategic advisory group are not
responsible for managing our day-to-day affairs and have no authority to engage in substantive discussions with business combination
targets on our behalf. Pursuant to a Strategic Advisor Agreement between us and each member of our strategic advisory group, each strategic
advisor will receive a cash payment of $50,000 upon, and subject to, consummation of our initial business combination, and will be reimbursed
for out-of-pocket expenses incurred by them in connection with our search for an acquisition target and consummation of our initial business
combination. In addition, subject to the agreement of the target company in our initial business combination, each strategic advisor
will receive a grant of options to purchase up to 20,000 shares of common stock of the combined company, at an exercise price of $11.50
per share, following the initial business combination pursuant to an option agreement to be entered into between us (or the successor
entity in our initial business combination) and the strategic advisor.
We believe that the
combination of our management team and strategic advisory group is an innovative approach to identifying potential high quality business
combination targets and aligns incentives with our stockholders, providing us with distinctive and differentiated capabilities to create
stockholder value.
With respect to the foregoing descriptions,
the past performance of Chardan and its affiliates, our management team and board of directors and our strategic advisory group is not
a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of
success with respect to any business combination we may consummate. As described in this prospectus, Messrs. Grossman and Patel
have had management and/or board experience with blank check companies. None of our other officers or directors has had management experience
with blank check companies or special purpose acquisition corporations in the past. You should not rely on their respective historical
records or the performance of Chardan, its affiliates, our management team or board of directors or our strategic advisory group as indicative
of our future performance. Our officers and directors may have conflicts of interest with other entities to which they owe fiduciary
or contractual obligations with respect to initial business combination opportunities, including for Mr. Patel, with respect to
Quantum FinTech Acquisition Corporation and for Mr. Grossman, with respect to Ventoux CCM Acquisition Corp., Chardan NexTech Acquisition
Corp. and Chardan NexTech Acquisition 2 Corp., which we collectively refer to as the “Affiliated SPACs.” For a list of our
officers and directors and entities for which a conflict of interest may or does exist between such officers or directors and the company,
as well as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities
to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.
Acquisition Sourcing and Strategy - Approach and Focus
Our
acquisition strategy is to leverage our expertise and network relationships to identify,
negotiate and acquire one or more business targets (i.e. companies), and/or in-license one
or more assets, or combine business targets with in-licensed assets with the ultimate objective
of building a public clinical stage biotech enterprise. It is our goal to evaluate business
targets that are developing or enabling development of pre-commercial therapeutic candidates
across a broad array of therapeutic areas, with an initial focus on oncology and immunology.
Approach – Leverage Team Network
We expect our business target sourcing and acquisition
process to leverage the insights, extensive biotech network, knowledge and access of our Board, management team and advisors. We
believe our team is well-positioned to identify compelling therapeutic candidate opportunities. We also anticipate that the networking
and regular interactions of the Board and our management team in the healthcare ecosystem, including at financial institutions, investment
funds, venture capital firms and consultants, will be a robust resource to identify potential business targets. We plan to employ a proactive,
thematic sourcing strategy and to identify and prioritize business targets or assets where we believe the combination of the relationships,
capital, capital markets expertise and operating experience of our co-sponsors and board, will accelerate the target business growth and
performance.
The
overarching thesis that drives our approach is our belief that therapeutic candidates
with strong scientific data and rationale can generate meaningful outcomes for patients and
therefore have the potential to generate meaningful commercial impact and financial return.
We will view potential acquisition candidates, initially focused on small molecule and biologics,
through a lens that integrates potential patient benefit and anticipated clinical and regulatory
development pathways, with the goal of identifying assets that have the potential to yield
early but clear proof of concept clinical data leveraging innovation in genomic and biomarker
and other technologies exploiting genetic underpinning of the disease.
With the expertise of the
team, in the pursuit of an initial business combination, particular emphasis will be placed on identifying superior management teams with
novel technology platforms.
While we will use the above guidelines to generally
guide our approach, we will also be opportunistic in assessing assets or companies that come to our attention. For example, this could
include opportunities affiliated with our co-sponsors, executive officers or directors, or completing the business combination through
a joint venture or other form of shared ownership with our co-sponsors, executive officers or directors.
Market Opportunity
The
therapeutics sector of the global healthcare market represents an attractive and expanding
market opportunity with a substantial list of target acquisition opportunities. We believe
current macro-economic trends will continue to support the growth of the therapeutics sector,
and the biotechnology sub-sector in particular. More specifically we believe there is substantial
opportunity to find attractive targets in oncology and immunology, as there are more than
1,800 oncology assets in development, representing the therapeutic areas with most assets,
and 400 immunology assets currently in development.
Demand for healthcare products is increasing globally
due to demographic shifts, rising middle class and prosperity trends, in addition to increased allocation of resources to healthcare and
wellbeing. Total healthcare spending in the United States reached $3.8 trillion in 2019 and is expected to grow by an average 5.4 percent
annually from 2019 to 2028, reaching nearly $6.2 trillion by 2028, according to a report by CMS. Furthermore, total healthcare expenditures
are expected rise to almost 20 percent of the US Gross Domestic Product by 2028. In addition, increased financial and in-kind contributions
in less developed economies are driving unprecedented expansion of healthcare insurance and infrastructure.
Despite a substantial level of spending on healthcare,
the United States does not achieve commensurate health outcomes, with several contributing factors, one such factor being that decision
making processes regarding healthcare spending are not guided by an alignment of cost and expected outcomes. We believe the global healthcare
market is poised to shift from paying for activities and inputs to paying for results and outcomes. As a result, the healthcare industry
is positioned for new innovative technologies and business models to address the prevailing challenges associated with increasing costs,
lack of adequate access to care and most importantly, patient outcomes.
We believe the biotech market creates a unique
investment opportunity. Over the past ten years, venture capital funding has increased from approximately $3 billion to over $25 billion.
This industry dynamic creates a favorable target pool, as VC funds seek liquidity events. Additionally, biotech M&A activity has
more than doubled over the past decade, indicating a strong transaction appetite amongst the industry. Since 2018, there have been more
than 25 biotech SPAC mergers announced or closed. The median enterprise value of these biotech SPAC targets was over $500 million. Given
the favorable market factors, we believe Monterey Bio is well positioned within the biotech ecosystem.
Fundamental scientific discovery and innovation
in biomedical sciences has led to the development of countless medicines for serious diseases and improved quality of life for patients.
Sustained investments over decades in biomedical sciences by both government and industry have recently borne fruit, and the resulting
scientific advances have yielded innovative medicines and new therapeutic modalities including cell and gene therapies. In the past decade,
conventional therapeutic modalities, small molecule compounds and biologics, have also resulted in significant advances in treatments
of diseases. Paradigm shifts in development of next generation cell and gene therapies products have potential to transform clinical outcomes
for previously untreatable diseases and patient populations. Development of these breakthrough medicines are actively supported by regulatory
agencies around the world, allowing companies to accelerate drug development processes and availability of treatments to patients. The
US FDA and further national regulatory authorities are adjusting and streamlining their respective approval processes to accelerate and
optimize the efficiency of bringing products to market. The number of novel drugs approved by the FDA’s Center for Drug Evaluation
and Review has increased substantially over the last ten years from 30 in 2011 to 53 in 2020.
The pace of innovation in drug discovery and development
is also accelerating due to concurrent advancements in precision medicine, computational chemistry, structural biology and machine learning
tools. These advances are enabling the industry to capitalize on insights of basic science and disease pathophysiology, and human genetic
discoveries to develop drugs against disease mechanisms previously considered intractable or “undruggable”. Advances in precision
medicine are similarly improving the design of clinical studies and leading to a better selection process of patients most likely to benefit
from treatment. These converging trends of innovation are likely to enhance productivity in drug development leading to effective and
accurate treatment options for patients while delivering cost savings.
Given the aforementioned
growth and evolution within the healthcare and biotech industries, a broad universe of private companies, and by extension target acquisition
companies, exists. Furthermore, this universe presents an attractive opportunity for a SPAC transaction, creating value not only for investors,
but for the target company as well. At the core of industry growth lies disruptive innovation and by nature of the industry, a need for
capital. A SPAC transaction can alleviate this need, providing a company with means to succeed. Monterey Bio’s team of management,
board of directors, and co-sponsors are well suited to identify a target with a promising and proven product, primed for strong performance
in the public markets.
Initial Business Combination
We will have 12 months from the closing of
this offering to consummate an initial business combination. In addition, if we anticipate that we may not be able to consummate our
initial business combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period of time
to consummate a business combination up to three times by an additional three months each time (for a total of up to 21 months to complete
a business combination); provided that, pursuant to the terms of our certificate of incorporation and the trust agreement to be entered
into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend the time available
for us to consummate our initial business combination is for our insiders or their affiliates or designees, upon five days’ advance
notice prior to each applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if the over-allotment option is
exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or $3,450,000 if the over-allotment option is exercised
in full, if the time to consummate a business combination is extended to a full 21 months), on or prior to the date of the applicable
deadline. Public stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.
In the event that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money
into trust, the insiders would receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that
will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust
account to do so. In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to
effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.
In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely
deposited. Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete
our initial business combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to consummate
our initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount required. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private warrants
will expire and will be worthless.
Nasdaq rules require
that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets
held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account)
at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make
the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we may obtain an opinion from an independent investment banking
or accounting firm as to the fair market value of the target business. Additionally, pursuant to Nasdaq rules, any initial business combination
must be approved by a majority of our independent directors.
We may, at our option, pursue
a business combination opportunity jointly with Chardan or one or more entities affiliated with Chardan, which we refer to as an “Affiliated
Joint Acquisition.” We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any such parties would
co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we and Chardan considered a transaction
to be mutually beneficial to us as well as the affiliated entity; and (iii) other business reasons exist to do so, such as the strategic
merits of including such co-investors, the need for additional capital beyond the amount held in our trust account to fund the initial
business combination and/or the desire to obtain committed capital for closing the initial business combination.
We anticipate structuring our initial business
combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or
acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or stockholders, or for other reasons. However, we will only complete our initial business combination if
the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act of 1940, as amended, or the “Investment Company Act.” Even if the post-transaction
company owns 50% or more of the voting securities of the target, our stockholders prior to the 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
transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test, provided
that in the event that the business combination involves more than one target business, the 80% test will be based on the aggregate value
of all of the target businesses.
Chardan will be the beneficial owner of founder
shares or private warrants following this offering by virtue of its ownership of Chardan Monterey and members of our management team may
indirectly own such securities. In May 2021, NorthStar transferred an aggregate of 325,000 founder shares to our officers, directors
and director nominees. Because of such ownership and interests, Chardan and our officers and directors may have a conflict of interest
in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination
if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement
with respect to our initial business combination.
Our co-sponsors, officers, directors, Chardan
and their respective affiliates may participate in the formation of, or become an officer or director of, any other blank check company
prior to completion of our initial business combination. In particular, certain of our directors also serve as officers or directors of
an Affiliated SPAC, which is focused on searching for businesses that may provide significant opportunities for attractive investor returns
in industries similar to the industries in which our search is focused. As a result, our co-sponsors, officers or directors could have
conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with
which they may become involved.
Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities
pursuant to which such officer or director is or will be required to present a business combination opportunity, including an Affiliated
SPAC. Our certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director
or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company,
such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and
to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. Accordingly,
if any of our officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to
which he or she has fiduciary, contractual or other obligations or duties, including an Affiliated SPAC, he or she will honor these obligations
and duties to present such business combination opportunity to such entities first, and only present it to us if such entities reject
the opportunity and he or she determines to present the opportunity to us.
Effecting a Business Combination
General
We are not presently engaged in, and we will not
engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination
using cash from the proceeds of this offering and the private placement of the private warrants, our shares, new debt, or a combination
of these, as the consideration to be paid in our initial business combination. We may seek to consummate our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth (such as a company that has
begun operations but is not yet at the stage of commercial manufacturing and sales), which would subject us to the numerous risks inherent
in such companies and businesses, although we will not be permitted to effectuate our initial business combination with another blank
check company or a similar company with nominal operations.
If our initial business combination is paid for
using shares or debt securities, or not all of the funds released from the trust account are used for payment of the purchase price in
connection with our business combination or used for redemptions of purchases of our common stock, we may apply the cash released to us
from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion
of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business
combination, to fund the purchase of other companies or for working capital.
We will have 12 months from the closing
of this offering to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial
business combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period of time
to consummate a business combination up to three times by an additional three months each time (for a total of up to 21 months
to complete a business combination); provided that, pursuant to the terms of our certificate of incorporation and the trust
agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way
to extend the time available for us to consummate our initial business combination is for our insiders or their affiliates or designees,
upon five days’ advance notice prior to each applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if
the over-allotment option is exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or $3,450,000 if the over-allotment
option is exercised in full, if the time to consummate a business combination is extended to a full 21 months), on or prior to the date
of the applicable deadline. In the event that our insiders elected to extend the time to complete a business combination and deposited
the applicable amount of money into trust, the insiders would receive a non-interest bearing, unsecured promissory note equal to the
amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds
available outside the trust account to do so. In the event that we receive notice from our insiders five days prior to the applicable
deadline of their intent to effect an extension, we intend to issue a press release announcing such intention at least three days prior
to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether
or not the funds had been timely deposited. Our insiders and their affiliates or designees are not obligated to fund the trust account
to extend the time for us to complete our initial business combination. To the extent that some, but not all, of our insiders, decide
to extend the period of time to consummate our initial business combination, such insiders (or their affiliates or designees) may deposit
the entire amount required. If we are unable to consummate our initial business combination within such time period, we will, as promptly
as possible but not more than 10 business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of
the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in the trust account
and not previously released to us to pay our taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute
such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders. In the event of our
dissolution and liquidation, the private warrants will expire and will be worthless.
We have not identified any acquisition targets.
From the period prior to our formation through the date of this prospectus, there have been no communications, evaluations or discussions
between any of our officers, directors or our co-sponsors and any of their contacts or relationships regarding a potential initial business
combination. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition
candidate. Subject to the requirement that our initial business combination must be with one or more target businesses or assets having
an aggregate fair market value of at least 80% of the value of the trust account (excluding any deferred underwriters’ fees and
taxes payable on the income earned on the trust account) at the time of the agreement to enter into such initial business combination,
we have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. Accordingly, there
is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately
complete our initial business combination. Although our management will assess the risks inherent in a particular target business with
which we may combine, this assessment may not result in our identifying all risks that a target business may encounter. Furthermore, some
of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely
impact a target business.
We may seek to raise additional funds through
a private offering of debt or equity securities in connection with the consummation of our initial business combination, and we may effectuate
our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject
to compliance with applicable securities laws, we would consummate such financing only simultaneously with the consummation of our business
combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents
or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law or Nasdaq,
we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans
in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third
party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target business candidates
will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital funds, private equity
groups, leveraged buyout funds, management buyout funds and other members of the financial community. Target businesses may be brought
to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources also may
introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will
have read this prospectus and know what types of businesses we are targeting. Our officers and directors, members of our strategic advisory
group as well as their affiliates, also may bring to our attention target business candidates that they become aware of through their
business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions.
In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to
us as a result of the business relationships of our officers and directors. While we do not presently anticipate engaging the services
of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or
other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation to be determined
in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management
determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us
on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s
fees is customarily tied to completion of a transaction, in which case any such fee may be paid out of the funds held in the trust account.
Although some of our officers and directors may enter into employment or consulting agreements with the acquired business following our
initial business combination, the presence or absence of any such arrangements will not be used as a criterion in our selection process
of an acquisition candidate.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our co-sponsors, officers or directors. In the event we seek to complete our
initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions on the type of target business we seek
to acquire that such an initial business combination is fair to our public stockholders from a financial point of view.
Selection of a Target Business and Structuring of a Business
Combination
Subject to the requirement that our initial business
combination must be with one or more target businesses or assets having an aggregate fair market value of at least 80% of the value of
the trust account (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account) at the
time of the agreement to enter into such initial business combination, our management will have virtually unrestricted flexibility in
identifying and selecting one or more prospective target businesses. In any case, we will only consummate an initial business combination
in which we become the majority shareholder of the target (or control the target through contractual arrangements in limited circumstances
for regulatory compliance purposes as discussed below) or are otherwise not required to register as an investment company under the Investment
Company Act, or to the extent permitted by law we may acquire interests in a variable interest entity, in which we may have less than
a majority of the voting rights in such entity, but in which we are the primary beneficiary. There is no basis for investors in this offering
to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth (such as a company that has begun operations but is not yet at the stage of commercial manufacturing and sales),
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we may not properly ascertain or assess all significant risk factors.
In evaluating a prospective target business, we
expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information
made available to us.
The time required to select and evaluate a target
business and to structure and complete our initial business combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target
business with which a business combination is not ultimately completed will result in our incurring losses and will reduce the funds we
can use to complete another business combination. We will not pay any finders or consulting fees to members of our management team, or
any of their respective affiliates, for services rendered to or in connection with our initial business combination.
Fair Market Value of Target Business or Businesses
The target business or businesses or assets with
which we effect our initial business combination must have a collective fair market value equal to at least 80% of the value of the trust
account (excluding any deferred underwriters’ fees and taxes payable on the income earned on the trust account) at the time of the
agreement to enter into such initial business combination. If we acquire less than 100% of one or more target businesses in our initial
business combination, the aggregate fair market value of the portion or portions we acquire must equal at least 80% of the value of the
trust account at the time of the agreement to enter into such initial business combination. However, we will always acquire at least a
controlling interest in a target business. The fair market value of a portion of a target business or assets will likely be calculated
by multiplying the fair market value of the entire business by the percentage of the target we acquire. We may seek to consummate our
initial business combination with an initial target business or businesses with a collective fair market value in excess of the balance
in the trust account. In order to consummate such an initial business combination, we may issue a significant amount of debt, equity or
other securities to the sellers of such business and/or seek to raise additional funds through a private offering of debt, equity or other
securities. If we issue securities in order to consummate such an initial business combination, our stockholders could end up owning a
minority of the combined company’s voting securities as there is no requirement that our stockholders own a certain percentage of
our company (or, depending on the structure of the initial business combination, an ultimate parent company that may be formed) after
our business combination. Because we have no specific business combination under consideration, we have not entered into any such arrangement
to issue our debt or equity securities and have no current intention of doing so.
The fair market value of a target business or
businesses or assets will be determined by our board of directors based upon standards generally accepted by the financial community,
such as actual and potential gross margins, the values of comparable businesses, earnings and cash flow, book value, enterprise value
and, where appropriate, upon the advice of appraisers or other professional consultants. Investors will be relying on the business judgment
of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of
a particular target business. If our board of directors is not able to independently determine that the target business or assets has
a sufficient fair market value to meet the threshold criterion, we will obtain an opinion from an unaffiliated, independent investment
banking firm or another independent entity that commonly renders valuation opinions on the type of target business we seek to acquire
with respect to the satisfaction of such criterion. Notwithstanding the foregoing, unless we consummate a business combination with an
affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or another independent entity
that commonly renders valuation opinions on the type of target business we seek to acquire, that the price we are paying is fair to our
public stockholders.
Lack of Business Diversification
For an indefinite period of time after consummation
of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it
is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business.
By consummating our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory
developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial
business combination, and
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cause us to depend on the marketing and sale of a single
product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management
of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our
assessment of the target business’ management may not prove to be correct. The future role of members of our management team, if
any, in the target business cannot presently be stated with any certainty. Consequently, members of our management team may not become
a part of the target’s management team, and the future management may not have the necessary skills, qualifications or abilities
to manage a public company. Further, it is also not certain whether one or more of our directors will remain associated in some capacity
with us following our initial business combination. Moreover, members of our management team may not have significant experience or knowledge
relating to the operations of the particular target business. Our key personnel may not remain in senior management or advisory positions
with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made
at the time of our initial business combination.
Following our initial business combination, we
may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability to
recruit additional managers, or to ascertain that additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Redemption Rights for Public Stockholders upon Completion
of Our Initial Business Combination
We will provide our public stockholders with
the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior
to the consummation of our initial business combination, including interest earned on the funds held in the trust account and not previously
released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein.
The amount in the trust account is initially anticipated to be $10.10 per public share. The per-share amount we will distribute to investors
who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the representative of the
underwriters in this offering. The redemption rights may include the requirement that a beneficial holder must identify itself in order
to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect
to our warrants. Notwithstanding the foregoing, our initial stockholders have agreed, pursuant to written letter agreements with us,
not to redeem any public shares held by them.
Manner of Conducting Redemptions
We will provide our public stockholders with
the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in
connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. Except as required
by applicable law, the decision as to whether we will seek stockholder approval of a proposed business combination or conduct 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 stockholder approval under stock exchange listing requirements.
Asset acquisitions and stock purchases would not typically require stockholder approval, while direct mergers with our company where
we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our certificate
of incorporation would typically require stockholder approval.
If a stockholder vote is not required and
we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our certificate of incorporation:
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conduct the redemptions
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and
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file tender offer
documents with the SEC prior to completing our initial business combination which contain
substantially the same financial and other information about the initial business combination
and the redemption rights as is required under Regulation 14A of the Exchange Act, which
regulates the solicitation of proxies.
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Upon the public announcement of our initial
business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our initial stockholders will terminate
any plan established in accordance with Rule 10b5-1 under the Exchange Act to purchase shares of our common stock in the
open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event that we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under
the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares, which number will be based on the requirement that we will only redeem our public shares so long as (after such redemption) our
net tangible assets will be at least $5,000,001 either immediately 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) or any greater net tangible asset or cash
requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more
shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination, and instead
may search for an alternative business combination.
If, however, stockholder approval of the transaction
is required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other
reasons, we will:
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conduct the redemptions
in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules,
and
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file proxy materials
with the SEC.
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If we seek stockholder approval, we will complete
our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business
combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock
of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote
at such meeting. Our initial stockholders will count towards this quorum and have agreed to vote any founder shares and any public shares
held by them in favor of our initial business combination. As a result, in addition to their founder shares, we would need only 3,750,001,
or 37.5% (assuming all outstanding shares are voted), of the 10,000,000 public shares sold in this offering to be voted in favor of a
transaction in order to have our initial business combination approved (assuming the underwriters’ over-allotment option is
not exercised).
Pursuant to Delaware law, we will not give
less than 10 days nor more than 60 days prior written notice of any such meeting, if required, at which a vote shall be taken to approve
our initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make
it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares
irrespective of whether they vote for or against the proposed transaction or do not vote at all.
We may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the date set forth in the proxy materials mailed to such holders, or up to two business
days prior to the vote on the proposal to approve the business combination, or to deliver their shares to the transfer agent electronically.
The proxy materials that we will furnish to holders of our public shares in connection with our initial business combination will indicate
whether we are requiring public stockholders to satisfy such delivery requirements. If the proposed business combination is not approved
and we continue to search for a target company, we will promptly return any certificates delivered, or shares tendered electronically,
by public stockholders who elected to redeem their shares.
Our certificate of incorporation provides
that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either
immediately 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) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. For example, the proposed business combination may require: (i) cash consideration to be paid
to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or
(iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the
event the aggregate cash consideration we would be required to pay for all shares of common stock 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, and all shares of common stock submitted
for redemption will be returned to the holders thereof, and instead may search for an alternative business combination.
Limitation on Redemption Rights of Stockholders Holding More
Than 20% of the Shares Sold in this Offering if we Hold Stockholder Vote
Notwithstanding
the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions
in connection with our business combination pursuant to the tender offer rules, our certificate of incorporation provides that a public
stockholder, individually or together with any affiliate of such stockholder or any other person with whom such stockholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 20% of the shares sold in this offering. Absent this provision, a public stockholder
holding more than an aggregate of 20% of the shares sold in this offering could threaten to exercise its redemption rights against a
business combination if such holder’s shares are not purchased by us or our management at a premium to the then-current market
price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 20% of the shares sold in
this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to
complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing
condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’
ability to vote all of their shares (including all shares held by those stockholders that hold more than 20% of the shares sold in this
offering) for or against our initial business combination.
If we seek stockholder approval of a proposed
business combination, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders
or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth
in the proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination,
or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At
Custodian) System, at the holder’s option. The proxy materials that we will furnish to holders of our public shares in connection
with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements,
which may include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a
public stockholder would have from the time we send out our proxy materials until up to two business days prior to the vote on the business
combination to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period,
it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal
cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the
DWAC System. The transfer agent will typically charge the tendering broker a nominal fee and it would be up to the broker whether or
not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders
seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights
regardless of the timing of when such delivery must be effectuated.
The foregoing is different
from the procedures used by some blank check companies. In order to perfect redemption rights in connection with their business combinations,
some blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and
a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking
to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to
arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option
window” after the completion of the business combination during which he or she could monitor the price of the company’s
stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually
delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they
needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business
combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting
ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.
Any request to redeem
such shares, once made, may be withdrawn at any time up to two business days prior to the date of the stockholder meeting set forth in
our proxy materials (unless we elect to allow additional withdrawal rights. Furthermore, if a holder of a public share delivered its
certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to
exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It
is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly
after the completion of our initial business combination.
If our initial business
combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights
would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return
any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination
is not completed, we may continue to try to complete a different business combination until 12 months (or up to 21 months, as applicable)
from the closing of this offering.
Liquidation of Trust Account if No Business Combination
If we do not complete a business combination
within 12 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law. However, if we anticipate that we may not be able to consummate our
initial business combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period of time
to consummate a business combination up to three times by an additional three months each time (for a total of up to 21 months to complete
a business combination); provided that, pursuant to the terms of our certificate of incorporation and the trust agreement to be entered
into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend the time available
for us to consummate our initial business combination is for our insiders or their affiliates or designees, upon five days’ advance
notice prior to each applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if the over-allotment option is
exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or $3,450,000 if the over-allotment option is exercised
in full, if the time to consummate a business combination is extended to a full 21 months), on or prior to the date of the applicable
deadline. Public stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.
Our insiders or their affiliates or designees or designees are not obligated to fund the trust account to extend the time for us to complete
our initial business combination. If we are unable to consummate our initial business combination within the applicable time period,
we will, promptly redeem the public shares for a pro rata portion of the funds held in the trust account and promptly following such
redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each
case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event
that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money into trust,
the insiders would receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be
repaid in the event that we are unable to close a business combination unless there are funds available outside the trust account to
do so. In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to effect an
extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition,
we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited.
Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our
initial business combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to consummate
our initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount required. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. There will be no redemption rights or liquidating distributions with
respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the allotted time
period.
Our initial stockholders have agreed (A) to
vote their founder shares and any public shares held by them in favor of any proposed business combination, (B) not to propose, or vote
in favor of, prior to and unrelated to an initial business combination, an amendment to our certificate of incorporation that would affect
the substance or timing of our redemption obligation to redeem all public shares if we cannot complete an initial business combination
within 12 months (or up to 21 months, as applicable) of the closing of this offering, unless we provide public stockholders an opportunity
to redeem their public shares in conjunction with any such amendment, (C) not to convert any shares, including founder shares, into the
right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination
or sell any shares to us in any tender offer in connection with our proposed initial business combination, and (D) that the founder shares
shall not participate in any liquidating distribution upon winding up if a business combination is not consummated.
Under the DGCL, stockholders may be held liable
for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion
of our trust account distributed to our public stockholders upon the redemption of 100% of our outstanding public shares in the event
we do not complete our initial business combination within the required time period may be considered a liquidation distribution under
Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it
makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought
against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting
period before any redemptions are made to stockholders, any liability of stockholders with respect to a redemption is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our
trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not complete
our initial business combination within the required time period is not considered a liquidation distribution under Delaware law and
such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for
claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation
distribution. It is our intention to redeem our public shares as soon as reasonably possible following the 12th month (or up to the 21st
month, as applicable) from the closing of this offering and, therefore, we do not intend to comply with the above procedures. As such,
our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability
of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280
of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide
for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years.
However, because we are a blank check company, rather than an operating company, and our operations will be limited to seeking to complete
an initial business combination, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.)
or prospective target businesses.
We will seek to have all third parties (including
any vendors or other entities we engage after this offering) and any prospective target businesses enter into valid and enforceable agreements
with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account. The underwriters
in this offering will execute such a waiver agreement. As a result, the claims that could be made against us will be limited, thereby
lessening the likelihood that any claim would result in any liability extending to the trust. We therefore believe that any necessary
provision for creditors will be reduced and should not have a significant impact on our ability to distribute the funds in the trust
account to our public stockholders. Nevertheless, there is no guarantee that vendors, service providers and prospective target businesses
will execute such agreements. In the event that a potential contracted party refuses to execute such a waiver, we will execute an agreement
with that entity only if our management first determines that we would be unable to obtain, on a reasonable basis, substantially similar
services or opportunities from another entity willing to execute such a waiver. Examples of instances where we may engage a third party
that refuses to execute a waiver would be the engagement of a third party consultant who cannot sign such an agreement due to regulatory
restrictions, such as our auditors who are unable to sign due to independence requirements, or whose particular expertise or skills are
believed by management to be superior to those of other consultants that would agree to execute a waiver, or a situation in which management
does not believe it would be able to find a provider of required services willing to provide the waiver. There is also no guarantee that,
even if third parties execute such agreements with us, they will not seek recourse against the trust account. Our co-sponsors have agreed
that they will be liable to us if and to the extent any claims by a vendor 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 amount of funds in the trust account to
below $10.10 per public share, except as to any claims by a third party who executed a valid and enforceable agreement with us waiving
any right, title, interest or claim of any kind they may have in or to any monies held in the trust account and except as to any claims
under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act.
However, we have not asked our co-sponsors to reserve for such indemnification obligations, nor have we independently verified whether
our co-sponsors have sufficient funds to satisfy its indemnity obligations and we believe that our co-sponsors’ only assets are
securities of our company. Therefore, we cannot assure you that our co-sponsors would be able to satisfy those obligations. None of our
officers or directors will indemnify us for claims by third parties, including, without limitation, claims by vendors and prospective
target businesses. As a result, if we liquidate, the per-share distribution from the trust account could be less than the estimated $10.10
due to claims or potential claims of creditors. We will distribute to all of our public stockholders, in proportion to their respective
equity interests, an aggregate sum equal to the amount then held in the trust account, inclusive of any interest not previously released
to us, subject to our obligations under Delaware law to provide for claims of creditors.
If we are unable to consummate an initial business
combination and are forced to redeem 100% of our outstanding public shares for a portion of the funds held in the trust account, we anticipate
notifying the trustee of the trust account to begin liquidating such assets promptly after such date, and anticipate it will take no more
than ten business days to effectuate the redemption of our public shares. Our insiders have waived their rights to participate in
any redemption with respect to their insider shares. We will pay the costs of any subsequent liquidation from our remaining assets outside
of the trust account. If such funds are insufficient, our insiders have agreed to pay the funds necessary to complete such liquidation
(currently anticipated to be no more than approximately $50,000), and have agreed not to seek repayment of such expenses. Each holder
of public shares will receive a pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds
held in the trust account and not previously released to us or necessary to pay our taxes. The proceeds deposited in the trust account
could, however, become subject to claims of our creditors that are in preference to the claims of public stockholders.
Our public stockholders shall be entitled
to receive funds from the trust account only in the event of our failure to complete our initial business combination in the required
time period or if the stockholders seek to have us redeem their respective shares of common stock upon a business combination which is
actually completed by us. In no other circumstances shall a stockholder have any right or interest of any kind to or in the trust account.
If we are forced to file a bankruptcy case
or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per share redemption amount received
by public stockholders may be less than $10.10.
If, after we distribute the proceeds in the trust
account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either
a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover
all amounts received by our stockholders. 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 stockholders
from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these reasons.
Certificate of Incorporation
Our certificate of incorporation contains
certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business
combination. If we hold a stockholder vote to amend any provisions of our certificate of incorporation relating to stockholder’s
rights or pre-business combination activity (including the substance or timing within which we have to complete a business combination),
we will provide our public stockholders with the opportunity to redeem their shares of common stock 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 taxes, divided by the number of then outstanding
public shares, in connection with any such vote. Our insiders have agreed to waive any redemption rights with respect to any insider
shares and any public shares they may hold in connection with any vote to amend our certificate of incorporation. Specifically, our certificate
of incorporation provides, among other things, that:
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•
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prior to the consummation of our initial business combination, we shall
either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which public
stockholders may seek to redeem their shares of common stock, regardless of whether they vote for or against the proposed business
combination, for a pro rata portion of the aggregate amount then on deposit in the trust account, or (2) provide our stockholders
with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for
an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, in each case subject to the
limitations described herein;
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we will consummate our initial business combination only if public stockholders
do not exercise redemption rights in an amount that would cause our net tangible assets to be less than $5,000,001 and a majority
of the outstanding shares of common stock voted are voted in favor of the business combination;
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•
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if our initial business combination is not
consummated within 12 months (or up to 21 months, as applicable) of the closing of this offering,
then our existence will terminate and we will distribute all amounts in the trust account
to all of our public holders of shares of common stock;
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•
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upon the consummation of this offering,
$101,000,000, or $116,150,000 if the over-allotment option is exercised in full, shall be
placed into the trust account;
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•
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we may not consummate any other business combination, merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to our initial business combination;
and
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prior to our initial business combination, we may not issue
additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote
on any initial business combination.
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Potential Revisions to Agreements with Insiders
Each of our insiders has entered into a letter
agreement with us pursuant to which each of them has agreed to do certain things relating to us and our activities prior to a business
combination. We could seek to amend these letter agreements without the approval of stockholders, although we have no intention to do
so. In particular:
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Restrictions relating to liquidating the trust account if
we failed to consummate a business combination in the time-frames specified above could be amended, but only if we allowed all stockholders
to redeem their shares in connection with such amendment;
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Restrictions relating to our insiders being required to vote
in favor of a business combination or against any amendments to our organizational documents could be amended to allow our insiders to
vote on a transaction as they wished;
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The requirement of members of the management team to remain
our officer or director until the closing of a business combination could be amended to allow persons to resign from their positions
with us if, for example, the current management team was having difficulty locating a target business and another management team had
a potential target business;
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The restrictions on transfer of our securities could be amended
to allow transfer to third parties who were not members of our original management team;
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The obligation of our management team to not propose amendments
to our organizational documents could be amended to allow them to propose such changes to our stockholders;
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The obligation of insiders to not receive any compensation
in connection with a business combination could be modified in order to allow them to receive such compensation; and
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The requirement to obtain a valuation for any target business
affiliated with our insiders, in the event it was too expensive to do so.
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Except as specified above, stockholders would
not be required to be given the opportunity to redeem their shares in connection with such changes. Such changes could result in:
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Our having an extended period of time to consummate a business
combination (although with less in trust as a certain number of our stockholders would certainly redeem their shares in connection with
any such extension);
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Our insiders being able to vote against a business combination
or in favor of changes to our organizational documents;
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Our operations being controlled by a new management team
that our stockholders did not elect to invest with;
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Our insiders receiving compensation in connection with a
business combination; and
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Our insiders closing a transaction with one of their affiliates
without receiving an independent valuation of such business.
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We will not agree to any such changes unless we
believed that such changes were in the best interests of our stockholders (for example, if we believed such a modification were necessary
to complete a business combination). Each of our officers and directors have fiduciary obligations to us requiring that they act in our
best interests and the best interests of our stockholders.
Competition
In identifying, evaluating and selecting a target
business for our initial business combination, we may encounter intense competition from other entities having a business objective similar
to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic
acquisitions. Many of these entities are well established and have significant experience identifying and effecting business combinations
directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than
us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives
others an advantage in pursuing the acquisition of a target business. Furthermore, the requirement that we acquire a target business or
businesses having a fair market value equal to at least 80% of the value of the trust account (excluding any deferred underwriters’
fees and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the business combination,
our obligation to pay cash in connection with our public stockholders who exercise their redemption rights and the number of our outstanding
warrants and the future dilution they potentially represent may not be viewed favorably by certain target businesses. Any of these factors
may place us at a competitive disadvantage in successfully negotiating our initial business combination.
Facilities
We will pay to an affiliate of one or more of
the insiders a fee of $10,000 per month for use of office space and certain office and secretarial services. The office space will be
located at 17 State Street, 21st Floor, New York, NY 10004.
Employees
We currently have two executive officers. These
individuals are not obligated to devote any specific number of hours to our matters but intend to devote as much of his time as he deems
necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period
will vary based on whether a target business has been selected for our initial business combination and the stage of the business combination
process we are in. We do not intend to have any full time employees prior to the consummation of our initial business combination.
Periodic Reporting and Audited Financial Statements
We intend to register our units, shares of common
stock and warrants under the Exchange Act and will have reporting obligations, including the requirement that we file annual, quarterly
and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual report will contain financial statements
audited and reported on by our independent registered public accountants.
We will provide stockholders with audited financial
statements of the prospective target business as part of any proxy solicitation sent to stockholders to assist them in assessing the target
business. In all likelihood, the financial information included in the proxy solicitation materials will need to be prepared in accordance
with U.S. 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. The financial statements may also be required to be prepared in accordance with U.S. GAAP for the Form 8-K
announcing the closing of an initial business combination, which would need to be filed within four business days thereafter. We cannot
assure you that any particular target business identified by us as a potential acquisition candidate will have the necessary financial
information. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business.
We will be required to comply with the internal
control requirements of the Sarbanes-Oxley Act beginning for the fiscal year ending December 31, 2022. A target company may not be
in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal
controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any
such acquisition.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to 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 non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take
advantage of the benefits of this extended transition period.
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 completion of this offering, (b) in
which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our
most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible
debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning
associated with it in the JOBS Act.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates
exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during
such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that
year’s second fiscal quarter.
Legal Proceedings
There is no material litigation, arbitration or
governmental proceeding currently pending against us or any of our officers or directors in their capacity as such, and we and our officers
and directors have not been subject to any such proceeding in the 12 months preceding the date of this prospectus.
Comparison to Offerings of Blank Check Companies Subject to Rule 419
The following table compares and contrasts the
terms of our offering and the terms of an offering of blank check companies under Rule 419 promulgated by the SEC assuming that the
gross proceeds, underwriting discounts and underwriting expenses for the Rule 419 offering are the same as this offering and that
the underwriters will not exercise their over-allotment option. None of the terms of a Rule 419 offering will apply to this offering
because we will be listed on a national securities exchange, we will have net tangible assets in excess of $5,000,001 upon the consummation
of this offering, and we will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact.
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Terms of the Offering
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Terms Under a Rule 419 Offering
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Escrow
of offering proceeds
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$101,000,000 of the
net offering proceeds and proceeds from the sale of the private warrants will be deposited into a trust account in the United States,
maintained by Continental Stock Transfer & Trust Company, acting as trustee.
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$89,100,000 of the
offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a
separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial
interests in the account.
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Investment
of net proceeds
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The $101,000,000 of
the net offering proceeds and proceeds from the sale of the private warrants held in trust will only be invested in United States
government treasury bills, bonds or notes with a maturity of 185 days or less or in money market funds meeting the applicable
conditions under Rule 2a-7 promulgated under the Investment Company Act and that invest solely in United States government
treasuries.
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Proceeds could be invested
only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are
direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
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Limitation on fair value or net assets of target business
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The initial target business that we acquire must have a fair market value equal to at least 80% of the balance in our trust account net of taxes payable at the time of the execution of a definitive agreement for our initial business combination.
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We would be restricted from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the maximum offering proceeds.
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Trading of securities issued
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The units may commence trading on or promptly after the date of this prospectus. The shares of common stock and warrants comprising the units will begin to trade separately on the 90th day after the date of this prospectus unless Chardan informs us of its decision to allow earlier separate trading (based upon its assessment of the relative strengths of the securities markets and small capitalization and blank check companies in general, and the trading pattern of, and demand for, our securities in particular), provided we have filed with the SEC a Current Report on Form 8-K, which includes an audited balance sheet reflecting our receipt of the proceeds of this offering.
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No trading of the units or the underlying securities would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
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Exercise of the warrants
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The warrants cannot be exercised until the completion of a business combination and, accordingly, will be exercised only after the trust account has been terminated and distributed.
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The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
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Election
to remain an investor
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We will either (1) give our stockholders the
opportunity to vote on the business combination or (2) provide our public stockholders with the opportunity to sell their public
shares to us in a tender offer for cash equal to their pro rata share of the aggregate amount then on deposit in the trust
account, less taxes. If we hold a meeting to approve a proposed business combination, we will send each stockholder a proxy statement
containing information required by the SEC. Under Delaware law, we must provide at least ten days’ advance notice of any
meeting of stockholders. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether to
exercise their rights to redeem their shares for cash at such a meeting or to remain an investor in our company. Alternatively, if
we do not hold a meeting and instead conduct a tender offer, we will conduct such tender offer in accordance with the tender offer
rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other
information about the initial business combination as we would have included in a proxy statement.
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A prospectus containing information required by
the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company, in writing, within a
period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective
amendment, to decide whether he, she or it elects to remain a stockholder of the company or require the return of his or her investment.
If the company has not received the notification by the end of the 45th business
day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the stockholder.
Unless a sufficient number of investors elect to remain investors, all of the deposited funds in the escrow account must be returned
to all investors and none of the securities will be issued.
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The tender offer rules require us to hold the tender offer open for at least 20 business days. Accordingly, this is the minimum amount of time we would need to provide holders to determine whether they want to sell their shares to us in the tender offer or remain an investor in our company.
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Business
combination deadline
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Pursuant to our certificate of incorporation, if we do not complete an initial business combination
within 12 months (or up to 21 months, as applicable) from the consummation of this offering, it will trigger our automatic winding
up, dissolution and liquidation.
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If an acquisition has
not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or
escrow account would be returned to investors.
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Interest earned on the funds in the trust account
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There can be released to us, from time to time, any interest earned on the funds in the trust account that we may need to pay our tax obligations. The remaining interest earned on the funds in the trust account will not be released until the earlier of the completion of a business combination and our entry into liquidation upon failure to effect a business combination within the allotted time.
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All interest earned on the funds in the trust account will be held in trust for the benefit of public stockholders until the earlier of the completion of a business combination and our liquidation upon failure to effect a business combination within the allotted time.
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Release
of funds
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Except for interest
earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds held in the trust
account will not be released until the earlier of the completion of a business combination (in which case, the proceeds released
to us will be net of the funds used to pay redeeming or tendering stockholders, as the trustee will directly send the appropriate
portion of the amount held in trust to the redeeming or tendering stockholders at the time of the business combination) and the liquidation
of our trust account upon failure to effect a business combination within the allotted time.
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The proceeds held in
the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a
business combination within the allotted time.
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MANAGEMENT
Directors, Director Nominees and Executive Officers
Our current directors, director nominees and executive
officers are as follows:
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Name
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Age
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Position
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Sanjeev Satyal
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52
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Chief Executive Officer
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William McKeever
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66
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Chief Financial Officer and Director
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Jonas Grossman
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47
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Director
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Sandip I. Patel
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54
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Director
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Frances K. Heller
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54
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Director Nominee
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James R. Neal
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65
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Director Nominee
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Sanjeev
Satyal, Ph.D. has served as our Chief Executive Officer since April 2021. From
2018 to February 2021, Dr. Satyal served as Chief Executive Officer of pH Pharma Co.
Inc., a clinical-stage biopharmaceutical company focused on developing innovative healthcare
products for unmet clinical and patient needs. From 2015 to February 2021, he has also served
as Vice President of Research & Development at pH Pharma. Previously, Dr. Satyal
served as Vice President, Biology at StemGuard Therapeutics, a biotech company focused on
developing therapies for degenerative diseases. Prior to that he worked as a Director of
Research at StemPar Sciences and as a Director of Cancer Biology at OncoMed Pharmaceuticals.
Dr. Satyal was a postdoctoral fellow at Genentech. Dr. Satyal is the inventor of
over 30 U.S. issued or pending patents, and their foreign counterparts, in various pharmaceutical
areas and has also co-authored several scientific publications. Dr. Satyal earned a
B.Sc. in Life Sciences at St. Xavier’s College, University of Bombay, an M.Sc. in Biotechnology
at the University of Poona and a Ph.D. in Biochemistry at Northwestern University.
William
McKeever has served as our Chief Financial Officer since May 2021. Mr. McKeever has more than 20 years of experience
in the healthcare industry encompassing various roles in equity research, portfolio management and investment banking. Since 2017, Mr. McKeever
has worked as a consultant to various companies that are creating breakthrough technologies to treat diseases in the healthcare industry.
From 2010 to 2016, Mr. McKeever was Managing Director of First Bridgehouse Securities, a boutique investment firm, where he was
a consultant to early-stage companies across a broad range of sectors within the healthcare industry. Prior to that, Mr. McKeever
was a sell-side equity analyst covering the managed care industry at firms including PaineWebber from 1997 to 2000 and UBS from 2000
to 2005. While at PaineWebber and UBS, he was a managing director and was ranked for several year as an All-American Analyst by Institutional
Investor magazine based on its poll of analysts around the country. While at UBS, he was involved in several initial public offerings
of managed care companies. From 2005 to 2009, From 2005 to 2009, Mr. McKeever was a Managing Director managing all health care investments
including pharmaceuticals, medical devices, services and biotechnology in the Principal Credit Group (PCG) of Merrill Lynch. PCG was
an internal fund that managed debt and equity investments in all sectors globally. Mr. McKeever earned his B.A. in Economics from
Denison University and his M.B.A. in Finance from the Wharton School of the University of Pennsylvania.
Jonas
Grossman has served as a member of our board of directors since July 2020. Mr. Grossman
has served as Managing Partner and Head of Capital Markets for Chardan, a New York headquartered
broker/dealer, since December 2003, and has additionally served as President of Chardan
since September 2015. Mr. Grossman has been a founder and member of the board of
seven special purpose acquisition companies, of which on four he also has served as Chief
Executive Officer and President. Since April 2020, Mr. Grossman has served as the
President and Chief Executive Officer of Chardan Healthcare Acquisition 2 Corp. which announced
its merger with Renovacor, Inc. in March 2021. He also served as President and
Chief Executive Officer of Chardan Healthcare Acquisition Corp. from March 2018 until
its merger in October 2019 with BiomX Ltd. (NYSE: PHGE). He is currently a director
of BiomX. Mr. Grossman also serves as the President and Chief Executive Officer of Chardan
NexTech Acquisition Corp. and Chardan NexTech Acquisition 2 Corp., each, a special purpose
acquisition company. Mr. Grossman was a founder and director of LifeSci Acquisition
Corp (Nasdaq: LSAC) from March 2020 until the close of its business combination with
Vincera Pharma, Inc. in December 2020. He has served as a director of Ventoux CCM
Acquisition Corp (Nasdaq: VTAQ) since December 2020 and CleanTech Acquisition Corp since
July 2021. Previously, from 2001 to 2003, Mr. Grossman worked at Ramius Capital Group,
LLC, a global multi-strategy hedge fund where he served as Vice President and Head Trader.
Mr. Grossman holds a B.A. in Economics from Cornell University and an M.B.A. from New
York University’s Stern School of Business. He has served on the board of directors
for UNICEF since December 2016.
Sandip
I. Patel, Esq. has served as a member of our board of directors since April 2021. Mr. Patel has been an
attorney and corporate business consultant at Sandip I. Patel, P.A., a law firm founded by Mr. Patel in 2000. Since 2017, Mr. Patel
has also served as Chief Legal Counsel of Channel Investments, LLC, a medical device company. Mr. Patel has been involved in the
formation, acquisition, development, growth, and liquidity events related to companies in the healthcare, insurance and financial services
fields. Mr. Patel currently holds public and private investments in a wide range of industries with a focus on medical devices, biotechnology,
healthcare services and related technologies, as well as FinTech and related services. Mr. Patel is also a co-founding shareholder
of AtlasBanc, and was a co-founding shareholder, and board member of Anderen Bank. He served on the board of directors for Avatar Property
and Casualty Insurance Company, a Florida-based homeowners insurance company. Mr. Patel was the Founder, President and Chief Executive
Officer of the Orion group of companies, a full-service real estate development company. Previously, Mr. Patel served as Head of
the New Business Development and M&A team to national health insurance companies. Mr. Patel oversaw all legal, regulatory and
governmental affairs on behalf of WellCare, while serving as the General Counsel and a partner in the company. Since February 2021,
Mr. Patel has served as a director of Quantum FinTech Acquisition Corporation, a special purpose acquisition company (NYSE: QFTA).
Mr. Patel holds a J.D. degree from the Stetson University College of Law and a B.B.A. in Finance from the University of Georgia.
We believe Mr. Patel is well qualified to serve as a director due to his substantial experience with public and private investments
in a wide range of industries, including the financial services and technology industries, as well as his experience serving on the boards
of financial services, insurance and other companies.
Frances
K. Heller has agreed to serve on our board of directors immediately upon the effective date of the registration statement
of which this prospectus forms a part. For more than 25 years, Ms. Heller has been an executive and director in the pharmaceutical
and biotech industries with expertise in business development, strategic transactions, and legal affairs. In this sector, Ms. Heller
was most recently Senior Vice President of Business Development at Bristol-Myers Squibb and a Trustee of the Bristol-Myers Squibb Foundation,
from 2012 to 2014. In 2015, Ms. Heller founded Good2Go, Inc., an IoT technology company, for which she currently serves as
Chair and Chief Executive Officer. Ms. Heller is a member of the board of directors of Affinivax, a private early-stage vaccine
company, the Co-Chair of Lava Maex, a non-profit clean water/mobile hygiene organization and is also on the board of advisers at Tulane
University. She previously served as a board member of Zafgen, Inc. (Nasdaq: ZFGN) (currently Larimar Therapeutics, Inc.) from
2014 to 2017. She also previously served as Trustee of the Dana Farber Cancer Institute. Ms. Heller is a member of the California
State Bar and is licensed by the U.S. Patent and Trademark Office. Ms. Heller holds a B.S. in Biology from Tulane University, an
M.A. in Biology from American University and a J.D. degree from Golden Gate University. We believe Ms. Heller is well qualified
to serve as a director due to her significant experience as an executive and director in the pharmaceutical and biotech industries and
her expertise in business development and strategic transactions and related legal affairs.
James
R. Neal has agreed to serve on our board of directors immediately upon the effective date of the registration statement
of which this prospectus forms a part. Since 2016, Mr. Neal has served as Chief Executive Officer and director of Xoma Corporation
(Nasdaq: XOMA), a biotech royalty aggregator, after having previously served as its Senior Vice President and Chief Operating Officer.
He joined Xoma in 2009 as its Vice President, Business Development. Prior to joining Xoma, Mr. Neal was Acting Chief Executive Officer
of Entelos, Inc. a leading bio-simulation company. Previously, in 2007, Entelos acquired Iconix Biosciences, a privately held company
where Mr. Neal served as Chief Executive Officer and established multi-year collaborations with Bristol-Myers Squibb, Abbott Labs,
Eli Lilly and the U.S. Food and Drug Administration. While Executive Vice President of Incyte Genomics from 1999 to 2002, he led the global
commercial activities with pharmaceutical company collaborators and partners including Pfizer, Aventis and Schering-Plough, as well as
sales, marketing and business development activities for the company. Previously, he was an executive with Monsanto Company in positions
of increasing responsibility. Mr. Neal also serves as Chairman of the board of directors of Palisade Bio, a clinical-stage biopharmaceutical
company. Mr. Neal earned his B.Sc. in Agriculture and his M.Sc. in Genetics and Plant Breeding, each from the University of Manitoba,
Canada, and holds an Executive M.B.A. degree from Washington University in St. Louis, Missouri. We believe Mr. Neal is well qualified
to serve as a director due to his significant executive leadership experience with biopharmaceutical companies, including more than 20
years of experience forming and maximizing business and technology collaborations globally and in bringing novel products and technologies
to market.
Executive Compensation
No
executive officer has received any cash compensation for services rendered to us. NorthStar
has granted to Dr. Satyal 150,000 founder shares as consideration for services to be
provided by Dr. Satyal related to our search for and completion of an initial business
combination. Such shares will vest in three equal annual instalments as follows: (i) 50,000
founder shares on the closing date of a business combination, (ii) 50,000 founder shares
on the first anniversary of the closing date of a business combination and (iii) 50,000
founder shares on the second anniversary of the closing date of a business combination, subject
to the additional terms and conditions of an assignment agreement between NorthStar and Dr. Satyal.
Commencing on the date of this prospectus through
the completion of our initial business combination with a target business, we will pay to an affiliate of one or more of the insiders
a fee of $10,000 per month for providing us with office space and certain office and secretarial services. However, pursuant to the terms
of such agreement, we may delay payment of such monthly fee upon a determination by our audit committee that we lack sufficient funds
held outside the trust to pay actual or anticipated expenses in connection with our initial business combination. Any such unpaid amount
will accrue without interest and be due and payable no later than the date of the consummation of our initial business combination. No
compensation or fees of any kind, including finder’s fees, consulting fees and other similar fees, will be paid to our insiders
or any of the members of our management team, for services rendered prior to or in connection with the consummation of our initial business
combination (regardless of the type of transaction that it is). However, such individuals will receive reimbursement for any out-of-pocket
expenses incurred by them in connection with activities on our behalf, such as identifying potential target businesses, performing business
due diligence on suitable target businesses and business combinations as well as traveling to and from the offices, plants or similar
locations of prospective target businesses to examine their operations. There is no limit on the amount of out-of-pocket expenses reimbursable
by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest
income earned on the amounts held in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business
combination.
After our initial business combination, members
of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all
amounts being fully disclosed to stockholders, to the extent then known, in the proxy solicitation materials furnished to our stockholders.
It is unlikely the amount of such compensation will be known at the time of a stockholder meeting held to consider our initial business
combination, as it will be up to the directors of the post-combination business to determine executive and director compensation. In this
event, such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, as required
by the SEC.
Director Independence
Nasdaq listing standards require that a majority
of our board of directors be independent. An “independent director” is defined generally as a person other than an officer
or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s
board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of
a director. Our board of directors has determined that Messrs. Neal and Patel and Ms. Heller are “independent directors”
as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings
at which only independent directors are present.
We will only enter into a business combination
if it is approved by a majority of our independent directors. Additionally, we will only enter into transactions with our officers and
directors and their respective affiliates that are on terms no less favorable to us than could be obtained from independent parties. Any
related party transactions must be approved by our audit committee and a majority of disinterested directors.
Audit Committee
Upon the effectiveness of the registration
statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Nasdaq rules require
that the audit committee of a listed company be comprised solely of at least three independent directors. The members of our audit committee
will be Messrs. Neal and Patel and Ms. Heller and Mr. Neal will serve as chair of the audit committee. Messrs. Neal
and Patel and Ms. Heller meet the independent director standard under Nasdaq’s listing standards. Notwithstanding that Mr.
Patel is an independent director under Nasdaq’s listing standards, Mr. Patel beneficially owns more than 10% of our common stock
and as a result, does not fall under the Safe Harbor Provision of SEC Rule 10A-3.
Each member of the audit committee is financially
literate and our board of directors has determined that Mr. Patel qualifies as an “audit committee financial expert” as defined
in applicable SEC rules.
The audit committee’s duties, which are
specified in our Audit Committee Charter, include, but are not limited to:
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the
appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and
any other independent registered public accounting firm engaged by us;
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•
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pre-approving all audit and permitted non-audit services
to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and
establishing pre-approval policies and procedures;
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•
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reviewing and discussing with the independent registered public
accounting firm all relationships the independent registered public accounting firm have with us in order to evaluate their continued
independence;
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setting clear hiring policies for employees or former employees
of the independent registered public accounting firm;
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setting clear policies for audit partner rotation in compliance
with applicable laws and regulations;
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obtaining a report, at least annually, from the independent
registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures
and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm,
or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more
independent audits carried out by the firm and any steps taken to deal with such issues;
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reviewing and approving any related party transaction required
to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;
and
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reviewing with management, the independent registered public
accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with
regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial
statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting
Standards Board, the SEC or other regulatory authorities.
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Compensation Committee
Upon the effectiveness of the registration statement
of which this prospectus forms a part, we will establish a compensation committee of the board of directors as required by Nasdaq rules.
Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors. The members
of our compensation committee will be Messrs. Neal and Patel and Ms. Heller and Mr. Patel will serve as chairman of the
compensation committee. Messrs. Neal and Patel and Ms. Heller meet the independent director standard under Nasdaq’s listing
standards. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, as
required by Nasdaq rules, including:
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reviewing and approving on an annual basis the corporate goals
and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance
in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s
based on such evaluation;
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reviewing and approving the compensation of all of our other
executive officers;
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reviewing our executive compensation policies and plans;
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implementing and administering our incentive compensation equity-based remuneration
plans;
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assisting management in complying with our proxy statement and
annual report disclosure requirements;
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approving all special perquisites, special cash payments and
other special compensation and benefit arrangements for our executive officers and employees;
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producing a report on executive compensation to be included
in our annual proxy statement; and
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reviewing, evaluating and recommending changes, if appropriate,
to the remuneration for directors.
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The charter will also provide that the compensation
committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser, and will
be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving
advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence
of each such adviser, including the factors required by Nasdaq and the SEC.
Compensation Committee Interlocks and Insider Participation
None of our directors who currently serve as members
of our compensation committee is, or has at any time in the past been, one of our officers or employees. None of our executive officers
currently serves, or in the past year has served, as a member of the compensation committee of any other entity that has one or more executive
officers serving on our board of directors. None of our executive officers currently serves, or in the past year has served, as a member
of the board of directors of any other entity that has one or more executive officers serving on our compensation committee.
Director Nominations
We do not have
a standing nominating committee. In accordance with Nasdaq Rule 5605(e)(2), a majority of the independent directors may recommend
a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily
carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
The directors who shall participate in the consideration and recommendation of director nominees are Messrs. Neal and Patel
and Ms. Heller. In accordance with Rule 5605(e)(1)(A) of the Nasdaq rules, all such directors are independent. As there
is no standing nominating committee, we do not have a nominating committee charter in place. The board of directors will also consider
director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for
election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish
to nominate a director for election to the board of directors should follow the procedures set forth in our certificate of incorporation.
We have not formally established any specific,
minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating
nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our
business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.
Code of Ethics
Effective upon consummation of this offering,
we will adopt a code of ethics that applies to all of our executive officers, directors and employees. The code of ethics codifies the
business and ethical principles that govern all aspects of our business.
Conflicts of Interest
Investors should be aware of the following potential
conflicts of interest:
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None of our officers and directors is required to commit their
full time to our affairs, and, accordingly, they may have conflicts of interest in allocating their time among various business activities.
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In the course of their other business activities, our officers
and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well
as the other entities with which they are affiliated. Our officers and directors may have conflicts of interest in determining to which
entity a particular business opportunity should be presented.
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Certain of our directors and director nominees currently are,
and our officers and directors may in the future become, affiliated with entities, including other blank check companies, engaged in
business activities similar to those intended to be conducted by our company.
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Unless we consummate our initial business combination, our officers,
directors and other insiders will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses
exceed the amount of available proceeds not deposited in the trust account.
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NorthStar has transferred an aggregate of 325,000 founder shares
to our officers, directors and director nominees. Such securities will be worthless if we do not complete an initial business combination.
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We may engage Chardan, or another affiliate of Chardan Monterey, as a financial advisor in connection with our initial business combination
and pay such affiliate a customary financial advisory fee in an amount that constitutes a market standard financial advisory fee for comparable
transactions.
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Furthermore, we may acquire a target company that has engaged Chardan, or another affiliate of Chardan Monterey, as a financial advisor,
and such target company may pay such affiliate a financial advisory fee in connection with our initial business combination.
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Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our
initial business combination.
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•
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NorthStar or our officers or directors may have a conflict of interest with respect to evaluating a business combination and financing
arrangements as we may obtain loans from NorthStar or an affiliate of NorthStar or any of our officers or directors to finance transaction
costs in connection with an intended initial business combination.
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The insider shares beneficially owned by our co-sponsors, officers
and directors will be released from escrow only if our initial business combination is successfully completed. Additionally, if we are
unable to complete an initial business combination within the required time frame, our co-sponsors, officers and directors will not be
entitled to receive any amounts held in the trust account with respect to any of their insider shares or private warrants, as applicable.
Furthermore, the co-sponsors have agreed that the private warrants will not be sold or transferred by them until after we have completed
our initial business combination. For the foregoing reasons, our board may have a conflict of interest in determining whether a particular
target business is an appropriate business with which to effect our initial business combination.
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Our co-sponsors, officers and directors have agreed to waive their redemption rights with respect to any founder shares and any public
shares held by them in connection with the consummation of our initial business combination. Additionally, our co-sponsors, officers and
directors have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held
by them if we fail to consummate our initial business combination within the completion window. However, if our co-sponsors, any of our
officers, directors or affiliates acquire public shares in or after this offering, they will be entitled to liquidating distributions
from the trust account with respect to such public shares if we fail to consummate our initial business combination within the completion
window. 50% of these founder shares will not be transferred, assigned, sold or released from escrow until the earlier of (i) six
months after the date of the consummation of our initial business combination or (ii) the date on which the closing price of our
shares of common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations)
for any 20 trading days within any 30-trading day period commencing after our initial business combination. And the remaining 50% of the
founder shares will not be transferred, assigned, sold or released from escrow until six months after the date of the consummation of
our initial business combination or earlier, in either case, if, subsequent to our initial business combination, we consummate a subsequent
liquidation, merger, stock exchange 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. Since our co-sponsors, officers and directors may directly or indirectly
own common stock and warrants following this offering, our officers and directors may have a conflict of interest in determining whether
a particular target business is an appropriate business with which to effectuate our initial business combination.
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In general, officers and directors of a corporation
incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
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the corporation could financially undertake the opportunity;
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the opportunity is within the corporation’s line of business;
and
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it would not be fair to the corporation and its stockholders
for the opportunity not to be brought to the attention of the corporation.
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Accordingly, as a result of multiple business
affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the
above-listed criteria to multiple entities. Furthermore, our certificate of incorporation provides that the doctrine of corporate opportunity
will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict
with any fiduciary duties or contractual obligations they may have. In order to minimize potential conflicts of interest which may arise
from multiple affiliations, our officers and directors (other than our independent directors) have agreed to present to us for our consideration,
prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of: (1) our
consummation of an initial business combination and (2) 12 months (or up to 21 months, as applicable) from the date of this prospectus.
This agreement is, however, subject to any pre-existing fiduciary and contractual obligations such officer or director may from time
to time have to another entity. Accordingly, if any of them becomes aware of a business combination opportunity which is suitable for
an entity to which he or she has pre-existing fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual
obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity.
We do not believe, however, that the pre-existing fiduciary duties or contractual obligations of our officers and directors will materially
undermine our ability to complete our business combination because in most cases the affiliated companies are closely held entities controlled
by the officer or director or the nature of the affiliated company’s business is such that it is unlikely that a conflict will
arise.
The following table summarizes the current material
pre-existing fiduciary or contractual obligations of our officers, directors and director nominees:
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Name
of Individual
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Name
of Affiliated Company
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Entity’s
Business
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Affiliation
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Jonas Grossman
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Chardan Capital Markets
LLC
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Broker/dealer
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Partner and Head of
Capital Markets, President
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Chardan Nextech Acquisition
Corp.
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Special Purpose Acquisition
Company
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Chief Executive Officer
and Director
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Chardan Nextech Acquisition
2 Corp.
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Special Purpose Acquisition
Company
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Chief Executive Officer
and Director
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Chardan Healthcare Acquisition
2 Corp.
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Special Purpose Acquisition
Company
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Chief Executive Officer
and President
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Ventoux CCM Acquisition
Corp.
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Special Purpose Acquisition
Company
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Director
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CleanTech Acquisition Corp
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Special Purpose Acquisition Company
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Director
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BiomX
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Clinical-stage Developer
of Natural and Engineered Phage Therapies
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Director
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Cornix Advisors, LLC
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Hedge Fund
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Founding Partner
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Sandip I. Patel
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Atlas Bank
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Financial Services
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Co-founding Shareholder
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Sandip I.
Patel, P.A.
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Law Firm
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Attorney;
Corporate Business Consultant
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Channel Investments,
LLC
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Medical Device Company
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Chief Legal Counsel
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Tria Beauty (UK, Korea
and Japan)
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Beauty
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Director
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Chinola, LLC
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Beverage Manufacturing
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Director
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Quantum FinTech Acquisition
Corporation
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Special Purpose Acquisition
Company
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Director
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Frances K. Heller
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Good2Go
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IoT Technology
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Chair of the Board
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Affinivax
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Vaccine Company
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Director
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Lava Maex
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Water/Mobile Hygiene
Organization
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Co-Chair of the Board
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James R. Neal
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Xoma Corporation
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Biotech Royalty Aggregator
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Chief Executive Officer
and Director
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Palisade Bio, Inc.
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Clinical-stage Biopharmaceutical
Company
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Chairman of the Board
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As noted above, Mr. Grossman is affiliated
with Chardan, which is also the underwriter in this offering and in turn, affiliated with our co-sponsor, Chardan Monterey. Mr. Grossman
owes a pre-existing fiduciary duty to Chardan, meaning that he will present opportunities to Chardan prior to presenting them to us, if,
for example, a potential target company is open to either raising funds in an offering or engaging in a transaction with a SPAC. This
may limit the number of potential targets Mr. Grossman presents to us for purposes of completing a business combination.
Our insiders, including our officers and directors,
have agreed to vote any shares of common stock held by them in favor of our initial business combination. In addition, they have agreed
to waive their respective rights to receive any amounts held in the trust account with respect to their insider shares if we are unable
to complete our initial business combination within the required time frame. If they purchase shares of common stock in this offering
or in the open market, however, they would be entitled to receive their pro rata share of the amounts held in the trust account if we
are unable to complete our initial business combination within the required time frame, but have agreed not to redeem such shares in
connection with the consummation of our initial business combination.
All ongoing and future transactions between us
and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than
are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority of
our disinterested independent directors, or the members of our board who do not have an interest in the transaction, in either case who
had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit
committee and a majority of our disinterested independent directors determine that the terms of such transaction are no less favorable
to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.
To further minimize conflicts of interest, we
have agreed not to consummate our initial business combination with an entity that is affiliated with any of our officers, directors or
other insiders, unless we have obtained (i) an opinion from an independent investment banking firm that the business combination
is fair to our public stockholders from a financial point of view and (ii) the approval of a majority of our disinterested and independent
directors. In no event will our insiders or any of the members of our management team be paid any finder’s fee, consulting fee or
other similar compensation prior to, or for any services they render in order to effectuate, the consummation of our initial business
combination (regardless of the type of transaction that it is).
Limitation on Liability and Indemnification of Directors and Officers
Our certificate of incorporation provides that
our directors and officers will be indemnified by us to the fullest extent authorized by Delaware law as it now exists or may in the future
be amended. In addition, our certificate of incorporation provides that our directors will not be personally liable for monetary damages
resulting from breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted
in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful
redemptions, or derived an improper personal benefit from their actions as directors. Notwithstanding the foregoing, as set forth in our
certificate of incorporation, such indemnification will not extend to any claims our insiders may make to us to cover any loss that they
may sustain as a result of their agreement to pay debts and obligations to target businesses or vendors or other entities that are owed
money by us for services rendered or contracted for or products sold to us as described elsewhere in this prospectus.
Our bylaws also will permit us to secure insurance
on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law
would permit indemnification. We will purchase a policy of directors’ and officers’ liability insurance that insures our directors
and officers against the cost of defense, settlement or payment of a judgment in accordance with the terms of such policy and insures
us against our obligations to indemnify the directors and officers.
These provisions may discourage stockholders from
bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the
likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit
us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement
and damage awards against directors and officers pursuant to these provisions. We believe that these provisions, the insurance and the
indemnity agreements are necessary to attract and retain talented and experienced directors and officers.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
PRINCIPAL
STOCKHOLDERS
The following table sets forth information regarding
the beneficial ownership of our shares of common stock as of the date of this prospectus and as adjusted to reflect the sale of our shares
of common stock included in the units offered by this prospectus (assuming none of the individuals listed purchase units in this offering),
by:
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each person known by us to be the beneficial owner of more than
5% of our issued and outstanding shares of common stock;
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•
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each of our executive officers, directors and director nominees;
and
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•
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all of our executive officers, directors and director nominees
as a group.
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Unless otherwise indicated, we believe that all
persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
The following table does not reflect record of beneficial ownership of any shares of common stock issuable upon exercise of the warrants,
as the warrants are not exercisable within 60 days of the date of this prospectus.
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Prior
to Offering
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After
Offering(2)
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Name and
Address of Beneficial Owner(1)
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Amount
and Nature of
Beneficial
Ownership
|
|
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Approximate
Percentage of
Outstanding
Shares of
Common Stock
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|
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Amount
and Nature of
Beneficial
Ownership
|
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|
Approximate
Percentage of
Outstanding
Shares of
Common Stock
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|
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NorthStar Bio Ventures, LLC(3)
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1,912,500
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66.5
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%
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1,631,250
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13.1
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%
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Chardan Monterey Investments LLC(4)
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637,500
|
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|
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22.2
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%
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|
|
543,750
|
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|
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4.4
|
%
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|
Sanjeev Satyal
|
|
|
150,000
|
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|
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5.2
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%
|
|
|
150,000
|
|
|
|
1.2
|
%
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|
Jonas Grossman(4)(5)
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|
|
672,500
|
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23.4
|
%
|
|
|
578,750
|
|
|
|
4.6
|
%
|
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Sandip I. Patel(3)(5)
|
|
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1,947,500
|
|
|
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67.7
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%
|
|
|
1,666,250
|
|
|
|
13.3
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%
|
|
William McKeever
|
|
|
35,000
|
|
|
|
1.2
|
%
|
|
|
35,000
|
|
|
|
*
|
|
|
Frances K. Heller
|
|
|
35,000
|
|
|
|
1.2
|
%
|
|
|
35,000
|
|
|
|
*
|
|
|
James R. Neal
|
|
|
35,000
|
|
|
|
1.2
|
%
|
|
|
35,000
|
|
|
|
*
|
|
|
All
executive officers, directors and director nominees as a group (6 individuals)
|
|
|
2,875,000
|
|
|
|
100.0
|
%
|
|
|
2,500,000
|
|
|
|
20.0
|
%
|
|
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(1)
|
The business address of each person is c/o Monterey Bio Acquisition
Corporation, 17 State Street, 21st Floor, New York, NY 10004, unless otherwise stated.
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|
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(2)
|
Assumes no exercise of
the over-allotment option and, therefore, the forfeiture of an aggregate of 375,000 shares
of common stock held by our initial stockholders.
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|
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(3)
|
The 1,912,500 shares
reported above are held in the name of NorthStar. Mr. Patel is the manager of NorthStar.
Accordingly, Mr. Patel has voting and dispositive power over the founder shares held
by NorthStar and may be deemed to beneficially own such founder shares.
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|
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(4)
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The
637,500 shares reported above are held in the name of Chardan Monterey. Chardan Monterey
is an affiliate of Chardan, the representative of the underwriters in this offering. Mr. Grossman
is the managing member of Chardan Monterey. Accordingly, Mr. Grossman has voting and
dispositive power over the founder shares held by Chardan Monterey and may be deemed to beneficially
own such founder shares.
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(5)
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Includes 35,000 founder shares that were transferred to each of Mr. Grossman and Mr. Patel by NorthStar.
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Immediately after this offering, our initial stockholders
will beneficially own 20% of the then issued and outstanding shares of common stock (assuming none of them purchase any units offered
by this prospectus). None of our initial stockholders has indicated to us that he or it intends to purchase securities in this offering.
Because of the ownership block held by our initial stockholders, they may be able to effectively exercise control over all matters requiring
approval by our stockholders, including the election of directors and approval of significant corporate transactions other than approval
of our initial business combination.
If the underwriters do not exercise all or
a portion of the over-allotment option, our initial stockholders will have up to an aggregate 375,000 shares of common stock subject
to forfeiture. Only a number of shares necessary to maintain our initial stockholders’ collective 20% ownership interest in our
shares of common stock after giving effect to the offering and the exercise, if any, of the underwriters’ over-allotment option
will be forfeited.
All of the insider shares issued and outstanding
prior to the date of this prospectus will be placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent,
until (1) with respect to 50% of the insider shares, the earlier of six months after the date of the consummation of our initial
business combination and the date on which the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for
share splits, share capitalizations, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period
commencing after our initial business combination, and (2) with respect to the remaining 50% of the insider shares, six months after
the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business
combination, we consummate a liquidation, merger, share exchange or other similar transaction which results in all of our stockholders
having the right to exchange their shares for cash, securities or other property. Up to 375,000 of the insider shares may also be released
from escrow earlier than this date for forfeiture and cancellation if the over-allotment option is not exercised in full as described
above.
During the escrow period, the holders of these
shares will not be able to sell or transfer their securities except (1) to any persons (including their affiliates and stockholders)
participating in the private placement of the private warrants, officers, directors, stockholders, employees and members of the co-sponsors
and their affiliates, (2) amongst initial stockholders or to our officers, directors and employees, (3) if a holder is an entity,
as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the holder’s
immediate family or to a trust, the beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning
purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations
order, (7) by certain pledges to secure obligations incurred in connection with purchases of our securities, (8) by private
sales at prices no greater than the price at which the shares were originally purchased or (9) for the cancellation of up to 375,000
shares of common stock subject to forfeiture to the extent that the underwriters’ over-allotment is not exercised in full or in
part or in connection with the consummation of our initial business combination, in each case (except for clause 9 or with our prior
consent) where the transferee agrees to the terms of the escrow agreement and the insider letter, but will retain all other rights as
our stockholders, including, without limitation, the right to vote their shares of common stock and the right to receive cash dividends,
if declared. If dividends are declared and payable in shares of common stock, such dividends will also be placed in escrow. If we are
unable to effect a business combination and liquidate the trust account, none of our initial stockholders will receive any portion of
the liquidation proceeds with respect to their insider shares.
The private warrants and any shares of common
stock issued upon exercise thereof are subject to transfer restrictions pursuant to lock-up provisions in a letter agreement with us
to be entered into by the co-sponsors, officers, directors and Chardan. Those lock-up provisions provide that such securities are not
transferable or salable until 30 days after the completion of our initial business combination, except (a) to our officers
or directors, any affiliates or family members of any of our officers or directors, any members of the co-sponsors or Chardan, or any
affiliates of the co-sponsors or Chardan; (b) in the case of an individual, by gift to a member of the individual’s immediate
family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or
to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the
individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers
made in connection with the consummation of an initial business combination at prices no greater than the price at which the shares or
warrants were originally purchased; (f) in the event of our liquidation prior to the completion of our initial business combination;
or (g) by virtue of the laws of Delaware or the applicable limited liability company agreement upon dissolution of our co-sponsors
or Chardan, provided, however, that in the case of clauses (a) through (e) or (g), these permitted transferees must enter into
a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements
and by the same agreements entered into by the co-sponsors, officers, directors and Chardan, as the case may be, with respect to such
securities (including provisions relating to voting, the trust account and liquidation distributions described elsewhere in this prospectus).
NorthStar has committed to purchase from us
3,750,000 private warrants (or 4,087,500 private warrants if the over-allotment option is exercised in full) and Chardan Monterey has
committed to purchase from us 1,250,000 private warrants (or 1,362,500 private warrants if the over-allotment option is exercised in
full), in each case, at a price of $1.00 per warrant, for an aggregate purchase price of $5,000,000 (or $5,450,000 if the over-allotment
option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. We refer to these
warrants, collectively, as the “private warrants” throughout this prospectus. Each private warrant is exercisable for one
(1) share of common stock at an exercise price of $11.50 per share. Of the $5,000,000 (or $5,450,000 if the over-allotment option
is exercised in full) we will receive from the sale of the private warrants, $2,500,000 (or $2,800,000 if the over-allotment option is
exercised in full) will be used for offering expenses and $1,500,000 will be used for working capital. If we do not complete our initial
business combination within 12 months (or up to 21 months, as applicable) from the closing of this offering, the proceeds from the sale
of the private warrants will be included in the liquidating distribution to the holders of our public shares. The private warrants are
identical to the warrants sold as part of the units in this offering except that each private warrant is exercisable for one share of
common stock at an exercise price of $11.50 per share.
In order to meet our working capital needs
following the consummation of this offering, our initial stockholders, officers and directors or their affiliates may, but are not obligated
to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would
be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest,
or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon consummation of our business combination into
additional private warrants to purchase shares of common stock at a conversion price of $1.00 per private warrant. Such private warrants
will be identical to the private warrants to be issued at the closing of this offering, except that each private warrant is exercisable
for one share of common stock at an exercise price of $11.50 per share. Our stockholders have approved the issuance of the private warrants
and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation
of our initial business combination. If we do not complete a business combination, the loans will not be repaid.
Each of our officers, directors and the co-sponsors
is a “promoter,” as that term is defined under the federal securities laws.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On
September 18, 2020, Chardan Monterey purchased 5,000,000 shares of common stock from
us for $25,000, or $0.005 per share. On May 20, 2021, Chardan Monterey transferred 687,500
founder shares back to us for no consideration, which shares were cancelled. On May 21, 2021,
Chardan Monterey transferred 3,315,625 founder shares to NorthStar at a price of $0.006 per
share. On May 21, 2021, NorthStar transferred 150,000 founder shares to Dr. Satyal,
our chief executive officer, and transferred 35,000 founder shares to each of our directors
and director nominees at a price of $0.006 per share. On September 1, 2021, NorthStar transferred
1,078,125 founder shares back to us and Chardan Monterey transferred 359,375 founder shares
back to us, in each case for no consideration, which shares were cancelled. As a result,
NorthStar holds a balance of 1,912,500 founder shares and Chardan Monterey holds a balance
of 637,500 founder shares. We refer to these shares held by our co-sponsors, officers and
directors as “founder shares” or “insider shares.”
If the underwriters do not exercise all or
a portion of their over-allotment option, our initial stockholders have agreed that up to an aggregate of 375,000 founder shares, in
proportion to the portion of the over-allotment option that was not exercised, are subject to forfeiture and would be immediately cancelled.
If the underwriters determine the size of the
offering should be increased (including pursuant to Rule 462(b) under the Securities Act) or decreased, a share capitalization
or a contribution back to capital, as applicable, would be effectuated in order to maintain our initial stockholder’s ownership
at 20% of the number of shares issued and outstanding after the closing of this offering.
NorthStar has committed to purchase from us
3,750,000 private warrants (or 4,087,500 private warrants if the over-allotment option is exercised in full) and Chardan Monterey has
committed to purchase from us 1,250,000 private warrants (or 1,362,500 private warrants if the over-allotment option is exercised in
full), in each case, at a price of $1.00 per warrant, for an aggregate purchase price of $5,000,000 (or $5,450,000 if the over-allotment
option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. Each private warrant
is exercisable for one (1) share of common stock at an exercise price of $11.50 per share. Of the $5,000,000 (or $5,450,000 if the
over-allotment option is exercised in full) we will receive from the sale of the private warrants, $2,500,000 (or $2,800,000 if the over-allotment
option is exercised in full) will be used for offering expenses and $1,500,000 will be used for working capital. If we do not complete
our initial business combination within 12 months from the closing of this offering (or up to 21 months from the closing of this offering
if we extend the period of time to consummate a business combination by the maximum amount as described in more detail in this prospectus),
the proceeds from the sale of the private warrants will be included in the liquidating distribution to the holders of our public shares.
The private warrants are identical to the warrants sold as part of the units in this offering except that each private warrant is exercisable
for one share of common stock at an exercise price of $11.50 per share.
In order to meet our working capital needs
following the consummation of this offering, our initial stockholders, officers and directors and their respective affiliates may, but
are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion.
Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination,
without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon consummation of our business
combination into additional private warrants to purchase shares of common stock at a conversion price of $1.00 per private warrant. Such
private warrants will be identical to the private warrants to be issued at the closing of this offering, except that each private warrant
is exercisable for one share of common stock at an exercise price of $11.50 per share. Our stockholders have approved the issuance of
the private warrants and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the
time of the consummation of our initial business combination. If we do not complete a business combination, the loans would not be repaid.
The holders of our insider shares issued and outstanding
on the date of this prospectus, as well as the holders of the private warrants (and all underlying securities), will be entitled to registration
and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of this offering. The holders of a majority
of these securities are entitled to make up to two demands that we register such securities. The holders of the majority of the insider
shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of
common stock are to be released from escrow. In addition, the holders have certain “piggy-back” registration rights with respect
to registration statements filed subsequent to our consummation of a business combination. Notwithstanding the foregoing, Chardan Monterey
may not exercise its demand and “piggyback” registration rights after five and seven years, respectively, after the effective
date of the registration statement of which this prospectus forms a part and may not exercise its demand rights on more than one occasion.
We will bear the expenses incurred in connection with the filing of any such registration statements.
We will have 12 months from the closing of
this offering to consummate an initial business combination. However, if we anticipate that we may not be able to consummate our initial
business combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate
a business combination up to three times by an additional three months each time (for a total of up to 21 months to complete a business
combination); provided that, pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to
be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend
the time available for us to consummate our initial business combination is for our insiders or their affiliates or designees, upon five
days’ advance notice prior to each applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if the over-allotment
option is exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or $3,450,000 if the over-allotment option
is exercised in full, if the time to consummate a business combination is extended to a full 21 months), on or prior to the date of the
applicable deadline. In the event that our insiders elected to extend the time to complete a business combination and deposited the applicable
amount of money into trust, the insiders would receive a non-interest bearing, unsecured promissory note equal to the amount of any such
deposit that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside
the trust account to do so. In the event that we receive notice from our insiders five days prior to the applicable deadline of their
intent to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable
deadline. In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had
been timely deposited. Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time
for us to complete our initial business combination. To the extent that some, but not all, of our insiders, decide to extend the period
of time to consummate our initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount
required. If we are unable to consummate our initial business combination within such time period, we will, as promptly as possible but
not more than 10 business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the
trust account, including a pro rata portion of any interest earned on the funds held in the trust account and not previously released
to us to pay our taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of
claims of creditors which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation,
the private warrants will expire and will be worthless.
On April 28, 2021, we issued an unsecured
promissory note to NorthStar, pursuant to which we may borrow up to an aggregate principal amount of $300,000. The promissory note is
non-interest bearing and will be payable at the closing of a business combination.
We may, at our option, pursue a business combination
opportunity jointly with Chardan or one or more entities affiliated with Chardan, which we refer to as an “Affiliated Joint Acquisition.”
We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any such parties would co-invest only if (i) permitted
by applicable regulatory and other legal limitations; (ii) we and Chardan considered a transaction to be mutually beneficial to us as
well as the affiliated entity; and (iii) other business reasons exist to do so, such as the strategic merits of including such co-investors,
the need for additional capital beyond the amount held in our trust account to fund the initial business combination and/or the desire
to obtain committed capital for closing the initial business combination. An Affiliated Joint Acquisition may be effected through a co-investment
with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete the
initial business combination by issuing to such parties a class of equity or equity-linked securities.
We will reimburse our officers and directors for
any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on our behalf such as identifying
and investigating possible target businesses and business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable
by us; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the trust account and the interest
income earned on the amounts held in the trust account, such expenses would not be reimbursed by us unless we consummate an initial business
combination. Our audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of
our management team, or our or their respective affiliates, and any reimbursements and payments made to members of our audit committee
will be reviewed and approved by our board of directors, with any interested director abstaining from such review and approval.
Commencing on the date of this prospectus through
the completion of our initial business combination with a target business, we will pay to an affiliate of one or more of the insiders
a fee of $10,000 per month for providing us with office space and certain office and secretarial services. However, pursuant to the terms
of such agreement, we may delay payment of such monthly fee upon a determination by our audit committee that we lack sufficient funds
held outside the trust to pay actual or anticipated expenses in connection with our initial business combination. Any such unpaid amount
will accrue without interest and be due and payable no later than the date of the consummation of our initial business combination.
No compensation or fees of any kind, including
finder’s fees, consulting fees or other similar compensation, will be paid to any of our initial stockholders, officers or directors
who owned our shares of common stock prior to this offering, or to any of their respective affiliates, prior to or with respect to the
business combination (regardless of the type of transaction that it is).
We will enter into indemnity agreements with
each of our officers and directors. These agreements will require us to indemnify these individuals to the fullest extent permitted under
Delaware law and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified to the
fullest extent permitted by applicable law and our certificate of incorporation.
All ongoing and future transactions between us
and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable to us than
are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval
by a majority of our disinterested independent directors or the members of our board who do not have an interest in the transaction, in
either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction
unless our disinterested independent directors (or, if there are no independent directors, our disinterested directors) determine that
the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction
from unaffiliated third parties.
We will also pay to Chardan, our underwriter
of this offering and an affiliate of Chardan Monterey, an underwriting discount of $0.20 per unit purchased by it in this offering. We
have also engaged Chardan as an advisor in connection with our business combination, pursuant to the Business Combination Marketing Agreement
described under “Underwriting (Conflicts of Interest) — Business Combination Marketing Agreement.” We will pay Chardan
the Marketing Fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate,
3.5% of the gross proceeds of this offering, including any proceeds from the full or partial exercise of the underwriters’ over-allotment
option. As a result, Chardan will not be entitled to such fee unless we consummate our initial business combination. For a period of
fifteen (15) months from the closing of an initial business combination we will give Chardan a right of first refusal to act as a bookrunner
for any and all future offerings of securities, including without limitation public and private equity and debt offerings, during such
period by the Company or any successor to or any subsidiary of the Company with economics that are equal to or greater than the median
economics of the “third bookrunner” in all applicable biotech offerings over the 12 month period immediately preceding the
date of commencement of such offering. For purposes of this right of first refusal, the “third bookrunner” shall refer to
the underwriter or placement agent, as applicable, with the third largest allocation of securities (or second largest allocation if two
other underwriters or placement agents receive the same larger allocation, or largest allocation if three or more underwriters or placement
agents receive the same largest allocation). Biotech offerings with less than three underwriters or placement agents, as applicable (including
offerings made directly by the issuer), shall not be included in calculating the median economics applicable to this right of first refusal.
For purposes of this right of first refusal, “biotech offerings” shall refer to any offerings made by any company included
in any of the following indices at the time of the commencement of the offering: (i) the Nasdaq Biotechnology Index, and (ii) the NYSE
Arca Biotechnology Index, and (iii) any successor index to any of the foregoing indices. For purposes of clarification, the economics
set forth above shall represent the minimum economics that shall apply to Chardan and the right of first refusal shall pertain to all
offerings of securities by us during the applicable time period regardless of the number of underwriters or placement agents involved.
Chardan’s failure to exercise its right of first refusal with respect to any particular proposal will not affect its right of first
refusal relative to future proposals. In accordance with FINRA Rule 5110(g)(6)(A), such right of first refusal will not have a duration
of more than three years from the effective date of the registration statement.
Related Party Policy
Our Code of Ethics, which we will adopt upon consummation
of this offering, will require us to avoid, wherever possible, all related party transactions that could result in actual or potential
conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related party transactions
are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar
year (or, in the case of a smaller reporting company, the amount involved exceeds the lesser of $120,000 or one percent of the average
of the smaller reporting company’s total assets at year end for the last two completed fiscal years), (2) we or any of our
subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater
than 5% beneficial owner of our common stock, or (c) immediate family member, of the persons referred to in clauses (a) and
(b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial
owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult
to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family,
receives personal benefits as a result of his or her position.
Our audit committee, pursuant to its written charter,
will be responsible for reviewing and approving related party transactions to the extent we enter into such transactions. All ongoing
and future transactions between us and any of our officers and directors or their respective affiliates will be on terms believed by us
to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by our
audit committee and a majority of our disinterested independent directors, or the members of our board who do not have an interest in
the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into
any such transaction unless our audit committee and a majority of our disinterested independent directors determine that the terms of
such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated
third parties. Additionally, we require each of our directors and executive officers to complete a directors’ and officers’
questionnaire that elicits information about related party transactions.
These procedures are intended to determine whether
any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director,
employee or officer.
To further minimize potential conflicts of interest,
we have agreed not to consummate a business combination with an entity which is affiliated with any of our initial stockholders unless
we obtain an opinion from an independent investment banking firm that the business combination is fair to our public stockholders from
a financial point of view. Furthermore, in no event will any of our existing officers, directors or initial stockholders, or any entity
with which they are affiliated, be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they
render in order to effectuate, the consummation of a business combination.
DESCRIPTION
OF SECURITIES
General
Pursuant to our certificate of incorporation,
our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.0001, and 1,000,000 shares of preferred stock,
par value $0.0001. As of the date of this prospectus, 2,875,000 shares of common stock are issued and outstanding, held by the co-sponsors
and our directors. No preferred shares are issued or outstanding.
Units
Each unit consists of one share of common
stock and one warrant. Each warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50 per whole
share, subject to adjustment as described in this prospectus. Each warrant will become exercisable on the later of one year after the
closing of this offering or the consummation of an initial business combination, and will expire five years after the completion of an
initial business combination, or earlier upon redemption.
The shares of common stock and warrants comprising
the units will not be separately traded until 90 days after the effective date of this prospectus unless Chardan informs us of its decision
to allow earlier separate trading, but in no event will the shares of common stock and warrants be traded separately until we have filed
with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds of
this offering. We will file a Current Report on Form 8-K which includes this audited balance sheet upon the consummation of this
offering, which is anticipated to take place three business days after the date of this prospectus. The audited balance sheet will reflect
proceeds we received from the exercise of the over-allotment option if such option is exercised prior to the filing of the Current Report
on Form 8-K. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on
Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the
exercise of the underwriters’ over-allotment option.
Common Stock
Our holders of record of our common stock are
entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve our
initial business combination, our insiders, officers and directors, have agreed to vote their respective shares of common stock owned
by them immediately prior to this offering, including both the insider shares and any shares acquired in this offering or following this
offering in the open market, in favor of the proposed business combination.
We will consummate our initial business combination
only if public stockholders do not exercise redemption rights in an amount that would cause our net tangible assets to be less than $5,000,001
and a majority of the outstanding shares of common stock voted are voted in favor of the business combination.
Pursuant to our certificate of incorporation,
if we do not consummate our initial business combination within 12 months from the closing of this offering, we will (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem 100% of the outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve
and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law. However, if we anticipate that we may not be able to consummate our initial business
combination within 12 months, our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate
a business combination up to three times by an additional three months each time (for a total of up to 21 months to complete a business
combination); provided that, pursuant to the terms of our certificate of incorporation and the trust agreement to be entered into between
us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend the time available for us
to consummate our initial business combination is for our insiders or their affiliates or designees, upon five days’ advance notice
prior to each applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if the over-allotment option is exercised
in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or $3,450,000 if the over-allotment option is exercised in full,
if the time to consummate a business combination is extended to a full 21 months), on or prior to the date of the applicable deadline.
In the event that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money
into trust, the insiders would receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that
will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust
account to do so. In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to
effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.
In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely
deposited. Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete
our initial business combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to consummate
our initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount required. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. There will be no redemption rights or liquidating distributions with
respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the allotted time
period.Our insiders have agreed to waive their rights to share in any distribution with respect to their insider shares.
Our stockholders have no conversion, preemptive
or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except
that public stockholders have the right to sell their shares to us in any tender offer or have their shares of common stock redeemed
for cash equal to their pro rata share of the trust account if they vote on the proposed business combination and the business combination
is completed.
If we hold a stockholder vote to amend any
provisions of our certificate of incorporation relating to stockholder’s rights or pre-business combination activity (including
the substance or timing within which we have to complete a business combination), we will provide our public stockholders with the opportunity
to redeem their shares of common stock 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 taxes or for working capital purposes, divided by the number of then outstanding public shares, in connection with any
such vote. In either of such events, redeeming stockholders would be paid their pro rata portion of the trust account promptly following
consummation of the business combination or the approval of the amendment to the certificate of incorporation. If the business combination
is not consummated or the amendment is not approved, stockholders will not be paid such amounts.
Preferred Stock
There are no shares of preferred stock outstanding.
No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered, without
stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect
the voting power or other rights of the holders of common stock. However, the underwriting agreement prohibits us, prior to a business
combination, from issuing preferred stock which participates in any manner in the proceeds of the trust account, or which votes as a class
with the common stock on our initial business combination. We may issue some or all of the preferred stock to effect our initial business
combination. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control
of us. Although we do not currently intend to issue any shares of preferred stock, we reserve the right to do so in the future.
Warrants
No warrants are currently outstanding. Each
public warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per whole share, subject to
adjustment as described below, at any time commencing on the later of one year after the closing of this offering or the consummation
of an initial business combination. However, no warrants will be exercisable for cash unless we have an effective and current registration
statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares
of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise
of the warrants is not effective within 120 days from the closing of our initial business combination, warrant holders may, until such
time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration
statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. The warrants
will expire five years from the closing of our initial business combination at 5:00 p.m., New York City time.
The private warrants will be identical to
the public warrants underlying the units being offered by this prospectus, except that each private warrant is exercisable for one share
of common stock at an exercise price of $11.50 per share.
We may call the outstanding warrants for redemption,
in whole and not in part, at a price of $0.01 per warrant:
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at any time while the warrants are exercisable,
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upon not less than 30 days’ prior written notice of redemption
to each warrant holder,
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if, and only if, the reported last sale price of the shares
of common stock equals or exceeds $16.50 per share, for any 20 trading days within a 30-day trading period ending on the third business
day prior to the notice of redemption to warrant holders, and
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if, and only if, there is a current registration statement in
effect with respect to the shares of common stock underlying such warrants at the time of redemption and for the entire 30-day trading
period referred to above and continuing each day thereafter until the date of redemption.
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The right to exercise will be forfeited unless
the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder
of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such
warrant.
The redemption criteria for our warrants have
been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide
a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as
a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.
If we call the warrants for redemption as described
above, our management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”
In such event, each holder would pay the 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” by (y) the fair market value. The
“fair market value” shall mean the average reported last sale price of our common stock for the ten trading days ending on
the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether we will exercise
our option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety of factors including
the price of our common shares at the time the warrants are called for redemption, our cash needs at such time and concerns regarding
dilutive share issuances.
The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder (i) to
cure 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 this prospectus) or to cure, correct or supplement any including to conform the
any defective provision, (ii) to make any amendments that are necessary in the good faith determination of our board of directors
(taking into account then existing market precedents) to allow for the warrants to be classified as equity in our financial statements
or (iii) to add or change any other 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 interests of the registered
holders of the warrants, but requires the approval, by written consent or vote, of the holders of a majority of the then outstanding warrants
in order to make any change that adversely affects the interests of the registered holders;
provided that, solely with respect to any amendment to the terms of the private warrants or any provision of the warrant agreement with
respect to the private warrants that does not adversely affect any of the terms of the public warrants, such amendment will require only
the written consent or vote of the registered holders of at least a majority of the then outstanding private warrants.
The exercise price and number of shares of common
stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary
dividend or our recapitalization, reorganization, merger or consolidation. In addition, if (x) we issue additional shares of common
stock 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 share of common stock (with such issue price or effective issue price to be determined in good
faith by our board of directors and, in the case of any such issuance to our initial stockholders or their affiliates, without taking
into account any founder shares or private warrants held by them, as applicable, prior to such issuance), (y) the aggregate gross
proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of
our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (z) the
Market Value is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of
the higher of the Market Value and the newly issued price and the $16.50 per share redemption trigger price described below under will
be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the newly issued price.
The warrants may be exercised upon surrender of
the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse
side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or
official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges
of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After
the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of
record on all matters to be voted on by stockholders.
Except as described above, no warrants will
be exercisable for cash, and we will not be obligated to issue shares of common stock unless at the time a holder seeks to exercise such
warrant, a prospectus relating to the shares of common stock issuable upon exercise of the warrants is current and the shares of common
stock have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the
warrants. Under the terms of the warrant agreement, we have agreed to use our best efforts to meet these conditions and to maintain a
current prospectus relating to the shares of common stock issuable upon exercise of the warrants until the expiration of the warrants.
However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the shares of
common stock issuable upon exercise of the warrants, holders will be unable to exercise their warrants, and we will not be required to
settle any such warrant exercise. If the prospectus relating to the shares of common stock issuable upon the exercise of the warrants
is not current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the
warrants reside, we will not be required to net cash settle or cash settle the warrant exercise, the warrants may have no value, the
market for the warrants may be limited and the warrants may expire worthless.
A holder of a warrant may notify us in writing
in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent
that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual
knowledge, would beneficially own in excess of 4.99% or 9.99% (or such other amount as a holder may specify) of common stock outstanding.
No fractional shares will be issued upon exercise
of the warrants. 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 shares of common stock to be issued to the warrant holder.
Our warrant agreement will provide 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. We will waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum.
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. 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. 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, or a foreign action, in the name of any holder of our warrants, such holder shall be deemed to have consented to:
(x) the personal jurisdiction of the state and federal courts located in 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, or 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.
Dividends
We have not paid any cash dividends on our shares
of common stock to date, and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash
dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition
subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the
discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use
in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.
Our Transfer Agent and Warrant Agent
The
transfer agent for our shares of common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company,
1 State Street, 30th Floor, New York, New York 10004.
Certain Anti-Takeover Provisions of Delaware Law and our Certificate
of Incorporation and Bylaws
We have opted out of Section 203 of the DGCL.
However, our certificate of incorporation contains similar provisions providing that we may not engage in certain “business combinations”
with any “interested stockholder” for a three-year period following the time that the stockholder became an interested stockholder,
unless:
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prior to such time, our board of directors approved either the
business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction
commenced, excluding certain shares; or
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at or subsequent to that time, the business combination is approved
by our board of directors and by the affirmative vote of holders of at least 66 2/3% of the outstanding voting stock that is not owned
by the interested stockholder.
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Generally, a “business combination”
includes a merger, asset or stock sale or certain other transactions resulting in a financial benefit to the interested stockholder. Subject
to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates,
owns, or within the previous three years owned, 20% or more of our voting stock.
Under certain circumstances, this provision will
make it more difficult for a person who would be an “interested stockholder” to effect various business combinations with
a corporation for a three-year period. This provision may encourage companies interested in acquiring our company to negotiate in advance
with our board of directors because the stockholder approval requirement would be avoided if our board of directors approves either the
business combination or the transaction which results in the stockholder becoming an interested stockholder. These provisions also may
have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions which stockholders
may otherwise deem to be in their best interests.
Our certificate of incorporation provides that
the co-sponsors and their respective affiliates, any of their respective direct or indirect transferees of at least 20% of our outstanding
common stock and any group as to which such persons are party to, do not constitute “interested stockholders” for purposes
of this provision.
Special meeting of stockholders
Our bylaws provide that special meetings of our
stockholders may be called only by a majority vote of our board of directors, by our chief executive officer or by our chairman.
Advance notice requirements for stockholder proposals and director
nominations
Our
bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election
as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s
notice will need to be delivered to our principal executive offices not later than the close of business on the 90th
day nor earlier than the opening of business on the 120th day prior to the scheduled date
of the annual meeting of stockholders. Our bylaws also specify certain requirements as to the form and content of a stockholders’
meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making
nominations for directors at our annual meeting of stockholders.
Authorized but unissued shares
Our authorized but unissued shares of common stock
and preferred stock are available for future issuances without stockholder approval, and could be utilized for a variety of corporate
purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized
but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of
us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive forum for certain lawsuits
Our certificate of incorporation provides that,
unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest
extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of our company,
(2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company to our
company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a claim against our
company or any director or officer of our company arising pursuant to any provision of the DGCL or our certificate of incorporation or
our bylaws, or (4) action asserting a claim against us or any director or officer of our company governed by the internal affairs
doctrine except for, as to each of (1) through (4) above, any claim (A) as to which the Court of Chancery determines that
there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent
to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive
jurisdiction of a court or forum other than the Court of Chancery, or (C) arising under the federal securities laws, including the
Securities Act as to which the Court of Chancery and the federal district court for the District of Delaware shall concurrently be the
sole and exclusive forums. Notwithstanding the foregoing, the inclusion of such provision in our certificate of incorporation will not
be deemed to be a waiver by our stockholders of our obligation to comply with federal securities laws, rules and regulations, and
the provisions of this paragraph 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 shall be the sole and exclusive forum. Although we believe
this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it
applies, the provision may have the effect of discouraging lawsuits against our directors and officers. Furthermore, the enforceability
of choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it
is possible that a court could find these types of provisions to be inapplicable or unenforceable.
SECURITIES
ELIGIBLE FOR FUTURE SALE
Immediately after this offering, we will have
12,500,000 shares of common stock issued and outstanding, or 14,375,000 shares of common stock if the over-allotment option is exercised
in full. Of these shares, the 10,000,000 shares sold in this offering, or 11,500,000 shares if the over-allotment option is exercised
in full, will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased
by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining shares are restricted securities
under Rule 144, in that they were issued in private transactions not involving a public offering. All of those shares will not be
transferable except in limited circumstances described elsewhere in this prospectus.
Rule 144
A person who has beneficially owned restricted
shares of common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person
is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we
are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Persons who have beneficially
owned restricted shares of common stock for at least six months but who are our affiliates at the time of, or any time during the three
months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of either of the following:
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1% of the number of
shares of common stock then issued and outstanding, which will equal 125,000 shares immediately
after this offering (or 143,750 if the over-allotment option is exercised in full); and
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The average weekly trading volume of the shares of common stock
during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
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Sales under Rule 144 are also limited by
manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies or Former
Shell Companies
Historically, the SEC staff had taken the position
that Rule 144 is not available for the resale of securities initially issued by companies that are, or previously were, blank check
companies, like us. The SEC has codified and expanded this position in the amendments discussed above by prohibiting the use of Rule 144
for resale of securities issued by any shell companies (other than business combination related shell companies) or any issuer that has
been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following
conditions are met:
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the issuer of the securities that was formerly a shell company
has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports
and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required
to file such reports and materials), other than Form 8-K reports; and
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at least one year has elapsed from the time that the issuer
filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
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As a result, it is likely that pursuant to Rule 144,
our initial stockholders will be able to sell their insider shares freely without registration one year after we have completed our initial
business combination assuming they are not an affiliate of ours at that time.
Registration and Stockholder Rights
The holders of our insider shares issued and
outstanding on the date of this prospectus, as well as the holders of the private warrants (and underlying securities), will be entitled
to registration and stockholder rights pursuant to an agreement to be signed prior to or on the effective date of this offering. The
holders of a majority of these securities are entitled to make up to two demands that we register such securities. The holders of the
majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date
on which these shares of common stock are to be released from escrow. The holders of a majority of the private warrants (and underlying
securities) can elect to exercise these registration rights at any time after we consummate a business combination. In addition, the
holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation
of a business combination. Notwithstanding the foregoing, Chardan Monterey may not exercise its demand and “piggyback” registration
rights after five and seven years, respectively, after the effective date of the registration statement of which this prospectus forms
a part and may not exercise its demand rights on more than one occasion. We will bear the expenses incurred in connection with the filing
of any such registration statements.
U.S.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of certain U.S.
federal income tax considerations generally applicable to the ownership and disposition of our units, shares of common stock and warrants,
which we refer to collectively as our securities. Because the components of a unit are separable at the option of the holder, the holder
of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying common stock and redeemable
warrant components of the unit, as the case may be. As a result, the discussion below with respect to actual holders of common stock and
warrants should also apply to holders of units (as the deemed owners of the underlying common stock and warrants that comprise the units).
This discussion applies only to securities that are held as capital assets for U.S. federal income tax purposes and is applicable only
to holders who purchased units in this offering.
This discussion is a summary only and does not
describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including but not limited
to the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply if you are
subject to special rules that apply to certain types of investors, including but not limited to:
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financial institutions or financial services entities;
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governments or agencies or instrumentalities thereof;
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regulated investment companies;
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real estate investment trusts;
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expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more of our voting shares;
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dealers or traders subject to a mark-to-market method of accounting with respect to the securities;
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persons holding the securities as part of a “straddle,” hedge, integrated transaction or similar transaction;
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U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
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partnerships or other pass-through entities for U.S. federal income tax purposes and any beneficial owners of such entities;
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If a partnership (including an entity or arrangement
treated as a partnership for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner, member or other beneficial
owner in such partnership will generally depend upon the status of the partner, member or other beneficial owner, the activities of the
partnership and certain determinations made at the partner, member or other beneficial owner level. If you are a partner, member or other
beneficial owner of a partnership holding our securities, you are urged to consult your tax advisor regarding the tax consequences of
the ownership and disposition of our securities.
This discussion is based on the Internal Revenue
Code of 1986, as amended (the “Code”), and administrative pronouncements, judicial decisions and final, temporary and proposed
Treasury regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which
subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect
of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).
We have not sought, and will not seek, a ruling
from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its
determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings
or court decisions will not adversely affect the accuracy of the statements in this discussion. You are urged to consult your tax advisor
with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the
laws of any state, local or foreign jurisdiction.
Personal Holding Company Status
We could be subject to a second level of U.S.
federal income tax on a portion of our income if we are determined to be a PHC for U.S. federal income tax purposes. A U.S. corporation
generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the
last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals
for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable trusts) own or are deemed
to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least
60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year
consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances,
rents).
Depending on the date and size of our initial
business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income. In addition, depending
on the concentration of our stock in the hands of individuals, including the members of our initial stockholders and certain tax-exempt organizations,
pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed owned (pursuant to the constructive
ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will not be a PHC following
this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax,
currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority
directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes and, therefore, that
treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition
of one share of our common stock and one warrant to acquire one share of common stock. For U.S. federal income tax purposes, each holder
of a unit must allocate the purchase price paid by such holder for such unit between the one share of common stock and the warrant based
on the relative fair market value of each at the time of issuance. Under U.S. federal income tax law, each investor must make his or
her own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult
his or her tax advisor regarding the determination of value for these purposes. The price allocated to each share of common stock and
warrant should be the stockholder’s tax basis in such share of common stock or warrant, as the case may be. Any disposition of
a unit should be treated for U.S. federal income tax purposes as a disposition of the share of common stock and warrant comprising the
unit, and the amount realized on the disposition should be allocated between the common stock and the warrant based on their respective
relative fair market values (as determined by each such unit holder based on all the relevant facts and circumstances) at the time of
disposition. The separation of the share of common stock and warrant comprising a unit should not be a taxable event for U.S. federal
income tax purposes.
The foregoing treatment of the shares of common
stock and warrants and a holder’s purchase price allocation are not binding on the Internal Revenue Service (“IRS”)
or the courts. Because there are no authorities that directly address instruments that are similar to the units, no assurance can be given
that the IRS or the courts will agree with the characterization described above or the discussion below. Accordingly, each prospective
investor is urged to consult its own tax advisors regarding the tax consequences of an investment in a unit (including alternative characterizations
of a unit). The balance of this discussion assumes that the characterization of the units described above is respected for U.S. federal
income tax purposes.
U.S. Holders
This section applies to you if you are a “U.S.
holder.” A U.S. holder is a beneficial owner of our units, shares of common stock or warrants who or that is, for U.S. federal income
tax purposes:
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an individual who is a citizen or resident of the United States;
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a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the
United States, any state thereof or the District of Columbia;
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an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
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a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the
trust and one or more United States persons (as defined in the Code) have authority to control all substantial decisions of the trust
or (ii) it has a valid election in effect under Treasury Regulations to be treated as a United States person.
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Taxation
of Distributions. If we pay distributions in cash or other property (other than certain distributions
of our stock or rights to acquire our stock) to U.S. holders of shares of our common stock, such distributions generally will constitute
dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined
under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return
of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our common stock.
Any remaining excess will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described
under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants”
below.
Dividends we pay to a U.S. holder that is a taxable
corporation will be taxable at regular corporate tax rates and generally will qualify for the dividends received deduction if the requisite
holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes
of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S.
holder generally will constitute “qualified dividends” that will be subject to tax at preferential long-term capital
gains rates. It is unclear whether the redemption rights with respect to the common stock described in this prospectus may prevent a U.S.
holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential
tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then a corporation may
not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate holders
may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified
dividend income.
Gain
or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants. Upon a
sale or other taxable disposition of our common stock or warrants which, in general, would include a redemption of common stock or warrants
that is treated as a sale of such securities as described below, and including as a result of a dissolution and liquidation in the event
we do not consummate an initial business combination within the required time period, a U.S. holder generally will recognize capital gain
or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the common
stock or warrants. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding
period for the common stock or warrants so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect
to the common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running
of the holding period for the common stock is suspended, then non-corporate U.S. holders may not be able to satisfy the one-year holding
period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares or
warrants would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital
gains recognized by non-corporate U.S. holders will be eligible to be taxed at reduced rates. The deductibility of capital losses
is subject to limitations.
Generally, the amount of gain or loss recognized
by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any
property received in such disposition (or, if the common stock or warrants are held as part of units at the time of the disposition, the
portion of the amount realized on such disposition that is allocated to the common stock or the warrants based upon the then fair market
values of the common stock and the warrants included in the units) and (ii) the U.S. holder’s adjusted tax basis in its common
stock or warrants so disposed of. A U.S. holder’s adjusted tax basis in its common stock or warrants generally will equal the U.S.
holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of common
stock or warrant or, as discussed below, the U.S. holder’s initial basis for common stock received upon exercise of warrants) less,
in the case of a share of common stock, any prior distributions treated as a return of capital.
Redemption
of Common Stock. In the event that a U.S. holder’s common stock is redeemed pursuant to the redemption
provisions described in this prospectus under the section of this prospectus entitled “Description of Securities — Common
Stock” or if we purchase a U.S. holder’s common stock in an open market transaction (each of which we refer to as a “redemption”),
the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the
common stock under Section 302 of the Code. If the redemption qualifies as a sale of common stock, the U.S. holder will be treated
as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and
Warrants” above. If the redemption does not qualify as a sale of common stock, the U.S. holder will be treated as receiving a corporate
distribution with the tax consequences described above under “U.S. Holders — Taxation of Distributions.” Whether a redemption
qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. holder (including
any stock constructively owned by the U.S. holder as a result of owning warrants) relative to all of our shares outstanding both before
and after the redemption. The redemption of common stock generally will be treated as a sale of the common stock (rather than as a corporate
distribution) if the redemption (i) is “substantially disproportionate” with respect to the U.S. holder, (ii) results
in a “complete termination” of the U.S. holder’s interest in us or (iii) is “not essentially equivalent to
a dividend” with respect to the U.S. holder. These tests are explained more fully below.
In determining whether any of the foregoing tests
are satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares of our stock that are
constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related
individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder, as well as any stock the
U.S. holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant
to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting stock
actually and constructively owned by the U.S. holder immediately following the redemption of common stock must, among other requirements,
be less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. holder immediately before
the redemption. There will be a complete termination of a U.S. holder’s interest if either (i) all of the shares of our stock
actually and constructively owned by the U.S. holder are redeemed or (ii) all of the shares of our stock actually owned by the U.S.
holder are redeemed and the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution
of stock owned by certain family members and the U.S. holder does not constructively own any other shares of our stock. The redemption
of the common stock will not be essentially equivalent to a dividend if the redemption results in a “meaningful reduction”
of the U.S. holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. holder’s
proportionate interest in us will depend on the particular facts and circumstances.
However, the IRS has indicated in a published
ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises
no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. holder should consult with its own
tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests is satisfied, then
the redemption will be treated as a corporate distribution and the tax effects will be as described under “U.S. Holders —
Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. holder in the redeemed
common stock will be added to the U.S. holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. holder’s
adjusted tax basis in its warrants or possibly in other stock constructively owned by it.
Exercise,
Lapse or Redemption of a Warrant. Except as discussed below with respect to the cashless exercise of
a warrant, a U.S. holder generally will not recognize taxable gain or loss on the acquisition of common stock upon exercise of a warrant
for cash. The U.S. holder’s tax basis in the share of our common stock received upon exercise of the warrant generally will be an
amount equal to the sum of the U.S. holder’s initial investment in the warrant (i.e., the portion of the U.S. holder’s purchase
price for a unit that is allocated to the warrant, as described above under “— Allocation of Purchase Price and Characterization
of a Unit”) and the exercise price. It is unclear whether the U.S. holder’s holding period for the common stock received upon
exercise of the warrants will begin on the date following the date of exercise or on the date of exercise of the warrants; in either case,
the holding period will not include the period during which the U.S. holder held the warrants. If a warrant is allowed to lapse unexercised,
a U.S. holder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The tax consequences of a cashless exercise of
a warrant are not clear under current tax law. A cashless exercise may be tax-free, either because the exercise is not a realization event
or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-free situation, a U.S. holder’s
basis in the common stock received would equal the holder’s basis in the warrants exercised therefor. If the cashless exercise were
treated as not being a realization event, it is unclear when a U.S. holder’s holding period in the common stock would be treated
as commencing. If the cashless exercise were treated as a recapitalization, the holding period of the common stock would include the holding
period of the warrants exercised therefor.
It is also possible that a cashless exercise could
be treated in whole or in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder could be
deemed to have surrendered a number of warrants having an aggregate fair market value equal to the exercise price for the total number
of warrants to be exercised. The U.S. holder would recognize capital gain or loss in an amount equal to the difference between the fair
market value of the common stock received in respect of the warrants deemed surrendered and the U.S. holder’s tax basis in such
warrants. Such gain or loss would be long-term or short-term, depending on the U.S. holder’s holding period in the warrants
deemed surrendered. In this case, a U.S. holder’s tax basis in the common stock received would equal the sum of the U.S. holder’s
initial investment in the warrants exercised (i.e., the portion of the U.S. holder’s purchase price for a unit that is allocated
to the warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise
price of such warrants. It is unclear whether a U.S. holder’s holding period for the common stock would commence on the date following
the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include the period during
which the U.S. holder held the warrant. There may also be alternative characterizations of any such taxable exchange that would result
in similar tax consequences, except that a U.S. Holder’s gain or loss would be short-term.
Due to the absence of authority on the U.S. federal
income tax treatment of a cashless exercise, including when a U.S. holder’s holding period would commence with respect to the common
stock received, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would
be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of
a cashless exercise.
If we redeem warrants for cash pursuant to the
redemption provisions described in the section of this prospectus entitled “Description of Securities — Warrants” or
if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition
to the U.S. holder, taxed as described above under “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition
of Common Stock and Warrants.”
Possible
Constructive Distributions. The terms of each warrant provide for an adjustment to the number of shares
of common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the
section of this prospectus entitled “Description of Securities — Warrants.” An adjustment which has the effect of preventing
dilution generally is not taxable. The U.S. holders of the warrants would, however, be treated as receiving a constructive distribution
from us if, for example, the adjustment to the number of such shares or to such exercise price increases the warrant holders’ proportionate
interest in our assets or earnings and profits (e.g., through an increase in the number of shares of common stock that would be obtained
upon exercise or through a decrease in the exercise price of the warrant) as a result of a distribution of cash or other property, such
as other securities, to the holders of shares of our common stock, or as a result of the issuance of a stock dividend to holders of shares
of our common stock, in each case which is taxable to the U.S. holders of such shares as a distribution. Such constructive distribution
would be subject to tax in the same manner as if the U.S. holders of the warrants received a cash distribution from us equal to the fair
market value of such increased interest resulting from the adjustment.
Information
Reporting and Backup Withholding. In general, information reporting requirements may apply to dividends
paid to a U.S. holder and to the proceeds of the sale or other disposition of our units, shares of common stock and warrants, unless the
U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder fails to provide a taxpayer identification
number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification
has not been withdrawn). Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will
be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is
timely furnished to the IRS. All U.S. holders should consult their tax advisors regarding the application of information reporting and
backup withholding to them.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S.
holder.” As used herein, the term “Non-U.S. holder” means a beneficial owner of our units, common stock or warrants
who or that is for U.S. federal income tax purposes:
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a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax
as expatriates);
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a foreign corporation or
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an estate or trust that is not a U.S. holder;
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but generally does not include an individual who
is present in the United States for 183 days or more in the taxable year of disposition. If you are such an individual, you
should consult your tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition
of our securities.
Taxation
of Distributions. In general, any distributions (including constructive distributions) we make to a
Non-U.S. holder of shares of our common stock, to the extent paid out of our current or accumulated earnings and profits (as determined
under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends
are not effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States, we will be
required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for a reduced
rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate
(usually on an IRS Form W-8BEN or W-8BEN-E). In the case of any constructive dividend, it is possible that this tax would be
withheld from any amount owed to a Non-U.S. holder by the applicable withholding agent, including cash distributions on other property
or sales proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend
will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our common stock
and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale or other disposition
of the common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other
Taxable Disposition of Common Stock and Warrants” below. In addition, if we determine that we are classified as a “United States
real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition
of Common Stock and Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings
and profits.
The withholding tax does not apply to dividends
paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s
conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular
U.S. federal income tax as if the Non-U.S. holder were a United States resident, subject to an applicable income tax treaty providing
otherwise. A Non-U.S. corporation receiving effectively connected dividends may also be subject to an additional “branch profits
tax” imposed at a rate of 30% (or a lower applicable treaty rate).
Gain
on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants. A Non-U.S. holder
generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or
other taxable disposition of our common stock, which would include a dissolution and liquidation in the event we do not complete an initial
business combination within 12 months (or up to 21 months, as applicable) from the closing of this offering, or warrants (including an
expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit, unless:
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the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and,
under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S.
holder); or
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we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any
time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held our
common stock or warrants, as applicable, and, in the case where shares of our common stock and warrants are treated as regularly traded
on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of our common stock or more
than 5% of our warrants, as applicable, at any time within the shorter of the five-year period preceding the disposition or such
Non-U.S. holder’s holding period for the shares of our common stock or warrants, as applicable. There can be no assurance that our
common stock or warrants will be treated as regularly traded on an established securities market for this purpose.
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Unless an applicable treaty provides otherwise,
gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the
Non-U.S. holder were a United States resident. Any gains described in the first bullet point above of a Non-U.S. holder that is a
foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower treaty rate).
If the second bullet point above applies to a
Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our common stock or warrants will be subject
to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our common stock or warrants from such holder may
be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether
we will be a United States real property holding corporation in the future until we complete an initial business combination. We
will be classified as a United States real property holding corporation if the fair market value of our “United States
real property interests” equals or exceeds 50 percent of the sum of the fair market value of our worldwide real property interests
plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.
Redemption
of Common Stock. The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S.
holder’s common stock generally will correspond to the U.S. federal income tax characterization of such a redemption of a U.S. holder’s
common stock, as described under “U.S. Holders — Redemption of Common Stock” above, and the consequences of the redemption
to the Non-U.S. holder will be as described above under “Non-U.S. Holders — Taxation of Distributions” and “Non-U.S.
Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants,” as applicable.
Exercise
or Redemption of a Warrant. The U.S. federal income tax treatment of a Non-U.S. holder’s exercise
of a warrant, or the lapse of a warrant held by a Non-U.S. holder, generally will correspond to the U.S. federal income tax treatment
of the exercise or lapse of a warrant by a U.S. holder, as described under “U.S. Holders — Exercise, Lapse or Redemption of
a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to
those described above in “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and
Warrants.”
Possible
Constructive Distributions. The terms of each warrant provide for an adjustment to the number of shares
of common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the
section of this prospectus entitled “Description of Securities — Warrants.” An adjustment which has the effect of preventing
dilution generally is not taxable. The Non-U.S. holders of the warrants would, however, be treated as receiving a constructive distribution
from us if, for example, the adjustment to the number of such shares or to such exercise price increases the warrant holders’ proportionate
interest in our assets or earnings and profits (e.g., through an increase in the number of shares of common stock that would be obtained
upon exercise or through a decrease in the exercise price of the warrant) as a result of a distribution of cash or other property, such
as other securities, to the holders of shares of our common stock, or as a result of the issuance of a stock dividend to holders of shares
of our common stock, in each case which is taxable to the holders of such shares as a distribution. Such constructive distribution would
be subject to tax in the same manner as if the Non-U.S. holders of the warrants received a cash distribution from us equal to the fair
market value of such increased interest resulting from the adjustment.
Information
Reporting and Backup Withholding. Information returns will be filed with the IRS in connection with
payments of dividends and the proceeds from a sale or other disposition of our units, shares of common stock and warrants. A Non-U.S.
holder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information
reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty
generally will satisfy the certification requirements necessary to avoid the backup withholding as well.
Backup withholding is not an additional tax. The
amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal
income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.
All Non-U.S. holders should consult their tax
advisors regarding the application of information reporting and backup withholding to them.
FATCA
Withholding Taxes. Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative
guidance promulgated thereunder (commonly referred as the “Foreign Account Tax Compliance Act” or “FATCA”) generally
impose withholding at a rate of 30% in certain circumstances on dividends in respect of our securities which are held by or through certain
foreign financial institutions (including investment funds), unless any such institution (1) enters into, and complies with, an agreement
with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that
are owned by certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold
on certain payments, or (2) if required under an intergovernmental agreement between the United States and an applicable foreign
country, reports such information to its local tax authority, which will exchange such information with the U.S. authorities. An intergovernmental
agreement between the United States and an applicable foreign country may modify these requirements. Accordingly, the entity through
which our securities are held will affect the determination of whether such withholding is required. Similarly, dividends in respect of
our securities held by an investor that is a non-financial non-U.S. entity that does not qualify under certain exceptions will generally
be subject to withholding at a rate of 30%, unless such entity either (1) certifies to us or the applicable withholding agent that
such entity does not have any “substantial United States owners” or (2) provides certain information regarding the
entity’s “substantial United States owners,” which will in turn be provided to the U.S. Department of Treasury.
All prospective investors should consult their tax advisors regarding the possible implications of FATCA on their investment in our securities.
UNDERWRITING
(CONFLICTS OF INTEREST)
We intend to offer our securities described in
this prospectus through the underwriters named below. Chardan Capital Markets LLC is the representative for the underwriters. We have
entered into an underwriting agreement with the representative. Subject to the terms and conditions of the underwriting agreement, each
of the underwriters has severally agreed to purchase from us the number of units listed next to its name in the following table:
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Underwriter
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Number
of
Units
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Chardan Capital Markets LLC
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B. Riley
Securities, Inc.
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Total
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10,000,000
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A copy of the form of the underwriting agreement
will be filed as an exhibit to the registration statement of which this prospectus forms a part.
Listing of our Securities
Our units, shares of common stock and warrants
will be quoted on Nasdaq under the symbols “MTRYU,” “MTRY,” and “MTRYW,” respectively. Our units will
be listed on Nasdaq on or promptly after the effective date of the registration statement. Following the date that our shares of common
stock and warrants are eligible to trade separately, we anticipate that our shares of common stock and warrants will be listed separately
and as a unit on Nasdaq. We cannot guarantee that our securities will continue to be listed on Nasdaq after this offering.
Over-allotment Option
We have granted the underwriters an option
to buy up to 1,500,000 additional units. The underwriters may exercise this option solely for the purpose of covering over-allotments,
if any, made in connection with this offering. The underwriters have 45 days from the date of this prospectus to exercise this option.
If the underwriters exercise this option, they will each purchase additional units approximately in proportion to the amounts specified
in the table above.
Commissions and Discounts
Units sold by the underwriters to the public will
initially be offered at the offering price set forth on the cover of this prospectus. Any units sold by the underwriters to securities
dealers may be sold at a discount of up to $ per unit from the public offering price. Any of these
securities dealers may resell any units purchased from the underwriters to other brokers or dealers at a discount of up to $
per unit from the public offering price. If all of the units are not sold at the initial public offering price, the representative may
change the offering price and the other selling terms. Upon execution of the underwriting agreement, the underwriters will be obligated
to purchase the units at the prices and upon the terms stated therein, and, as a result, will thereafter bear any risk associated with
changing the offering price to the public or other selling terms.
On September 18, 2020, our co-sponsor,
Chardan Monterey purchased 5,000,000 shares of common stock from us for $25,000, or $0.005 per share. On May 20, 2021, Chardan Monterey
transferred 687,500 founder shares back to us for no consideration, which shares were cancelled. On May 21, 2021, Chardan Monterey transferred
3,315,625 founder shares to NorthStar at a price of $0.006 per share. On September 1, 2021, Chardan Monterey transferred 359,375 founder
shares back to us for no consideration, which shares were cancelled. As a result, Chardan Monterey holds a balance of 637,500 founder
shares. On May 21, 2021, NorthStar transferred 35,000 founder shares to Jonas Grossman, an associated person of Chardan and our director,
for $203.00. In addition, Chardan Monterey, has committed to purchase from us 1,250,000 warrants (or 1,362,500 warrants if the over-allotment
option is exercised in full), at a price of $1.00 per warrant, in a private placement that will close simultaneously with the closing
of this offering. See “Certain Relationships and Related Party Transactions” in this prospectus for more information.
Such founder shares and private warrants (and
underlying securities) will be considered underwriting compensation in connection with this offering. Such founder shares and private
warrants (and underlying securities) will be subject to lock-up restrictions, as required by FINRA rule 5110(e)(1) and may not
be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative,
put, or call transaction that would result in the effective economic disposition of such securities by any person for a period of 180
days immediately following the date of effectiveness of the registration statement of which this prospectus forms a part or commencement
of sales of the offering, except to any underwriter and selected dealer participating in the offering and their bona fide officers or
partners; provided that all securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
In addition, for so long as they are held by Chardan Monterey, the private warrants will not be exercisable more than five years from
the effective date of the registration statement of which this prospectus forms a part in accordance with FINRA rules. We have granted
the holders of private warrants the registration rights as described under Securities Eligible for Future Sale — Registration and
Stockholder Rights.” As described under the section “Securities Eligible for Future Sale — Registration and Stockholder
Rights,” Chardan Monterey may not exercise its demand and “piggyback” registration rights after five and seven years,
respectively, after the effective date of the registration statement of which this prospectus forms a part and may not exercise its demand
rights on more than one occasion.
In addition to the underwriting discount, we paid
Chardan $25,000 upon the execution of the engagement letter, as a refundable advance against out-of-pocket accountable expenses actually
incurred by the underwriters and required to be paid or reimbursed as set forth in the following sentence. We have agreed to pay or reimburse
the underwriters for travel, lodging and other “road show” expenses, FINRA-related fees and expenses of the underwriters’
legal counsel and certain diligence and other fees, including the preparation, binding and delivery of bound volumes in form and style
reasonably satisfactory to the representative, transaction Lucite cubes or similar commemorative items in a style as reasonably requested
by the representative, and reimbursement for background checks on our directors, director nominees and executive officers, which fees
and expenses, including out-of-pocket accountable expenses are capped at an aggregate of $130,000.
Right of First Refusal
For a period of fifteen (15) months from the
closing of an initial business combination we will give Chardan a right of first refusal to act as a bookrunner for any and all future
offerings of securities, including without limitation public and private equity and debt offerings, during such period by the Company
or any successor to or any subsidiary of the Company with economics that are equal to or greater than the median economics of the “third
bookrunner” in all applicable biotech offerings over the 12 month period immediately preceding the date of commencement of such
offering. For purposes of this right of first refusal, the “third bookrunner” shall refer to the underwriter or placement
agent, as applicable, with the third largest allocation of securities (or second largest allocation if two other underwriters or placement
agents receive the same larger allocation, or largest allocation if three or more underwriters or placement agents receive the same largest
allocation). Biotech offerings with less than three underwriters or placement agents, as applicable (including offerings made directly
by the issuer), shall not be included in calculating the median economics applicable to this right of first refusal. For purposes of
this right of first refusal, “biotech offerings” shall refer to any offerings made by any company included in any of the
following indices at the time of the commencement of the offering: (i) the Nasdaq Biotechnology Index, and (ii) the NYSE Arca Biotechnology
Index, and (iii) any successor index to any of the foregoing indices. For purposes of clarification, the economics set forth above shall
represent the minimum economics that shall apply to Chardan and the right of first refusal shall pertain to all offerings of securities
by us during the applicable time period regardless of the number of underwriters or placement agents involved. Chardan’s failure
to exercise its right of first refusal with respect to any particular proposal will not affect its right of first refusal relative to
future proposals. In accordance with FINRA Rule 5110(g)(6)(A), such right of first refusal will not have a duration of more than three
years from the effective date of the registration statement.
The following table shows the per unit and
total underwriting discounts and commissions we will pay to the underwriters assuming both no exercise and full exercise of the underwriters’
over-allotment option to purchase up to an additional 1,500,000 units.
|
|
|
Per
Unit
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public
offering price
|
|
$
|
10.00
|
|
|
$
|
100,000,000
|
|
|
$
|
115,000,000
|
|
|
Underwriting
discounts and commissions(1)(2)(3)
|
|
$
|
0.20
|
|
|
$
|
2,000,000
|
|
|
$
|
2,300,000
|
|
|
|
1)
|
$0.20 per share or $2,000,000 in the aggregate (or $2,300,000 if the
underwriter’s over-allotment option is exercised in full), is payable upon the closing
of this offering. This excludes the 637,500 founder shares owned by Chardan Monterey (93,750
of which are subject to forfeiture if the over-allotment is not exercised) and the 1,250,000
private warrants (or 1,362,500 private warrants if the over-allotment option is exercised
in full) that Chardan Monterey has agreed to purchase, which will be deemed to be compensation
for Chardan under FINRA Rule 5110. The private warrants and underlying securities will
not be exercisable more than five years from the effective date of the registration statement
of which this prospectus forms a part in accordance with FINRA Rule 5110(g)(8)(A).
|
|
|
(2)
|
B. Riley Securities, Inc. will receive a fee of $100,000 from the
total underwriting discount in consideration for its services and expenses incurred as a
“qualified independent underwriter.”
|
|
|
(3)
|
Excludes the Marketing Fee payable to Chardan of $3,500,000 (or $4,025,000
if the underwriters’ over-allotment option is exercised in full).
|
Pricing of Securities
We have been advised by the representative of
the underwriters that the underwriters propose to offer the units to the public at the offering price set forth on the cover page of
this prospectus.
Prior to this offering there has been no public
market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and
the representative. Factors considered in determining the prices and terms of the units, including the shares of common stock and warrants
underlying the units, include:
• the
history and prospects of companies whose principal business is the acquisition of other companies;
• prior
offerings of those companies;
• our
prospects for acquiring an operating business at attractive values;
• our
capital structure;
• the
per share amount of net proceeds being placed into the trust account;
• an
assessment of our management and their experience in identifying operating companies;
• general
conditions of the securities markets at the time of the offering; and
• other
factors as were deemed relevant.
However, although these factors were considered,
the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry
since the underwriters are unable to compare our financial results and prospects with those of public companies operating in the same
industry.
Business Combination Marketing Agreement
We have engaged Chardan as an advisor in connection
with our business combination to assist us in holding meetings with our stockholders to discuss the potential business combination and
the target business’s attributes, introduce us to potential investors that are interested in purchasing our securities in connection
with the potential business combination, assist us in obtaining stockholder approval for the business combination and assist us with our
press releases and public filings in connection with the business combination. We will pay Chardan the Marketing Fee for such services
upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of this
offering, including any proceeds from the full or partial exercise of the over-allotment option.
Conflicts of Interest
Chardan Monterey, an affiliate of Chardan, beneficially
owns in excess of 10% of our issued and outstanding common stock. Because Chardan is an underwriter in this offering and its affiliate
owns in excess of 10% of our issued and outstanding common stock, Chardan is deemed to have a “conflict of interest” under
Rule 5121.
Accordingly,
this offering is being made in compliance with the requirements of Rule 5121, which
requires, among other things, that a qualified independent underwriter participate in the
preparation of, and exercise the usual standards of due diligence with respect to, the registration
statement and this prospectus. B. Riley Securities, Inc. has agreed to act as a qualified
independent underwriter for this offering and to undertake the legal responsibilities and
liabilities of an underwriter under the Securities Act, specifically including those inherent
in Section 11 thereof. B. Riley Securities, Inc. will receive $100,000 from the total
underwriting discount for serving as a qualified independent underwriter in connection with
this offering. We have agreed to indemnify B. Riley Securities, Inc. against liabilities
incurred in connection with acting as a qualified independent underwriter, including liabilities
under the Securities Act. Pursuant to Rule 5121, Chardan will not confirm any sales
to any account over which it exercises discretionary authority without the specific written
approval of the account holder.
Regulatory Restrictions on Purchase of Securities
Rules of the SEC may limit the ability of
the underwriters to bid for or purchase our units before the distribution of the units is completed. However, the underwriters may engage
in the following activities in accordance with the rules:
|
|
•
|
Stabilizing Transactions. The underwriters may make bids or purchases for the purpose of preventing or retarding a decline in the price of our units, as long as stabilizing bids do not exceed the offering price of $10.00 and the underwriters comply with all other applicable rules.
|
|
|
|
|
|
|
•
|
Over-Allotments and Syndicate Coverage Transactions. The underwriters may create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus up to the amount of the over-allotment option. This is known as a covered short position. The underwriters may also create a short position in our units by selling more of our units than are set forth on the cover page of this prospectus and the units allowed by the over-allotment option. This is known as a naked short position. If the underwriters create a short position during the offering, the representative may engage in syndicate covering transactions by purchasing our units in the open market. The representative may also elect to reduce any short position by exercising all or part of the over-allotment option. Determining what method to use in reducing the short position depends on how the units trade in the aftermarket following the offering. If the unit price drops following the offering, the short position is usually covered with shares purchased by the underwriters in the aftermarket. However, the underwriters may cover a short position by exercising the over-allotment option even if the unit price drops following the offering. If the unit price rises after the offering, then the over-allotment option is used to cover the short position. If the short position is more than the over-allotment option, the naked short must be covered by purchases in the aftermarket, which could be at prices above the offering price.
|
|
|
|
|
|
|
•
|
Penalty Bids. The representative may reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
|
Stabilization and syndicate covering transactions
may cause the price of our securities to be higher than they would be in the absence of these transactions. The imposition of a penalty
bid might also have an effect on the prices of our securities if it discourages resales of our securities.
Neither we nor the underwriters make any representation
or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may occur
on Nasdaq, in the over-the-counter market or on any trading market. If any of these transactions are commenced, they may be discontinued
without notice at any time.
Other Terms
Except as set forth above, we are not under any
contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent
to do so. However, any of the underwriters may, among other things, introduce us to potential target businesses or assist us in raising
additional capital, as needs may arise in the future. If any underwriter provides services to us after this offering, we may pay the underwriter
fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be
entered into with the underwriter and no fees for such services will be paid to the underwriter prior to the date which is 90 days after
the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s compensation in connection
with this offering.
Indemnification
We have agreed to indemnify the underwriters against
some liabilities, including civil liabilities under the Securities Act, or to contribute to payments the underwriters may be required
to make in this respect.
Resale Restrictions
We intend to distribute our securities in the
Province of Ontario, Canada (the “Canadian Offering Jurisdiction”) by way of a private placement and exempt from the requirement
that we prepare and file a prospectus with the securities regulatory authorities in such Canadian Offering Jurisdiction. Any resale of
our securities in Canada must be made under applicable securities laws that will vary depending on the relevant jurisdiction, and which
may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Canadian resale restrictions in some circumstances may apply to resales of interests made outside of
Canada. Canadian purchasers are advised to seek legal advice prior to any resale of our securities. We may never be a “reporting
issuer”, as such term is defined under applicable Canadian securities legislation, in any province or territory of Canada in which
our securities will be offered and there currently is no public market for any of the securities in Canada, and one may never develop.
Canadian investors are advised that we have no intention to file a prospectus or similar document with any securities regulatory authority
in Canada qualifying the resale of the securities to the public in any province or territory in Canada.
Representations of Purchasers
A Canadian purchaser will be required to represent
to us and the dealer from whom the purchase confirmation is received that:
|
|
•
|
the purchaser is entitled under applicable provincial securities
laws to purchase our securities without the benefit of a prospectus qualified under those securities laws;
|
|
|
•
|
where required by law, that the purchaser is purchasing as principal
and not as agent;
|
|
|
•
|
the purchaser has reviewed the text above under Resale Restrictions; and
|
|
|
|
|
|
|
•
|
the purchaser acknowledges and consents to the provision of specified information concerning its purchase of our securities to the regulatory authority that by law is entitled to collect the information.
|
Rights of Action — Ontario Purchasers Only
Under Ontario securities legislation, certain
purchasers who purchase a security offered by this prospectus during the period of distribution will have a statutory right of action
for damages, or while still the owner of our securities, for rescission against us in the event that this prospectus contains a misrepresentation
without regard to whether the purchaser relied on the misrepresentation. The right of action for damages is exercisable not later than
the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years
from the date on which payment is made for our securities. The right of action for rescission is exercisable not later than 180 days from
the date on which payment is made for our securities. If a purchaser elects to exercise the right of action for rescission, the purchaser
will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which our
securities were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation,
we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are
proven to not represent the depreciation in value of our securities as a result of the misrepresentation relied upon. These rights are
in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory
provisions.
Enforcement of Legal Rights
All of our directors and officers as well as the
experts named herein are located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service
of process within Canada upon us or those persons. All of our assets and the assets of those persons are located outside of Canada and,
as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian
courts against us or those persons outside of Canada.
Collection of Personal Information
If a Canadian purchaser is resident in or otherwise
subject to the securities laws of the Province of Ontario, the Purchaser authorizes the indirect collection of personal information pertaining
to the Canadian purchaser by the Ontario Securities Commission (the “OSC”) and each Canadian purchaser will be required to
acknowledge and agree that the Canadian purchaser has been notified by us (i) of the delivery to the OSC of personal information
pertaining to the Canadian purchaser, including, without limitation, the full name, residential address and telephone number of the Canadian
purchaser, the number and type of securities purchased and the total purchase price paid in respect of the securities, (ii) that
this information is being collected indirectly by the OSC under the authority granted to it in securities legislation, (iii) that
this information is being collected for the purposes of the administration and enforcement of the securities legislation of Ontario, and
(iv) that the title, business address and business telephone number of the public official in Ontario who can answer questions about
the OSC’s indirect collection of the information is the Administrative Assistant to the Director of Corporate Finance, the Ontario
Securities Commission, Suite 1903, Box 5520, Queen Street West, Toronto, Ontario, M5H 3S8, Telephone: (416) 593-8086, Facsimile:
(416) 593-8252.
LEGAL
MATTERS
Greenberg Traurig, LLP, is acting as counsel
in connection with the registration of our securities under the Securities Act and will pass on the validity of the securities offered
in the prospectus. Reed Smith LLP is acting as counsel for the representative of the underwriters in this offering.
EXPERTS
The
financial statements of Monterey Bio Acquisition Corporation as of December 31, 2020, and for the period from July 23, 2020
(inception) through December 31, 2020 included in this prospectus have been audited by Marcum LLP, independent registered public
accounting firm, as set forth in their report thereon (which contains an explanatory paragraph relating to substantial doubt about
the ability of Monterey Bio Acquisition Corporation to continue as a going concern as described in Note 1 to the financial statements),
appearing elsewhere in this prospectus, and are included in reliance on the report of such firm given on their authority as experts in
auditing and accounting.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement
on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not
contain all of the information included in the registration statement. For further information about us and our securities, you should
refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in
this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description
of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement
for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject
to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other
information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website
at www.sec.gov.
MONTEREY BIO ACQUISITION CORPORATION
INDEX TO FINANCIAL STATEMENTS
|
|
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
|
F-2
|
|
Financial Statements:
|
|
|
|
Balance Sheets as of December 31, 2020 and June 30, 2021
|
|
F-3
|
|
Statements of Operations for the period from July 23,
2020 (inception) through December 31, 2020 and for the six months ended June 30, 2021
|
|
F-4
|
|
Statement of Changes in Stockholder’s Equity for
the period from July 23, 2020 (inception) through December 31, 2020 and for the six months ended June 30, 2021
|
|
F-5
|
|
Statements of Cash Flows for the period from July 23,
2020 (inception) through December 31, 2020 and for the six months ended June 30, 2021
|
|
F-6
|
|
Notes to Financial Statements
|
|
F-7
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Shareholders and the Board of Directors of
Monterey Bio Acquisition Corporation
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Monterey Bio
Acquisition Corporation (the “Company”) as of December 31, 2020 and the related statements of operations, changes in
stockholder’s equity and cash flows for the period from July 23, 2020 (inception) through December 31, 2020 and the related
notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2020 and the results of its operations and its
cash flows for the period from July 23, 2020 (inception) through December 31, 2020, in conformity with accounting principles
generally accepted in the United States of America.
Explanatory Paragraph — Going Concern
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described
in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its completion of the
proposed initial public offering described in Note 3 to the financial statements. The Company lacks the financial resources it needs to
sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with
regard to these matters are also described in Notes 1 and 3. The financial statements do not include any adjustments that might become
necessary should the Company be unable to continue as a going concern.
Basis for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit
of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion.
Our
audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides
a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2021.
New York, NY
May 21, 2021, except for Note 8 as to which the date is September
7, 2021
MONTEREY BIO ACQUISITION CORPORATION
BALANCE SHEETS
|
|
|
JUNE 30,
2021
|
|
|
DECEMBER 31,
2020
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
29,180
|
|
|
$
|
25,000
|
|
|
Prepaid expense and other current
assets
|
|
|
125
|
|
|
|
—
|
|
|
Total Current Assets
|
|
|
29,305
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred offering costs
|
|
|
216,375
|
|
|
|
—
|
|
|
Total Assets
|
|
$
|
245,680
|
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
Accrued offering costs
|
|
|
70,300
|
|
|
|
—
|
|
|
Promissory note
– related party
|
|
|
150,405
|
|
|
|
—
|
|
|
Total Liabilities
|
|
|
221,705
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder’s Equity
|
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common
stock, $0.0001 par value; 100,000,000 shares authorized; 2,875,000 shares issued and outstanding(1)(2)
|
|
|
288
|
|
|
|
288
|
|
|
Additional paid-in capital
|
|
|
24,712
|
|
|
|
24,712
|
|
|
Accumulated deficit
|
|
|
(1,025
|
)
|
|
|
(1,000
|
)
|
|
Total Stockholder’s
Equity
|
|
|
23,975
|
|
|
|
24,000
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
$
|
245,680
|
|
|
$
|
25,000
|
|
|
(1)
|
Includes an aggregate of up to
375,000 shares of common stock subject to forfeiture if the over-allotment option is not exercised in
full or in part by the underwriters (see Note 5).
|
|
|
|
|
(2)
|
On May 20, 2021, Chardan Monterey forfeited 687,500 founder shares for no consideration, and on September
1, 2021, the co-Sponsors forfeited an aggregate of 1,437,500 founder shares for no consideration resulting in an aggregate of 2,875,000
shares of common stock outstanding. All shares and associated amounts have been retroactively restated to reflect the share forfeiture
(see Notes 5 and 8).
|
The accompanying notes are an integral part
of these financial statements.
MONTEREY BIO ACQUISITION CORPORATION
STATEMENTS OF OPERATIONS
|
|
|
FOR
THE
SIX
MONTHS
ENDED JUNE 30,
2021
|
|
|
FOR
THE
PERIOD
FROM JULY
23, 2020
(INCEPTION) THROUGH
DECEMBER 31,
2020
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Formation
and operating costs
|
|
$
|
25
|
|
|
$
|
1,000
|
|
|
Net Loss
|
|
|
(25
|
)
|
|
$
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding, basic and diluted(1)(2)
|
|
|
2,500,000
|
|
|
|
2,500,000
|
|
|
Basic and
diluted net loss per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Excludes an aggregate of up to 375,000 shares of common stock subject
to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).
|
|
|
|
|
(2)
|
On May 20, 2021, Chardan Monterey forfeited 687,500 founder shares for no consideration, and on September
1, 2021, the co-Sponsors forfeited an aggregate of 1,437,500 founder shares for no consideration resulting in an aggregate of 2,875,000
shares of common stock outstanding. All shares and associated amounts have been retroactively restated to reflect the share forfeiture
(see Notes 5 and 8).
|
The accompanying notes are an integral part
of these financial statements.
MONTEREY BIO ACQUISITION CORPORATION
STATEMENT OF CHANGES
IN STOCKHOLDER’S EQUITY
FOR THE PERIOD FROM JULY 23, 2020 (INCEPTION)
THROUGH DECEMBER 31, 2020 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2021
|
|
|
Common
Stock(1)
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholder’s
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance – July 23, 2020 (inception)
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Issuance
of common stock to Initial stockholders(1)(2)
|
|
|
2,875,000
|
|
|
|
288
|
|
|
|
24,500
|
|
|
|
—
|
|
|
|
25,000
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,000
|
)
|
|
|
(1,000
|
)
|
|
Balance – December 31,
2020
|
|
|
2,875,000
|
|
|
|
288
|
|
|
|
24,500
|
|
|
|
(1,000
|
)
|
|
|
24,000
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25
|
)
|
|
|
(25
|
)
|
|
Balance – June
30, 2021 (Unaudited)
|
|
|
2,875,000
|
|
|
$
|
288
|
|
|
$
|
24,500
|
|
|
$
|
(1,025
|
)
|
|
$
|
23,975
|
|
|
(1)
|
Includes an aggregate of up to 375,000 shares of common stock subject
to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).
|
|
|
|
|
(2)
|
On May 20, 2021, Chardan Monterey forfeited 687,500 founder shares for no consideration,
and on September 1, 2021, the co-Sponsors forfeited an
aggregate of 1,437,500 founder shares for no consideration resulting in an aggregate of 2,875,000 shares of common stock
outstanding. All shares and associated amounts have been retroactively restated to reflect the share forfeiture (see Notes 5 and
8).
|
The accompanying notes are an integral part
of these financial statements.
MONTEREY BIO ACQUISITION CORPORATION
STATEMENTS OF CASH FLOWS
|
|
|
FOR
THE
SIX
MONTHS
ENDED
JUNE 30, 2021
|
|
|
FOR
THE
PERIOD
FROM JULY
23, 2020
(INCEPTION)
THROUGH
DECEMBER
31, 2020
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(25
|
)
|
|
$
|
(1,000
|
)
|
|
Adjustment to reconcile net loss to
net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current
assets
|
|
|
(125
|
)
|
|
|
—
|
|
|
Accrued expenses
|
|
|
—
|
|
|
|
1,000
|
|
|
Net cash
used in operating activities
|
|
|
(150
|
)
|
|
|
—
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
to Initial stockholders
|
|
|
—
|
|
|
|
25,000
|
|
|
Proceeds from promissory note –
related party
|
|
|
150,405
|
|
|
|
—
|
|
|
Payment of offering
costs
|
|
|
(146,075
|
)
|
|
|
—
|
|
|
Net cash
provided by financing activities
|
|
|
4,330
|
|
|
|
25,000
|
|
|
Net Change in Cash
|
|
|
4,180
|
|
|
|
25,000
|
|
|
Cash – Beginning of period
|
|
|
25,000
|
|
|
|
—
|
|
|
Cash – End of period
|
|
$
|
29,180
|
|
|
$
|
25,000
|
|
|
Non-cash financing activities:
|
|
|
|
|
|
|
|
|
|
Deferred offering costs included in
accrued offering costs
|
|
$
|
70,300
|
|
|
$
|
—
|
|
The accompanying notes are an integral part
of these financial statements.
MONTEREY
BIO ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations
Chardan FinTech Acquisition Corp. (the “Company”)
was incorporated in Delaware on July 23, 2020. On April 9, 2021, the Company changed its name to Monterey Bio Acquisition Corporation.
The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”).
The Company is not limited to a particular industry
or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such,
the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30, 2021, the Company had not commenced
any operations. All activity for the period from July 23, 2020 (inception) through June 30, 2021 relates to the Company’s
formation and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will
not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate
non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering. The Company has selected
December 31 as its fiscal year end.
The Company’s ability to commence operations
is contingent upon obtaining adequate financial resources through a Proposed Public Offering of 10,000,000 units (the “Units”
and, with respect to the shares of common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit
(or 11,500,000 Units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3, and the sale
of 5,000,000 warrants (or 5,450,000 if the underwriters’ over-allotment option is exercised in full) (the “Private Warrants”)
at a price of $1.00 per Private Warrant in a private placement to Chardan Monterey Investments LLC (“Chardan Monterey”) (the
affiliate of Chardan Capital Markets LLC – the representative of the underwriters) and to NorthStar Bio Ventures, LLC (“NorthStar”)
(the affiliate of certain of the Company’s officers and directors) (“Chardan Monterey” and “NorthStar”
are collectively known as co-Sponsors), that will close simultaneously with the Proposed Public Offering. On May 10, 2021, Chardan Monterey Investments LLC changed its name from Chardan FinTech Investments LLC.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance
that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having
an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (less any deferred underwriting
commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination.
The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing
of the Proposed Public Offering, management has agreed that an amount equal to at least $10.10 per Unit sold in the Proposed Public Offering,
including the proceeds from the sale of the Private Warrants, will be held in a trust account (“Trust Account”), located
in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund
selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the
earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account, as described
below.
The Company will provide its holders of the
outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares
upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business
Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business
Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled
to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.10 per
Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to
pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s
public warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon
the completion of the Proposed Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.”
MONTEREY
BIO ACQUISITION CORPORATION
NOTES
TO FINANCIAL STATEMENTS
The Company will proceed with a Business Combination
if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination
and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder
vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company
will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”),
conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and
file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior
to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides
to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection
with a Business Combination, the initial stockholders have agreed (A) to vote their Founder Shares (as defined in Note 5) and any
Public Shares purchased during or after the Proposed Public Offering in favor of approving a Business Combination, (B) not to propose,
or vote in favor of, prior to and unrelated to the Initial Business Combination, an amendment to the Company’ certificate of incorporation
that would affect the substance or timing of the Company’s redemption obligation to redeem all public shares if the Company cannot
complete the Initial Business Combination within 12 months (or up to 21 months, as applicable) unless the Company provides public stockholders
the opportunity to redeem their public shares in conjunction with any such amendment, (C) not to redeem any shares (including their
Founder Shares) in connection with a stockholder vote to approve the Proposed Initial Business Combination or sell any shares back to
the Company in a tender offer in connection with the Initial Business Combination, and (D), that the Founder Shares shall not participate
in any liquidating distribution upon winding up if the Business Combination is not consummated. None of the initial stockholders or their
affiliates has indicated any intention to purchase units in the Public Offering or any units or shares of common stock in the
open market or in private transactions.
The initial stockholders have agreed (a) to
waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business
Combination, including their Founder Shares and Public Shares that they have purchased during or after the Proposed Public Offering,
if any and (b) to waive their rights to liquidating distributions with respect to their Founder Shares if the Company fails to consummate
the Initial Business Combination within 12 months (or up to 21 months, as applicable) from the closing of the Proposed Public Offering.
However, if the initial stockholders have acquired Public Shares in or after the Proposed Public Offering, they will be entitled to receive
liquidating distributions with respect to such Public Shares if the Company fails to consummate the Initial Business Combination within
the required time period.
The Company will have up to 12 months (or
up to 21 months, as applicable) from the closing of the Proposed Public Offering to complete a Business Combination (the “Combination
Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease
all operations except for the purpose of winding up, (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 the Company to pay its tax obligations
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case
to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
There will be no redemption rights or liquidating distributions with respect to the Company’s private warrants, which will expire
worthless if the Company fails to complete a Business Combination within the Combination Period.
The
Company’s placing of funds in the Trust Account may not protect those funds from third-party claims against the Company. Although,
the Company will seek to have all vendors, service providers (excluding the independent registered public accounting firm), prospective
target businesses and other entities with which the Company do business execute agreements with the Company 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 Stockholders, 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 the Company’s
assets, including the funds held in the Trust Account. If any third-party refuses to execute an agreement waiving such claims to the
monies held in the Trust Account, the Company’s 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 the Company’s management believes that such third-party’s
engagement would be significantly more beneficial to the Company than any alternative. 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 the Company and will not seek recourse against the Trust Account for any reason. Upon redemption of the Public Shares, if the Company
was unable to consummate the Initial Business Combination within 12 months (or up to 21 months, as applicable) from the closing of the
Proposed Offering, or upon the exercise of the redemption right in connection with the Business Combination, the Company will be required
to provide for payment of claims of creditors that were not waived that may be brought against the Company within the ten years following
redemption. Accordingly, the per-share redemption amount received by Public Stockholders could be less than the $10.10 per Public Share
initially held in the Trust Account, due to claims of such creditors.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
NorthStar
has agreed to be liable to the Company if and to the extent any claims by a third-party (excluding the Company’s independent registered
public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company
has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10
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 $10.10 per share due to reductions in
the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable)
nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against
certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover,
in the event that an executed waiver is deemed to be unenforceable against a third party, NorthStar will not be responsible to the extent
of any liability for such third-party claims.
Going Concern Consideration
At June 30, 2021, the Company had $29,180
in cash and a working capital deficit of $192,400. The Company has incurred and expects to continue to incur significant costs in
pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to
continue as a going concern within one year after the date that the financial statements are issued. Management plans to address
this uncertainty through a Proposed Public Offering as discussed in Note 3. There is no assurance that the Company’s plans to
raise capital or to consummate a Business Combination will be successful within the Combination Period. The financial statements do
not include any adjustments that might result from the outcome of this uncertainty.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented
in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and
regulations of the SEC.
The accompanying financial statements as of
and for the six months ended June 30, 2021 have been prepared in accordance with U.S. GAAP for interim financial information and Article 10
of Regulation S-X. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have
been included. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2021.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered
public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Further, Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those
that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the
Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can
elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any
such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when
a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth
company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use of Estimates
The preparation of financial statements in conformity
with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of 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 statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and cash equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of June 30, 2021 and December 31, 2020.
Deferred Offering Costs
The Company complies with the
requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A – “Expenses of
Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date
that are related to the Proposed Public Offering. Offering costs are charged to shareholder’s equity or the statement of
operations based on the relative value of the Public and Private Warrants (if accounted for as liabilities) to the proceeds received
from the Units sold upon the completion of the Proposed Public Offering. Should the Proposed Public Offering proved to be
unsuccessful, these deferred offering costs, as well as additional expenses to be incurred, will be charged to operations.
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing
authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There
were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2021 and December 31, 2020. The
Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from
its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The provision for income taxes was deemed
to be de minimis for the period from July 23, 2020 (inception) through June 30, 2021. The Company’s deferred tax assets were
deemed to be de minimis as of June 30, 2021 and December 31, 2020.
Net Loss Per Common Share
Net loss per share is computed by dividing
net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares of common stock subject
to forfeiture by the Initial Stockholders. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common
stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). At June 30, 2021
and December 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised
or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same
as basic loss per share for the period presented.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal
Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts
represented in the accompanying balance sheet, primarily due to their short-term nature.
Warrant Instruments
The Company accounts for warrants as either
equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable
authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The
assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether
the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net
cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This
assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly
period end date while the instruments are outstanding. As discussed in Note 7, the Company determined that upon further review of the
proposed form of warrant agreement, management concluded that the Public Warrants and Private Placement Warrants to be issued pursuant
to the warrant agreement qualify for equity accounting treatment.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”)
to simplify certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion
and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity
classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible
debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings
per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is for fiscal
years beginning after December 15, 2021 and should be applied on a full or modified retrospective basis. Early adoption is permitted,
but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Management is
currently evaluating the impact of adopting ASU 2020-06.
Management does not believe that any other
recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s
financial statements.
Risks and Uncertainties
Management is currently evaluating
the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect
on the Company’s financial position, results of its operations, close of the Proposed Public Offering, and/or search for a target
company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 3 — Public Offering
Pursuant to the Proposed Public Offering,
the Company intends to offer for sale 10,000,000 Units (or 11,500,000 Units if the over-allotment option is exercised in full) at a price
of $10.00 per Unit. Each Unit will consist of one share of common stock and one redeemable warrant (“Public Warrant”). Each
Public Warrant will entitle the holder to purchase one share of common stock at an exercise price of $11.50 per whole share (see Note
7).
Note 4 — Private Placement
NorthStar, one of the co-Sponsors has committed
to purchase an aggregate of 3,750,000 Private Warrants (or 4,087,500 if the underwriters’ over-allotment option is exercised in
full) and Chardan Monterey, one of the co-Sponsors, has committed to purchase 1,250,000 Private Warrants (or 1,362,500 if the underwriters’
over-allotment option is exercised in full), in each case, at a price of $1.00 per Private Warrant, for an aggregate purchase price of
$5,000,000 (or $5,450,000 if the underwriters’ over-allotment option is exercised in full), in a private placement that will occur
simultaneously with the closing of the Proposed Public Offering. Each Private Warrant will entitle the holder to purchase one share of
common stock at a price of $11.50 per full share, subject to adjustment (see Note 7).
Note 5 — Related Party Transactions
Founder Shares
On September 18, 2020, Chardan Monterey
purchased an aggregate of 5,000,000 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price
of $25,000, or $0.005 per share. On May 20, 2021, Chardan Monterey transferred 687,500 Founder Shares back to the Company for no consideration,
which shares were cancelled, resulting in an aggregate of 4,132,500 shares of common stock outstanding. On September 1, 2021, the Sponsor
forfeited 1,437,500 founder shares for no consideration resulting in an aggregate of 2,875,000 shares of common stock outstanding. All
shares and associated amounts have been retroactively stated to reflect the share forfeiture resulting to $0.006 per share. On May 21,
2021, Chardan Monterey transferred 3,315,625 Founder Shares to NorthStar at a price of $0.006 per share, resulting in Chardan Monterey
holding a balance of 996,875 Founder Shares. On May 21, 2021, NorthStar transferred 150,000 Founder Shares to Dr. Satyal, the Company’s
Chief Executive Officer, and transferred 35,000 Founder Shares to each of the Company’s directors and director nominees at a price
of $0.006 per share, resulting in NorthStar holding a balance of 2,990,625 Founder Shares. The Founder Shares held by the
co-Sponsors, Officers, and Directors are referred collectively as “Founder Shares” or “Insider Shares”. The Founder
Shares include an aggregate of up to 375,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment is
not exercised in full or in part, so that the Sponsor will collectively own 20% of the Company’s issued and outstanding shares
after the Proposed Public Offering (assuming the Sponsor does not purchase any Public Shares in the Proposed Public Offering).
All of the Insider Shares issued and outstanding
prior to the date of the Public Offering will be placed in escrow with Continental Stock Transfer & Trust Company, as escrow
agent, until (1) with respect to 50% of the Insider Shares, the earlier of six months or after the date of the consummation of Initial
Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 per share for any 20 trading
days within any 30-trading period commencing after the Initial Business Combination, and (2) with respect to the remaining 50% of
the Insider Shares, six months after the date of the consummation of Initial Business Combination, or earlier, in either case, if subsequent
to the Initial Business Combination, the Company consummate a liquidation, merger, share exchange or other similar transaction which
will result in all of the stockholders having the right to exchange their shares for cash, securities, or other property. Up to 375,000
of the Insider Shares may be released from escrow earlier than this date for forfeiture and cancellation if the over-allotment is not
exercised in full.
During the escrow period,
the holders of these shares will not be able to sell or transfer their securities except (1) to any persons (including their affiliates
and stockholders) participating in the private placement of the private warrants, officers, directors, stockholders, employees and members
of the co-sponsors and their affiliates, (2) amongst initial stockholders or to Company’s officers, directors and employees,
(3) if a holder is an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona
fide gift to a member of the holder’s immediate family or to a trust, the beneficiary of which is a holder or a member of a holder’s
immediate family, for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant
to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of our
securities, (8) by private sales at prices no greater than the price at which the shares were originally purchased or (9) for
the cancellation of up to 375,000 shares of common stock subject to forfeiture to the extent that the underwriters’ over-allotment
is not exercised in full or in part.
The sale of the Founder Shares to the
Company’s Chief Executive Officer, directors and director nominees is in the scope of FASB ASC Topic 718,
“Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with
equity-classified awards is measured at fair value upon the grant date. The Company has hired a valuation firm to assess using the
lattice model, the fair value associated with the Founder Shares granted. The fair value of the 325,000 Founder Shares granted to
the Company’s Chief Executive Officer, directors and director nominees was $1,901,250 or $5.85 per share. The Founder Shares
were granted subject to a performance condition (i.e., the occurrence of a Business Combination and occurrence of an initial public
offering). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of
occurrence under the applicable accounting literature in this circumstance. As of June 30, 2021, the Company determined the
performance conditions are not considered probable, and, therefore, no stock-based compensation expense has been recognized.
Stock-based compensation would be recognized at the date the performance conditions are considered probable (i.e., upon consummation
of a Business Combination or the consummation of an initial public offering) in an amount equal to the number of Founder Shares
vested times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase
of the Founder Shares.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Related Party Loans
In addition, in order to finance transaction
costs in connection with an intended Initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s
officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
Each loan would be evidenced by a promissory note. The notes would be paid upon consummation of a Business Combination, without interest,
or, at the lender’s discretion up to $1,500,000 of the notes may be converted upon consummation of a Business Combination into
additional Private Warrants to purchase shares of common stock at a conversion price of $1.00 per Private Warrant. Such Private Warrants
will be identical to the Public Warrants to be issued at the closing of the Proposed Public Offering, except that each Private Warrant
is exercisable for one share of common stock at an exercise price of $11.50 per share.
Promissory Note
On April 28, 2021, the Company issued an unsecured promissory note
to NorthStar, one of the co-Sponsors (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate
principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) September 30, 2021 or (ii)
the consummation of the Proposed Public Offering. As of June 30, 2021, there was $150,405 outstanding under the Promissory Note.
Administrative Support Agreement
The Company intends to enter into an agreement,
commencing on the effective date of the Proposed Public Offering through the earlier of the Company’s consummation of a Business
Combination and its liquidation, to pay NorthStar a total of $10,000 per month for office space, utilities and secretarial and administrative
support. However, pursuant to the terms of such agreement, the Company may delay payment of such monthly fee upon a determination by the
Company’s Audit Committee that the Company lacks sufficient funds held outside the Trust Account to pay actual or anticipated expenses
in connection with a Business Combination. Any such unpaid amount will accrue without interest and be due and payable no later than the
date of the consummation of the Initial Business Combination.
Note 6 — Commitments and Contingencies
Registration Rights
The holders of the Insider Shares issued and outstanding
on the date of the Proposed Offering, Private Warrants (and underlying securities) will be entitled to registration and stockholder rights
pursuant to an agreement to be signed prior to or on the effective date of Proposed Public Offering. The holders of a majority of these
securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Insider
Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of
common stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect to
exercise these registration rights at any time after the consummation of Business Combination. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. Notwithstanding
the foregoing, Chardan Monterey may not exercise its demand and “piggyback” registration rights after five and seven years,
respectively, after the effective date of the registration statement of which this forms part and may not exercise its demand rights on
more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company will grant the underwriters a
45-day option from the date of Proposed Public Offering to purchase up to 1,500,000 additional Units to cover over-allotments, if any,
at the Proposed Public Offering price less the underwriting discounts and commissions.
The underwriters will
be entitled to a cash underwriting discount of $0.20 per unit, or $2,000,000 in the aggregate (or $2,300,000 if the underwriters’
over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Related Party Transactions
The
Company will engage Chardan as an advisor in connection with the Business Combination. The Company will pay Chardan the Marketing Fee
for such services upon the consummation of the Initial Business Combination in an amount equal to, or in aggregate 3.5% of the gross
proceeds of the Proposed Offering (or $3,500,000), including any proceeds from the full or partial exercise of the over-allotment option
(up to $4,025,000 if the over-allotment option is exercised in full), including any proceeds from the full or partial exercise of over-allotment
option.
Chardan Monterey, an affiliate
of Chardan beneficially owns in excess of 10% of the Company’s issued and outstanding common stock. Because Chardan is an underwriter
in the Proposed Offering and its affiliate owns in excess of 10% of the Company’s issued and outstanding common stock, Chardan is
deemed to have a “conflict of interest” under Rule 5121.
Accordingly,
the Proposed Offering is being made in compliance with the requirements of Rule 5121,
which requires that a qualified independent underwriter participate in the preparation of,
and exercise of the usual standard of due diligence with respect to registration statement.
B. Riley Securities, Inc. has agreed to act as a qualified independent underwriter for the
Proposed Offering and to undertake the legal responsibilities and liabilities of an underwriter
under the Securities Act, specifically including those inherent in Section 11, it will
receive $100,000 from the total underwriting discount for serving as qualified independent
underwriter in connection with the Proposed Offering.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 7 — Stockholder’s Equity
Preferred
Stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At June 30, 2021 and
December 31, 2020, there were no shares of preferred stock issued or outstanding.
Common
Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share.
At June 30, 2021 and December 31, 2020, there were 2,875,000 shares of common stock issued and outstanding, after the shares and
associated amounts have been retroactively restated to reflect the cancellation of 2,125,000 Founder Shares, of which an aggregate of up
to 375,000 shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full
or in part, so that the Sponsor will collectively own 20% of the Company’s issued and outstanding common stock after the Proposed
Public Offering (assuming Sponsor does not purchase any Public Shares in the Proposed Public Offering).
Warrants — Warrants may
only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the warrants. If, upon exercise
of the warrants, a holder would be entitled to receive fractional interest in a share, the Company will, upon exercise, round down to
the nearest whole number the number of shares of common stock to be issued to the warrant holder. The warrants will become exercisable
on the later of one year after the closing of the Proposed Offering or the consummation of a Business Combination. The warrants will
expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.
No warrant will be exercisable for cash, and
the Company will not be obligated to issue shares of common stock unless at the time a holder seeks to exercise such warrant, a prospectus
relating to the shares of common stock issuable upon exercise is current and the shares of common stock have been registered, qualified
or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. Under the terms
of the warrant agreement, the Company has agreed to use its best efforts to meet the above conditions and to maintain a current prospectus
relating to the shares of common stock issuable upon exercise of the warrants until the expiration of the warrants. If the prospectus
relating to the shares of common stock issuable upon the exercise of the warrants is not current or if the common stock is not qualified
or exempt from qualification in the jurisdictions in which the holders of the warrants reside, the Company will not be required to net
cash settle or cash settle the warrant exercise, the warrants may have no value, the market for the warrants may be limited and the warrants
may expire worthless.
Redemptions for warrants. The Company
may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant:
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·
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at any time while
the warrants are exercisable;
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·
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upon not less than
30 days’ prior written notice of redemption to each warrant holder;
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·
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if, and only if,
the reported last sales price of the shares common stock equals or exceeds $16.50 per share,
for any 20 trading days within a 30-day trading period ending on the third business day prior
to the notice of redemption to warrant holders; and
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·
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if, and only if,
there is a current registration statement in effect with respect to the shares of common
stock underlying such warrants at the time of redemption and for the entire 30-day trading
period referred to above and continuing each day thereafter until the date of redemption.
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The right to exercise will be forfeited unless
the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder
of the warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such
warrant.
The redemption criteria for the warrants have
been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide
a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines
as a result of the Company’s redemption call, the redemption will not cause the share price to drop below the exercise price of
the warrants.
If the Company calls the warrants for redemption
as described above, its management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless
basis”. In such event, each holder would pay the 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” by (y) the fair market value. The
“fair market value” shall mean the average reported last sales price of shares of common stock for the ten trading days ending
on the third trading day prior to the date on which the notice of redemption is sent to the holders of the warrants. Whether the Company
will exercise its option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety
of factors including the price of shares of common stock at the time the warrants are called for redemption, the Company’s cash
needs at such time, and concerns regarding dilutive shares issuances.
The exercise price and number of shares of
common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend,
extraordinary dividend, recapitalization, reorganization, merger, or consolidation. In addition, if (x) the Company issues additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business
Combination at an issued price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined
in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without
taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and
interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such
initial Business Combination (net of redemptions), and (z) the Market Value is below $9.50 per share, the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $16.50
per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 165% of the higher of the Market Value and the
Newly Issued Price.
The Private Warrants will be identical to
the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that each Private Warrant is exercisable
for one share of common stock at an exercise price of $11.50 per share. The Private Warrants and any shares of common stock issued upon
exercise thereof are subject to transfer restrictions pursuant to lock-up provision in a letter agreement with the Company to be entered
into by the co-sponsors, officers, directors, and Chardan. Those lock-up provisions provide that such securities are not transferable
or salable until 30 days after the completion of the Initial Business Combination, except to conditions as set forth in the agreement.
MONTEREY BIO ACQUISITION CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 8 — Subsequent Events
The Company
evaluated subsequent events and transactions that occurred after June 30, 2021, the balance sheet date
up to September 7, 2021, the date that the financial statements were available to be issued. Based upon this review, other than as
described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the
financial statements.
On April 12, 2021,
the SEC issued a statement with respect to the accounting for warrants issued by special purchase acquisition companies. In light of
the SEC Staff’s Statement, the Company has determined that the fair value of the warrants should be classified as equity on the
Company’s balance sheet as of the closing of the Proposed Public Offering that will be filed on Form 8-K.
On
September 1, 2021, the co-Sponsors forfeited an aggregate of 1,437,500 founder shares for no consideration resulting in an
aggregate of 2,875,000 shares of common stock outstanding. All shares and associated amounts have been retroactively restated to
reflect the share forfeiture.
$100,000,000
Monterey Bio Acquisition Corporation
10,000,000 Units
__________________________________
PRELIMINARY PROSPECTUS
__________________________________
Sole Book-Running Manager
Chardan
_______, 2021
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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Item 13.
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Other Expenses of Issuance and Distribution.
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The estimated expenses payable by us in connection
with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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Initial Trustee fee
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$
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6,500
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SEC Registration Fee
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12,550
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FINRA filing fee
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17,750
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Accounting fees and expenses
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40,000
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Nasdaq listing fees
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75,000
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Printing and filing expenses
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30,000
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Legal fees and expenses
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250,000
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Miscellaneous
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68,200
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Total
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$
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500,000
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Item 14.
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Indemnification of Directors and Officers.
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Our certificate of incorporation provides that
all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest extent permitted
by Section 145 of the DGCL, or the DGCL.
Section 145 of the DGCL concerning indemnification
of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers,
directors, employees and agents; insurance.
(a) A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right
of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct
was unlawful.
(b) A corporation
shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was
a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’
fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person
acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem
proper.
(c) To
the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by
such person in connection therewith.
(d) Any indemnification
under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper
in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such
determination: (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than
a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum,
or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by
the stockholders.
(e) Expenses
(including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees)
incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The
indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action
in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the
certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to the certificate of incorporation or the
bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action,
suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such
act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g) A corporation
shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify
such person against such liability under this section.
(h) For purposes
of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position
under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation
if its separate existence had continued.
(i) For
purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines”
shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the
request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants
or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the
corporation” as referred to in this section.
(j) The
indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized
or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court
of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of
expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication
of such issue.
In accordance with Section 102(b)(7) of
the DGCL, our certificate of incorporation provides that our directors will not be personally liable for monetary damages resulting from
breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith,
knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions,
or derived an improper personal benefit from their actions as directors. The effect of this provision of our certificate of incorporation
is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary
damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly
negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate
our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach
of a director’s duty of care.
If the DGCL is amended to authorize corporate
action further eliminating or limiting the liability of directors, then, in accordance with our certificate of incorporation, the liability
of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended.
Our certificate of incorporation also provides
that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors,
as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or
agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any
threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability
and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in
settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing,
a person eligible for indemnification pursuant to our certificate of incorporation will be indemnified by us in connection with a proceeding
initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to
indemnification.
The right to indemnification conferred by our
certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise
participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an
advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will
be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it
is ultimately determined that such person is not entitled to be indemnified for such expenses under our certificate of incorporation or
otherwise.
The rights to indemnification and advancement
of expenses will not be deemed exclusive of any other rights which any person covered by our certificate of incorporation may have or
hereafter acquire under law, our certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors,
or otherwise.
Any repeal or amendment of provisions of our certificate
of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions
inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in
law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect
any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any
act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our certificate of incorporation
will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other
that those specifically covered by our certificate of incorporation.
Our bylaws, which we intend to adopt immediately
prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent
with those set forth in our certificate of incorporation. In addition, our bylaws provide for a right of indemnity to bring a suit in
the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws
also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our
corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power
to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our bylaws
affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of
any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment
or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely
affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or
adoption of such inconsistent provision.
We will enter into indemnity agreements with each
of our officers and directors, a form of which is filed as Exhibit 10.6 to this Registration Statement. These agreements will require
us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses incurred as a result of any
proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting Agreement that will
be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriters and the Underwriters have agreed
to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities
under the Securities Act.
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Item 15.
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Recent Sales of Unregistered Securities.
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On
September 18, 2020, Chardan Monterey purchased 5,000,000 shares of common stock from
us for $25,000, or $0.005 per share. On May 20, 2021, Chardan Monterey transferred 687,500
founder shares back to us for no consideration, which shares were cancelled. On May 21, 2021,
Chardan Monterey transferred 3,315,625 founder shares to NorthStar at a price of $0.006 per
share. On May 21, 2021, NorthStar transferred 150,000 founder shares to Dr. Satyal,
our chief executive officer, and transferred 35,000 founder shares to each of our directors
and director nominees at a price of $0.006 per share. On [ ], 2021, NorthStar transferred
1,078,125 founder shares back to us and Chardan Monterey transferred 359,375 founder shares
back to us, in each case for no consideration, which shares were cancelled. As a result,
NorthStar holds a balance of 1,912,500 founder shares and Chardan Monterey holds a balance
of 637,500 founder shares. We refer to these shares held by our co-sponsors, officers and
directors as “founder shares” or “insider shares.” The founder shares
include an aggregate of up to 375,000 shares that are subject to forfeiture to the extent
that the underwriters’ over-allotment option is not exercised in full or in part. Because
these offers and sales were made in transactions not involving a public offering, the shares
were issued in reliance on the exemption from registration contained in Section 4(a)(2) of
the Securities Act.
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•
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NorthStar has committed to purchase from us 3,750,000 warrants
(or 4,087,500 warrants if the over-allotment option is exercised in full) and Chardan Monterey has committed to purchase from us 1,250,000
warrants (or 1,362,500 warrants if the over-allotment option is exercised in full), in each case, at a price of $1.00 per warrant, for
an aggregate purchase price of $5,000,000 (or $5,450,000 if the over-allotment option is exercised in full) in a private placement that
will close simultaneously with the closing of this offering. We refer to these warrants, collectively, as the “private warrants”
throughout this prospectus. Each private warrant is exercisable for one (1) share of common stock at an exercise price of $11.50
per share. Because this offer and sale is being made to existing stockholders, the sale does not involve a public offering and is being
made in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act.
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No underwriting discounts or commissions were
paid with respect to such sales.
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Item 16.
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Exhibits and Financial Statement Schedules.
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(a) The
following exhibits are filed as part of this Registration Statement:
* Filed herewith.
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(a)
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The undersigned registrant hereby undertakes to provide to
the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names
as required by the underwriter to permit prompt delivery to each purchaser.
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(b)
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Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person
of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of such issue.
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(c)
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The undersigned registrant hereby undertakes that:
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(1)
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For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
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(2)
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For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.
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SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, New York on the 7th day of September, 2021.
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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/s/ Sanjeev Satyal
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Name:
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Sanjeev Satyal
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Title:
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Chief Executive Officer
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SIGNATURES
KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Sanjeev Satyal and William McKeever his true and lawful attorney-in-fact, with full
power of substitution and resubstitution for him and in his name, place and stead, in any
and all capacities to sign any and all amendments including post-effective amendments
to this registration statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorney-in-fact or his substitute, each acting alone,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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Name
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Position
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Date
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/s/ Sanjeev Satyal
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Chief Executive Officer
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September 7, 2021
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Sanjeev Satyal
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(Principal Executive Officer)
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/s/ William McKeever
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Chief Financial Officer and Director
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September 7, 2021
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William McKeever
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(Principal Financial and Principal Accounting Officer)
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/s/ Sandip I. Patel
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Director
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September 7, 2021
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Sandip I. Patel
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/s/ Jonas Grossman
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Director
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September 7, 2021
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Jonas Grossman
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Exhibit 1.1
10,000,000 Units
Monterey Bio Acquisition Corporation
UNDERWRITING AGREEMENT
[•], 2021
Chardan Capital Markets, LLC
17 State Street, Suite 2100
New York, New York 10004
As Representative of the Underwriters named on
Schedule A hereto
Ladies and Gentlemen:
The undersigned, Monterey Bio Acquisition Corporation,
a Delaware corporation (“Company”), hereby confirms its agreement with Chardan Capital Markets, LLC (hereinafter referred
to as “you”, “Chardan”, or as the “Representative”) and with the other underwriters
named on Schedule A hereto for which you are acting as representative (the Representative and the other Underwriters being collectively
referred to herein as the “Underwriters” or, individually, an “Underwriter”), as follows:
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1.
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Purchase and Sale of Securities.
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1.1.1 Purchase
of Firm Units. On the basis of the representations and warranties herein contained, but subject to the terms and conditions set forth
herein, the Company agrees to issue and sell, severally and not jointly, to the several Underwriters, an aggregate of 10,000,000 units
(the “Firm Units”) of the Company at a purchase price (net of discounts and commissions) of $9.80 per Firm Unit. The
Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Units set forth opposite their respective
names on Schedule A attached hereto and made a part hereof at a purchase price (net of discounts and commissions) of $9.80 per
Firm Unit. The Firm Units (and the Option Units (as hereinafter defined), if any) are to be offered initially to the public (the “Offering”)
at the offering price of $10.00 per Firm Unit, it being understood that the offering price is not in excess of the price recommended
by the QIU (as hereinafter defined). Each Firm Unit consists of one (1) share of the Company’s common stock, par value $0.0001
per share (the “Common Stock”), and one (1) redeemable warrant (the “Warrant(s)”), each Warrant
entitling the holder thereof to purchase one (1) share of Common Stock; provided, however, the Company will not sell
or issue fractional shares. The shares of Common Stock and the Warrants included in the Firm Units will not be separately transferable
until the earlier of the 90th day after the date that the Registration Statement (as defined below) becomes effective (the
“Effective Date”) or the announcement by the Company of the Representative’s decision to allow earlier trading,
subject, however, to the Company filing a Current Report on Form 8-K (“Form 8-K”) with the Commission (as
defined below) containing an audited balanced sheet reflecting the Company’s receipt of the gross proceeds of the Offering and
issuing a press release announcing when such separate trading will begin.
In no event will the Company
allow separate trading until (i) the preparation of an audited balance sheet of the Company reflecting receipt by the Company of
the proceeds of the Offering and the filing of such audited balance sheet with the Commission (as defined below) on a Form 8-K or
similar form by the Company which includes such balance sheet and (ii) the issuance of a press release announcing when such separate
trading shall begin. Each Warrant entitles the holder to purchase one share of Common Stock (provided, however, the Company
will not sell or issue fractional shares) at a price of $11.50 per share, exercisable during the period commencing on the later of the
date (a) one year after the closing of the Offering, or (b) the consummation of a Business Combination (as defined below) and
expiring five years after the completion of a Business Combination or earlier upon redemption. As used herein, the term “Business
Combination” shall mean any merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other
similar business combination with one or more businesses or entities by the Company. The Company has the right to redeem the Warrants,
upon not less than thirty (30) days written notice at a price of $0.01 per Warrant at any time after the Warrants become exercisable;
so long as (i) the last sales price of the Common Stock has been at least $16.50 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any twenty (20) trading days within a 30-trading day period ending three Business
Days before the Company sends the notice of redemption and (ii) there is a current registration statement in effect with respect
to the shares of Common Stock underlying such Warrants at the time of redemption and for the entire 30-day trading period referred to
above and continuing each day thereafter until the date of redemption. As used herein, the term “Business Day” shall
mean any day other than a Saturday, Sunday or any day on which national banks in New York, New York are not open for business.
1.1.2 Payment
and Delivery. Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York time, on the second (2nd)
Business Day following the Effective Date of the Registration Statement (or the third (3rd) Business Day following the Effective
Date, if the Registration Statement is declared effective on or after 4:00 p.m.) or at such earlier time as shall be agreed upon by the
Representative and the Company at the offices of the Representative or at such other place as shall be agreed upon by the Representative
and the Company. The closing of the public offering contemplated by this Agreement is referred to herein as the “Closing”
and the hour and date of delivery and payment for the Firm Units is referred to herein as the “Closing Date.” Payment
for the Firm Units shall be made on the Closing Date at the Representative’s election by wire transfer in Federal (same day) funds
or by certified or bank cashier’s check(s) in New York Clearing House funds. $101,000,000 ($116,150,000 if the Over-allotment
Option (as defined in Section 1.2) is exercised in full), or $10.10 per Unit, of the proceeds received by the Company for
the Firm Units and from the Private Placement (as defined in Section 1.3) shall be deposited in the trust account established
by the Company for the benefit of the public stockholders as described in the Registration Statement (the “Trust Account”)
pursuant to the terms of an investment management trust agreement (the “Trust Agreement”) by and between the Company
and Continental Stock Transfer & Trust Company. The proceeds (less commissions, expense allowance and actual expense payments
or other fees payable pursuant to this Agreement) shall be paid to the order of the Company upon delivery to the Representative of certificates
(in form and substance satisfactory to the Underwriters) representing the Firm Units (or through the facilities of the Depository Trust
Company (“DTC”)) for the account of the Underwriters. The Firm Units shall be registered in such name or names and
in such authorized denominations as the Representative may request in writing at least two (2) Business Days prior to the Closing
Date. The Company will permit the Representative to examine and package the Firm Units for delivery, at least one (1) full Business
Day prior to the Closing Date. The Company shall not be obligated to sell or deliver the Firm Units except upon tender of payment by
the Representative for all the Firm Units.
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1.2
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Over-Allotment Option.
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1.2.1 Option
Units. For the purpose of covering any over-allotments in connection with the distribution and sale of the Firm Units, the Underwriters
are hereby granted, severally and not jointly, an option to purchase up to an additional 1,500,000 units from the Company (the “Over-allotment
Option”). Such additional 1,500,000 units shall be identical in all respects to the Firm Units and are hereinafter referred
to as “Option Units.” The Firm Units and the Option Units are hereinafter collectively referred to as the “Units,”
and the Units, the shares of Common Stock and Warrants included in the Units and the shares of Common Stock issuable upon exercise of
such Warrants are hereinafter referred to collectively as the “Public Securities.” The purchase price to be paid for
the Option Units (net of discounts and commissions) will be $9.80 per Option Unit. The Option Units are to be offered initially to the
public at the offering price of $10.00 per Option Unit.
1.2.2 Exercise
of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised by the Representative
as to all (at any time) or any part (from time to time) of the Option Units within forty-five (45) days after the Effective Date. The
Underwriters will not be under any obligation to purchase any Option Units prior to the exercise of the Over- allotment Option. The Over-allotment
Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in
writing by overnight mail, facsimile transmission or e-mail transmission setting forth the number of Option Units to be purchased and
the date and time for delivery of and payment for the Option Units, which will not be later than five (5) Business Days after the
date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of the Representative
or at such other place or in such other manner as shall be agreed upon by the Company and the Representative. If such delivery and payment
for the Option Units does not occur on the Closing Date, the date and time of the closing for such Option Units will be as set forth
in the notice (hereinafter the “Option Closing Date”). Upon exercise of the Over-allotment Option, the Company will
become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become
obligated to purchase, the number of Option Units specified in such notice.
1.2.3 Payment
and Delivery. Delivery and payment for the Option Units shall be made at 10:00 AM, New York time, on the Option Closing Date or at
such earlier time as shall be agreed upon by the Representative and the Company at the offices of the Representative or at such other
place as shall be agreed upon by the Representative and the Company. Payment for the Option Units shall be made at the Representative’s
election by wire transfer in Federal (same day) funds or by certified or bank cashier’s check(s) in New York Clearing House
funds, by deposit of the sum of $9.80 per Option Unit in the Trust Account pursuant to the Trust Agreement upon delivery to the Representative
of certificates (in form and substance satisfactory to the Underwriters) representing the Option Units (or through the facilities of
DTC) for the account of the Underwriters. The Option Units shall be registered in such name or names and in such authorized denominations
as the Representative may request not less than two (2) Business Days prior to the Closing Date or the Option Closing Date, as the
case may be, and will be made available to the Representative for inspection, checking and packaging at the aforesaid office of the Company’s
transfer agent or correspondent not less than one (1) full Business Day prior to such Closing Date or Option Closing Date.
1.3 Private
Placement. Simultaneously with the Closing, (i) NorthStar Bio Ventures, LLC (“NorthStar”) shall purchase
from the Company, pursuant to the Subscription Agreement (as defined in Section 2.23.2 hereof) an aggregate of 3,750,000
warrants (or 4,087,500 warrants if the over-allotment option is exercised in full) (the “NorthStar Placement Warrants”)
and Chardan Monterey Investments LLC (“Chardan Monterey”) shall purchase from the Company, pursuant to the Subscription
Agreement, an aggregate of 1,250,000 warrants (or 1,362,500 warrants if the over-allotment option is exercised in full) (the “Chardan
Monterey Placement Warrants”, together with the NorthStar Placement Warrants, the “Co-Sponsor Placement Warrants”),
in each case at a purchase price of $1.00 per Co-Sponsor Placement Warrant in a private placement (the “Private Placement”).
The Co-Sponsor Placement Warrants and the shares of Common Stock underlying the Co-Sponsor Placement Warrants are hereinafter referred
to collectively as the “Placement Securities,” and the Public Securities and the Placement Securities are hereinafter
referred to collectively as the “Securities.” Each Co-Sponsor Placement Warrant shall be identical to the Warrants
sold in the Offering except that the Co-Sponsor Placement Warrants (may not, subject to certain limited exceptions, be transferred, assigned
or sold by the initial purchaser until thirty (30) days after the completion of the Company’s initial business combination. The
Chardan Monterey Placement Warrants will not be exercisable more than five (5) years from the Effective Date, in accordance with
FINRA Rule 5110(g)(8)(A), as long as Chardan Monterey or any of its related persons beneficially own these warrants. There will
be no placement agent in the Private Placement and no party shall be entitled to a placement fee or expense allowance from the sale of
the Placement Securities. Pursuant to Rule 5110(g)(1) of FINRA’s (as defined below) Rules, the Co-Sponsor Placement Warrants
are subject to a lock-up for a period of 180 days immediately following the Effective Date of the Registration Statement or the commencement
of sales in the Offering and, for that 180 day period following the Effective Date, may not be sold, transferred, assigned, pledged
or hypothecated, or be subject of any hedging, short sale, derivative or put or call transaction that would result in the economic disposition
of the securities. Pursuant to Rule 5110(g)(8) of FINRA’s Rules, Chardan Capital Markets, LLC and its related persons
may not, with respect to the Chardan Monterey Placement Warrants (and the shares that are issuable upon exercise of the Chardan Monterey
Placement Warrants), (i) have more than one demand registration right at the Company’s expense, (ii) exercise their demand
registration rights more than five (5) years from the effective date of the Registration Statement, and (iii) exercise their
“piggy-back” registration rights more than seven (7) years from the effective date of the Registration Statement, as
long as Chardan Capital Markets, LLC or any of its related persons are beneficial owners of Chardan Monterey Placement Warrants.
1.4 Qualified
Independent Underwriter. The Company hereby confirms its engagement of B. Riley Securities, Inc. (“B. Riley”)
as, and B. Riley hereby confirms its agreement with the Company to render services as, the “qualified independent underwriter,”
within the meaning of Rule 5121 of the Financial Industry Regulatory Authority, Inc. (“FINRA”) with respect
to the offering and sale of the Public Securities. B. Riley, solely in its capacity as the qualified independent underwriter and not
otherwise, is referred to herein as the “QIU.” As compensation for services rendered, on the Closing Date, the Company
shall pay to the QIU, by wire transfer of immediately available funds on the Closing Date, a fee of $100,000 from the total underwriting
discount. B. Riley hereby consents to the reference to it as set forth under the heading “Underwriting (Conflicts of Interest)”
in the Preliminary Prospectus and the Prospectus (as defined herein) and any amendment or supplement thereto.
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2.
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Representations and Warranties of the Company. The Company
represents and warrants to the Underwriters and the QIU as follows:
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2.1
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Filing of Registration Statement.
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2.1.1 Pursuant
to the Act. The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration
statement and an amendment or amendments thereto, on Form S-1 (File No. 333-[•]), including any related preliminary prospectus
(the “Preliminary Prospectus”, including any prospectus that is included in the Registration Statement immediately
prior to the effectiveness of the Registration Statement), for the registration of the Public Securities under the Securities Act of
1933, as amended (the “Act”), which registration statement and amendment or amendments have been prepared by the Company
in conformity in all material respects with the requirements of the Act, and the rules and regulations (the “Regulations”)
of the Commission under the Act. The conditions for use of Form S-1 to register the Offering under the Act, as set forth in the
General Instructions to such Form, have been satisfied in all material respects. Except as the context may otherwise require, such registration
statement, as amended, on file with the Commission at the time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information
deemed to be a part thereof as of such time pursuant to Rule 430A of the Regulations), is hereinafter called the “Registration
Statement,” and the form of the final prospectus dated the Effective Date included in the Registration Statement (or, if applicable,
the form of final prospectus containing information permitted to be omitted at the time of effectiveness by Rule 430A of the Regulations
filed with the Commission pursuant to Rule 424 of the Regulations), is hereinafter called the “Prospectus.” For
purposes of this Agreement, “Time of Sale”, as used in the Act, means [●] p.m., New York City time, on the date
of this Agreement. If the Company has filed, or is required pursuant to the terms hereof to file, a registration statement pursuant to
Rule 462(b) under the Securities Act registering the Public Securities (a “Rule 462(b) Registration Statement”),
then, unless otherwise specified, any reference herein to the term “Registration Statement” shall be deemed to include
such Rule 462(b) Registration Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes
effective upon filing, no other document with respect to the Registration Statement has heretofore been filed with the Commission. All
of the Public Securities have been registered under the Act pursuant to the Registration Statement or, if any Rule 462(b) Registration
Statement is filed, will be duly registered under the Securities Act with the filing of such Rule 462(b) Registration Statement.
The Registration Statement has been declared effective by the Commission on the date hereof. If, subsequent to the date of this Agreement,
the Company or the Representative has determined that at the Time of Sale the Prospectus included an untrue statement of a material fact
or omitted a statement of material fact necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading, and have agreed to provide an opportunity to purchasers of the Units to terminate their old purchase contracts
and enter into new purchase contracts, the Prospectus will be deemed to include any additional information available to purchasers at
the time of entry into the first such new purchase contract.
2.1.2 Pursuant
to the Exchange Act. The Company has filed with the Commission a Form 8-A (Registration No. 001-[●]), providing for
the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Units, the Common
Stock and the Warrants. The registration of the Units, Common Stock and Warrants under the Exchange Act will be declared effective by
the Commission on or prior to the Effective Date.
2.2 No
Stop Orders, Etc. Neither the Commission nor, to the best of the Company’s knowledge, any state regulatory authority has issued
any order or threatened to issue any order preventing or suspending the use of any Preliminary Prospectus or has instituted or, to the
best of the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
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2.3
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Disclosures in Registration Statement.
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2.3.1 10b-5
Representation. At the time the Registration Statement became effective, upon the filing or first use (within the meaning of the
Regulations) of the Prospectus and at the Closing Date and the Option Closing Date, if any, the Registration Statement and the Prospectus
contained or will contain all material statements that are required to be stated therein in accordance with the Act and the Regulations,
and did or will in all material respects conform to the requirements of the Act and the Regulations. Neither the Registration Statement
nor any Preliminary Prospectus or the Prospectus, nor any amendment or supplement thereto, on their respective dates, did or will contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein (in the case of the Preliminary Prospectus and the Prospectus, in light of the circumstances under which they were made), not
misleading. When any Preliminary Prospectus was first filed with the Commission (whether filed as part of the Registration Statement
for the registration of the Public Securities or any amendment thereto or pursuant to Rule 424(a) of the Regulations) or first
used (within the meaning of the Regulations) and when any amendment thereof or supplement thereto was first filed with the Commission
or first used (within the meaning of the Regulations), such Preliminary Prospectus and any amendments thereof and supplements thereto
complied or will have been corrected in the Prospectus to comply in all material respects with the applicable provisions of the Act and
the Regulations and did not and will not contain an untrue statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading. The representation and warranty made in this Section 2.3.1 does not apply to statements made or statements omitted
in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters by the Representative
expressly for use in the Registration Statement or Prospectus or any amendment thereof or supplement thereto. It is understood that the
following identified statements set forth in the Prospectus under the heading “Underwriting (Conflicts of Interest)” constitute,
for the purposes of this Agreement, information furnished by the Representative with respect to the Underwriters: (i) the table
of underwriters in the first paragraph of “Underwriting (Conflicts of Interest)”, (ii) the first paragraph of the Underwriting
subsection “Pricing of Securities,” (iii) the Underwriting subsection “Regulatory Restrictions on Purchase of
Securities” and (iv) the Underwriting subsection “Resale Restrictions.”
2.3.2 Disclosure
of Agreements. The agreements and documents described in the Registration Statement, the Preliminary Prospectus and the Prospectus
conform to the descriptions thereof contained therein and there are no agreements or other documents required to be described in the
Registration Statement, the Preliminary Prospectus or the Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which
the Company is a party or by which its property or business is or may be bound or affected and (i) that is referred to in the Registration
Statement, Preliminary Prospectus or the Prospectus or attached as an exhibit thereto, or (ii) is material to the Company’s
business, has been duly and validly executed by the Company, is in full force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as
such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally,
(y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws,
and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in breach or default
thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both,
would constitute a breach or default thereunder. To the Company’s knowledge, performance by the Company of the material provisions
of such agreements or instruments will not result in a material violation of any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental laws and regulations.
2.3.3 Prior
Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of,
any person or persons controlling, controlled by, or under common control with the Company since the date of the Company’s formation,
except as disclosed in the Registration Statement.
2.3.4 Regulations.
The disclosures in the Registration Statement, the Preliminary Prospectus and the Prospectus concerning the effects of Federal, state
and local regulation on the Company’s business as currently contemplated fairly summarize, to the best of the Company’s knowledge,
such effects and do not omit to state a material fact necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.
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2.4
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Changes After Dates in Registration Statement.
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2.4.1 No
Material Adverse Change. Except as contemplated in the Prospectus or specifically stated therein, since the respective dates as of
which information is given in the Registration Statement, any Preliminary Prospectus and/or the Prospectus: (i) there has been no
material adverse change in the condition, financial or otherwise, or business prospects of the Company; (ii) there have been no
material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; (iii) no member of the
Company’s board of directors or management has resigned from any position with the Company and (iv) no event or occurrence
has taken place which materially impairs, or would likely materially impair, with the passage of time, the ability of the members of
the Company’s board of directors or management to act in their capacities with the Company as described in the Registration Statement
and the Prospectus.
2.4.2 Recent
Securities Transactions, Etc. Except as contemplated in the Prospectus, subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as may otherwise be indicated or contemplated herein or therein,
the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money;
or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
2.5 Independent
Accountants. To the best of the Company’s knowledge, Marcum LLP (“Marcum”), whose report is filed with the
Commission as part of the Registration Statement and included in the Registration Statement, the Preliminary Prospectus and the Prospectus,
are independent accountants as required by the Act and the Regulations and the Public Company Accounting Oversight Board (including the
rules and regulations promulgated by such entity, the “PCAOB”). To the best of the Company’s knowledge,
Marcum is duly registered and in good standing with the PCAOB. Marcum has not, during the periods covered by the financial statements
included in the Registration Statement and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act.
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2.6
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Financial Statements; Statistical Data.
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2.6.1 Financial
Statements. The financial statements, including the notes thereto and supporting schedules included in the Registration Statement,
the Preliminary Prospectus and the Prospectus fairly present the financial position and the results of operations of the Company at the
dates and for the periods to which they apply; and such financial statements have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. To the best of the Company’s knowledge, no other financial
statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Preliminary
Prospectus or the Prospectus. The Registration Statement, the Preliminary Prospectus and the Prospectus disclose all material off-balance
sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of the Company with unconsolidated
entities or other persons that may have a material current or future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.
To the best of the Company’s knowledge, there are no pro forma or as adjusted financial statements which are required to be included
in the Registration Statement and the Prospectus in accordance with Regulation S-X which have not been included as so required.
2.6.2 Statistical
Data. The statistical, industry-related and market-related data included in the Registration Statement, the Preliminary Prospectus
and the Prospectus, if any, are based on or derived from sources which the Company reasonably and in good faith believes are reliable
and accurate, and such data agree with the sources from which they are derived.
2.7 Authorized
Capital; Options, Etc. The Company had at the date or dates indicated in the Registration Statement, the Preliminary Prospectus and
the Prospectus, as the case may be, duly authorized, issued and outstanding capitalization as set forth in the Registration Statement,
the Preliminary Prospectus and the Prospectus. Based on the assumptions stated in the Registration Statement, the Preliminary Prospectus
and the Prospectus, the Company will have on the Closing Date the adjusted stock capitalization set forth therein. Except as set forth
in, or contemplated by, the Registration Statement, the Preliminary Prospectus and the Prospectus, on the Effective Date of the Prospectus
and on the Closing Date and the Option Closing Date, if any, there will be no options, warrants, or other rights to purchase or otherwise
acquire any authorized, but unissued shares of Common Stock of the Company or any security convertible into shares of Common Stock of
the Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or convertible
securities.
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2.8
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Valid Issuance of Securities, Etc.
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2.8.1 Outstanding
Securities. All issued and outstanding securities of the Company (including, without limitation, the Placement Securities) have been
duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of rescission with respect
thereto, and are not subject to personal liability by reason of being such holders; and none of such securities were issued in violation
of the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. The Securities
conform in all material respects to all statements relating thereto contained in the Registration Statement, the Preliminary Prospectus
and the Prospectus. Subject to the disclosure contained in the Registration Statement, the Preliminary Prospectus and the Prospectus
with respect to the Placement Securities, the offers and sales of the outstanding shares of Common Stock were at all relevant times either
registered under the Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties
of the purchasers of such shares, exempt from such registration requirements.
2.8.2 Securities
Sold. The Securities have been duly authorized and reserved for issuance and when issued and paid for, will be validly issued, fully
paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason of being such holders; the
Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate actions required to be taken for the authorization, issuance and sale of the Securities
have been duly and validly taken. The Securities conform in all material respects to all statements with respect thereto contained in
the Registration Statement, the Preliminary Prospectus and the Prospectus, as the case may be.
2.8.3 Placement
Securities. The Placement Securities have been duly authorized and reserved for issuance and when issued and paid for, will be validly
issued, fully paid and non-assessable; the Placement Securities are not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the Company; and all corporate actions required to be taken for
the authorization, issuance and sale of the Placement Securities have been duly and validly taken. When issued, the Co-Sponsor Placement
Warrants will constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof and payment of the exercise
price therefor, the number and type of securities of the Company called for thereby in accordance with the terms thereof, and such Co-Sponsor
Placement Warrants are enforceable against the Company in accordance with their respective terms, except: (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability
of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy
of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought. The shares of Common Stock underlying the Co-Sponsor Placement Warrants
have been reserved for issuance upon the exercise of the Co-Sponsor Placement Warrants and, when issued in accordance with the terms
of the Co-Sponsor Placement Warrants, will be duly and validly authorized, validly issued, fully paid and non- assessable, and the holders
thereof are not and will not be subject to personal liability by reason of being such holders.
2.8.4 No
Integration. Subject to the disclosure contained in the Registration Statement, the Preliminary Prospectus and/or the Prospectus
with respect to the Placement Securities, neither the Company nor any of its affiliates has, prior to the date hereof, made any offer
or sale of any securities which are required to be “integrated” pursuant to the Act or the Regulations with the offer and
sale of the Public Securities pursuant to the Registration Statement.
2.9 Registration
Rights of Third Parties. Except as set forth in the Registration Statement, the Preliminary Prospectus or the Prospectus, no holders
of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the
right to require the Company to register any such securities of the Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10 Validity
and Binding Effect of Agreements. This Agreement, the Warrant Agreement (as defined in Section 2.22 hereof), the Trust
Agreement, the Services Agreement (as defined in Section 3.5.2 hereof), the Subscription Agreements (as defined in Section 2.23.2
hereof), the Registration Rights Agreement (as defined in Section 2.23.3 hereof), the Business Combination Marketing
Agreement (as defined in Section 2.32) and the Escrow Agreement (as defined in Section 2.23.4 hereof) have been
duly and validly authorized by the Company and constitute valid and binding agreements of the Company, enforceable against the Company
in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision
may be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought.
2.11 No
Conflicts, Etc. The execution, delivery, and performance by the Company of this Agreement, the Warrant Agreement, the Business Combination
Marketing Agreement, the Trust Agreement, the Services Agreement, the Subscription Agreements, the Registration Rights Agreement and
the Escrow Agreement, the consummation by the Company of the transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse of time or both: (i) result
in a material breach of, or conflict with any of the terms and provisions of, or constitute a material default under, or result in the
creation, modification, termination or imposition of any material lien, charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any agreement or instrument to which the Company is a party; (ii) result in any violation of the provisions
of the amended and restated certificate of incorporation of the Company; or (iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
2.12 No
Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition of any
material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which
the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any
material agreement, license, permit, applicable law, rule, regulation, judgment or decree of any governmental agency or court, domestic
or foreign, having jurisdiction over the Company or any of its properties or businesses, except for such violations which would not reasonably
be expected to have a material adverse effect on the Company. The Company is not in violation of any term or provision of its amended
and restated certificate of incorporation.
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2.13
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Corporate Power; Licenses; Consents.
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2.13.1 Conduct
of Business. The Company has all requisite corporate power and authority, and has all necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of the date hereof to
conduct its business for the purposes described in the Registration Statement, the Preliminary Prospectus and the Prospectus. The disclosures
in the Registration Statement and the Prospectus concerning the effects of federal, state and local regulation on the Offering and the
Company’s business purpose as currently contemplated are correct in all material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make the statements therein (with respect to the Prospectus, in light of the circumstances
under which they were made), not misleading. Since its formation, the Company has conducted no business and has incurred no liabilities
other than in connection with and in furtherance of the Offering.
2.13.2 Transactions
Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and to carry out the provisions
and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith have been obtained. No
consent, authorization or order of, and no filing with, any court, government agency or other body is required for the valid issuance,
sale and delivery of the Securities and the consummation of the transactions and agreements contemplated by this Agreement, the Warrant
Agreement, the Trust Agreement, the Services Agreement, the Subscription Agreements, the Business Combination Marketing Agreement and
the Registration Rights Agreement and the Escrow Agreement and as contemplated by the Prospectus, except with respect to applicable federal
and state securities laws and the rules and regulations promulgated by FINRA.
2.14 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the “Questionnaires”)
completed by the Company’s stockholders immediately prior to the Offering (the “Initial Stockholders”) and each
of the Company’s officers and directors and provided to the Underwriters is true and correct and the Company has not become aware
of any information which would cause the information disclosed in the questionnaires completed by the Initial Stockholders and each officer
or director, to become inaccurate and incorrect.
2.15 Litigation;
Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation or governmental proceeding
pending or, to the best of the Company’s knowledge, threatened against, or involving the Company or, to the best of the Company’s
knowledge, the Initial Stockholders, which has not been disclosed in the Registration Statement, the Questionnaires, the Preliminary
Prospectus and the Prospectus.
2.16 Good
Standing. The Company has been duly organized, is validly existing and is in good standing under the laws of Delaware and is duly
qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease of property
or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse effect
on the Company.
2.17 No
Contemplation of a Business Combination. Prior to the date hereof, neither the Company, its officers and directors nor the Initial
Stockholders had, and as of the Closing, the Company and such officers and directors and Initial Stockholders will not have had: (i) any
specific Business Combination under consideration or contemplation; or (ii) any substantive interactions or discussions with any
target business regarding a possible Business Combination.
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2.18
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Transactions Affecting Disclosure to FINRA.
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2.18.1 Except
as described in the Preliminary Prospectus and/or the Prospectus, there are no claims, payments, arrangements, agreements or understandings
relating to the payment of a finder’s, consulting or origination fee by the Company or the Initial Stockholders with respect to
the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s
knowledge, the Initial Stockholders that may affect the Underwriters’ compensation, as determined by FINRA.
2.18.2 Except
as described in the Preliminary Prospectus and/or the Prospectus, the Company has not made any direct or indirect payments (in cash, securities
or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital
for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any FINRA member; or
(iii) to any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve
(12) months prior to the Effective Date, other than payments to the Representative.
2.18.3 Except
as described in the Preliminary Prospectus and/or the Prospectus, no officer, director, or beneficial owner of any class of the Company’s
securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) (any
such individual or entity, a “Company Affiliate”) is a member, a person associated, or affiliated with a member of
FINRA.
2.18.4 Except
as described in the Preliminary Prospectus and/or the Prospectus, no Company Affiliate is an owner of stock or other securities of any
member of FINRA (other than securities purchased on the open market).
2.18.5 No
Company Affiliate has made a subordinated loan to any member of FINRA.
2.18.6 No
proceeds from the sale of the Public Securities (excluding underwriting compensation) or the Placement Securities will be paid to any
FINRA member, or any persons associated or affiliated with a member of FINRA, except as specifically authorized herein and in the Subscription
Agreements.
2.18.7 Except
as described in the Preliminary Prospectus and/or the Prospectus, the Company has not issued any warrants or other securities, or granted
any options, directly or indirectly to anyone who is a potential underwriter in the Offering or a related person (as defined by FINRA
rules) of such an underwriter within the 180-day period prior to the initial filing date of the Registration Statement.
2.18.8 Except
as described in the Preliminary Prospectus and/or the Prospectus, no person to whom securities of the Company have been privately issued
within the 180-day period prior to the initial filing date of the Registration Statement has any relationship or affiliation or association
with any member of FINRA.
2.18.9 Except
as described in the Preliminary Prospectus and/or the Prospectus, no FINRA member intending to participate in the Offering has a conflict
of interest with the Company. For this purpose, a “conflict of interest” exists when a member of FINRA and its associated
persons, parent or affiliates in the aggregate beneficially own 10% or more of the Company’s outstanding subordinated debt or common
equity, or 10% or more of the Company’s preferred equity. “Members participating in the Offering” include managing agents,
syndicate group members and all dealers which are members of FINRA.
2.18.10 Except
with respect to the Representative in connection with the Offering and except as described in the Preliminary Prospectus and/or the Prospectus,
the Company has not entered into any agreement or arrangement (including, without limitation, any consulting agreement or any other type
of agreement) during the 180- day period prior to the initial filing date of the Registration Statement, which arrangement or agreement
provides for the receipt of any item of value and/or the transfer of any warrants, options, or other securities from the Company to a
FINRA member, any person associated with a member (as defined by FINRA rules), any potential underwriters in the Offering and any related
persons.
2.19 Foreign
Corrupt Practices Act. Neither the Company nor the Initial Stockholders or any other person acting on behalf of the Company has,
directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers in
the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any
governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic
or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in a position
to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that: (i) might
subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding; (ii) if not given
in the past, might have had a material adverse effect on the assets, business or operations of the Company as reflected in any of the
financial statements contained in the Registration Statement, the Preliminary Prospectus and/or the Prospectus; or (iii) if not
continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The Company’s internal
accounting controls and procedures are sufficient to cause the Company to comply with the Foreign Corrupt Practices Act of 1977, as amended.
2.20 Patriot
Act. Neither the Company nor, to the Company’s knowledge, any officer, director or Initial Stockholder has violated: (i) the
Bank Secrecy Act, as amended; (ii) the Money Laundering Control Act of 1986, as amended; or (iii) the Uniting and Strengthening
of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules and
regulations promulgated under any such law, or any successor law.
2.21 Officers’
Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or to the Representative’s
counsel shall be deemed a representation and warranty by the Company to the Underwriters and the QIU as to the matters covered thereby.
2.22 Warrant
Agreement. The Company has entered into a warrant agreement with respect to the Warrants and the Co-Sponsor Placement Warrants with
Continental Stock Transfer & Trust Company, substantially in the form filed as an exhibit to the Registration Statement (the
“Warrant Agreement”).
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2.23
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Agreements with Officers, Directors and Initial Stockholders.
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2.23.1 Insider
Letters. The Company has caused to be duly executed legally binding and enforceable agreements (except: (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability
of any indemnification, contribution or non-compete provision may be limited under the federal and state securities laws; and (iii) that
the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought) forms of which are annexed as exhibits to the Registration
Statement (the “Insider Letters”), pursuant to which each of the officers, directors and Initial Stockholders of the
Company agree to certain matters.
2.23.2 Subscription
Agreements. Pursuant to those subscription agreements executed by NorthStar and Chardan Monterey, the form of which is attached as
an exhibit to the Registration Statement (the “Subscription Agreements”), 1) NorthStar, among other things, will purchase
an aggregate of 3,750,000 Co-Sponsor Placement Warrants (or 4,087,500 Co-Sponsor Placement Warrants if the over-allotment
option is exercised in full) in the Private Placement and 2) Chardan Monterey, among other things, will purchase an aggregate of 1,250,000
Co-Sponsor Placement Warrants (or 1,362,500 Co-Sponsor Placement Warrants if the over-allotment option is exercised
in full) in the Private Placement. Pursuant to the Subscription Agreements, all of the proceeds from the sale of the Co-Sponsor Placement
Warrants will be deposited by the Company in the Trust Account in accordance with the terms of the Trust Agreement prior to the Closing.
2.23.3 Registration
Rights Agreement. The Company, the Initial Stockholders and Continental Stock Transfer & Trust Company have entered into
a registration rights agreement (the “Registration Rights Agreement”) substantially in the form annexed as an exhibit
to the Registration Statement, whereby the parties will be entitled to certain registration rights with respect to their securities,
as set forth in such Registration Rights Agreement and described more fully in the Registration Statement.
2.23.4 Escrow
Agreement. The Company has caused the Initial Stockholders to enter into an escrow agreement (the “Escrow Agreement”)
with Continental Stock Transfer & Trust Company substantially in the form filed as an exhibit to the Registration Statement,
whereby the shares of Common Stock owned by the Initial Stockholders will be held in escrow during the period in which they are subject
to the transfer restrictions as set forth in the Prospectus. During such escrow period, the Initial Stockholders shall be prohibited
from selling or otherwise transferring such shares (except as otherwise set forth in the Escrow Agreement) but will retain the right
to vote any such shares of Common Stock. To the Company’s knowledge, the Escrow Agreement is enforceable against each of the Initial
Stockholders and will not, with or without the giving of notice or the lapse of time or both, result in a breach of, or conflict with
any of the terms and provisions of, or constitute a default under, any agreement or instrument to which any of the Initial Stockholders
is a party.
2.24 Investment
Management Trust Agreement. The Company has entered into the Trust Agreement with respect to certain proceeds of the Offering and
the Private Placement substantially in the form filed as an exhibit to the Registration Statement.
2.25 Covenants
Not to Compete. To the Company’s knowledge, the officers and directors of the Company are not subject to any non-competition
agreement or non-solicitation agreement with any employer or prior employer which could materially affect his or her ability to be an
employee, officer or director of the Company.
2.26 Investments.
No more than 45% of the “value” (as defined in Section 2(a)(41) of the Investment Company Act of 1940, as amended (the
“Investment Company Act”)) of the Company’s total assets consist of, and no more than 45% of the Company’s
net income after taxes is derived from, securities other than “Government Securities” (as defined in Section 2(a)(16)
of the Investment Company Act).
2.27 Subsidiaries.
The Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or other business
entity.
2.28 Related
Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any Company Affiliate, on
the one hand, and any director, officer, stockholder, customer or supplier of the Company or any Company Affiliate, on the other hand,
which is required by the Act, the Exchange Act or the Regulations to be described in the Registration Statement, the Preliminary Prospectus
and/or the Prospectus which is not so described and described as required. There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of
the officers or directors of the Company or any of their respective family members, except as disclosed in the Registration Statement,
the Preliminary Prospectus and/or the Prospectus. The Company has not extended or maintained credit, arranged for the extension of credit,
or renewed an extension of credit, in the form of a personal loan to or for any director or officer of the Company.
2.29 No
Influence. The Company has not offered, or caused the Underwriters to offer, the Firm Units to any person or entity with the intention
of unlawfully influencing: (i) a customer or supplier of the Company or any Company Affiliate to alter the customer’s or supplier’s
level or type of business with the Company or such affiliate; or (ii) a journalist or publication to write or publish favorable
information about the Company or any such affiliate.
2.30 Trading
of the Public Securities on the Nasdaq Capital Market. As of the Effective Date and the Closing Date, the Public Securities will
have been authorized for listing on the Nasdaq Capital Market and no proceedings have been instituted or threatened which would effect,
and no event or circumstance has occurred as of the Effective Date which is reasonably likely to effect, the listing of the Public Securities
on the Nasdaq Capital Market.
2.31 Definition
of “Knowledge”. As used in this Agreement, the term “knowledge of the Company” (or similar language)
shall mean the knowledge of the officers and directors of the Company who are named in the Prospectus, with the assumption that such
officers and directors shall have made reasonable and diligent inquiry of the matters presented.
2.32 The
Business Combination Marketing Agreement. The Company has entered into a business combination marketing agreement with Chardan Capital
Markets, LLC substantially in the form filed as an exhibit to the Registration Statement (the “Business Combination Marketing
Agreement”).
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3.
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Covenants of the Company. The Company covenants and agrees
as follows:
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3.1 Amendments
to Registration Statement. The Company will deliver to the Representative, prior to filing, any amendment or supplement to the Registration
Statement or Prospectus proposed to be filed after the Effective Date and will not file any such amendment or supplement to which the
Representative shall reasonably object in writing.
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3.2
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Federal Securities Laws.
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3.2.1 Compliance.
During the time when a Prospectus is required to be delivered under the Act, the Company will use all reasonable efforts to comply with
all requirements imposed upon it by the Act, the Regulations and the Exchange Act and by the regulations under the Exchange Act, as from
time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Public Securities in accordance with
the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Public Securities is required to be delivered
under the Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters,
the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary during such period to amend the Registration Statement or amend or supplement the Prospectus to
comply with the Act, the Company will notify the Representative promptly and prepare and file with the Commission, subject to Section 3.1
hereof, an appropriate amendment to the Registration Statement or amendment or supplement to the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
3.2.2 Filing
of Final Prospectus. The Company will file the Prospectus (in form and substance satisfactory to the Representative) with the Commission
pursuant to the requirements of Rule 424 of the Regulations.
3.2.3 Exchange
Act Registration. For a period of five (5) years from the Effective Date, or until such earlier time upon which the Company
is required to be liquidated, the Company will use its best efforts to maintain the registration of the Units, Common Stock and Warrants
(until the Business Combination) under the provisions of the Exchange Act. The Company will not deregister the Units, Common Stock or
Warrants prior to the Business Combination without the prior written consent of the Representative.
3.2.4 Sarbanes-Oxley
Compliance. As soon as it is legally required to do so, the Company shall take all actions necessary to obtain and thereafter maintain
material compliance with each applicable provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
promulgated thereunder and related or similar rules and regulations promulgated by any other governmental or self-regulatory entity
or agency with jurisdiction over the Company.
3.2.5 Blue
Sky Filing. Unless the Public Securities are listed on the Nasdaq Capital Market or another national securities exchange, the Company,
at its expense, will endeavor in good faith, in cooperation with the Representative, at or prior to the time the Registration Statement
becomes effective, to qualify the Public Securities for offering and sale under the securities laws of such jurisdictions as the Representative
may reasonably designate, provided that no such qualification shall be required in any jurisdiction where, as a result thereof,
the Company would be subject to service of general process or to taxation as a foreign corporation doing business in such jurisdiction.
In each jurisdiction where such qualification shall be effected, the Company will, unless the Representative agrees that such action
is not at the time necessary or advisable, use all reasonable efforts to file and make such statements or reports at such times as are
or may be required by the laws of such jurisdiction.
3.2.6 Delivery
to Underwriters of Prospectuses. The Company will deliver to each of the several Underwriters, without charge, from time to time
during the period when the Prospectus is required to be delivered under the Act or the Exchange Act such number of copies of each Preliminary
Prospectus and Prospectus and all amendments and supplements to such documents as such Underwriters may reasonably request and, as soon
as the Registration Statement or any amendment or supplement thereto becomes effective, deliver to the Representative two original executed
Registration Statements, including exhibits, and all post-effective amendments thereto and copies of all exhibits filed therewith or
incorporated therein by reference and all original executed consents of certified experts.
3.3 Effectiveness
and Events Requiring Notice to the Representative. The Company will use all reasonable efforts to cause the Registration Statement
to remain effective and will notify the Representative immediately and confirm the notice in writing: (i) of the effectiveness of
the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement, or any post-effective amendment thereto or preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state
securities commission of any proceedings for the suspension of the qualification of the Public Securities for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the
Commission for filing of any amendment or supplement to the Registration Statement or Prospectus; (v) of the receipt of any comments
or request for any additional information from the Commission; and (vi) of the happening of any event during the period described
in Section 3.4 hereof that, in the judgment of the Company, makes any statement of a material fact made in the Registration
Statement, the Preliminary Prospectus and/or the Prospectus untrue or that requires the making of any changes in the Registration Statement,
the Preliminary Prospectus and/or the Prospectus in order to make the statements therein, (with respect to the Prospectus, in light of
the circumstances under which they were made), not misleading. If the Commission or any state securities commission shall enter a stop
order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such
order.
3.4 Review
of Financial Statements. Until the earlier of five (5) years from the Effective Date, or until such earlier date upon which
the Company is required to be liquidated, the Company, at its expense, shall cause its regularly engaged independent certified public
accountants to review (but not audit) the Company’s financial statements for each of the first three fiscal quarters prior to the
announcement or filing of quarterly financial information, if any.
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3.5
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Affiliated Transactions.
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3.5.1 Business
Combinations. The Company will not consummate a Business Combination with any entity which is affiliated with the Initial Stockholders
or an officer or director of the Company unless the Company obtains an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions stating the Business Combination is fair to the Company’s stockholders
from a financial perspective.
3.5.2 Administrative
Services. The Company has entered into an administrative services agreement (the “Services Agreement”) with NorthStar
in the form filed as an exhibit to the Registration Statement pursuant to which the Company has made and will continue to make available
to the Company general and administrative services including office space and utilities for the Company’s use for $10,000 per month
until the consummation of a Business Combination.
3.5.3 Compensation.
Except (a) as set forth in the Registration Statement, the Preliminary Prospectus or the Prospectus or (b) as set forth in
this Section 3.5, the Company shall not pay any officer, director or Initial Stockholder, or any of their affiliates, any
fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the Offering or the consummation
of a Business Combination.
3.6 Secondary
Market Trading. In the event the Public Securities are not listed on the Nasdaq Capital Market or another national securities exchange,
the Company will (i) apply to be included in Mergent, Inc. Manual for a period of five (5) years from the consummation
of a Business Combination, (ii) take such commercially reasonable steps as may be necessary to obtain a secondary market trading
exemption for the Company’s securities in such jurisdictions as reasonably requested by the Representative, and (iii) take
such other action as may be reasonably requested by the Representative to obtain a secondary market trading exemption in such other states
as may be requested by the Representative; provided that no qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or to taxation as a foreign entity doing business in such jurisdiction.
3.7 Financial
Public Relations Firm. Promptly after the execution of a definitive agreement for a Business Combination, the Company shall retain
a financial public relations firm reasonably acceptable to the Representative for a term to be agreed upon by the Company and the Representative.
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3.8
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Reports to the Representative.
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3.8.1 Periodic
Reports, Etc. For a period of five (5) years from the Effective Date or until such earlier time upon which the Company is dissolved,
the Company will furnish to the Representative and its counsel copies of such financial statements and other periodic and special reports
as the Company from time to time furnishes generally to holders of any class of its securities, and promptly furnish to the Representative:
(i) a copy of each periodic report the Company shall be required to file with the Commission; (ii) a copy of every press release
and every news item and article with respect to the Company or its affairs which was released by the Company; (iii) a copy of each
Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company; (iv) five (5) copies of each Registration
Statement; and (v) such additional documents and information with respect to the Company and the affairs of any future subsidiaries
of the Company as the Representative may from time to time reasonably request; provided that the Representative shall sign, if
requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and
its counsel in connection with the Representative’s receipt of such information. Documents filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) shall be deemed to have been delivered to the
Representative pursuant to this section.
3.8.2 Transfer
Sheets. For a period of five (5) years following the Effective Date or until such earlier time upon which the Company is dissolved,
the Company shall retain a transfer and warrant agent acceptable to the Representative (the “Transfer Agent”). In
the event the Public Securities are not listed on the Nasdaq Capital Market or another national securities exchange, the Company will
furnish to the Underwriters at the Company’s sole cost and expense such transfer sheets of the Company’s securities as the
Representative may request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and DTC. Continental Stock
Transfer & Trust Company is an acceptable Transfer Agent to the Representative.
3.8.3 Trading
Reports. If the Public Securities are quoted on the OTC Bulletin Board (or any successor trading market) or a market operated by
the OTC Market Group Inc. (or similar publisher of quotations), then during such time the Company shall provide to the Representative,
at its expense, such reports published by the OTC Bulletin Board or the OTC Market Group Inc. relating to price trading of the Public
Securities, as the Representative shall reasonably request. In addition to the requirements of the preceding sentence, if the Public
Securities are not listed on the Nasdaq Capital Market or such other national securities exchange for a period of two (2) years
from the Closing Date, the Company, at its expense, shall provide Chardan a subscription to the Company’s weekly Depository Transfer
Company Security Position Reports.
3.9 Disqualification
of Form S-1. For a period equal to seven (7) years from the date hereof, the Company will not take any action or actions
which may prevent or disqualify the Company’s use of Form S-1 (or other appropriate form) for the registration of the Warrants
under the Act.
3.10 Payment
of Expenses. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to the extent not
paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including,
but not limited to: (i) the Company’s legal and accounting fees and disbursements; (ii) the costs of preparing, printing,
mailing (including the payment of postage with respect to such mailing) and delivering the Registration Statement, the Preliminary Prospectus
and final Prospectus contained therein and amendments thereto, post-effective amendments and supplements thereto, this Agreement and
related documents, including the cost of all copies thereof and any amendments thereof or supplements thereto supplied to the Underwriters
in quantities as may be required by the Underwriters; (iii) the printing, engraving, issuance and delivery of the Units and the
shares of Common Stock and Warrants included in the Units, including any transfer or other taxes payable thereon; (iv) if the Public
Securities are not listed on the Nasdaq Capital Market or such other national securities exchange, the qualification of the Public Securities
under state or foreign securities or Blue Sky laws specified by Representative, including the costs of printing and mailing the “Preliminary
Blue Sky Memorandum,” and all amendments and supplements thereto, and fees and disbursements for counsel of Representative’s
choice retained for such purpose; (v) filing fees (including SEC filing fees), costs and expenses (including third party expenses
and disbursements) incurred in registering the Offering; (vi) filing fees incurred in registering the Offering with FINRA; (vii) fees
and disbursements of the registrar and transfer and rights and warrant agent; (viii) the Company’s expenses associated with
“due diligence” meetings arranged by the Representative (none of which will be received or paid on behalf of an “underwriter
and related person” as such term is defined in Rule 5110 of FINRA’s Rules); (ix) all costs and expenses associated
with “road show” marketing and “due diligence” trips for the Company’s management to meet with prospective
investors, including without limitation, all travel, food and lodging expenses associated with such trips; and (x) all other reasonable
costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this
Section 3.10 that the Underwriters have notified the Company about on or prior to the Closing Date. The Company has agreed to pay or reimburse the Underwriters for travel, lodging and other “road show”
expenses, FINRA-related fees and expenses of the Underwriters’ legal counsel and certain diligence and other fees, including the
preparation, binding and delivery of bound volumes in form and style reasonably satisfactory to the Underwriters, transaction Lucite cubes
or similar commemorative items in a style as reasonably requested by the Representative, and reimbursement for background checks on the
directors, director nominees and executive officers, which fees and expenses, including out-of-pocket accountable expenses, are capped
at an aggregate of $130,000.
3.11 Application
of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application
described under the caption “Use of Proceeds” in the Prospectus.
3.12 Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth (15th) full calendar month following the Effective Date, an earnings statement (which
need not be certified by independent public or independent certified public accountants unless required by the Act or the Regulations,
but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering a period of at least
twelve (12) consecutive months beginning after the Effective Date.
3.13.1 Business
Combination. In the event any person or entity (regardless of any FINRA affiliation or association) is engaged to assist the Company
in its search for a merger candidate or to provide any other merger and acquisition services, the Company will provide the following
to FINRA and the Representative prior to the consummation of the Business Combination: (i) complete details of all services and
copies of agreements governing such services; and (ii) justification as to why the person or entity providing the merger and acquisition
services should not be considered an “underwriter and related person” (as such term is defined in Rule 5110 of FINRA’s
Rules) with respect to the Offering. The Company also agrees that proper disclosure of such arrangement or potential arrangement will
be made in any proxy or tender offer statement which the Company files in connection with the Business Combination.
3.13.2 Broker/Dealer.
In the event the Company intends to register as a broker/dealer, merge with or acquire a registered broker/dealer, or otherwise become
a member of FINRA, it shall promptly notify FINRA.
3.14 Stabilization.
Neither the Company, nor, to its knowledge, any of its employees, directors or stockholders (without the consent of the Representative)
has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to
cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Units.
3.15 Internal
Controls. The Company will maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions
are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary
in order to permit preparation of financial statements in accordance with generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
3.16 Accountants.
For a period of five (5) years from the Effective Date or until such earlier time upon which the Company is required to be liquidated,
the Company shall retain Marcum or other independent public accountants reasonably acceptable to the Representative.
3.17 Form 8-K.
The Company shall, on the date hereof, retain its independent public accountants to audit the financial statements of the Company as
of the Closing Date (the “Audited Financial Statements”) reflecting the receipt by the Company of the proceeds of
the Offering and the Private Placement, as well as the proceeds from the exercise of the Over-Allotment if such exercise has occurred
on the date of the Prospectus. Within four (4) Business Days of the Closing Date, the Company will file a Current Report on Form 8-K
with the Commission, which Report shall contain the Audited Financial Statements.
3.18 FINRA.
The Company shall advise FINRA if it is aware that any 5% or greater stockholder of the Company becomes an affiliate or associated person
of a FINRA member participating in the distribution of the Company’s Public Securities.
3.19 Corporate
Proceedings. All corporate proceedings and other legal matters necessary to carry out the provisions of this Agreement and the transactions
contemplated hereby shall have been done to the reasonable satisfaction to counsel for the Underwriters.
3.20 Investment
Company. The Company shall cause the proceeds of the Offering to be held in the Trust Account to be invested only in “government
securities” with specific maturity dates or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act as set forth in the Trust Agreement and disclosed in the Prospectus. The Company will otherwise conduct its
business in a manner so that it will not become subject to the Investment Company Act. Furthermore, once the Company consummates a Business
Combination, it will be engaged in a business other than that of investing, reinvesting, owning, holding or trading securities.
3.21 Business
Combination Announcement. Within four (4) Business Days following the consummation by the Company of a Business Combination,
the Company shall cause an announcement (“Business Combination Announcement”) to be issued by a press release service
announcing the consummation of the Business Combination and indicating that the Representative was one of the co-managing underwriters
in the Offering and also indicating the name and location of any other financial advisors engaged by the Company as a merger and acquisitions
advisor. The Company shall supply the Representative with a draft of the Business Combination Announcement and provide the Representative
with a reasonable advance opportunity to comment thereon. The Company will not issue the Business Combination Announcement without the
final approval of the Representative, which approval will not be unreasonably withheld.
3.22 Press
Releases. The Company agrees that it will not issue press releases or engage in any other publicity, without Chardan’s prior
written consent (not to be unreasonably withheld), for a period of twenty-five (25) days after the Effective Date.
3.23 Electronic
Prospectus. The Company shall cause to be prepared and delivered to the Representative, at its expense, within one (1) Business
Day from the Effective Date, an Electronic Prospectus to be used by the Underwriters in connection with the Offering. As used herein,
the term “Electronic Prospectus” means a form of prospectus, and any amendment or supplement thereto, that meets each
of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Representative, that may be transmitted
electronically by the other Underwriters to offerees and purchasers of the Units for at least the period during which a Prospectus relating
to the Units is required to be delivered under the Act; (ii) it shall disclose the same information as the paper prospectus and
prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in which
case such graphic and image material shall be replaced in the electronic prospectus with a fair and accurate narrative description or
tabular representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic
format, satisfactory to the Representative, that will allow recipients thereof to store and have continuously ready access to the prospectus
at any future time, without charge to such recipients (other than any fee charged for subscription to the Internet as a whole and for
on-line time). The Company hereby confirms that it has included or will include in the Prospectus filed pursuant to EDGAR or otherwise
with the Commission and in the Registration Statement at the time it was declared effective an undertaking that, upon receipt of a request
by an investor or his or her representative within the period when a prospectus relating to the Units is required to be delivered under
the Securities Act, the Company shall transmit or cause to be transmitted promptly, without charge, a paper copy of the Prospectus.
3.24 Reservation
of Shares. The Company will reserve and keep available that maximum number of its authorized but unissued securities which are issuable
upon exercise of the Warrants and the Co-Sponsor Placement Warrants outstanding from time to time.
3.25 Private
Placement Proceeds. Immediately upon establishment of the Trust Account and prior to the Closing, the Company shall deposit all of
the proceeds from the Private Placement in the Trust Account and shall provide the Representative with evidence of the same.
3.26 No
Amendment to Charter.
3.26.1 Prior
to the closing of a Business Combination, the Company covenants and agrees it will not seek to amend or modify its amended and restated
certificate of incorporation without the prior approval of its Board of Directors and the affirmative vote of at least a majority of
the voting power of the outstanding shares of Common Stock.
3.26.2 The
Company acknowledges that the purchasers of the Firm Units and Option Units in this Offering shall be deemed to be third party beneficiaries
of this Section 3.26.
3.26.3 The
Representative and the Company specifically agree that this Section 3.26 shall not be modified or amended in any way without
the approval of at least a majority of the voting power of the outstanding shares of Common Stock.
3.27 Financial
Printer. The Company shall retain a financial printer, reasonably acceptable to the Representative, for the purpose of facilitating
the Company’s EDGAR filings and the printing of the Preliminary Prospectus and Prospectus.
3.28 Listing
on the Nasdaq Capital Market. The Company will use commercially reasonable efforts to maintain the listing of the Public Securities
on the Nasdaq Capital Market or another national securities exchange until the earlier of five (5) years from the Effective Date
or until the Public Securities are no longer registered under the Exchange Act.
4. Conditions
of Underwriters’ Obligations. The obligations of the QIU and the several Underwriters to purchase and pay for the Units, as
provided herein, shall be subject to the continuing accuracy of the representations and warranties of the Company as of the date hereof
and as of each of the Closing Date and the Option Closing Date, if any, to the accuracy of the statements of officers of the Company
made pursuant to the provisions hereof and to the performance by the Company of its obligations hereunder and to the following conditions:
4.1 Regulatory
Matters.
4.1.1 Effectiveness
of Registration Statement. The Registration Statement shall have become effective not later than 5:00 P.M., New York time, on the
date of this Agreement or such later date and time as shall be consented to in writing by the Representative, and, at each of the Closing
Date and the Option Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and
no proceedings for the purpose shall have been instituted or shall be pending or contemplated by the Commission and any request on the
part of the Commission for additional information shall have been complied with to the reasonable satisfaction of Reed Smith, LLP.
4.1.2 FINRA
Clearance. By the Effective Date, the Representative shall have received clearance from FINRA as to the amount of compensation allowable
or payable to the Underwriters as described in the Registration Statement.
4.1.3 No
Commission Stop Order. At each of the Closing Date and the Option Closing Date, the Commission has not issued any order or threatened
to issue any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or any part thereof, and has not
instituted or threatened to institute any proceedings with respect to such an order.
4.1.4 No
Blue Sky Stop Orders. No order suspending the sale of the Units in any jurisdiction designated by the Representative pursuant to
Section 3.3 hereof, if any, shall have been issued on either the Closing Date or the Option Closing Date, and no proceedings
for that purpose shall have been instituted or shall be contemplated.
4.1.5 The
Nasdaq Capital Market. By the Effective Date, the Securities shall have been approved for trading on the Nasdaq Capital Market.
4.2 Company
Counsel Matters.
4.2.1 Closing
Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion of Greenberg Traurig LLP
(“Greenberg Traurig”), counsel to the Company, dated the Closing Date, addressed to the Representative and
the other Underwriters and in form and substance reasonably satisfactory to the Representative. The opinion of counsel shall further
include a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and representatives of the Underwriters at which the contents of
the Registration Statement, final Preliminary Prospectus, the Prospectus and related matters were discussed and although such counsel
is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in
the Registration Statement, final Preliminary Prospectus and the Prospectus (except as otherwise set forth in such opinion), no facts
have come to the attention of such counsel which lead them to believe that either the Registration Statement, final Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, as of the date of such opinion contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such counsel need express no opinion with respect to the financial
statements and related notes and schedules and other financial and statistical data included in the Registration Statement, final Preliminary
Prospectus or the Prospectus or matters relating to the sale of securities in any jurisdiction outside the U.S.). The opinion of counsel
shall state that such counsel is not opining as to the Placement Securities with respect to any rights to rescind or the effect any exercise
of such rights will have on any other securities of the Company or on the Offering.
4.2.2 Option
Closing Date Opinion of Counsel. On each Option Closing Date, if any, the Representative shall have received the favorable opinion
of Greenberg Traurig, dated each Option Closing Date, addressed to the Representative and in form and substance reasonably satisfactory
to counsel to the Representative, confirming as of each Option Closing Date, the statements made by Greenberg Traurig in its opinion
delivered on the Closing Date.
4.2.3 Reliance.
In rendering such opinion, such counsel may rely: (i) as to matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative) of other counsel
reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the extent they
deem proper, on certificates or other written statements of officers of the Company and officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to the Underwriters’ counsel if requested. The opinion of counsel for the Company
and any opinion relied upon by such counsel for the Company shall include a statement to the effect that it may be relied upon by counsel
for the Underwriters in its opinion delivered to the Underwriters.
4.3 Cold
Comfort Letter. At the time this Agreement is executed, and at each of the Closing Date and the Option Closing Date, if any, the
Representative shall have received a letter, addressed to the Representative and in form and substance satisfactory in all respects (including
the nature of the changes or decreases, if any, referred to in Section 4.3.3 below) to the Representative from Marcum dated,
respectively, as of the date of this Agreement and as of the Closing Date and the Option Closing Date, if any:
4.3.1 Confirming
that they are an independent registered public accounting firm with respect to the Company within the meaning of the Act and the applicable
Regulations;
4.3.2 Stating
that in their opinion the financial statements of the Company included in the Registration Statement, the Preliminary Prospectus and
the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act and the Regulations
thereunder;
4.3.3 Stating
that, on the basis of limited procedures which included a reading of the latest available minutes of the stockholders and board of directors
and the various committees of the board of directors, consultations with officers and other employees of the Company responsible for
financial and accounting matters and other specified procedures and inquiries, nothing has come to their attention which would lead them
to believe that: (a) at a date not later than five (5) days prior to the Effective Date, Closing Date or Option Closing Date,
as the case may be, there was any change in the capital stock or long-term debt of the Company, or any decrease in the stockholders’
equity of the Company as compared with amounts shown in the December 31, 2020 and June 30, 2021 balance sheets included in
the Registration Statement, the Preliminary Prospectus and the Prospectus, other than as set forth in or contemplated by the Registration
Statement, the Preliminary Prospectus and the Prospectus, or, if there was any decrease, setting forth the amount of such decrease; and
(c) during the period from December 31, 2020 and June 30, 2021 (balance sheet dates) to a specified date not later than
five (5) days prior to the Effective Date, Closing Date or Option Closing Date, as the case may be, there was any decrease in net
earnings or net earnings per share of Common Stock, in each case as compared with the Statement of Operations for the period from July 23,
2020 (inception) to December 31, 2020 and for the six months ended June 30, 2021 included in the Registration Statement
and the Prospectus, or, if there was any such decrease, setting forth the amount of such decrease;
4.3.4 Stating
they have compared specific dollar amounts, numbers of shares, percentages of earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Preliminary Prospectus and the Prospectus in each case to the extent that
such amounts, numbers, percentages, statements and information may be derived from the general accounting records, including work sheets,
of the Company and excluding any questions requiring an interpretation by legal counsel, with the results obtained from the application
of specified readings, inquiries and other appropriate procedures (which procedures do not constitute an examination in accordance with
the standards of the PCAOB) set forth in the letter and found them to be in agreement; and
4.3.5 Statements
as to such other matters incident to the transaction contemplated hereby as the Representative may reasonably request.
4.4 Officers’
Certificates.
4.4.1 Officers’
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Chief Executive Officer or the President and the Secretary or Assistant Secretary of the Company, dated
the Closing Date or the Option Closing Date, as the case may be, respectively, to the effect that the Company has performed all covenants
and complied with all conditions required by this Agreement to be performed or complied with by the Company prior to and as of the Closing
Date, or the Option Closing Date, as the case may be, and that the conditions set forth in Section 4 hereof have been satisfied
as of such date and that, as of Closing Date and the Option Closing Date, as the case may be, the representations and warranties of the
Company set forth in Section 2 hereof are true and correct. In addition, the Representative will have received such other
and further certificates of officers of the Company as the Representative may reasonably request.
4.4.2 Secretary’s
Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall have received a certificate
of the Company signed by the Secretary or Assistant Secretary of the Company, dated the Closing Date or the Option Closing Date, as the
case may be, certifying: (i) that the amended and restated certificate of incorporation of the Company are true and complete, have
not been modified and are in full force and effect; (ii) that the resolutions relating to the Offering are in full force and effect
and have not been modified; (iii) all correspondence between the Company or its counsel and the Commission; (iv) all correspondence
between the Company or its counsel and the Nasdaq Stock Market; and (v) as to the incumbency of the officers of the Company. The
documents referred to in such certificate shall be attached to such certificate.
4.5 No
Material Changes. Prior to and on each of the Closing Date and the Option Closing Date, if any: (i) there shall have been no
material adverse change or development that is likely to result in a material adverse change in the condition or prospects or the business
activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration
Statement and Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against
the Company or the Initial Stockholders before or by any court or federal or state commission, board or other administrative agency wherein
an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition
or income of the Company, except as set forth in the Registration Statement, the Preliminary Prospectus and Prospectus; (iii) no
stop order shall have been issued under the Act and no proceedings therefor shall have been initiated or threatened by the Commission;
and (iv) the Registration Statement, the Preliminary Prospectus and the Prospectus and any amendments or supplements thereto shall
contain all material statements which are required to be stated therein in accordance with the Act and the Regulations and shall conform
in all material respects to the requirements of the Act and the Regulations, and neither the Registration Statement, the Preliminary
Prospectus nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made), not misleading.
4.6 Delivery
of Agreements.
4.6.1 Effective
Date Deliveries. On the Effective Date, the Company shall have delivered to the Representative executed copies of the Trust Agreement,
the Warrant Agreement, the Business Combination Marketing Agreement, all of the Insider Letters, the Subscription Agreements, the Registration
Rights Agreement and the Escrow Agreement.
5. Indemnification
5.1 Indemnification
of Underwriters.
5.1.1 General.
Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each of the Underwriters and each dealer
selected by the Representative that participates in the offer and sale of the Units (each a “Selected Dealer”) and
each of their respective directors, officers and employees and each person, if any, who controls any such Underwriter (“Controlling
Person”) within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred
in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out
of any action between any of the Underwriters and the Company or between any of the Underwriters and any third party or otherwise) to
which they or any of them may become subject under the Act, the Exchange Act or any other federal, state or local statute, law, rule,
regulation or ordinance or at common law or otherwise or under the laws, rules and regulation of foreign countries, arising out
of or based upon any untrue statement or alleged untrue statement of a material fact contained in: (i) any Preliminary Prospectus,
the Registration Statement, or the Prospectus (as from time to time each may be amended and supplemented); or (ii) any application
or other document or written communication (in this Section 5, collectively called “Application”) executed
by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Units under the
securities laws thereof or filed with the Commission, any state securities commission or agency, the Nasdaq Stock Market or any securities
exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the Company with respect to an Underwriter by or on behalf of such
Underwriter expressly for use in any Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment or supplement
thereof. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus,
the indemnity agreement contained in this paragraph shall not inure to the benefit of any Underwriter to the extent that any loss, liability,
claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the person
asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such person
as required by the Act and the Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless such
failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under Section 3.2 hereof.
The Company agrees to promptly notify the Representative of the commencement of any litigation or proceedings against the Company or
any of its officers, directors or Controlling Persons in connection with the issue and sale of the Securities or in connection with the
Preliminary Prospectus, the Registration Statement, or the Prospectus.
5.1.2 Indemnification
of the QIU. Without limitation of and in addition to its obligations under the other paragraphs of this Section 5, the
Company agrees to indemnify, defend and hold harmless the QIU, its directors, officers, employees and each Controlling Person of the
QIU, if any, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or severally, the QIU or any such person may incur, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon the QIU’s acting as a “qualified independent
underwriter” (within the meaning of FINRA Rule 5121) in connection with the offering contemplated by this Agreement, and the
Company agrees to advance and reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such loss, damage, expense, liability or claim; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the QIU specifically for use in the Registration Statement or Prospectus.
5.1.3 Procedure.
If any action is brought against an Underwriter, the QIU or a Controlling Person in respect of which indemnity may be sought against
the Company pursuant to Section 5.1.1, such Underwriter or the QIU shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the
reasonable approval of such Underwriter or the QIU) and payment of actual expenses. Such Underwriter, the QIU or Controlling Person shall
have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter, the QIU or such Controlling Person unless: (i) the employment of such counsel at the expense of the Company
shall have been authorized in writing by the Company in connection with the defense of such action within reasonable time under the circumstances;
(ii) the Company shall not have employed counsel to have charge of the defense of such action; or (iii) such indemnified party
or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional
to those available to the Company, or another conflict of interest or conflict as to legal representation exists (in which case the Company
shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events
the reasonable fees and expenses of not more than one additional firm of attorneys selected by the Underwriter, the QIU and/or Controlling
Person shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if the Underwriter, the QIU or Controlling
Person shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement
of such action which approval shall not be unreasonably withheld.
5.2 Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its directors, officers
and employees and agents who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in
any Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment or supplement thereto, or in any Application,
in reliance upon, and in strict conformity with, written information furnished to the Company with respect to such Underwriter by or
on behalf of the Underwriter expressly for use in such Preliminary Prospectus, the Registration Statement, or the Prospectus, or any
amendment or supplement thereto or in any such Application, which furnished written information, it is expressly agreed, consists solely
of the information described in the last sentence of Section 2.3.1. In case any action shall be brought against the Company
or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment
or supplement thereto or any Application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall
have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties
given to the several Underwriters by the provisions of Section 5.1.2.
5.3 Contribution.
5.3.1 Contribution
Rights. In order to provide for just and equitable contribution under the Act in any case in which: (i) any person entitled
to indemnification under this Section 5 makes a claim for indemnification pursuant hereto but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5
provides for indemnification in such case; or (ii) contribution under the Act, the Exchange Act or otherwise may be required
on the part of any such person in circumstances for which indemnification is provided under this Section 5, then, and in
each such case, the Company and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by said indemnity agreement incurred by the Company and the Underwriters, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance;
provided, that, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions
of this Section 5.3.1, no Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Public Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay in respect of such losses, liabilities, claims, damages and expenses.
For purposes of this Section, each director, officer and employee of an Underwriter or the Company, as applicable, and each person, if
any, who controls an Underwriter or the Company, as applicable, within the meaning of Section 15 of the Act shall have the same
rights to contribution as the Underwriters or the Company, as applicable. The QIU, in its capacity as “qualified independent underwriter”
(within the meaning of FINRA Rule 5121), shall in no event be required to contribute any amount in excess of the amount the compensation
received by the QIU for acting in such capacity exceeds the amount of any damage which the QIU has otherwise been required to pay by
reason of the QIU’s acting in such capacity in connection with the offering contemplated by this Agreement.
5.3.2 Contribution
Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement
of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party
(“Contributing Party”), notify the Contributing Party of the commencement thereof, but the omission to so notify the
Contributing Party will not relieve it from any liability which it may have to any other party other than for contribution hereunder.
In case any such action, suit or proceeding is brought against any party, and such party notifies a Contributing Party or its representative
of the commencement thereof within the aforesaid fifteen (15) days, the Contributing Party will be entitled to participate therein with
the notifying party and any other Contributing Party similarly notified. Any such Contributing Party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or proceeding effected by such party seeking contribution on account
of any settlement of any claim, action or proceeding effected by such party seeking contribution without the written consent of such
Contributing Party. The contribution provisions contained in this Section are intended to supersede, to the extent permitted by
law, any right to contribution under the Act, the Exchange Act or otherwise available. The Underwriters’ obligations to contribute
pursuant to this Section 5.3 are several and not joint.
6. Default
by an Underwriter
6.1 Default
Not Exceeding 10% of Firm Units or Option Units. If any Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the Over-allotment Option is exercised, hereunder, and if the number of the Firm Units
or Option Units with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Units or Option
Units that all Underwriters have agreed to purchase hereunder, then such Firm Units or Option Units to which the default relates shall
be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2 Default
Exceeding 10% of Firm Units or Option Units. In the event that the default addressed in Section 6.1 above relates to more than
10% of the Firm Units or Option Units, the Representative may in its discretion arrange for itself or for another party or parties to
purchase such Firm Units or Option Units to which such default relates on the terms contained herein. If, within one (1) Business
Day after such default relating to more than 10% of the Firm Units or Option Units, the Representative does not arrange for the purchase
of such Firm Units or Option Units, then the Company shall be entitled to a further period of one (1) Business Day within which
to procure another party or parties satisfactory to the Company and the Representative to purchase said Firm Units or Option Units on
such terms. In the event neither the Company nor the Representative arranges for the purchase of the Firm Units or Option Units to which
a default relates as provided in this Section 6, this Agreement may be terminated by the Company without liability on the
part of the Company (except as provided in Sections 3.10 and 5 hereof) or the several Underwriters (except as provided
in Section 5 hereof); provided, however, that if such default occurs with respect to the Option Units, this
Agreement will not terminate as to the Firm Units; and provided further that nothing herein shall relieve a defaulting Underwriter of
its liability, if any, to the other several Underwriters and to the Company for damages occasioned by its default hereunder.
6.3 Postponement
of Closing Date. In the event the Firm Units or Option Units to which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the Company shall have the right
to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five (5) Business Days,
in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Preliminary Prospectus and/or the
Prospectus, as the case may be, or in any other documents and arrangements, and the Company agrees to file promptly any amendment to,
or to supplement, the Registration Statement, the Preliminary Prospectus and/or the Prospectus, as the case may be, that in the opinion
of counsel for the Underwriters may thereby be made necessary. The term “Underwriter” as used in this Agreement shall
include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement
with respect to such Securities.
7. Additional
Covenants.
7.1 Additional
Shares or Options. The Company hereby agrees that until the Company consummates a Business Combination, it shall not issue any shares
of Common Stock or any options or other securities convertible into shares of Common Stock, or any class of shares which participate
in any manner in the Trust Account or which vote as a class with the Common Stock on a Business Combination.
7.2 Trust
Account Waiver Acknowledgments. The Company hereby agrees that it will not commence its due diligence investigation of any operating
business or businesses which the Company seeks to acquire (each, a “Target Business”) unless and until such Target
Business acknowledges in writing, whether through a letter of intent, memorandum of understanding or other similar document (and subsequently
acknowledges the same in any definitive document replacing any of the foregoing), that: (i) it has read the Prospectus and understands
that the Company has established the Trust Account, initially in an amount of $101,000,000 for the benefit of the public stockholders,
and that (ii) for and in consideration of the Company agreeing to evaluate such Target Business for purposes of consummating a Business
Combination with it, such Target Business agrees that it does not have any right, title, interest or claim of any kind in or to any monies
of the Trust Account (“Claim”) and waives any Claim it may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever.
The Company further agrees that it will use commercially reasonable efforts, prior to obtaining the services of any vendor, to obtain
a written acknowledgment from such vendor, whether through a letter of intent, memorandum of understanding or other similar document
(and subsequently acknowledges the same in any definitive document replacing any of the foregoing), that: (i) such vendor has read
the Prospectus and understands that the Company has established the Trust Account, initially in an amount of $101,000,000 for the benefit
of the public stockholders, and that (ii) for and in consideration of the Company agreeing to engage the services of the vendor,
such vendor agrees that it does not have any Claim and waives any Claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever.
The foregoing letters shall substantially be in the form attached hereto as Exhibits A and B, respectively.
7.3 Insider
Letters. The Company shall not take any action or omit to take any action which would cause a breach of any of the Insider Letters
executed among the Initial Stockholders, the officers and directors of the Company, and the Company or the Subscription Agreements and
will not allow any amendments to, or waivers of, such Insider Letters or the Subscription Agreements without the prior written consent
of the Representative.
7.4 Certificate
of Incorporation. The Company shall not take any action or omit to take any action that would cause the Company to be in breach or
violation of its amended and restated certificate of incorporation. Except as provided in Section 3.26, prior to the consummation
of a Business Combination, the Company will not amend its amended and restated certificate of incorporation, without the prior written
consent of the Representative.
7.5 Tender
Offer Documents, Proxy Materials and Other Information. The Company shall provide counsel to the Representative with copies of all
tender offer documents or proxy information and all related material filed with the Commission in connection with a Business Combination
concurrently with such filing with the Commission. In addition, the Company shall furnish any other State in which the Offering was registered,
such information as may be required by such State.
7.6 Acquisition/Liquidation
Procedure. The Company agrees that it will comply with its amended and restated certificate of incorporation in connection with
the consummation of a Business Combination or the failure to consummate a Business Combination within 12 months (or up to 21 months,
as applicable) from the Closing Date.
7.7 Rule 419.
The Company agrees that it will use its best efforts to prevent the Company from becoming subject to Rule 419 under the Act prior
to the consummation of any Business Combination, including, but not limited to, using its best efforts to prevent any of the Company’s
outstanding securities from being deemed to be a “penny stock” as defined in Rule 3a-51-1 under the Exchange Act during
such period.
7.8 Presentation
of Potential Target Businesses. The Company shall cause the Company’s officers, directors and Initial Stockholders to agree
that, in order to minimize potential conflicts of interest which may arise from multiple affiliations, the Company’s officers,
directors and Initial Stockholders will present to the Company for its consideration, prior to presentation to any other person or company,
any suitable opportunity to acquire an operating business, until the earlier of the consummation by the Company of a Business Combination
or the liquidation of the Company, subject to any pre-existing fiduciary obligations the Initial Stockholders might have.
7.9 Right
of First Refusal. For a period of fifteen (15) months from the closing of a business combination the Company shall give Chardan a
right of first refusal to act as a bookrunner for any and all future offerings of securities, including without limitation public and
private equity and debt offerings, during such period by the Company or any successor to or any subsidiary of the Company with economics
that are equal to or greater than the median economics of the “third bookrunner” in all applicable biotech offerings over
the 12 month period immediately preceding the date of commencement of such offering. For purposes of this right of first refusal, the
“third bookrunner” shall refer to the underwriter or placement agent, as applicable, with the third largest allocation of
securities (or second largest allocation if two other underwriters or placement agents receive the same larger allocation, or largest
allocation if three or more underwriters or placement agents receive the same largest allocation). Biotech offerings with less than three
underwriters or placement agents, as applicable (including offerings made directly by the issuer), shall not be included in calculating
the median economics applicable to this right of first refusal. For purposes of this right of first refusal, “biotech offerings”
shall refer to any offerings made by any company included in any of the following indices at the time of the commencement of the offering:
(i) the Nasdaq Biotechnology Index, and (ii) the NYSE Arca Biotechnology Index, and (iii) any successor index to any of the foregoing
indices. For purposes of clarification, the economics set forth above shall represent the minimum economics that shall apply to Chardan
and the right of first refusal shall pertain to all offerings of securities by the Company during the applicable time period regardless
of the number of underwriters or placement agents involved. The Representative’s failure to exercise its right of first refusal
with respect to any particular proposal shall not affect its right of first refusal relative to future proposals. In accordance with
FINRA Rule 5110(g)(6)(A), such right of first refusal shall not have a duration of more than three years from the effective date of the
Registration Statement.
8. Representations
and Agreements to Survive Delivery. Except as the context otherwise requires, all representations, warranties and agreements contained
in this Agreement shall be deemed to be representations, warranties and agreements at the Closing Date or the Option Closing Date, if
any, and such representations, warranties and agreements of the Underwriters and the Company, including the indemnity agreements contained
in Section 5 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf
of any Underwriter, the Company or any Controlling Person, and shall survive termination of this Agreement or the issuance and delivery
of the Units to the several Underwriters until the earlier of the expiration of any applicable statute of limitations and the seventh
anniversary of the later of the Closing Date or the Option Closing Date, if any, at which time the representations, warranties and agreements
shall terminate and be of no further force and effect.
9. Effective
Date of This Agreement and Termination Thereof.
9.1 Effective
Date. This Agreement shall become effective on the Effective Date at the time the Registration Statement is declared effective by
the Commission.
9.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date: (i) if any domestic or
international event or act or occurrence has materially disrupted, or in the Representative’s opinion will in the immediate future
materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange, the NYSE
American, the Nasdaq Stock Market or on the OTC Bulletin Board (or successor trading market) shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been fixed, or maximum ranges
for prices for securities shall have been required on the OTC Bulletin Board or by order of the Commission or any other government authority
having jurisdiction; or (iii) if the United States shall have become involved in a war or an initiation or increase in major hostilities,
or (iv) if a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign
exchange trading has been declared which materially adversely impacts the United States securities markets; or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act which, whether or not such loss shall have been insured, will, in the Representative’s opinion, make it inadvisable to proceed
with the delivery of the Units; or (vii) if any of the Company’s representations, warranties or covenants hereunder are breached;
or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions
or prospects of the Company, or such material adverse change in general market conditions, including, without limitation, as a result
of terrorist activities after the date hereof, as in the Representative’s judgment would make it impracticable to proceed with
the offering, sale and/or delivery of the Units or to enforce contracts made by the Underwriters for the sale of the Units.
9.3 Expenses.
In the event this Agreement shall not be carried out for any reason whatsoever, except as a result of the Representative’s or any
Underwriters’ breach or default with respect to any of its material obligations pursuant to this Agreement, within the time specified
herein or any extensions thereof pursuant to the terms herein, the obligations of the Company to pay the out- of-pocket expenses actually
incurred by the Representative related to the transactions contemplated herein shall be governed by Section 3.10 hereof,
but such aggregate cap shall be reduced from $130,000 to $100,000.
9.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall not be in any way affected by such
election or termination or failure to carry out the terms of this Agreement or any part hereof.
10. Miscellaneous.
10.1 Notices.
All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be mailed, delivered by
hand or reputable overnight courier or delivered by facsimile transmission (with printed confirmation of receipt) and confirmed, or by
electronic transmission via PDF, and shall be deemed given when so emailed, delivered, or faxed or transmitted (or if mailed, three days
after such mailing):
If to the Representative:
Chardan Capital Markets, LLC
17 State Street, Suite 2100
New York, New York 10004
Attn.: Shai Gerson
Email: sgerson@chardan.com
Fax: (646) 465-9008
Copy
to (which copy shall not be deemed to constitute notice to the Representative):
Reed Smith
LLP
599 Lexington Avenue
New York, New York 10022
Attn: Ari Edelman, Esq., Edward Bromley III, Esq.
Email:
aedelman@reedsmith.com; ebromley@reedsmith.com
Fax:
(212) 521-5450
If to the Company:
Monterey Bio Acquisition Corporation
17 State Street, 21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Email: sanjeev@montereybio.com
Copy to (which copy shall not be deemed to constitute
notice to the Company):
Greenberg
Traurig, LLP
1750 Tysons Boulevard, Suite 1000
McLean, Virginia 22102
Attn: Jason Simon
Email: simonj@gtlaw.com
Fax: (703) 714-8386
If to the QIU:
B. Riley Securities, Inc.
299 Park Avenue, 7th Floor
New York, New York 10171
Attn: Jonathan Mitchell
Email: jmitchell@brileyfin.com
Fax: (310) 966-1448
10.2 Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
10.3 Amendment.
This Agreement may only be amended by a written instrument executed by each of the parties hereto.
10.4 Entire
Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection with this
Agreement and the engagement letter by and between Chardan and the Company dated March 11, 2021, as amended) constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and thereof, and supersede all prior agreements and understandings
of the parties, oral and written, with respect to the subject matter hereof.
10.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the QIU,
the Company and the Controlling Persons, directors and officers referred to in Section 5 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein contained.
10.6 Governing
Law, Venue, Etc.
10.6.1 This
Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect
to the conflict of laws principles thereof. Each of the Representative and the Company (and any individual signatory hereto): (i) agrees
that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby shall
be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern District
of New York; (ii) waives any objection which such party may have or hereafter have to the venue of any such suit, action or proceeding;
and (iii) irrevocably and exclusively consents to the jurisdiction of the New York Supreme Court, County of New York, and the United
States District Court for the Southern District of New York in any such suit, action or proceeding.
10.6.2 Each
of the Representative and the Company (and any individual signatory hereto) further agrees to accept and acknowledge service of any and
all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York and agrees that service of process upon the Company or any such individual
mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon the Company
or any such individual in any such suit, action or proceeding, and service of process upon the Representative mailed by certified mail
to the Representative’s addresses shall be deemed in every respect effective service process upon the Representative, in any such
suit, action or proceeding.
10.6.3 THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
10.6.4 The
Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable
attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor.
10.7 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall
become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement by fax or email/.pdf transmission shall constitute valid and sufficient delivery
thereof.
10.8 Waiver,
Etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision hereof or
the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach, non-compliance
or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument executed by
the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non- compliance or non-fulfillment.
10.9 No
Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are acting solely as underwriters, and the QIU is acting
solely as a “qualified independent underwriter” within the meaning of FINRA Rule 5121, in connection with the Offering.
The Company further acknowledges that the Underwriters and the QIU are acting pursuant to a contractual relationship created solely by
this Agreement entered into on an arm’s length basis and in no event do the parties intend that the Underwriters or the QIU act
or be responsible as a fiduciary to the Company, its management, stockholders, creditors or any other person in connection with any activity
that the Underwriters or the QIU may undertake or have undertaken in furtherance of the Offering, either before or after the date hereof.
The Underwriters and the QIU hereby expressly disclaim any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding
and agreement to that effect. The Company, the Underwriters and the QIU agree that they are each responsible for making their own independent
judgments with respect to any such transactions, and that any opinions or views expressed by the Underwriters or the QIU to the Company
regarding such transactions, including but not limited to any opinions or views with respect to the price or market for the Company’s
securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Underwriters or the QIU with respect to any breach or alleged breach
of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or any matters leading
up to such transactions.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing correctly sets forth the understanding
among the Underwriters, the QIU and the Company, please so indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between us.
Very truly yours,
MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name: Sanjeev Satyal
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Title: Chief Executive Officer
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Agreed to and accepted on the date first above written.
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CHARDAN CAPITAL MARKETS, LLC,
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as Representative of the several Underwriters
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By:
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Name:
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Title:
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B. RILEY SECURITIES INC.,
as Qualified Independent Underwriter
[Signature Page of the Underwriting Agreement]
SCHEDULE A
MONTEREY BIO ACQUISITION CORPORATION
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Number of Firm
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Units to be
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Underwriter
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Purchased
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Chardan Capital Markets, LLC
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B. Riley Securities, Inc.
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TOTAL
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10,000,000
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EXHIBIT A
Form of Target Business Letter
Monterey Bio Acquisition Corporation
17 State Street, 21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Gentlemen:
Reference is made to the Final Prospectus of Monterey Bio Acquisition
Corporation (the “Company”), dated [ ● ], 2021 (the “Prospectus”). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus and understand that
the Company has established a “trust account”, initially in an amount of at least $101,000,000 for the benefit of the “public
stockholders” and the underwriters of the Company’s initial public offering (the “Underwriters”) and that, except
for interest earned on the trust account that may be released to the Company to pay any taxes it incurs, proceeds in the trust account
will not be released until (a) the consummation of a Business Combination, or (b) the dissolution and liquidation of the Company
if it is unable to consummate a Business Combination within the allotted time.
For and in consideration of the Company agreeing
to evaluate the undersigned for purposes of consummating a business combination or other form of acquisition with it, the undersigned
hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the trust account (the “Claim”)
and hereby waives any Claim it may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with
the Company and will not seek recourse against the trust account for any reason whatsoever.
Print Name of Target Business
Authorized Signature of Target Business
EXHIBIT B
Form of Vendor Letter
Monterey Bio Acquisition Corporation
17 State Street, 21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Gentlemen:
Reference is made to the Final Prospectus of Monterey Bio Acquisition
Corporation (the “Company”), dated [ ● ], 2021 (the “Prospectus”). Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus and understand that
the Company has established a “trust account”, initially in an amount of at least $101,000,000 for the benefit of the “public
stockholders” and the underwriters of the Company’s initial public offering (the “Underwriters”) and that, except
for interest earned on the trust account that may be released to the Company to pay any taxes it incurs, proceeds in the trust account
will not be released until (a) the consummation of a Business Combination, or (b) the dissolution and liquidation of the Company
if it is unable to consummate a Business Combination within the allotted time.
For and in consideration of the Company agreeing
to use the products or services of the undersigned, the undersigned hereby agrees that it does not have any right, title, interest or
claim of any kind in or to any monies in the trust account (the “Claim”) and hereby waives any Claim it may have in the future
as a result of, or arising out of, any negotiations, contracts or agreements with the Company and will not seek recourse against the trust
account for any reason whatsoever.
Print Name of Vendor
Authorized Signature of Vendor
Exhibit 1.2
Chardan Capital Markets, LLC
17 State Street, Suite 2100
New York, New York 10004
[●], 2021
Monterey Bio Acquisition Corporation
17 State Street, 21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Ladies and Gentlemen:
This is to confirm our agreement
whereby Monterey Bio Acquisition Corporation, a Delaware corporation (“Company”), has requested Chardan Capital Markets,
LLC (the “Advisor”) to assist it in connection with the Company engaging in a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination (in each case, a “Business Combination”)
with one or more businesses (each, a “Target”) as described in the Company’s Registration Statement on Form S--1
(File No. 333-[•]), as amended, filed with the U.S. Securities and Exchange Commission (“Registration Statement”)
in connection with the Company’s initial public offering (“IPO”).
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1.
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Services and Fees. (a) The Advisor will, from time to time, upon the Company’s request
and in consultation with the Company:
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(i)
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Assist the Company in arranging meetings with its stockholders to discuss one or more potential Business
Combinations, including making calls to stockholders and providing business updates and marketing feedback, in all cases to the extent
legally permissible;
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(ii)
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Introduce the Company to potential investors to purchase the Company’s publicly-traded securities
in after- market transactions following the public announcement of the Business Combination;
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(iii)
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Provide financial advisory services to assist the Company in its efforts to obtain any stockholder approval
for one or more Business Combinations, until such time as the Company has completed an initial Business Combination; and
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(iv)
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Assist the Company with any press releases and/or filings related to any Business Combination or related
Targets (the activities described in the foregoing clauses (i)-(iv), the “Services”).
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Notwithstanding anything to the contrary contained
herein, the Services will not include (x) any solicitation of potential investors in connection with the IPO or any Business Combination,
(y) any solicitation of proxies in connection with the Business Combination, or (z) any provision of M&A-related advisory
services. In the event that the Company requests that the Advisor provide any placement agent and/or M&A-related advisory services,
such engagement will be set forth in one or more separate agreements between the Company and the Advisor.
(b) As
compensation for the Services, the Company will pay the Advisor a cash fee equal to, in the aggregate, 3.5% of the gross proceeds received
by the Company from the sale of its equity securities pursuant to the Registration Statement in connection with the IPO, including any
gross proceeds from the full or partial exercise of the underwriters’ over-allotment option described therein (the “Fee”).
The Fee is due and payable to the Advisor by wire transfer at the closing of the initial Business Combination (“Closing”).
If a proposed Business Combination is not consummated for any reason within 12 months (or up to 21 months, as applicable) (as such period may be extended pursuant
to the Company’s amended and restated certificate of incorporation) from the closing of the IPO, no Fee shall be due or payable
to the Advisor hereunder. The Fee shall be exclusive of any other fees that are payable or may become payable to the Advisor pursuant
to any other agreement among the Advisor and the Company or any Target.
2. Expenses.
At the Closing, the Company shall reimburse the Advisor for all reasonable and documented costs and out-of-pocket expenses incurred by
the Advisor (including reasonable and documented fees and disbursements of outside counsel) in connection with the performance of the
Services hereunder; provided, however, that such expenses shall not exceed $5,000 in the aggregate without the prior written consent of
the Company.
3. Company
Cooperation; Information. (a) The Company will provide full cooperation to the Advisor as may be reasonably necessary for the
efficient performance by the Advisor of its obligations hereunder, including providing to the Advisor and its counsel, on a timely basis,
all documents and information regarding the Company and any Target that the Advisor may reasonably request or that are otherwise relevant
to the Advisor’s performance of its obligations hereunder (collectively, the “Information”); making the Company’s
management, auditors, consultants and advisors available to the Advisor; and using commercially reasonable efforts to provide the Advisor
with reasonable access to the management, auditors, suppliers, customers, consultants and advisors of any Target. The Company will promptly
notify the Advisor of any change in facts or circumstances or new developments affecting the Company or any Target or that might reasonably
be considered material to the Advisor’s engagement hereunder.
(b) The
Advisor shall not share with third parties any Information, presentations and/or materials about the Company, its shareholders and/or
affiliates, any Business Combination and/or any Targets, to the extent that any such information has not already been provided to the
public in the Registration Statement, unless the Advisor obtains the Company’s prior written approval (which may be provided via
email).
4. Representations,
Warranties and Covenants. (a) The Company represents, warrants and covenants to the Advisor that all Information it makes available
to the Advisor by or on behalf of the Company in connection with the performance of its obligations hereunder will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make statements made, in light of the circumstances
under which they were made, not misleading as of the date thereof and as of the consummation of the Business Combination.
(b) Each
party hereby represents, warrants and covenants to the other party that it is not prohibited from entering into this Agreement by
any applicable contract, agreement, law or order.
5. Indemnity.
The Company shall indemnify the Advisor and its affiliates and their respective directors, officers, employees, shareholders, representatives
and agents in accordance with the indemnification provisions set forth in Annex I hereto, all of which are incorporated herein by reference.
Notwithstanding the foregoing
and Annex I, the Advisor agrees, if there is no Closing, (i) that it does not have any right, title, interest or claim of any kind
in or to any monies in the Company’s trust account (“Trust Account”) established in connection with the IPO with
respect to the Fee or any expenses provided for hereunder (each, a “Claim”); (ii) to waive any Claim it may have
in the future as a result of, or arising out of, any Services provided to the Company hereunder; and (iii) to not seek recourse against
the Trust Account with respect to the Fee or any expenses provided for hereunder.
6. Use
of Name and Reports. Without the Advisor’s prior written consent (which may be provided via email), neither the Company nor
any of its affiliates (nor any director, officer, manager, partner, member, employee or agent thereof) shall quote or refer to in any
public communication (i) the Advisor’s name or (ii) any advice rendered by the Advisor to the Company or any communication
from the Advisor, in connection with performance of the Services, except as required by applicable federal or state law, regulation or
securities exchange rule.
7. Status
as Independent Contractor. The Advisor shall perform the Services as an independent contractor and not as an employee of the Company
or affiliate thereof. It is expressly understood and agreed to by the parties that the Advisor shall have no authority to act for, represent
or bind the Company or any affiliate thereof in any manner, except as may be expressly agreed to by the Company in writing. In rendering
such services, the Advisor will be acting solely pursuant to a contractual relationship on an arm’s-length basis. This Agreement
is not intended to create a fiduciary relationship between the parties and neither the Advisor nor any of the Advisor’s officers,
directors or personnel will owe any fiduciary duty to the Company or any other person in connection with any of the matters contemplated
by this Agreement.
8. Potential
Conflicts. The Company acknowledges that the Advisor is a full-service securities firm engaged in securities trading and brokerage
activities and providing investment banking and advisory services from which conflicting interests may arise. In the ordinary course of
business, the Advisor and its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions,
for its own account and the accounts of customers, in debt or equity securities of the Company, its affiliates or other entities that
may be involved in the transactions contemplated hereby, and may provide advisory and other services to one or more actual or potential
Targets, investors or other parties to any Business Combination or other transaction entered into by the Company, for which services the
Advisor or one or more of its affiliates may be paid fees, including fees conditioned upon the closing of a particular Business Combination
or other transaction or transactions. Nothing in this Agreement shall be construed to limit or restrict the Advisor or any of its affiliates
in conducting any such business.
9. Entire
Agreement. This Agreement constitutes the entire understanding among the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings, oral or written, with respect thereto. This Agreement may not be modified or terminated
orally or in any manner other than by an agreement in writing signed by the parties hereto.
10. Notices.
Any notices required or permitted to be given hereunder shall be in writing and shall be deemed given when sent via email to each party
at its respective address set forth below its signature and received by such party’s online access provider or mailed by certified
mail or private courier service, return receipt requested, addressed to each party at its respective addresses set forth above, or such
other address as may be given by a party in a notice given pursuant to this section.
11. Successors
and Assigns. This Agreement may not be assigned by any party without the written consent of the other parties hereto. This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and, except where prohibited, to their successors
and permitted assigns.
12. Non-Exclusivity.
Nothing herein shall be deemed to restrict or prohibit the engagement by the Company of other consultants providing the same or similar
services or the payment by the Company of fees to such parties. The Company’s engagement of any other consultant(s) shall not
affect the Advisor’s right to receive the Fee and reimbursement of expenses pursuant to this Agreement.
13. Applicable
Law; Venue. This Agreement shall be construed and enforced in accordance with the internal laws of the State of New York.
IN THE EVENT OF ANY DISPUTE
UNDER THIS AGREEMENT, EACH PARTY HERETO AGREES THAT THE DISPUTE SHALL BE BROUGHT AND ENFORCED IN THE COURTS OF THE STATE OF NEW YORK,
COUNTY OF NEW YORK UNDER THE ACCELERATED ADJUDICATION PROCEDURES OF THE COMMERCIAL DIVISION. EACH PARTY IRREVOCABLY SUBMITS TO SUCH JURISDICTION,
WHICH JURISDICTION SHALL BE EXCLUSIVE. EACH PARTY HEREBY WAIVES ANY OBJECTION TO SUCH EXCLUSIVE JURISDICTION AND THAT SUCH COURTS REPRESENT
AN INCONVENIENT FORUM. ANY PROCESS OR SUMMONS TO BE SERVED IN SUCH A DISPUTE UPON A PARTY MAY BE SERVED BY TRANSMITTING A COPY THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, ADDRESSED TO SUCH PARTY AT THE ADDRESS FOR SUCH PARTY SET FORTH AT THE BEGINNING OF
THIS AGREEMENT. SUCH MAILING SHALL BE DEEMED PERSONAL SERVICE AND SHALL BE LEGAL AND BINDING UPON THE PARTY BEING SERVED. THE PARTIES
AGREE THAT THE PREVAILING PARTY(IES) IN ANY SUCH ACTION SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY(IES) ALL OF SUCH PREVAILING
PARTY’S(IES’) REASONABLE ATTORNEYS’ FEES AND EXPENSES RELATING TO SUCH ACTION OR PROCEEDING AND/OR INCURRED IN CONNECTION
WITH THE PREPARATION THEREFOR.
14. Interpretation.
The term “including” shall mean “including, but not limited to”.
15. Counterparts.
This Agreement may be executed in several original or facsimile counterparts, each one of which shall constitute an original, and all
of which together shall constitute but one instrument.
[Signature Page Follows]
If the foregoing correctly
sets forth the understanding among the Advisor and the Company with respect to the foregoing, please indicate your agreement by signing
in the place provided below, and this letter shall become a binding contract as of the date first set forth above.
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CHARDAN CAPITAL MARKETS, LLC
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By:
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Name: Shai Gerson
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Title: Partner, Head of Capital Markets
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Agreed and accepted by:
MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name: Sanjeev Satyal
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Title: Chief Executive Officer
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[Signature Page to Business Combination
Marketing Agreement]
ANNEX I
INDEMNIFICATION
In connection with the Company’s
engagement of Chardan Capital Markets, LLC (the “Advisor”) pursuant to that certain letter agreement (“Agreement”)
of which this Annex forms a part, Monterey Bio Acquisition Corporation (the “Company”) hereby agrees, subject to the
second paragraph of Section 5 of the Agreement, to indemnify and hold harmless the Advisor and each of its affiliates and the respective
directors, officers, employees, shareholders, representatives and agents of any of the foregoing (collectively, the “Indemnified
Persons”), from and against any and all claims, actions, suits, proceedings (including those of stockholders), damages, liabilities
and reasonable expenses incurred by any of them (including the reasonable fees and expenses of counsel), as incurred (collectively a “Claim”),
that (A) are related to or arise out of (i) any actions taken or omitted to be taken (including any untrue statements made or
any statements omitted to be made) by the Company, or (ii) any actions taken or omitted to be taken by any Indemnified Person, in
connection with the Company’s engagement of the Advisor, or (B) otherwise relate to or arise out of the Advisor’s activities
on the Company’s behalf under the Advisor’s engagement, and the Company shall reimburse any Indemnified Person for all reasonable
expenses (including the reasonable fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating,
preparing and defending any such claim, action, suit or proceeding, whether or not in connection with pending or threatened litigation
in which any Indemnified Person is a party. The Company will not, however, be responsible for any Claim that is finally judicially determined
to have resulted from bad faith, gross negligence or willful misconduct of any Indemnified Person. The Company further agrees that no
Indemnified Person shall have any liability to the Company for or in connection with the Company’s engagement of the Advisor except
for any Claim incurred by the Company as a result of such Indemnified Person’s bad faith, gross negligence or willful misconduct.
The Company further agrees
that it will not, without the prior written consent of the Advisor, settle, compromise or consent to the entry of any judgment in any
pending or threatened Claim in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual
or potential party to such Claim), unless such settlement, compromise or consent includes an unconditional, irrevocable release of each
Indemnified Person from any and all liability arising out of such Claim.
Promptly upon receipt by an
Indemnified Person of notice of any complaint or the assertion or institution of any Claim with respect to which indemnification is being
sought hereunder, such Indemnified Person shall notify the Company in writing of such complaint or of such assertion or institution, but
failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent
such failure results in the forfeiture by the Company of substantial rights and defenses. If the Company so elects or is requested by
such Indemnified Person, the Company will assume the defense of such Claim, including the employment of counsel reasonably satisfactory
to such Indemnified Person and the payment of the fees and expenses of such counsel. In the event, however, that legal counsel to such
Indemnified Person reasonably determines that having common counsel would present such counsel with an actual or potential conflict of
interest or if the defendant in, or target of, any such Claim includes an Indemnified Person and the Company, and legal counsel to such
Indemnified Person reasonably concludes that there may be actual or potential legal defenses available to it or other Indemnified Persons
different from or in addition to those available to the Company, then such Indemnified Person may employ its own separate counsel to represent
or defend him, her or it in any such Claim and the Company shall pay the reasonable fees and expenses of such counsel, provided that any
such fees and expenses shall be promptly reimbursed to the Company in the event that the underlying Claim is finally judicially determined
to have resulted from bad faith, gross negligence or willful misconduct of any Indemnified Person. Notwithstanding anything herein to
the contrary, if the Company fails timely or diligently to defend, contest, or otherwise protect against any Claim, the relevant Indemnified
Party shall have the right, but not the obligation, to defend, contest, compromise, settle, assert crossclaims, or counterclaims or otherwise
protect against the same, and shall be fully indemnified by the Company therefor, including for the reasonable fees and expenses of its
counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof.
In addition, with respect
to any Claim in which the Company assumes the defense, the Indemnified Person shall have the right to participate in such Claim and to
retain his, her or its own counsel therefor at his, her or its own expense. The Company agrees that if any indemnity sought by an Indemnified
Person hereunder is held by a court to be unavailable for any reason (other than a final judicial determination that the underlying Claim
resulted from bad faith, gross negligence or willful misconduct of an Indemnified Person), then (whether or not the Advisor is an Indemnified
Person) the Company and the Advisor shall contribute to the Claim for which such indemnity is held unavailable in such proportion as is
appropriate to reflect the relative benefits to the Company, on the one hand, and the Advisor, on the other, in connection with the Advisor’
engagement referred to above, subject to the limitation that in no event shall the amount of any the Advisor’s contribution to such
Claim exceed the amount of Fee actually received by the Advisor from the Company pursuant to such engagement. The Company hereby agrees
that the relative benefits to the Company, on the one hand, and the Advisor, on the other, with respect to the Advisor’s engagement
shall be deemed to be in the same proportion as (a) the total value paid or proposed to be paid or received by the Company or its
stockholders, as the case may be, pursuant to the transaction (whether or not consummated) for which the Advisor are engaged to render
services bears to (b) the Fee paid or proposed to be paid to the Advisor in connection with such engagement.
The Company’s indemnity,
reimbursement and contribution obligations under this Agreement (a) shall be in addition to, and shall in no way limit or otherwise
adversely affect, any rights that any Indemnified Party may have at law or at equity and (b) shall be effective whether or not the
Company is at fault in any way.
Exhibit 3.1
CERTIFICATE
OF INCORPORATION
OF
CHARDAN FINTECH ACQUISITION CORP.
THE
UNDERSIGNED, in order to form a corporation for the purposes herein stated, under and pursuant to the provisions of the General Corporation
Law of the State of Delaware, hereby certifies as follows:
FIRST:
The name of the corporation is Chardan FinTech Acquisition Corp. (hereinafter called the "Corporation").
SECOND:
The registered office of the Corporation is to be located at 3411 Silverside Road, Tatnall Building, #104, in the City of Wilmington,
in the County of New Castle, Delaware 19810. The name of its Registered Agent at such address is Corporate Creations Network Inc.
THIRD:
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH:
The name and mailing address of the incorporator is: Jaszick Maldonado, c/o Loeb & Loeb LLP, 345 Park Avenue, New York
NY 10154.
FIFTH:
The total number of shares which the Corporation shall have authority
to issue is five million (5,000,000) shares of common stock, $0.0001
par value.
SIXTH:
A Director of the Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
Director of the Corporation, except to the extent that exculpation
from liability is not permitted under the General Corporation Law of the State of Delaware as in effect at
the time such liability is
determined. No amendment or repeal of this paragraph shall apply to
or have any effect on the liability or alleged liability of any
Director of the Corporation for or with respect to any acts or omissions of such Director
occurring
SEVENTH:
In furtherance and not in imitation of the powers conferred by statute, the Board of Directors of the Corporation
is expressly authorized to make,
alter or repeal the By-Laws of
the Corporation; provided, however, that no By-Laws hereafter adopted
by the Board of Directors
or stockholders shall invalidate any
prior act of the Directors
which would have been valid
if such By-Laws had not been adopted.
EIGHTH: The
Corporation shall, to the maximum extent permitted from
time to time under the law of the State of Delaware,
indemnify and upon request advance expenses
to any person who is or was a party or is threatened to be
made a party to any
threatened, pending or completed action,
suit, proceeding or claim, whether civil, criminal, administrative
or investigative, by reason
of the fact that such person
is or was or has agreed to be a Director or
officer of the Corporation or while a
Director or officer is or
was serving at the request of the Corporation
as a director, officer, partner,
trustee, employee or agent
of any corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, against expenses (including attorneys' fees and expenses), judgments, fines,
penalties and amounts paid in settlement incurred (and not otherwise recovered) in connection with the investigation, preparation to
defend or defense of such action, suit, proceeding or claim; provided, however, that the foregoing shall not require the Corporation
to indemnify or advance expenses to any person in connection with any action, suit, proceeding, claim or counterclaim initiated by
or on behalf of such person. Such indemnification shall not be exclusive of other indemnification rights arising under any By-Law,
agreement, vote of Directors or stockholders or otherwise and shall inure to the benefits of the heirs and legal representatives of
such person. Any person seeking indemnification under this paragraph shall be deemed to have met the standard of conduct required
for such indemnification unless the contrary shall be established. Any repeal or modification of the foregoing provisions of this
paragraph shall not adversely affect any right or protection of a Director or officer of the Corporation with respect to any acts or
omissions of such Director or officer occurring prior to such repeal or modification.
NINTH:
In furtherance of and not in limitation of powers conferred by statute, it is further provided:
1.
Election of Directors need not be by written ballot unless the By-Laws of the Corporation so provide.
2.
Meetings of stockholders may be held within or without the State of Delaware, as the By Laws may provide.
3.
To the extent permitted by law, the books of the Corporation may be kept outside the State of Delaware at such place or places
as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.
TENTH:
Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein
are granted subject to this reservation.
IN WITNESS
WHEREOF, the undersigned, being the incorporator herein before named, has executed this Certificate of Incorporation this 23rd day
of July, 2020.
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Isl Jaszick
Maldonado
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Jaszick Maldonado, Incorporator
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Exhibit 3.2
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
CHARDAN FINTECH ACQUISITION CORP.
Pursuant to the provisions
of Section 241 of the General Corporation Law of the State of Delaware, Chardan Fintech Acquisition Corp., a corporation organized and
existing under the laws of the State of Delaware, does hereby certify as follows:
FIRST. The name of
this corporation is Chardan Fintech Acquisition Corp. (the “Corporation”).
SECOND. The Certificate
of Incorporation (the “Certificate”) of the Corporation is hereby amended by striking the FIRST article in its entirety and
inserting in lieu thereof the following:
FIRST: The name of the corporation is Monterey Bio Acquisition
Corporation (hereinafter called the “Corporation”).
THIRD. The Certificate
of the Corporation is hereby amended by striking the FIFTH article in its entirety and inserting in lieu thereof the following:
FIFTH: The total number of shares which the Corporation
shall have authority to issue is one hundred one million (101,000,000) shares, $0.0001 par value, of which one hundred million (100,000,000)
shares shall be common stock and one million (1,000,000) shares shall be preferred stock.
FOURTH. That the Corporation
has not received any payment for any of its stock.
FIFTH. This amendment
to the Certificate of Incorporation was adopted and declared advisable by written consent of the sole member of the Board of Directors
as of April 9, 2021 pursuant to Section 141 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF,
said Chardan Fintech Acquisition Corp. has caused this certificate to be signed by Jonas Grossman, its President, this 9th day of April
2021.
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/s/ Jonas Grossman
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Name: Jonas Grossman
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Title: President
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Exhibit 3.3
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MONTEREY BIO ACQUISITION CORPORATION
____________, 2021
Monterey Bio Acquisition Corporation, a corporation
organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY AS FOLLOWS:
1. The name of the Corporation is “Monterey
Bio Acquisition Corporation”. The original certificate of incorporation of the Corporation was filed with the Secretary of State
of the State of Delaware on [__], 2021 (the “Original Certificate”).
2. This Amended and Restated Certificate of Incorporation
(the “Amended and Restated Certificate”), which both restates and amends the provisions of the Original Certificate,
was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time
to time (the “DGCL”), and by written consent of the Corporation’s stockholders in accordance with Section 228
of the DGCL.
3. This Amended and Restated Certificate shall
become effective on the date of filing with the Secretary of State of Delaware.
4. The text of the Original Certificate is hereby
restated and amended in its entirety to read as follows:
Article I
NAME
The name of the corporation is Monterey Bio Acquisition
Corporation (the “Corporation”).
Article II
PURPOSE
The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be organized under the DGCL. In addition to the powers and privileges conferred
upon the Corporation by law and those incidental thereto, the Corporation shall possess and may exercise all the powers and privileges
that are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation, including, but
not limited to, effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar
business combination, involving the Corporation and one or more businesses (a “Business Combination”).
Article III
REGISTERED AGENT
The address of the Corporation’s
registered office in the State of Delaware is 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808. The name of its
registered agent at such address is Corporation Service Company.
Article IV
CAPITALIZATION
Section 4.1 Authorized Capital
Stock. The total number of shares of all classes of capital stock, which the Corporation is authorized to issue is
101,000,000 shares, consisting of 100,000,000 shares of common stock, par value $0.0001 per share (the “Common
Stock”), and 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”).
The powers, preferences and relative, participating, optional and other special rights of the respective classes of the
Corporation’s capital stock or the holders thereof and the qualifications, limitations and restrictions thereof are as
follows:
Section 4.2 Preferred Stock. Subject
to Article IX of this Amended and Restated Certificate, the Board of Directors of the Corporation (the “Board”)
is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock
and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations,
powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications,
limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance
of such series and included in a certificate of designation (a “Preferred Stock Designation”) filed pursuant to the
DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or hereafter, to adopt any such
resolution or resolutions.
Section 4.3 Common Stock.
(a) Voting.
(i) Except as otherwise required by law
or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the shares of Common Stock shall
exclusively possess all voting power with respect to the Corporation.
(ii) Except as otherwise required by law
or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of shares of Common Stock shall be entitled
to one vote for each such share on each matter properly submitted to the stockholders on which the holders of the Common Stock are entitled
to vote.
(iii) Except as otherwise required by law
or this Amended and Restated Certificate (including any Preferred Stock Designation), at any annual or special meeting of the stockholders
of the Corporation, holders of the shares of Common Stock shall have the exclusive right to vote for the election of directors and on
all other matters properly submitted to a vote of the stockholders. Notwithstanding the foregoing, except as otherwise required by law
or this Amended and Restated Certificate (including any Preferred Stock Designation), holders of shares of Common Stock shall not be entitled
to vote on any amendment to this Amended and Restated Certificate (including any amendment to any Preferred Stock Designation) that relates
solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are
entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and
Restated Certificate (including any Preferred Stock Designation) or the DGCL.
(b) Dividends. Subject to applicable
law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and the provisions of Article IX hereof,
the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or
capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation
legally available therefor and shall share equally on a per share basis in such dividends and distributions.
(c) Liquidation, Dissolution or Winding
Up of the Corporation. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock
and the provisions of Article IX hereof, in the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares
of Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders,
ratably in proportion to the number of shares of Common Stock held by them.
Section 4.4 Rights
and Options. The Corporation has the authority to create and issue rights,
warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes,
with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board. The Board is empowered to set the
exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that
the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof.
Article V
BOARD OF DIRECTORS
Section 5.1 Board Powers. The business
and affairs of the Corporation shall be managed by, or under the direction of, the Board. In addition to the powers and authority expressly
conferred upon the Board by statute, this Amended and Restated Certificate or the Bylaws of the Corporation then in effect (the “Bylaws”),
the Board is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation,
subject, nevertheless, to the provisions of the DGCL, this Amended and Restated Certificate, and any Bylaws adopted by the stockholders
of the Corporation; provided, however, that no Bylaws hereafter adopted by the stockholders of the Corporation shall invalidate any prior
act of the Board that would have been valid if such Bylaws had not been adopted.
Section 5.2 Number, Election and Term.
(a) The number of directors of the Corporation,
other than those who may be elected by the holders of one or more series of the Preferred Stock voting separately by class or series,
shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted by a majority of the Board.
(b) Subject to the rights of the holders
of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more
series of Preferred Stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders present
in person or represented by proxy at the meeting and entitled to vote thereon.
(c) Subject to Section 5.5 hereof,
a director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor has
been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.
(d) Unless and except to the extent that
the Bylaws shall so require, the election of directors need not be by written ballot. The holders of shares of Common Stock shall not
have cumulative voting rights.
Section 5.3 Newly Created Directorships and
Vacancies. Subject to Section 5.5 hereof newly created directorships resulting from an increase in the number of directors
and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely
and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director
(and not by stockholders), and any director so chosen shall hold office for the remainder of the full term of the class of directors to
which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected and qualified, subject,
however, to such director’s earlier death, resignation, retirement, disqualification or removal.
Section 5.4 Removal. Subject to Section
5.5 hereof, any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote
of holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally
in the election of directors, voting together as a single class.
Section 5.5 Preferred Stock -
Directors. Notwithstanding any other provision of this Article V, and except as otherwise required by law, whenever
the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or
more directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall
be governed by the terms of such series of the Preferred Stock as set forth in this Amended and Restated Certificate (including any
Preferred Stock Designation) and such directors shall not be included in any of the classes created pursuant to this Article
V unless expressly provided by such terms.
Article VI
BYLAWS
In furtherance and not in limitation of the powers
conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or repeal the Bylaws by the
affirmative vote of a majority of the total number of directors present at a regular or special meeting of the Board at which there is
a quorum or by unanimous written consent. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided,
however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by
this Amended and Restated Certificate (including any Preferred Stock Designation), the affirmative vote of the holders of at least a majority
of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors,
voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the Bylaws; and provided further,
however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if
such Bylaws had not been adopted.
Article VII
MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN CONSENT
Section 7.1 Special Meetings. Subject
to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special
meetings of stockholders of the Corporation may be called only by the Chairman of the Board, the Chief Executive Officer of the Corporation,
or the Board pursuant to a resolution adopted by a majority of the Board, and the ability of the stockholders of the Corporation to call
a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders of the
Corporation may not be called by another person or persons.
Section 7.2 Advance Notice. Advance
notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the
stockholders of the Corporation shall be given in the manner provided in the Bylaws.
Section 7.3 Action by Written Consent.
Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate (including any Preferred Stock Designation)
relating to the rights of the holders of any outstanding series of Preferred Stock, subsequent to the consummation of the Corporation’s
initial public offering of securities (the “Offering”), any action required or permitted to be taken by the stockholders of
the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent
of the stockholders of the Corporation.
Article VIII
LIMITED LIABILITY; INDEMNIFICATION
Section 8.1 Limitation of Director Liability.
A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL
as the same exists or may hereafter be amended unless a director violated his or her duty of loyalty to the Corporation or its stockholders,
acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or
unlawful redemptions, or derived improper personal benefit from his or her actions as a director. Any amendment, modification or repeal
of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of
any act or omission occurring prior to the time of such amendment, modification or repeal.
Section 8.2 Indemnification and
Advancement of Expenses.
(a) To the fullest extent permitted by
applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify, defend and hold harmless each person
who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact
that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving
at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture,
trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “indemnitee”),
whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other
capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without
limitation, attorneys’ fees, judgments, fines, the Employee Retirement Income Security Act of 1974 (ERISA) excise taxes and penalties
and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding. The Corporation shall to the
fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an indemnitee in defending
or otherwise participating in any proceeding in advance of its final disposition; provided, however, that, to the extent required by applicable
law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking,
by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled
to be indemnified under this Section 8.2 or otherwise. The rights to indemnification and advancement of expenses conferred by this
Section 8.2 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions
of this Section 8.2(a), except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation
shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board. Notwithstanding the foregoing, no indemnification or advancement of
expenses will extend to any claims made by the Corporation’s officers and directors to cover any loss that such individuals may
sustain as a result of such individuals’ agreement to pay debts and obligations to target businesses or vendors or other entities
that are owed money by the Corporation for services rendered or contracted for or products sold to the Corporation, as described in the
Registration Statement.
(b) The rights to indemnification and
advancement of expenses conferred on any indemnitee by this Section 8.2 shall not be exclusive of any other rights that any indemnitee
may have or hereafter acquire under law, this Amended and Restated Certificate, the Bylaws, an agreement, vote of stockholders or disinterested
directors, or otherwise.
(c) Any repeal or amendment of this Section
8.2 by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Amended and Restated
Certificate inconsistent with this Section 8.2, shall, unless otherwise required by law, be prospective only (except to the extent
such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted
prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment
or adoption of such inconsistent provision in respect of any proceeding (regardless of when such proceeding is first threatened, commenced
or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent
provision.
(d) This Section 8.2 shall not
limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses
to persons other than indemnitees.
Article IX
BUSINESS COMBINATION REQUIREMENTS; EXISTENCE
Section 9.1 General.
(a) The provisions of this Article
IX shall apply during the period commencing upon the effectiveness of this Amended and Restated Certificate and terminating upon the
consummation of the Corporation’s initial Business Combination and no amendment to this Article IX shall be effective prior
to the consummation of the initial Business Combination unless approved by the affirmative vote of the holders of at least sixty-five
percent (65%) of all then outstanding shares of the Common Stock.
(b)
Immediately after the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including
the proceeds of any exercise of the underwriters’ over-allotment option) and certain other amounts specified in the
Corporation’s registration statement on Form S-1, as initially filed with the Securities and Exchange Commission (the
“SEC”) on [__], 2021, as amended (the “Registration Statement”), shall be deposited in a trust
account (the “Trust Account”), established for the benefit of the Public Stockholders (as defined below) pursuant
to a trust agreement described in the Registration Statement. Except for the withdrawal of interest income (if any) to pay the
Corporation’s taxes, if any, none of the funds held in the Trust Account (including the interest earned on the funds held in
the Trust Account) will be released from the Trust Account until the earliest to occur of (i) the completion of the initial Business
Combination, (ii) the redemption of 100% of the Offering Shares (as defined below) if the Corporation does not complete its initial
Business Combination within 12 months (or up to 21 months, as applicable) from the closing of the Offering, subject to applicable
law, and (iii) the redemption of Offering Shares in connection with a stockholder vote to approve an amendment to this Amended and
Restated Certificate (A) to modify the substance or timing of the Corporation’s obligation to redeem 100% of the Offering
Shares if the Corporation has not completed an initial Business Combination within 12 months (or up to 21 months, as applicable) of
the closing of the Offering or (B) with respect to any other provisions relating to stockholders’ rights or pre-initial
Business Combination activity (as described in Section 9.7). Holders of shares of the Common Stock included as part of the
units sold in the Offering (the “Offering Shares”) (whether such Offering Shares were purchased in the Offering
or in the secondary market following the Offering and whether or not such holders are NorthStar Bio Ventures, LLC, Chardan Monterey
Investments LLC (collectively the “Co-Sponsors”) or the officers or directors of the Corporation, or any
affiliates of any of the foregoing) are referred to herein as “Public Stockholders.” In the event that the
Corporation has not consummated an initial Business Combination within 12 months from the date of the closing of the Offering the
Corporation’s insiders or their affiliates may, but are not obligated to, extend the period of time to consummate a Business
Combination up to three times by an additional three months each time (for a total of up to 21 months to complete a Business
Combination); provided that, pursuant to the trust agreement to be entered into between the Corporation and Continental Stock
Transfer & Trust Company on the date of the final prospectus relating to the Offering, the only way to extend the time available
for the Corporation to consummate its initial Business Combination is for the Corporation’s insiders or their affiliates or
designees, upon five days’ advance notice prior to each applicable deadline, to deposit into the Trust Account $1,000,000, or
$1,150,000 if the over-allotment option is exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000, or
$3,450,000 if the over-allotment option is exercised in full, if the time to consummate a Business Combination is extended to a full
21 months), on or prior to the date of the applicable deadline.
Section 9.2 Redemption Rights.
(a) Prior to the consummation of the
initial Business Combination, the Corporation shall provide all holders of Offering Shares with the opportunity to have their Offering
Shares redeemed upon the consummation of the initial Business Combination pursuant to, and subject to the limitations of, Sections 9.2(b)
and 9.2(c) (such rights of such holders to have their Offering Shares redeemed pursuant to such Sections, the “Redemption
Rights”) hereof for cash equal to the applicable redemption price per share determined in accordance with Section 9.2(b)
hereof (the “Redemption Price”); provided, however, that the Corporation shall not redeem Offering Shares to the extent
that such redemption would result in the Corporation’s failure to have net tangible assets (as determined in accordance with Rule
3a51-1(g)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or any successor rule)) of
at least $5,000,001 either immediately prior to or upon consummation of the initial Business Combination or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to such initial Business Combination (such limitation hereinafter
called the “Redemption Limitation”). Notwithstanding anything to the contrary contained in this Amended and Restated
Certificate, there shall be no Redemption Rights or liquidating distributions with respect to any warrant issued pursuant to the Offering.
(b) If the Corporation offers to
redeem the Offering Shares other than in conjunction with a stockholder vote on an initial Business Combination with a proxy
solicitation pursuant to Regulation 14A under the Exchange Act (or any successor rules or regulations) and filing proxy materials
with the SEC, the Corporation shall offer to redeem the Offering Shares upon the consummation of the initial Business Combination,
subject to lawfully available funds therefor, in accordance with the provisions of Section 9.2(a) hereof, pursuant to a
tender offer in accordance with Rule 13e-4 and Regulation 14E under the Exchange Act (or any successor rule or regulation) (such
rules and regulations hereinafter called the “Tender Offer Rules”) which it shall commence prior to the
consummation of the initial Business Combination and shall file tender offer documents with the SEC prior to the consummation of the
initial Business Combination that contain substantially the same financial and other information about the initial Business
Combination and the Redemption Rights as is required under Regulation 14A under the Exchange Act (or any successor rule or
regulation) (such rules and regulations hereinafter called the “Proxy Solicitation Rules”), even if such
information is not required under the Tender Offer Rules; provided, however, that if a stockholder vote is required by law to
approve the proposed initial Business Combination, or the Corporation decides to submit the proposed initial Business Combination to
the stockholders for their approval for business or other legal reasons, the Corporation shall offer to redeem the Offering Shares,
subject to lawfully available funds therefor, in accordance with the provisions of Section 9.2(a) hereof, in conjunction
with a proxy solicitation pursuant to the Proxy Solicitation Rules (and not the Tender Offer Rules) at a price per share equal to
the Redemption Price calculated in accordance with the following provisions of this Section 9.2(b). In the event that the
Corporation offers to redeem the Offering Shares pursuant to a tender offer in accordance with the Tender Offer Rules, the
Redemption Price per share of the Common Stock payable to holders of the Offering Shares tendering their Offering Shares pursuant to
such tender offer shall be equal to the quotient obtained by dividing: (i) the aggregate amount then on deposit in the Trust Account
calculated as of two business days prior to the completion of the initial Business Combination, including interest earned on the
funds held in the Trust Account and not previously released to the Corporation to pay its taxes by (ii) the number of the then
outstanding Offering Shares. If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on the
proposed initial Business Combination pursuant to a proxy solicitation, the Redemption Price per share of the Common Stock payable
to holders of the Offering Shares exercising their Redemption Rights shall be equal to the quotient obtained by dividing (a) the
aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the completion of the initial
Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the
Corporation to pay its taxes by (b) the number of the then outstanding Offering Shares.
(c) If the Corporation offers to redeem
the Offering Shares in conjunction with a stockholder vote on an initial Business Combination pursuant to a proxy solicitation, a Public
Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as
a “group” (as defined under Section 13(d)(3) of the Exchange Act), shall be restricted from seeking Redemption Rights
with respect to more than an aggregate of 20% of the Offering Shares without the prior consent of the Corporation.
(d) In the
event that the Corporation has not completed an initial Business Combination within 12 months (or up to 21 months, as applicable)
from the closing of the Offering, the Corporation shall (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem
the Offering 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 not previously released to the Corporation to pay its taxes, if any
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then outstanding Offering Shares, which
redemption will completely extinguish rights of the Public Stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in
the case of clauses (ii) and (iii) to the Corporation’s obligations under the DGCL to provide for claims of creditors and the
requirements of other applicable law.
(e) If the Corporation offers to redeem
the Offering Shares in conjunction with a stockholder vote on an initial Business Combination, the Corporation shall consummate the proposed
initial Business Combination only if (i) such initial Business Combination is approved by the affirmative vote of the holders of a majority
of the shares of the Common Stock that are voted at a stockholder meeting held to consider such initial Business Combination and (ii)
the Redemption Limitation is not exceeded.
(f) If the Corporation conducts a tender
offer pursuant to Section 9.2(b), the Corporation shall consummate the proposed initial Business Combination only if the Redemption
Limitation is not exceeded.
Section 9.3 Distributions from the Trust
Account.
(a) A Public Stockholder shall be entitled
to receive funds from the Trust Account only as provided in Sections 9.2(a), 9.2(b), 9.2(d) or 9.7 hereof.
In no other circumstances shall a Public Stockholder have any right or interest of any kind in or to distributions from the Trust Account,
and no stockholder other than a Public Stockholder shall have any interest in or to the Trust Account.
(b) Each Public Stockholder that does
not exercise its Redemption Rights shall retain its interest in the Corporation and shall be deemed to have given its consent to the release
of the remaining funds in the Trust Account to the Corporation, and following payment to any Public Stockholders exercising their Redemption
Rights, the remaining funds in the Trust Account shall be released to the Corporation.
(c) The exercise by a Public Stockholder
of the Redemption Rights shall be conditioned on such Public Stockholder following the specific procedures for redemptions set forth by
the Corporation in any applicable tender offer or proxy materials sent to the Public Stockholders relating to the proposed initial Business
Combination, including the requirement that any Public Stockholder holder that holds Offering Shares beneficially through a nominee must
identify itself to the Corporation in connection with any redemption election in order to validly redeem such Offering Shares. Holders
of Offering Shares seeking to exercise their Redemption Rights may be required to either tender their certificates (if any) to the Corporation’s
transfer agent or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal
At Custodian) System, at the holder’s option, in each case up to two business days prior to the originally scheduled vote on the
proposal to approve a Business Combination. Payment of the amounts necessary to satisfy the Redemption Rights properly exercised shall
be made as promptly as practical after the consummation of the initial Business Combination.
Section 9.4 Share Issuances. Prior
to or in connection with the consummation of the Corporation’s initial Business Combination, the Corporation shall not issue any
additional securities of the Corporation that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote
on the Corporation’s initial Business Combination or any other proposal presented to the stockholders prior to or in connection
with the completion of an initial Business Combination.
Section 9.5 Transactions with Affiliates.
In the event the Corporation seeks to complete its initial Business Combination with a business combination target that is affiliated
with the Sponsor, or the executive officers or directors of the Corporation, the Corporation, or a committee of independent directors
of the Corporation, shall obtain an opinion from an independent investment banking firm or another independent entity that commonly renders
valuation opinions that such initial Business Combination is fair to the Corporation from a financial point of view.
Section 9.6 No Transactions with Other Blank
Check Companies. The Corporation shall not enter into an initial Business Combination with another blank check company or other
company.
Section 9.7 Additional
Redemption Rights. If, in accordance with Section 9.1(a), any amendment is made to Section 9.2(d) that would
affect the substance or timing of the Corporation’s obligation to allow redemption in connection with the Corporation’s
initial Business Combination or amendments to this Amended and Restated Certificate prior thereto or to redeem 100% of the Offering
Shares if the Corporation does not complete an initial Business Combination within 12 months (or up to 21 months, as applicable)
from the closing of the Offering or with respect to any other provision relating to stockholders’ rights or pre-initial
Business Combination activity, the Public Stockholders shall be provided with the opportunity to redeem their Offering 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 the Corporation to pay its
taxes, divided by the number of the then outstanding Offering Shares; provided, however, that any such amendment will be voided, and
this Article IX will remain unchanged, if any stockholders who wish to redeem are unable to redeem due to the Redemption
Limitation.
Section 9.8 Minimum Value of Target.
So long as the Corporation is listed on a national securities exchange, the Corporation’s initial Business Combination must occur
with one or more target businesses that together have an aggregate fair market value of at least 80% of the net assets held in the Trust
Account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the interest earned on the Trust Account)
at the time of the agreement to enter into the initial Business Combination.
Article X
CORPORATE OPPORTUNITY
To the extent allowed by law, the doctrine of corporate
opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its officers or directors, or
any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties
or contractual obligations they may have as of the date of this Amended and Restated Certificate or in the future, and the Corporation
renounces any expectancy that any of the directors or officers of the Corporation will offer any such corporate opportunity of which he
or she may become aware to the Corporation, except, the doctrine of corporate opportunity shall apply with respect to any of the directors
or officers of the Corporation only with respect to a corporate opportunity that was offered to such person solely in his or her capacity
as a director or officer of the Corporation and (i) such opportunity is one the Corporation is legally and contractually permitted to
undertake and would otherwise be reasonable for the Corporation to pursue and (ii) the director or officer is permitted to refer that
opportunity to the Corporation without violating any legal obligation.
Article XI
AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The Corporation reserves the right at any time
and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate (including any
Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that may be added
or inserted, in the manner now or hereafter prescribed by this Amended and Restated Certificate and the DGCL; and, except as set forth
in Article VIII, all rights, preferences and privileges of whatever nature herein conferred upon stockholders, directors or any
other persons by and pursuant to this Amended and Restated Certificate in its present form or as hereafter amended are granted subject
to the right reserved in this Article XI; provided, however, that Article IX of this Amended and Restated
Certificate may be amended only as provided therein.
Article XII
EXCLUSIVE FORUM FOR CERTAIN LAWSUITS
Section 12.1 Forum. Unless the
Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be
the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding
brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director,
officer or other employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, or any claim for
aiding and abetting any such alleged breach, (iii) any action asserting a claim against the Corporation, its directors, officers or
employees arising pursuant to any provision of the DGCL or this Amended and Restated Certificate or the Bylaws, or (iv) any action
asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except
for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable
party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal
jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction
of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction.
This exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act, the
Securities Act of 1933, as amended (the “Securities Act”), or any other claim for which the federal courts have
exclusive jurisdiction. 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 and Section 22 of the Securities Act creates
concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the
Securities Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought
to enforce any duty or liability created by the Exchange Act, the Securities Act, or any other claim for which the federal courts
have exclusive jurisdiction.
Section 12.2 Consent to Jurisdiction.
If any action the subject matter of which is within the scope of Section 12.1 is filed in a court other than a court located within
the State of Delaware (a “Foreign Action”) in the name of any stockholder, such stockholder shall be deemed to have
consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any
action brought in any such court to enforce Section 12.1 (an “FSC Enforcement Action”) and (ii) having service
of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign
Action as agent for such stockholder.
Section 12.3 Severability. If any
provision or provisions of this Article XII shall be held to be invalid, illegal or unenforceable as applied to any person or entity
or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of
such provisions in any other circumstance and of the remaining provisions of this Article XII (including, without limitation, each
portion of any sentence of this Article XII containing any such provision held to be invalid, illegal or unenforceable that is
not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances
shall not in any way be affected or impaired thereby. Any person or entity purchasing or otherwise acquiring any interest in shares of
capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.
Article XIII
APPLICATION OF DGCL SECTION 203
Section 13.1
Section 203 of the DGCL. The Corporation hereby expressly elects not
to be governed by Section 203 of the DGCL.
Section 13.2 Limitation
on Business Combinations. Notwithstanding the foregoing, the Corporation shall not engage in any business combination (as defined
below), at any point in time at which the Corporation’s Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act with any interested stockholder (as defined below) for a period of three (3) years following the time that such
stockholder became an interested stockholder, unless:
(a) prior
to such time, the Board approved either the business combination or the transaction which resulted in the stockholder becoming an interested
stockholder, or
(b) upon
consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least eighty-five percent (85%) of the voting stock outstanding at the time the transaction commenced, excluding for purposes of determining
the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons
who are directors and also officers of the Corporation and (ii) employee stock plans in which employee participants do not have
the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
(c) at
or subsequent to that time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders,
and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock that is not owned by the interested
stockholder.
Section 13.3 Certain
Definitions. Solely for purposes of this Article XIII, references to:
(a) “affiliate”
means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control
with, another person.
(b) “associate,”
when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated association or other
entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of twenty percent (20%) or more
of any class of voting stock; (ii) any trust or other estate in which such person has at least a twenty percent (20%) beneficial
interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such
person, or any relative of such spouse, who has the same residence as such person.
(c) “business
combination,” when used in reference to the Corporation and any interested stockholder of the Corporation, means:
(i) any
merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (a) with the interested
stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation
is caused by the interested stockholder and as a result of such merger or consolidation Section 12.2 is not applicable
to the surviving entity;
(ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately
as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets
of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value
equal to ten percent (10%) or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated
basis or the aggregate market value of all the outstanding stock of the Corporation
(iii) any
transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of the
Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (a) pursuant to the exercise,
exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary
which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under
Section 251(g) of the DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion
of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is
distributed, pro rata to all stockholders of a class or series of stock of the Corporation subsequent to the time the interested stockholder
became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all stockholders of
said stock; or (e) any issuance or transfer of stock by the Corporation; provided, however, that in no case
under items (c)-(e) of this subsection (iii) shall there be an increase in the interested stockholder’s proportionate
share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial
changes due to fractional share adjustments); or
(iv) any
transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect, directly
or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of
any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a result of
immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused,
directly or indirectly, by the interested stockholder.
(d) “control,”
including the terms “controlling,” “controlled by” and “under common control with,”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of twenty percent (20%) or more of
the voting power of the outstanding voting stock of the Corporation, partnership, unincorporated association or other entity shall be
presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the
foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing
this Article XIII, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually
or as a group have control of such entity.
(e) “Exempted
Person” means NorthStar Bio Ventures, LLC, Chardan Monterey Investments LLC and their respective affiliates, any of their
respective direct or indirect transferees of at least 20% of the Corporation’s outstanding common stock and any
“group” of which any such person is a part under Rule 13d-5 of the Exchange Act.
(f) “interested
stockholder” means any person (other than the Corporation or any direct or indirect majority-owned subsidiary of the Corporation)
that (i) is the owner of twenty percent (20%) or more of the voting stock of the Corporation, or (ii) is an affiliate or associate
of the Corporation and was the owner of twenty percent (20%) or more of the voting stock of the Corporation at any time within the three
(3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder;
and the affiliates and associates of such person; but “interested stockholder” shall not include (a) any Exempted Person,
or (b) any person whose ownership of shares in excess of the twenty percent (20%) limitation set forth herein is the result of any
action taken solely by the Corporation; provided that with respect to clause (b) such person shall be an interested stockholder
if thereafter such person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action
not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the
voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of
the definition of “owner” below but shall not include any other unissued stock of the Corporation which may be issuable pursuant
to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
(g) “owner,”
including the terms “own” and “owned,” when used with respect to any stock, means a person that
individually or with or through any of its affiliates or associates:
(i) beneficially
owns such stock, directly or indirectly; or
(ii) has
(a) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however,
that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such
person’s affiliates or associates until such tendered stock is accepted for purchase or exchange; or (b) the right to vote
such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of
any stock because of such person’s right to vote such stock if the agreement, arrangement or understanding to vote such stock arises
solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more persons; or
(iii) has
any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy
or consent as described in item (b) of subsection (ii) above), or disposing of such stock with any other person that beneficially
owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.
(h) “person”
means any individual, corporation, partnership, unincorporated association or other entity.
(i) “stock”
means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.
(j) “voting
stock” means stock of any class or series entitled to vote generally in the election of directors.
[Signature Page Follows]
IN WITNESS WHEREOF, Monterey Bio Acquisition Corporation
has caused this Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by an authorized officer
as of the date first set forth above.
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MONTEREY
BIO ACQUISITION CORPORATION
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By:
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Name: Sanjeev
Satyal
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Title: Chief
Executive Officer
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[Signature Page to Amended
and Restated Certificate of Incorporation]
Exhibit 3.4
BY LAWS
OF
MONTEREY BIO ACQUISITION CORPORATION
(THE “CORPORATION”)
Article
I
OFFICES
Section 1.1.
Registered Office. The registered office of the Corporation within the State of Delaware shall be located at either (a) the
principal place of business of the Corporation in the State of Delaware or (b) the office of the corporation or individual acting as the
Corporation’s registered agent in Delaware.
Section 1.2.
Additional Offices. The Corporation may, in addition to its registered office in the State of Delaware, have such other offices
and places of business, both within and outside the State of Delaware, as the Board of Directors of the Corporation (the “Board”)
may from time to time determine or as the business and affairs of the Corporation may require.
Article
II
STOCKHOLDERS MEETINGS
Section 2.1.
Annual Meetings. The annual meeting of stockholders shall be held at such place, either within or without the State of Delaware,
and time and on such date as shall be determined by the Board and stated in the notice of the meeting, provided that the Board may in
its sole discretion determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication
pursuant to Section 9.5(a). At each annual meeting, the stockholders shall elect those directors of the Corporation to fill
any term of a directorship that expires on the date of such annual meeting and may transact any other business as may properly be brought
before the meeting.
Section 2.2.
Special Meetings. Subject to the rights of the holders of any outstanding series of the Preferred Stock, special meetings of
stockholders, for any purpose or purposes, may be called only by the Chairman of the Board, Chief Executive Officer, or the Board pursuant
to a resolution adopted by a majority of the Board, and may not be called by any other person. Special meetings of stockholders shall
be held at such place, either within or without the State of Delaware, and time and on such date as shall be determined by the Board and
stated in the Corporation’s notice of the meeting, provided that the Board may in its sole discretion determine that the meeting
shall not be held at any place, but may instead be held solely by means of remote communication pursuant to Section 9.5(a).
Section 2.3. Notices.
Written notice of each stockholders meeting stating the place, if any, date, and time of the meeting, and the means of remote
communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and
the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the record date for
determining stockholders entitled to notice of the meeting, shall be given in the manner permitted by Section 9.3 to
each stockholder entitled to vote thereat as of the record date for determining the stockholders entitled to notice of the meeting,
by the Corporation not less than 10 nor more than 60 days before the date of the meeting unless otherwise required by the General
Corporation Law of the State of Delaware (the “DGCL”). If said notice is for a stockholders meeting other
than an annual meeting, it shall in addition state the purpose or purposes for which the meeting is called, and the business
transacted at such meeting shall be limited to the matters so stated in the Corporation’s notice of meeting (or any supplement
thereto). Any meeting of stockholders as to which notice has been given may be postponed, and any meeting of stockholders as to
which notice has been given may be cancelled, by the Board upon public announcement (as defined in Section 2.7(c)) given
before the date previously scheduled for such meeting.
Section 2.4.
Quorum. Except as otherwise provided by applicable law, the Corporation’s Certificate of Incorporation, as the same may
be amended or restated from time to time (the “Certificate of Incorporation”) or these By Laws, the presence,
in person or by proxy, at a stockholders meeting of the holders of shares of outstanding capital stock of the Corporation representing
a majority of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote at such meeting shall constitute
a quorum for the transaction of business at such meeting, except that when specified business is to be voted on by a class or series of
stock voting as a class, the holders of shares representing a majority of the voting power of the outstanding shares of such class or
series shall constitute a quorum of such class or series for the transaction of such business. If a quorum shall not be present or represented
by proxy at any meeting of the stockholders of the Corporation, the chairman of the meeting may adjourn the meeting from time to time
in the manner provided in Section 2.6 until a quorum shall attend. The stockholders present at a duly convened meeting may
continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Shares
of its own stock belonging to the Corporation or to another corporation, if a majority of the voting power of the shares entitled to vote
in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled
to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any
such other corporation to vote shares held by it in a fiduciary capacity.
Section 2.5.
Voting of Shares.
(a) Voting
Lists. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before every
meeting of stockholders, a complete list of the stockholders of record entitled to vote at such meeting; provided, however, if the
record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect
the stockholders entitled to vote as of the tenth day before the meeting date, arranged in alphabetical order and showing the
address and the number of shares registered in the name of each stockholder. Nothing contained in this Section 2.5(a)
shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list
shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a
period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information
required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the
principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an
electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of
the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the
meeting during the whole time thereof, and may be examined by any stockholder who is present. If a meeting of stockholders is to be
held solely by means of remote communication as permitted by Section 9.5(a), the list shall be open to the examination
of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required
to access such list shall be provided with the notice of meeting. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the list required by this Section 2.5(a) or to vote in person or by proxy at any
meeting of stockholders.
(b)
Manner of Voting. At any stockholders meeting, every stockholder entitled to vote may vote in person or by proxy. If authorized
by the Board, the voting by stockholders or proxy holders at any meeting conducted by remote communication may be effected by a ballot
submitted by electronic transmission (as defined in Section 9.3), provided that any such electronic transmission must either
set forth or be submitted with information from which the Corporation can determine that the electronic transmission was authorized by
the stockholder or proxy holder. The Board, in its discretion, or the chairman of the meeting of stockholders, in such person’s
discretion, may require that any votes cast at such meeting shall be cast by written ballot.
(c)
Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action
in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be
voted or acted upon after three years from its date, unless the proxy provides for a longer period. Without limiting the manner in which
a stockholder may authorize another person or persons to act for such stockholder as proxy, either of the following shall constitute a
valid means by which a stockholder may grant such authority.
(i)
A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be
accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing
such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.
(ii)
A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission
of an electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that
any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic
transmission was authorized by the stockholder.
Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be
substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or
transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission.
(d)
Required Vote. Subject to the rights of the holders of one or more series of preferred stock of the Corporation (“Preferred
Stock”), voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred
Stock, at all meetings of stockholders at which a quorum is present, the election of directors shall be determined by a plurality of the
votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. All other matters
presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes cast
by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon
which, by applicable law, the Certificate of Incorporation, these By Laws or applicable stock exchange rules, a different vote is required,
in which case such provision shall govern and control the decision of such matter.
(e)
Inspectors of Election. The Board may, and shall if required by law, in advance of any meeting of stockholders, appoint
one or more persons as inspectors of election, who may be employees of the Corporation or otherwise serve the Corporation in other capacities,
to act at such meeting of stockholders or any adjournment thereof and to make a written report thereof. The Board may designate one or
more persons as alternate inspectors to replace any inspector who fails to act. If no inspectors of election or alternates are appointed
by the Board, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging
his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to
the best of his or her ability. The inspectors shall ascertain and report the number of outstanding shares and the voting power of each;
determine the number of shares present in person or represented by proxy at the meeting and the validity of proxies and ballots; count
all votes and ballots and report the results; determine and retain for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors; and certify their determination of the number of shares represented at the meeting and their
count of all votes and ballots. No person who is a candidate for an office at an election may serve as an inspector at such election.
Each report of an inspector shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector
acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors.
Section 2.6. Adjournments.
Any meeting of stockholders, annual or special, may be adjourned, from time to time, whether or not there is a quorum, to reconvene
at the same or some other place. Notice need not be given of any such adjourned meeting if the date, time, and place, if any,
thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in
person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting
the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may
transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, notice
of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a
new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for
notice of such adjourned meeting in accordance with Section 9.2, and shall give notice of the adjourned meeting to each
stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned
meeting.
Section 2.7.
Advance Notice for Business.
(a)
Annual Meetings of Stockholders. No business (other than nominations of individual(s) for election to the Board) may be
transacted at an annual meeting of stockholders, other than business that is either (i) specified in the Corporation’s notice of
meeting (or any supplement thereto), (ii) otherwise properly brought before the annual meeting by or at the direction of the Board or
(iii) otherwise properly brought before the annual meeting by any stockholder of the Corporation (x) who is a stockholder of record on
the date of the giving of the notice provided for in this Section 2.7(a) and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (y) who complies with the notice procedures set forth in this Section 2.7(a).
Notwithstanding anything in this Section 2.7(a) to the contrary, only persons nominated for election as a director to fill
any term of a directorship that expires on the date of the annual meeting pursuant to Section 3.2 will be considered for election
at such meeting.
(i)
In addition to any other applicable requirements, for business (other than nominations) to be properly brought before an annual
meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation
and such business must otherwise be a proper matter for stockholder action. Subject to Section 2.7(a)(iii), a stockholder’s
notice to the Secretary with respect to such business, to be timely, must be delivered to the Secretary at the principal executive offices
of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before
the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual
meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 120th day before the meeting and not later than the later of (x) the close of
business on the 90th day before the meeting or (y) the close of business on the 10th day following the day on which public announcement
of the date of the annual meeting is first made by the Corporation. The public announcement of an adjournment or postponement of an annual
meeting shall not commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described in
this Section 2.7(a).
(ii) To
be in proper written form, a stockholder’s notice to the Secretary with respect to any business (other than nominations) must
set forth as to each such matter such stockholder proposes to bring before the annual meeting (A) a brief description of the
business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any
resolutions proposed for consideration and in the event such business includes a proposal to amend these By Laws, the language of
the proposed amendment) and the reasons for conducting such business at the annual meeting, (B) the name and record address of such
stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (C) the class or series
and number of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and by the
beneficial owner, if any, on whose behalf the proposal is made, (D) a description of all arrangements or understandings between such
stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their
names) in connection with the proposal of such business by such stockholder, (E) any material interest of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made in such business and (F) a representation that such stockholder (or a
qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business
before the meeting.
(iii)
The foregoing notice requirements of this Section 2.7(a) shall be deemed satisfied by a stockholder as to any proposal
(other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal
at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and such stockholder has complied with the requirements of such Rule for inclusion of such
proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. No business shall be conducted at
the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this
Section 2.7(a), provided, however, that once business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 2.7(a) shall be deemed to preclude discussion by any stockholder of any such business.
If the Board or the chairman of the annual meeting determines that any stockholder proposal was not made in accordance with the provisions
of this Section 2.7(a) or that the information provided in a stockholder’s notice does not satisfy the information requirements
of this Section 2.7(a), such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing
provisions of this Section 2.7(a), if the stockholder (or a qualified representative of the stockholder) does not appear at
the annual meeting of stockholders of the Corporation to present the proposed business, such proposed business shall not be transacted,
notwithstanding that proxies in respect of such matter may have been received by the Corporation.
(iv)
In addition to the provisions of this Section 2.7(a), a stockholder shall also comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 2.7(a)
shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant
to Rule 14a-8 under the Exchange Act.
(b)
Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board
may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting
only pursuant to Section 3.2.
(c)
Public Announcement. For purposes of these By Laws, “public announcement” shall mean disclosure
in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act (or any
successor thereto).
Section 2.8.
Conduct of Meetings. The chairman of each annual and special meeting of stockholders shall be the Chairman of the Board or, in
the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director)
or, in the absence (or inability or refusal to act of the Chief Executive Officer or if the Chief Executive Officer is not a director,
the President (if he or she shall be a director) or, in the absence (or inability or refusal to act) of the President or if the President
is not a director, such other person as shall be appointed by the Board. The Board may adopt such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with these By Laws or such rules and regulations
as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and to adjourn the
meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate
for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman
of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting;
(b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation
in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the
chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof;
and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or
the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary
procedure. The secretary of each annual and special meeting of stockholders shall be the Secretary or, in the absence (or inability or
refusal to act) of the Secretary, an Assistant Secretary so appointed to act by the chairman of the meeting. In the absence (or inability
or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary
of the meeting.
Section 2.9.
Consents in Lieu of Meeting. Unless otherwise provided by the Certificate of Incorporation, until the corporation consummates
an initial public offering (“Offering”), any action required to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted, and shall be delivered to the Corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by
hand or by certified or registered mail, return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein
unless, within 60 days of the earliest dated consent delivered in the manner required by this section and the DGCL to the
Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery
to its registered office in Delaware, its principal place of business or an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office
shall be by hand or by certified or registered mail, return receipt requested.
Article
III
DIRECTORS
Section 3.1.
Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation
or by these By Laws required to be exercised or done by the stockholders. Directors need not be stockholders or residents of the State
of Delaware.
Section 3.2.
Advance Notice for Nomination of Directors.
(a)
Only persons who are nominated in accordance
with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided by the
terms of one or more series of Preferred Stock with respect to the rights of holders of one or more series of Preferred Stock to elect
directors. Nominations of persons for election to the Board at any annual meeting of stockholders, or at any special meeting of stockholders
called for the purpose of electing directors as set forth in the Corporation’s notice of such special meeting, may be made (i) by
or at the direction of the Board or (ii) by any stockholder of the Corporation (x) who is a stockholder of record on the date of the giving
of the notice provided for in this Section 3.2 and on the record date for the determination of stockholders entitled to vote
at such meeting and (y) who complies with the notice procedures set forth in this Section 3.2.
(b)
In addition to any other applicable requirements,
for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary
of the Corporation. To be timely, a stockholder’s notice to the Secretary must be delivered to the Secretary at the principal executive
offices of the Corporation (i) in the case of an annual meeting, not later than the close of business on the 90th day nor earlier than
the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided,
however, that in the event that the annual meeting is more than 30 days before or more than 70 days after such anniversary date, notice
by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day before the meeting and not
later than the later of (x) the close of business on the 90th day before the meeting or (y) the close of business on the 10th day following
the day on which public announcement of the date of the annual meeting was first made by the Corporation; and (ii) in the case of a special
meeting of stockholders called for the purpose of electing directors, not later than the close of business on the 10th day following the
day on which public announcement of the date of the special meeting is first made by the Corporation. In no event shall the public announcement
of an adjournment or postponement of an annual meeting or special meeting commence a new time period (or extend any time period) for the
giving of a stockholder’s notice as described in this Section 3.2.
(c)
Notwithstanding anything in paragraph (b)
to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is greater than the number
of directors whose terms expire on the date of the annual meeting and there is no public announcement by the Corporation naming all of
the nominees for the additional directors to be elected or specifying the size of the increased Board before the close of business on
the 100th day prior to the anniversary date of the immediately preceding annual meeting of stockholders, a stockholder’s notice
required by this Section 3.2 shall also be considered timely, but only with respect to nominees for the additional directorships
created by such increase that are to be filled by election at such annual meeting, if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the 10th day following the date on which such public announcement
was first made by the Corporation.
(d)
To be in proper written form, a stockholder’s
notice to the Secretary must set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (A)
the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the
class or series and number of shares of capital stock of the Corporation, if any, that are owned beneficially or of record by the person,
(D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required
to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder, without regard to the application of the Exchange Act to either the nomination or the Corporation;
and (ii) as to the stockholder giving the notice (A) the name and record address of such stockholder as they appear on the Corporation’s
books and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, (B) the class or series and number
of shares of capital stock of the Corporation that are owned beneficially and of record by such stockholder and the beneficial owner,
if any, on whose behalf the nomination is made, (C) a description of all arrangements or understandings relating to the nomination to
be made by such stockholder among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made, each proposed
nominee and any other person or persons (including their names), (D) a representation that such stockholder (or a qualified representative
of such stockholder) intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (E) any other
information relating to such stockholder and the beneficial owner, if any, on whose behalf the nomination is made that would be required
to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied
by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.
(e)
If the Board or the chairman of the meeting
of stockholders determines that any nomination was not made in accordance with the provisions of this Section 3.2 or that
the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 3.2, then
such nomination shall not be considered at the meeting in question. Notwithstanding the foregoing provisions of this Section 3.2,
if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting of stockholders of the Corporation
to present the nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such nomination may have been
received by the Corporation.
(f)
In addition to the provisions of this Section 3.2,
a stockholder shall also comply with all of the applicable requirements of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth herein. Nothing in this Section 3.2 shall be deemed to affect any rights of the holders of
Preferred Stock to elect directors pursuant to the Certificate of Incorporation.
Section 3.3.
Compensation. Unless otherwise restricted by the Certificate of Incorporation or these By Laws, the Board shall have the authority
to fix the compensation of directors, including for service on a committee of the Board. The directors may be reimbursed their expenses,
if any, of attendance at each meeting of the Board. No such payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of committees of the Board may be allowed like reimbursement of expenses for service
on the committee.
Article
IV
BOARD MEETINGS
Section 4.1.
Annual Meetings. The Board shall meet as soon as practicable after the adjournment of each annual stockholders meeting at the
place of the annual stockholders meeting unless the Board shall fix another time and place and give notice thereof in the manner required
herein for special meetings of the Board. No notice to the directors shall be necessary to legally convene this meeting, except as provided
in this Section 4.1.
Section 4.2.
Regular Meetings. Regularly scheduled, periodic meetings of the Board may be held without notice at such times, dates and places
(within or without the State of Delaware) as shall from time to time be determined by the Board.
Section 4.3.
Special Meetings. Special meetings of the Board (a) may be called by the Chairman of the Board or President and (b) shall be
called by the Chairman of the Board, President or Secretary on the written request of at least a majority of directors then in office,
or the sole director, as the case may be, and shall be held at such time, date and place (within or without the State of Delaware) as
may be determined by the person calling the meeting or, if called upon the request of directors or the sole director, as specified in
such written request. Notice of each special meeting of the Board shall be given, as provided in Section 9.3, to each director
(i) at least 24 hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand
delivery or by means of a form of electronic transmission and delivery; (ii) at least two days before the meeting if such notice is sent
by a nationally recognized overnight delivery service; and (iii) at least five days before the meeting if such notice is sent through
the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called
the meeting or the directors who requested the meeting. Any and all business that may be transacted at a regular meeting of the Board
may be transacted at a special meeting. Except as may be otherwise expressly provided by applicable law, the Certificate of Incorporation,
or these By Laws, neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice or
waiver of notice of such meeting.
Section 4.4.
Quorum; Required Vote. A majority of the Board shall constitute a quorum for the transaction of business at any meeting of the
Board, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board, except
as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these By Laws. If a quorum shall not
be present at any meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present.
Section 4.5.
Consent In Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By Laws, any action required
or permitted to be taken at any meeting of the Board or any committee thereof may be taken without a meeting if all members of the Board
or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic
transmission or transmissions (or paper reproductions thereof) are filed with the minutes of proceedings of the Board or committee. Such
filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained
in electronic form.
Section 4.6.
Organization. The chairman of each meeting of the Board shall be the Chairman of the Board or, in the absence (or inability
or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) or, in the absence (or
inability or refusal to act) of the Chief Executive Officer or if the Chief Executive Officer is not a director, the President (if he
or she shall be a director) or in the absence (or inability or refusal to act) of the President or if the President is not a director,
a chairman elected from the directors present. The Secretary shall act as secretary of all meetings of the Board. In the absence (or inability
or refusal to act) of the Secretary, an Assistant Secretary shall perform the duties of the Secretary at such meeting. In the absence
(or inability or refusal to act) of the Secretary and all Assistant Secretaries, the chairman of the meeting may appoint any person to
act as secretary of the meeting.
Article
V
COMMITTEES OF DIRECTORS
Section 5.1.
Establishment. The Board may by resolution of the Board designate one or more committees, each committee to consist of one
or more of the directors of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board
when required by the resolution designating such committee. The Board shall have the power at any time to fill vacancies in, to change
the membership of, or to dissolve any such committee.
Section 5.2.
Available Powers. Any committee established pursuant to Section 5.1 hereof, to the extent permitted by applicable
law and by resolution of the Board, shall have and may exercise all of the powers and authority of the Board in the management of the
business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it.
Section 5.3.
Alternate Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of such committee. In the absence or disqualification of a member of the committee, the member
or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously
appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.
Section 5.4.
Procedures. Unless the Board otherwise provides, the time, date, place, if any, and notice of meetings of a committee shall
be determined by such committee. At meetings of a committee, a majority of the number of members of the committee (but not including any
alternate member, unless such alternate member has replaced any absent or disqualified member at the time of, or in connection with, such
meeting) shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which
a quorum is present shall be the act of the committee, except as otherwise specifically provided by applicable law, the Certificate of
Incorporation, these By Laws or the Board. If a quorum is not present at a meeting of a committee, the members present may adjourn the
meeting from time to time, without notice other than an announcement at the meeting, until a quorum is present. Unless the Board otherwise
provides and except as provided in these By Laws, each committee designated by the Board may make, alter, amend and repeal rules for the
conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board is authorized
to conduct its business pursuant to Article IV of these By Laws.
Article
VI
OFFICERS
Section 6.1.
Officers. The officers of the Corporation elected by the Board may include a Chairman of the Board, a Chief Executive Officer,
a President, a Chief Financial Officer, a Treasurer, a Secretary and such other officers (including without limitation, Vice Presidents
and Assistant Secretaries) as the Board from time to time may determine. Officers elected by the Board shall each have such powers and
duties as generally pertain to their respective offices, subject to the specific provisions of this Article VI. Such officers
shall also have such powers and duties as from time to time may be conferred by the Board. The Chief Executive Officer or President may
also appoint such other officers (including without limitation one or more Vice Presidents and Controllers) as may be necessary or desirable
for the conduct of the business of the Corporation. Such other officers shall have such powers and duties and shall hold their offices
for such terms as may be provided in these By Laws or as may be prescribed by the Board or, if such officer has been appointed by the
Chief Executive Officer or President, as may be prescribed by the appointing officer.
(a) Chairman
of the Board. The Chairman of the Board shall preside when present at all meetings of the stockholders and the Board. The
Chairman of the Board shall have general supervision and control of the acquisition activities of the Corporation subject to the
ultimate authority of the Board, and shall be responsible for the execution of the policies of the Board with respect to such
matters. In the absence (or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she
shall be a director) shall preside when present at all meetings of the stockholders and the Board. The powers and duties of the
Chairman of the Board shall not include supervision or control of the preparation of the financial statements of the Company (other
than through participation as a member of the Board). The position of Chairman of the Board and Chief Executive Officer may be held
by the same person.
(b)
Chief Executive Officer. The Chief Executive Officer shall be the chief executive officer of the Corporation, shall have
general supervision of the affairs of the Corporation and general control of all of its business subject to the ultimate authority of
the Board, and shall be responsible for the execution of the policies of the Board with respect to such matters, except to the extent
any such powers and duties have been prescribed to the Chairman of the Board pursuant to Section 6.1(a) above. In the absence
(or inability or refusal to act) of the Chairman of the Board, the Chief Executive Officer (if he or she shall be a director) shall preside
when present at all meetings of the stockholders and the Board. The position of Chief Executive Officer and President may be held by the
same person.
(c)
President. The President shall make recommendations to the Chief Executive Officer on all operational matters that would
normally be reserved for the final executive responsibility of the Chief Executive Officer. In the absence (or inability or refusal to
act) of the Chairman of the Board and Chief Executive Officer, the President (if he or she shall be a director) shall preside when present
at all meetings of the stockholders and the Board. The President shall also perform such duties and have such powers as shall be designated
by the Board. The position of President and Chief Executive Officer may be held by the same person.
(d)
Vice Presidents. In the absence (or inability or refusal to act) of the President, the Vice President (or in the event there
be more than one Vice President, the Vice Presidents in the order designated by the Board) shall perform the duties and have the powers
of the President. Any one or more of the Vice Presidents may be given an additional designation of rank or function.
(e)
Chief Financial Officer. The Chief Financial Officer shall perform all duties commonly incident to that office (including,
without limitation, the care and custody of the funds and securities of the Corporation, which from time to time may come into the Chief
Financial Officer’s hands and the deposit of the funds of the Corporation in such banks or trust companies as the Board, the Chief
Executive Officer or the President may authorize).
(f)
Treasurer. The Treasurer shall have the custody of the corporate funds and securities, except as otherwise provided by the
Board, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit
all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the
Board. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board, taking proper vouchers for such disbursements,
and shall render to the president and the directors, at the regular meetings of the Board, or whenever they may require it, an account
of all his or her transactions as Treasurer and of the financial condition of the Corporation.
(g)
Secretary.
(i)
The Secretary shall attend all meetings of the stockholders, the Board and (as required) committees of the Board and shall record
the proceedings of such meetings in books to be kept for that purpose. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board and shall perform such other duties as may be prescribed by the Board, the Chairman
of the Board, Chief Executive Officer or President. The Secretary shall have custody of the corporate seal of the Corporation and the
Secretary, or any Assistant Secretary, shall have authority to affix the same to any instrument requiring it, and when so affixed, it
may be attested by his or her signature or by the signature of such Assistant Secretary. The Board may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing thereof by his or her signature.
(ii)
The Secretary shall keep, or cause to be kept, at the principal executive office of the Corporation or at the office of the Corporation’s
transfer agent or registrar, if one has been appointed, a stock ledger, or duplicate stock ledger, showing the names of the stockholders
and their addresses, the number and classes of shares held by each and, with respect to certificated shares, the number and date of certificates
issued for the same and the number and date of certificates cancelled.
(h)
Assistant Secretaries. The Assistant Secretary or, if there be more than one, the Assistant Secretaries in the order determined
by the Board shall, in the absence (or inability or refusal to act) of the Secretary, perform the duties and have the powers of the Secretary.
Section 6.2.
Term of Office; Removal; Vacancies. The elected officers of the Corporation shall hold office until their successors are duly
elected and qualified or until their earlier death, resignation, retirement, disqualification, or removal from office. Any officer may
be removed, with or without cause, at any time by the Board. Any officer appointed by the Chief Executive Officer or President may also
be removed, with or without cause, by the Chief Executive Officer or President, as the case may be, unless the Board otherwise provides.
Any vacancy occurring in any elected office of the Corporation may be filled by the Board. Any vacancy occurring in any office appointed
by the Chief Executive Officer or President may be filled by the Chief Executive Officer, or President, as the case may be, unless the
Board then determines that such office shall thereupon be elected by the Board, in which case the Board shall elect such officer.
Section 6.3.
Multiple Officeholders; Stockholder and Director Officers. Any number of offices may be held by the same person unless the
Certificate of Incorporation or these By Laws otherwise provide. Officers need not be stockholders or residents of the State of Delaware.
Article
VII
SHARES
Section 7.1.
Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the
sole discretion of the Board and the requirements of the DGCL.
Section 7.2.
Multiple Classes of Stock. If the Corporation shall be authorized to issue more than one class of stock or more than one series
of any class, the Corporation shall (a) cause the powers, designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights
to be set forth in full or summarized on the face or back of any certificate that the Corporation issues to represent shares of such
class or series of stock or (b) in the case of uncertificated shares, within a reasonable time after the issuance or transfer of such
shares, send to the registered owner thereof a written notice containing the information required to be set forth on certificates as
specified in clause (a) above; provided, however, that, except as otherwise provided by applicable law, in lieu of the foregoing requirements,
there may be set forth on the face or back of such certificate or, in the case of uncertificated shares, on such written notice a statement
that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions
of such preferences or rights.
Section 7.3.
Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation
by (a) the Chairman of the Board, the Chief Executive Officer, the President or a Vice President and (b) the Chief Financial Officer,
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation. Any or all the signatures on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon
a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may
be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.
Section 7.4.
Consideration and Payment for Shares.
(a)
Subject to applicable law and the Certificate
of Incorporation, shares of stock may be issued for such consideration, having in the case of shares with par value a value not less than
the par value thereof, and to such persons, as determined from time to time by the Board. The consideration may consist of cash, tangible
or intangible property or any benefit to the Corporation or any combination thereof.
(b)
Subject to applicable law and the Certificate
of Incorporation, shares may not be issued until the full amount of the consideration has been paid, unless upon the face or back of each
certificate issued to represent any partly paid shares of capital stock or upon the books and records of the Corporation in the case of
partly paid uncertificated shares, there shall have been set forth the total amount of the consideration to be paid therefor and the amount
paid thereon up to and including the time said certificate representing certificated shares or said uncertificated shares are issued.
Section 7.5.
Lost, Destroyed or Wrongfully Taken Certificates.
(a)
If an owner of a certificate representing shares claims that such certificate has been lost, destroyed or wrongfully taken, the Corporation
shall issue a new certificate representing such shares or such shares in uncertificated form if the owner: (i) requests such a new certificate
before the Corporation has notice that the certificate representing such shares has been acquired by a protected purchaser; (ii) if requested
by the Corporation, delivers to the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against
the Corporation on account of the alleged loss, wrongful taking or destruction of such certificate or the issuance of such new certificate
or uncertificated shares; and (iii) satisfies other reasonable requirements imposed by the Corporation.
(b)
If a certificate representing shares has
been lost, apparently destroyed or wrongfully taken, and the owner fails to notify the Corporation of that fact within a reasonable time
after the owner has notice of such loss, apparent destruction or wrongful taking and the Corporation registers a transfer of such shares
before receiving notification, the owner shall be precluded from asserting against the Corporation any claim for registering such transfer
or a claim to a new certificate representing such shares or such shares in uncertificated form.
Section 7.6.
Transfer of Stock.
(a)
If a certificate representing shares of
the Corporation is presented to the Corporation with an endorsement requesting the registration of transfer of such shares or an instruction
is presented to the Corporation requesting the registration of transfer of uncertificated shares, the Corporation shall register the transfer
as requested if:
(i)
in the case of certificated shares, the certificate representing such shares has been surrendered;
(ii)
(A) with respect to certificated shares, the endorsement is made by the person specified by the certificate as entitled to such
shares; (B) with respect to uncertificated shares, an instruction is made by the registered owner of such uncertificated shares; or (C)
with respect to certificated shares or uncertificated shares, the endorsement or instruction is made by any other appropriate person or
by an agent who has actual authority to act on behalf of the appropriate person;
(iii)
the Corporation has received a guarantee of signature of the person signing such endorsement or instruction or such other reasonable
assurance that the endorsement or instruction is genuine and authorized as the Corporation may request;
(iv)
the transfer does not violate any restriction on transfer imposed by the Corporation that is enforceable in accordance with Section 7.8(a);
and
(v)
such other conditions for such transfer as shall be provided for under applicable law have been satisfied.
(b)
Whenever any transfer of shares shall be
made for collateral security and not absolutely, the Corporation shall so record such fact in the entry of transfer if, when the certificate
for such shares is presented to the Corporation for transfer or, if such shares are uncertificated, when the instruction for registration
of transfer thereof is presented to the Corporation, both the transferor and transferee request the Corporation to do so.
Section 7.7.
Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation
or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as
the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation,
vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of
the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee
on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions
as are provided under applicable law, may also so inspect the books and records of the Corporation.
Section 7.8.
Effect of the Corporation’s Restriction on Transfer.
(a)
A written restriction on the transfer or
registration of transfer of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any person or
group of persons, if permitted by the DGCL and noted conspicuously on the certificate representing such shares or, in the case of uncertificated
shares, contained in a notice sent pursuant to Section 7.2, may be enforced against the holder of such shares or any successor
or transferee of the holder including an executor, administrator, trustee, guardian or other fiduciary entrusted with like responsibility
for the person or estate of the holder.
(b)
A restriction imposed by the Corporation
on the transfer or the registration of shares of the Corporation or on the amount of shares of the Corporation that may be owned by any
person or group of persons, even if otherwise lawful, is ineffective against a person without actual knowledge of such restriction unless:
(i) the shares are certificated and such restriction is noted conspicuously on the certificate; or (ii) the shares are uncertificated
and such restriction was contained in a notice sent pursuant to Section 7.2.
Section 7.9.
Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable
requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of
shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for
the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.
Article
VIII
INDEMNIFICATION
Section 8.1. Right
to Indemnification. To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the
Corporation shall indemnify and hold harmless each person who was or is made a party or is threatened to be made a party to or is
otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or
officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or
nonprofit entity, including service with respect to an employee benefit plan (hereinafter an
“Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all
liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes
and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding; provided,
however, that, except as provided in Section 8.3 with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify an Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee only if
such proceeding (or part thereof) was authorized by the Board.
Section 8.2.
Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.1, an Indemnitee
shall also have the right to be paid by the Corporation to the fullest extent not prohibited by applicable law the expenses (including,
without limitation, attorneys’ fees) incurred in defending or otherwise participating in any such proceeding in advance of its final
disposition (hereinafter an “advancement of expenses”); provided, however, that, if the DGCL requires, an advancement
of expenses incurred by an Indemnitee in his or her capacity as a director or officer of the Corporation (and not in any other capacity
in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made
only upon the Corporation’s receipt of an undertaking (hereinafter an “undertaking”), by or on behalf
of such Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified
under this Article VIII or otherwise.
Section 8.3.
Right of Indemnitee to Bring Suit. If a claim under Section 8.1 or Section 8.2 is not paid in full
by the Corporation within 60 days after a written claim therefor has been received by the Corporation, except in the case of a claim
for an advancement of expenses, in which case the applicable period shall be 20 days, the Indemnitee may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be
entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking,
the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal
(hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification
set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee
of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit
that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties
to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable
standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification
or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking,
the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VIII
or otherwise shall be on the Corporation.
Section 8.4.
Non-Exclusivity of Rights. The rights provided to any Indemnitee pursuant to this Article VIII shall not be exclusive
of any other right, which such Indemnitee may have or hereafter acquire under applicable law, the Certificate of Incorporation, these
By Laws, an agreement, a vote of stockholders or disinterested directors, or otherwise.
Section 8.5.
Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee
or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability
or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the
DGCL.
Section 8.6.
Indemnification of Other Persons. This Article VIII shall not limit the right of the Corporation to the extent
and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Indemnitees. Without limiting
the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VIII with
respect to the indemnification and advancement of expenses of Indemnitees under this Article VIII.
Section 8.7.
Amendments. Any repeal or amendment of this Article VIII by the Board or the stockholders of the Corporation or
by changes in applicable law, or the adoption of any other provision of these By Laws inconsistent with this Article VIII,
will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law
permits the Corporation to provide broader indemnification rights to Indemnitees on a retroactive basis than permitted prior thereto),
and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring
prior to such repeal or amendment or adoption of such inconsistent provision; provided however, that amendments or repeals of this Article VIII
shall require the affirmative vote of the stockholders holding at least 65% of the voting power of all outstanding shares of capital stock
of the Corporation.
Section 8.8. Certain
Definitions. For purposes of this Article VIII, (a) references to “other enterprise” shall include any
employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an
employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that
imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries;
and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of
the Corporation” for purposes of Section 145 of the DGCL.
Section 8.9.
Contract Rights. The rights provided to Indemnitees pursuant to this Article VIII shall be contract rights and
such rights shall continue as to an Indemnitee who has ceased to be a director, officer, agent or employee and shall inure to the benefit
of the Indemnitee’s heirs, executors and administrators.
Section 8.10.
Severability. If any provision or provisions of this Article VIII shall be held to be invalid, illegal or unenforceable
for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Article VIII
shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VIII
(including, without limitation, each such portion of this Article VIII containing any such provision held to be invalid, illegal
or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.
Article
IX
MISCELLANEOUS
Section 9.1.
Place of Meetings. If the place of any meeting of stockholders, the Board or committee of the Board for which notice is required
under these By Laws is not designated in the notice of such meeting, such meeting shall be held at the principal business office of the
Corporation; provided, however, if the Board has, in its sole discretion, determined that a meeting shall not be held at any place, but
instead shall be held by means of remote communication pursuant to Section 9.5 hereof, then such meeting shall not be held
at any place.
Section 9.2.
Fixing Record Dates.
(a) In order that the Corporation may determine
the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which
shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be
more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date
for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date,
that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by
the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the
close of business on the business day next preceding the day on which notice is given, or, if notice is waived, at the close of business
on the business day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a
new record date for the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such
adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the
foregoing provisions of this Section 9.2(a) at the adjourned meeting.
(b)
In order that the Corporation may determine
the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled
to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board
may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which
record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
Section 9.3.
Means of Giving Notice.
(a)
Notice to Directors. Whenever under applicable law, the Certificate of Incorporation or these By Laws notice is required
to be given to any director, such notice shall be given either (i) in writing and sent by mail, or by a nationally recognized delivery
service, (ii) by means of facsimile telecommunication or other form of electronic transmission, or (iii) by oral notice given personally
or by telephone. A notice to a director will be deemed given as follows: (i) if given by hand delivery, orally, or by telephone, when
actually received by the director, (ii) if sent through the United States mail, when deposited in the United States mail, with postage
and fees thereon prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iii)
if sent for next day delivery by a nationally recognized overnight delivery service, when deposited with such service, with fees thereon
prepaid, addressed to the director at the director’s address appearing on the records of the Corporation, (iv) if sent by facsimile
telecommunication, when sent to the facsimile transmission number for such director appearing on the records of the Corporation, (v) if
sent by electronic mail, when sent to the electronic mail address for such director appearing on the records of the Corporation, or (vi)
if sent by any other form of electronic transmission, when sent to the address, location or number (as applicable) for such director appearing
on the records of the Corporation.
(b)
Electronic Transmission. “Electronic transmission” means any form of communication, not directly
involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof,
and that may be directly reproduced in paper form by such a recipient through an automated process.
(c)
Notice to Stockholders Sharing Same Address. Without limiting the manner by which notice otherwise may be given effectively
by the Corporation to stockholders, any notice to stockholders given by the Corporation under any provision of the DGCL, the Certificate
of Incorporation or these By Laws shall be effective if given by a single written notice to stockholders who share an address if consented
to by the stockholders at that address to whom such notice is given. A stockholder may revoke such stockholder’s consent by delivering
written notice of such revocation to the Corporation. Any stockholder who fails to object in writing to the Corporation within 60 days
of having been given written notice by the Corporation of its intention to send such a single written notice shall be deemed to have consented
to receiving such single written notice.
(d)
Exceptions to Notice Requirements. Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation
or these By Laws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and
there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any
action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same
force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the
filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required,
that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
Whenever notice is required to be given by the Corporation, under any
provision of the DGCL, the Certificate of Incorporation or these By Laws, to any stockholder to whom (1) notice of two consecutive annual
meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without
a meeting to such stockholder during the period between such two consecutive annual meetings, or (2) all, and at least two payments (if
sent by first-class mail) of dividends or interest on securities during a 12-month period, have been mailed addressed to such stockholder
at such stockholder’s address as shown on the records of the Corporation and have been returned undeliverable, the giving of such
notice to such stockholder shall not be required. Any action or meeting that shall be taken or held without notice to such stockholder
shall have the same force and effect as if such notice had been duly given. If any such stockholder shall deliver to the Corporation a
written notice setting forth such stockholder’s then current address, the requirement that notice be given to such stockholder shall
be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary
of State of Delaware, the certificate need not state that notice was not given to persons to whom notice was not required to be given
pursuant to Section 230 (b) of the DGCL. The exception in subsection (1) of the first sentence of this paragraph to the requirement
that notice be given shall not be applicable to any notice returned as undeliverable if the notice was given by electronic transmission.
Section 9.4.
Waiver of Notice. Whenever any notice is required to be given under applicable law, the Certificate of Incorporation, or these
By Laws, a written waiver of such notice, signed by the person or persons entitled to said notice, or a waiver by electronic transmission
by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to such required notice.
Attendance at a meeting shall constitute a waiver of notice of such meeting, except where a person attends for the express purpose of
objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.
Section 9.5.
Meeting Attendance via Remote Communication Equipment.
(a)
Stockholder Meetings. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as
the Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication:
(i)
participate in a meeting of stockholders; and
(ii) be
deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely
by means of remote communication, provided that (A) the Corporation shall implement reasonable measures to verify that each person
deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (B) the
Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to
participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the
proceedings of the meeting substantially concurrently with such proceedings, and (C) if any stockholder or proxy holder votes or
takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by
the Corporation.
(b)
Board Meetings. Unless otherwise restricted by applicable law, the Certificate of Incorporation or these By Laws, members
of the Board or any committee thereof may participate in a meeting of the Board or any committee thereof by means of conference telephone
or other communications equipment by means of which all persons participating in the meeting can hear each other. Such participation in
a meeting shall constitute presence in person at the meeting.
Section 9.6.
Dividends. The Board may from time to time declare, and the Corporation may pay, dividends (payable in cash, property or shares
of the Corporation’s capital stock) on the Corporation’s outstanding shares of capital stock, subject to applicable law and
the Certificate of Incorporation.
Section 9.7.
Reserves. The Board may set apart out of the funds of the Corporation available for dividends a reserve or reserves for any
proper purpose and may abolish any such reserve.
Section 9.8.
Contracts and Negotiable Instruments. Except as otherwise provided by applicable law, the Certificate of Incorporation or these
By Laws, any contract, bond, deed, lease, mortgage or other instrument may be executed and delivered in the name and on behalf of the
Corporation by such officer or officers or other employee or employees of the Corporation as the Board may from time to time authorize.
Such authority may be general or confined to specific instances as the Board may determine. The Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, the Treasurer or any Vice President may execute and deliver any contract, bond, deed,
lease, mortgage or other instrument in the name and on behalf of the Corporation. Subject to any restrictions imposed by the Board, the
Chairman of the Board Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Vice President may delegate
powers to execute and deliver any contract, bond, deed, lease, mortgage or other instrument in the name and on behalf of the Corporation
to other officers or employees of the Corporation under such person’s supervision and authority, it being understood, however, that
any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.
Section 9.9.
Fiscal Year. The fiscal year of the Corporation shall be fixed by the Board.
Section 9.10.
Seal. The Board may adopt a corporate seal, which shall be in such form as the Board determines. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 9.11.
Books and Records. The books and records of the Corporation may be kept within or outside the State of Delaware at such place
or places as may from time to time be designated by the Board.
Section 9.12.
Resignation. Any director, committee member or officer may resign by giving notice thereof in writing or by electronic transmission
to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. The resignation shall take effect at the time
it is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event
or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
Section 9.13.
Surety Bonds. Such officers, employees and agents of the Corporation (if any) as the Chairman of the Board, Chief Executive
Officer, President or the Board may direct, from time to time, shall be bonded for the faithful performance of their duties and for the
restoration to the Corporation, in case of their death, resignation, retirement, disqualification or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in their possession or under their control belonging to the Corporation, in
such amounts and by such surety companies as the Chairman of the Board, Chief Executive Officer, President or the Board may determine.
The premiums on such bonds shall be paid by the Corporation and the bonds so furnished shall be in the custody of the Secretary.
Section 9.14.
Securities of Other Corporations. Powers of attorney, proxies, waivers of notice of meeting, consents in writing and other
instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the Chairman
of the Board, Chief Executive Officer, President, or any officers authorized by the Board. Any such officer, may, in the name of and on
behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of
security holders of any corporation in which the Corporation may own securities, or to consent in writing, in the name of the Corporation
as such holder, to any action by such corporation, and at any such meeting or with respect to any such consent shall possess and may exercise
any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have
exercised and possessed. The Board may from time to time confer like powers upon any other person or persons.
Section 9.15.
Amendments. The Board shall have the power to adopt, amend, alter or repeal the By Laws. The affirmative vote of a majority
of the Board shall be required to adopt, amend, alter or repeal the By Laws. The By Laws also may be adopted, amended, altered or repealed
by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation
required by applicable law or the Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the voting
(except as otherwise provided in Section 8.7) power of all outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter
or repeal the By Laws.
Exhibit 4.1
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NUMBER
U-__________
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UNITS
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SEE REVERSE FOR
CERTAIN DEFINITIONS
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MONTEREY BIO ACQUISITION CORPORATION
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CUSIP [•]
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UNITS CONSISTING OF ONE SHARE OF
COMMON STOCK AND ONE WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK
THIS CERTIFIES THAT
is the owner of Units.
Each Unit (“Unit”) consists of one
share of common stock, par value $0.0001 per share, of Monterey Bio Acquisition Corporation, a Delaware corporation (the “Company”)
and one warrant to purchase one share of common stock. Only whole warrants are exercisable. Each warrant entitles the holder
to purchase one share of common stock of the Company at $11.50 per full share (subject to adjustment), upon the later to occur
of (i) the Company’s completion of a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination, with one or more target businesses (a “Business Combination”) or (ii) one year from
the closing of the Company’s initial public offering (the “IPO”). Each warrant expires 5 years after the completion
of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The common stock and warrants comprising the Units
represented by this certificate are not transferable separately until the 90th day after the date of the prospectus relating to the IPO,
unless Chardan Capital Markets, LLC informs the Company of its decision to allow earlier separate trading, provided that the Company has
filed with the Securities and Exchange Commission a Current Report on Form 8-K, which includes an audited balance sheet reflecting the
Company’s receipt of the gross proceeds of the IPO.
The terms of the warrants are governed by a warrant
agreement (the “Warrant Agreement”), dated as of [·], 2021, between the Company
and Continental Stock Transfer & Trust Company, as the warrant agent, and are subject to the terms and provisions contained therein,
all of which terms and provisions the holder of this certificate consents to by acceptance hereof. A copy of the Warrant Agreement is
on file at the office of the warrant agent at 1 State Street, 30th Floor, New York, New York 10004, and are available to any warrant holder
on written request and without cost.
Each Unit may be mandatorily split by the Company
in connection with the closing of a Business Combination.
This certificate is not valid unless countersigned
by the Transfer Agent and Registrar of the Company.
This Unit Certificate shall be governed and construed
in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
Witness the facsimile signatures of its duly authorized
officers.
By:
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Chairman
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Chief Financial Officer
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Monterey Bio Acquisition Corporation
The Company will furnish without
charge to each stockholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional
or other special rights of each class of shares or series thereof of the Company and the qualifications, limitations, or restrictions
of such preferences and/or rights.
The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to
applicable laws or regulations:
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TEN COM –
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as tenants in common
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UNIF GIFT MIN ACT -
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Custodian
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TEN ENT –
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as tenants by the entireties
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(Cust)
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(Minor)
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JT TEN –
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as joint tenants with right of survivorship
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under Uniform Gifts to Minors
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and not as tenants in common
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Act ______________
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(State)
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Additional abbreviations may also be used though
not in the above list.
For value received, ___________________________
hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
ZIP CODE, OF ASSIGNEE)
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Units represented by the within Certificate, and do hereby irrevocably constitute and appoint
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Attorney to transfer the said Units on the books of the within named Company with full power of substitution in the premises.
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Dated
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Notice:
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The signature to this assignment must correspond with the name as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
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As more fully described in the Company’s
final prospectus dated as of [•], 2021, the holder of this certificate shall be entitled to receive funds with respect to the underlying
shares of common stock from the trust account established in connection with the Company’s initial public offering only in the event
of the Company’s liquidation upon failure to consummate a business combination within the required time period set forth in the
Company’s Amended and Restated Certificate of Incorporation (the “Certificate”), as the same may be amended from time
to time, or if the holder seeks to convert his or her respective shares of common stock underlying the Unit upon consummation of such
business combination or in connection with certain amendments to the Certificate. In no other circumstances shall the holder have any
right or interest of any kind in or to the trust account.
Exhibit 4.2
MONTEREY BIO ACQUISITION
CORPORATION
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE
COMMON STOCK
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP [●]
This Certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE
SHARES OF COMMON STOCK OF
MONTEREY BIO ACQUISITION
CORPORATION
transferable on the books of the
Company in person or by duly authorized attorney upon surrender of this certificate properly endorsed.
The Company will be forced to liquidate if it is unable
to complete an initial business combination as defined in, and within the time period required by, its Amended and Restated Certificate
of Incorporation, as the same may be amended from time to time.
This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
Witness the facsimile signatures
of its duly authorized officers.
Dated:
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CHAIRMAN
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CHIEF FINANCIAL OFFICER
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The following abbreviations,
when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to
applicable laws or regulations:
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TEN COM –
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as tenants in common
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UNIF GIFT
MIN ACT -
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_____
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Custodian
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______
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TEN ENT –
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as tenants by the entireties
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(Cust)
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(Minor)
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JT TEN –
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as joint tenants with right of survivorship
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under Uniform Gifts to Minors
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and not as tenants in common
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Act ______________
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(State)
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Additional abbreviations may also be used though
not in the above list.
Monterey Bio Acquisition Corporation
The Company will furnish without
charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special
rights of each class of shares or series thereof of the Company and the qualifications, limitations, or restrictions of such preferences
and/or rights. This certificate and the shares represented thereby are issued and shall be held subject to all the provisions of the Company’s
Amended and Restated Certificate of Incorporation and all amendments thereto and resolutions of the Board of Directors providing for the
issue of preferred stock (copies of which may be obtained from the secretary of the Company), to all of which the holder of this certificate
by acceptance hereof assents.
For value received, ___________________________
hereby sells, assigns and transfers unto
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PLEASE INSERT SOCIAL SECURITY OR OTHER
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IDENTIFYING NUMBER OF ASSIGNEE
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(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
ZIP CODE, OF ASSIGNEE)
shares of common
stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
Attorney to transfer
the said stock on the books of the within named Company with full power of substitution in the premises.
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Notice:
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The signature to this assignment must correspond with the name
as written upon the face of the certificate in every particular, without alteration or enlargement or any change whatever.
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Signature(s) Guaranteed:
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
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As more fully described in the Company’s
final prospectus dated as of [•], 2021, the holder of this certificate shall be entitled to receive funds from the trust account
established in connection with the Company’s initial public offering only in the event of the Company’s liquidation upon failure
to consummate a business combination within the required time period set forth in the Company’s Amended and Restated Certificate
of Incorporation as the same may be amended from time to time (the “Certificate”), or if the holder seeks to convert his or
her shares of common stock upon consummation of a business combination or in connection with certain amendments to the Certificate. In
no other circumstances shall the holder have any right or interest of any kind in or to the trust account.
Exhibit 4.3
SPECIMEN WARRANT CERTIFICATE
(THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR
TO 5:00 P.M.
NEW YORK CITY TIME, FIVE YEARS FROM THE CLOSING
DATE OF THE COMPANY’S INITIAL
BUSINESS COMBINATION)
MONTEREY BIO ACQUISITION CORPORATION
CUSIP [●]
WARRANT
THIS WARRANT CERTIFIES THAT, for value received
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or registered assigns, is the registered holder of a Warrant or Warrants (the “Warrant”), expiring on a date which is five
(5) years from the completion of the Company’s initial business combination, to purchase one fully paid and non-assessable
share (the “Warrant Shares”), of common stock, par value $0.0001 per share (the “Common Stock”), of Monterey Bio
Acquisition Corporation, a Delaware corporation (the “Company”), for each Warrant evidenced by this Warrant Certificate. This
Warrant Certificate is subject to and shall be interpreted under the terms and conditions of the Warrant Agreement (as defined below).
The Warrant entitles the
holder thereof to purchase from the Company, from time to time, in whole or in part, commencing on the later to occur of (i) the completion
of the Company’s initial business combination or (ii) one year following the closing of the Company’s initial public offering,
such number of Warrant Shares at the price of $11.50 per share (the “Warrant Price”), upon surrender of this Warrant Certificate
and payment of the Warrant Price at the office or agency of Continental Stock Transfer & Trust Company (the “Warrant Agent”),
such payment to be made subject to the conditions set forth herein and in the Warrant Agreement, dated [●], 2021, between the Company
and the Warrant Agent (the “Warrant Agreement”). In no event shall the registered holder(s) of this Warrant be entitled to
receive a net-cash settlement in lieu of physical settlement in Warrant Shares of the Company. The Warrant Agreement provides that, upon
the occurrence of certain events, the Warrant Price and the number of Warrant Shares purchasable hereunder, set forth on the face hereof,
may be adjusted, subject to certain conditions. The term Warrant Price as used in this Warrant Certificate refers to the price per full
Warrant Share at which Warrant Shares may be purchased at the time the Warrant is exercised.
This Warrant will expire
on the date first referenced above if it is not exercised prior to such date by the registered holder pursuant to the terms of the Warrant
Agreement or if it is not redeemed by the Company prior to such date.
No fractional shares will
be issued upon any exercise of a Warrant. If, upon exercise of a Warrant, a holder would be entitled to receive a fractional interest
in a share, the Company will, upon exercise, issue or cause to be issued only the largest whole number of Warrant Shares issuable on such
exercise (and such fraction of a share will be disregarded).
Upon any exercise of the
Warrant for less than the total number of full Warrant Shares provided for herein, there shall be issued to the registered holder(s) hereof
or its assignee(s) a new Warrant Certificate covering the number of Warrant Shares for which the Warrant has not been exercised.
Warrant Certificates, when
surrendered at the office or agency of the Warrant Agent by the registered holder(s) hereof in person or by attorney duly authorized in
writing, may be exchanged in the manner and subject to the limitations provided in the Warrant Agreement, but without payment of
any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants.
Upon due presentment for registration of
transfer of the Warrant Certificate at the office or agency of the Warrant Agent, a new Warrant Certificate or Warrant Certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any applicable tax or other governmental
charge.
The Company and the Warrant
Agent may deem and treat the registered holder(s) as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone) for the purpose of any exercise hereof, of any distribution to the registered holder(s),
and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
This Warrant does not entitle the registered holder(s)
to any of the rights of a stockholder of the Company.
After the Warrant
becomes exercisable and prior to its expiration date, the Company reserves the right to call the Warrant at any time, with a notice
of call in writing to the holder(s) of record of the Warrant, giving thirty (30) days’ written notice of such call if the last
reported sale price of the Common Stock has been equal to or greater than $16.50 per share for any twenty (20) trading days within a
thirty (30) trading day period ending on the third (3rd) trading day prior to the date on which notice of such call is given,
provided that (i) a registration statement under the Securities Act of 1933, as amended (the “Act”) with respect to the
shares of Common Stock issuable upon exercise must be effective and a current prospectus must be available for use by the registered
holders hereof or (ii) the Warrants may be exercised on cashless basis as set forth in the Warrant Agreement and such cashless
exercise is exempt from registration under the Act. The call price is $0.01 per Warrant Share. No fractional shares will be issued
upon exercise of the Warrant.
If the foregoing conditions
are satisfied and the Company calls the Warrant for redemption, each holder will then be entitled to exercise his, her or its Warrant
prior to the date scheduled for redemption; provided that the Company may require the Registered Holder who desires to exercise the Warrant,
to elect cashless exercise as set forth in the Warrant Agreement, and such Registered Holder must exercise the Warrants on a cashless
basis if the Company so requires. Any Warrant either not exercised or tendered back to the Company by the end of the date specified in
the notice of call shall be canceled on the books of the Company and have no further value except for the $0.01 call price.
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By
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Chief Executive Officer
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[REVERSE OF CERTIFICATE]
SUBSCRIPTION FORM
To Be Executed by the Registered Holder(s) in Order
to Exercise Warrants
The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock in accordance with the terms
of this Warrant Certificate and pursuant to the method selected below. Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Warrant Certificate. PLEASE CHECK ONE METHOD OF PAYMENT:
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a “Cash Exercise” with respect to Warrant Shares; and/or
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a “Cashless Exercise” with respect to Warrant Shares because on the date of this exercise, there is no effective registration statement registering the Warrant Shares, or the prospectus contained therein is not available for the resale of the Warrant Shares, in which event the Company shall deliver to the registered holder(s) shares of Common Stock pursuant to Section 3.3.2 of the Warrant Agreement.
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The undersigned requests that a certificate for
such shares be registered in the name(s) of:
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(PLEASE TYPE OR PRINT NAME(S) AND ADDRESS)
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER(S))
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and be delivered to
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(PLEASE PRINT OR TYPE NAME(S) AND ADDRESS)
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and, if such number of Warrants shall not be all
the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the
name of, and delivered to, the registered holder(s) at the address(es) stated below:
Dated:
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(SIGNATURE(S))
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(ADDRESS(ES))
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(TAX IDENTIFICATION NUMBER(S))
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ASSIGNMENT
To Be Executed by the Registered Holder in Order
to Assign Warrants
For Value Received,
hereby sell(s), assign(s), and transfer(s) unto
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(PLEASE TYPE OR PRINT NAME(S) AND ADDRESS(ES))
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER(S))
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and to be delivered to
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(PLEASE PRINT OR TYPE NAME(S) AND ADDRESS(ES))
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(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER(S))
of the Warrants represented by this Warrant Certificate,
and hereby irrevocably constitute and appoint
Attorney to transfer this Warrant Certificate on the books of the Company, with full power of substitution in the premises.
Dated:
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
Signature(s) Guaranteed:
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).
Exhibit 4.4
WARRANT AGREEMENT
This Warrant Agreement (“Warrant Agreement”)
is made as of _________, 2021, by and between Monterey Bio Acquisition Corporation, a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company (the “Warrant Agent”).
WHEREAS, the Company is engaged in a public offering
(the “Public Offering”) of 10,000,000 units (the “Units”) of the Company (and up to 1,500,000 additional
Units if the underwriters’ over-allotment option is exercised in full), each Unit consisting of one share of common stock, par value
$0.0001 per share (the “Common Stock”) and one warrant (the “Public Warrant” or “Public
Warrants”), each whole Public Warrant entitling its holder to purchase one share of Common Stock (the “Public
Warrant Shares”);
WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, File No. [●]
(“Registration Statement”), and a prospectus (the “Prospectus”), for the registration, under the
Securities Act of 1933, as amended (“Securities Act”), of, among other securities, the Public Warrants;
WHEREAS, the Company has received a binding commitment
from NorthStar Bio Ventures, LLC to purchase up to 4,087,500 warrants and Chardan Monterey Investments LLC to purchase up to 1,362,500
warrants pursuant to the Private Placement Warrants Purchase Agreements, dated as of [●], 2021 (collectively, the “Private
Placement Warrants Purchase Agreements”), and in connection therewith, will issue and deliver up to 5,450,000 warrants (the
“Private Warrants”), each whole Private Warrant entitling its holder to purchase one share of Common Stock (“Private
Warrant Shares”, and together with the Public Warrant Shares, the “Warrant Shares”);
WHEREAS,
the Company may issue up to an additional 1,500,000 redeemable warrants in satisfaction of certain working capital loans made by the Company’s
officers, directors, initial stockholders (as defined in the Prospectus) and their affiliates (“Working Capital Warrants”);
WHEREAS,
following consummation of the Public Offering, the Company may issue additional warrants (“Post IPO Warrants” and collectively
with the Public Warrants, Private Warrants and Working Capital Warrants, the “Warrants”) in connection with, or following
the consummation by the Company of, an initial business combination;
WHEREAS, the Company desires the Warrant Agent
to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer,
exchange, redemption and exercise of the Warrants;
WHEREAS, the Company desires to provide for the
form, terms and provisions of the Warrants, including the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things have been done and
performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant
Agent, as provided herein, the legally valid and binding obligations of the Company, and to authorize the execution and delivery of this
Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, the parties hereto agree as follows:
1. Appointment
of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant
Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Warrant
Agreement.
2. Warrants.
2.1 Form
of Warrant. Each Warrant other than a Private Warrant shall be: (a) issued in registered form only, (b) in
substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and (c) signed by,
or bear the facsimile signature of (i) the Chairman of the Board, the Chief Executive Officer, the President or a Vice President and
(ii) the Chief Financial Officer, Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company. In the
event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such
person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be
such at the date of issuance.
2.2 Effect
of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall be invalid
and of no effect and may not be exercised by the holder thereof.
2.3 Registration.
2.3.1 Warrant
Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of the original
issuance and transfers of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants
in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant
Agent by the Company.
2.3.2 Registered
Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant shall be registered upon the Warrant Register (“Registered Holder”) as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant
certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4 Detachability
of Warrants. Each of the securities comprising the Units will begin to trade separately on (i) the 90th day after the effectiveness
of the Registration Statement, or (ii) such earlier date as Chardan Capital Markets, LLC, as representative of the underwriters (the “Representative”),
shall determine is acceptable (such date, the “Detachment Date”). In no event will separate trading of the securities
comprising the Units commence until the Company (i) files a Current Report on Form 8-K with the SEC including audited balance sheet reflecting
the Company’s receipt of the gross proceeds of the Public Offering and (ii) issues a press release announcing when such separate
trading will begin.
2.5 Private
Warrants. The Private Warrants will be exercisable either for cash or on a cashless basis at the holder’s option pursuant to
Section 3.3 hereof. The Private Warrants may not be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging,
short sale, derivative, put, or call transaction that would result in the effective economic disposition of, the Private Warrants (or
any securities underlying the Private Warrants) for a period of one hundred eighty (180) days following the effective date of the Registration
Statement to anyone other than any underwriter and selected dealer participating in the Public Offering and the officers or partners thereof,
if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder of the time period. For the
avoidance of doubt, no transfer of Private Warrants shall change the terms of such warrants, including the terms pursuant to which such
warrants may be exercised.
3. Terms
and Exercise of Warrants.
3.1 Warrant
Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions
of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at $11.50
per full share, subject to the adjustments provided in Section 4 hereof. The term “Warrant Price” as used in this
Warrant Agreement refers to the price per whole share at which shares of Common Stock may be purchased at the time such Warrant is exercised.
The Public Warrants may only be exercised for a whole number of Warrant Shares by a Registered Holder. The Company in its sole discretion
may lower the Warrant Price (including by allowing “cashless exercise”) at any time prior to the Expiration Date (as defined
below) for a period of not less than twenty (20) business days, provided, that the Company shall provide at least three (3) days prior
written notice of such reduction to Registered Holders of the Warrants and, provided further that any such reduction shall be identical
among all of the Warrants.
3.2 Duration
of Warrants. A Warrant may be exercised only during the period (“Exercise Period”) commencing on the later to
occur of (i) the completion of the Company’s initial business combination and (ii) 12 months following the closing of the
Public Offering, and terminating at 5:00 p.m., New York City time, on the earlier to occur of (i) (A) five years following the
completion of the Company’s initial business combination with respect to the Warrants, and (B) five years from the effective
date of the Registration Statement with respect to the Private Warrants purchased by Chardan Monterey Investments LLC, provided
that once the Private Warrants are not beneficially owned by Chardan Monterey Investments LLC or any of its related persons anymore,
the Private Warrants may not be exercised five years following the completion of the Company’s initial business combination;
and (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Warrant Agreement
(“Expiration Date”). Except with respect to the right to receive the Redemption Price (as set forth in
Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder
and all rights in respect thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date. The
Company may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will provide
written notice of not less than 10 days to Registered Holders of such extension and that such extension shall be identical in
duration among all of the then outstanding Warrants. Notwithstanding the above, the Private Warrants
(and the Private Warrant Shares that are issuable upon exercise of the Private Warrants) to be purchased by Chardan Monterey
Investments LLC have been deemed compensation by Financial Industry Regulatory Authority, Inc. (“FINRA”) and are
therefore subject to a 180-day lock-up described in the following sentence pursuant to FINRA Rule 5110(e)(1) commencing on the
effective date of the Registration Statement as long as Chardan Capital Markets, LLC or any of its related persons beneficially own
these Private Warrants. Pursuant to FINRA Rule 5110(e)(1), the Private Warrants (and the Private Warrant Shares that are issuable
upon exercise of the Private Warrants) purchased by Chardan Monterey Investments LLC will not be sold during the Public Offering, or
sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call
transaction that would result in the economic disposition of such securities by any person for a period of 180 days immediately
following the effective date of the Registration Statement, except to any underwriter and selected dealer participating in the
Public Offering made pursuant to the Registration Statement and their bona fide officers or partners, provided that all such
securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
3.3 Exercise
of Warrants.
3.3.1 Cash
Exercise. Subject to the provisions of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the Company, may be
exercised by the Registered Holder thereof by surrendering it at the office of the Warrant Agent, or at the office of its successor as
Warrant Agent, currently being:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Compliance Department
with the subscription form, as set forth in the
Warrant, duly executed, and by paying in full, in lawful money of the United States, by certified or bank cashier’s check payable
to the order of the Warrant Agent or by wire transfer to the Warrant Agent’s bank account, the Warrant Price for each whole Warrant
Share as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange
of the Warrant for the Warrant Shares, and the issuance of the Warrant Shares (such exercise, a “Cash Exercise”). A
Cash Exercise in accordance with this Section 3.3.1 is available to the Registered Holder only during such times that there is an effective
registration statement registering the Warrant Shares, with the prospectus contained therein being available for the resale of the Warrant
Shares.
3.3.2 Cashless
Exercise. Subject to Section 2.4, notwithstanding anything contained herein to the contrary, if there is no effective registration
statement registering the Warrant Shares on any day the Registered Holder desires to exercise the Warrants and more than 120 days have
passed since the Company completed its initial business combination, the Registered Holder may exercise the Warrants in whole or in part
in lieu of making a cash payment for whole numbers of Warrant Shares, by providing notice to the Chief Financial Officer of the Company
in a subscription form of its election to utilize cashless exercise, in which event the Company shall issue to the holder the number of
Warrant Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the holder.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
A = the fair market value of one share of Common Stock.
B = the Warrant Price.
The Registered Holder may not exercise any Warrants
in the absence of a registration statement except pursuant to this Section 3.3.2. For purposes of this Section 3.3.2 and Section
4.1, the fair market value of one share of Common Stock is defined as follows:
(i)
if the Company’s shares of Common Stock are listed and traded on the New York Stock Exchange, the NYSE American, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (each, a “Trading Market”), the fair market value
shall be deemed the average reported last sale price of the shares of Common Stock on such Trading Market for the 10 trading days ending
on the day prior to the date the subscription form is submitted to the Company in connection with the exercise of the Warrant; or
(ii) if
the Company’s shares of Common Stock are not listed on a Trading Market, but is traded in the over-the-counter market, the fair
market value shall be deemed to be the average of the bid price on such Trading Market for the 10 trading days ending on the day prior
to the date the subscription form is submitted in connection with the exercise of the Warrant; or
(iii)
if there is no active public market for the Company’s shares of Common Stock, the fair market value of the shares of Common Stock
shall be determined in good faith by the Company’s board of directors.
3.3.3 Fractional
Shares. Notwithstanding any provision to the contrary contained in this Warrant Agreement, the Company shall not be required to issue
any fraction of a Warrant Share in connection with the exercise of Warrants, and in any case where the Registered Holder would be entitled
under the terms of the Warrants to receive a fraction of a Warrant Share upon the exercise of such Registered Holder’s Warrants,
issue or cause to be issued only the largest whole number of Warrant Shares issuable on such exercise (and such fraction of a Warrant
Share will be disregarded); provided, that if more than one Warrant certificate is presented for exercise at the same time by the same
Registered Holder, the number of whole Warrant Shares which shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of Warrant Shares issuable on exercise of all such Warrants.
3.3.4 Issuance
of Certificates. No later than three (3) business days following the exercise of any Warrant and the clearance of the funds
in payment of the Warrant Price pursuant to Section 3.3.1 or cashless exercise pursuant to Section 3.3.2, the Company shall issue,
or cause to be issued, to the Registered Holder of such Warrant a certificate or certificates representing (or at the option of the
Registered Holder, deliver electronically through the facilities of the Depository Trust Corporation) the number of full shares of
Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and, if such
Warrant shall not have been exercised or surrendered in full, a new countersigned Warrant for the number of shares as to which such
Warrant shall not have been exercised or surrendered. Notwithstanding the foregoing, the Company shall not deliver, or cause to be
delivered, any securities without applicable restrictive legend pursuant to the exercise of a Warrant unless (a) a registration
statement under the Securities Act with respect to the shares of Common Stock issuable upon exercise of such Warrants is effective
and a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants is available for delivery to
the Registered Holder of the Warrant or (b) in the opinion of counsel to the Company, the exercise of the Warrants is exempt
from the registration requirements of the Securities Act and such securities are qualified for sale or exempt from qualification
under applicable securities laws of the states or other jurisdictions in which the Registered Holder resides. Warrants may not be
exercised by, or securities issued to, any Registered Holder in any state in which such exercise or issuance would be unlawful. In
addition, in no event will the Company be obligated to pay such Registered Holder any cash consideration upon exercise or otherwise
“net cash settle” the Warrant.
3.3.5 Valid
Issuance. All shares of Common Stock issued upon the proper exercise or surrender of a Warrant in conformity with this Warrant Agreement
shall be validly issued, fully paid and non-assessable.
3.3.6 Date
of Issuance. Each person or entity in whose name any such certificate for shares of Common Stock is issued shall, for all purposes,
be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant
Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a
date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at
the close of business on the next succeeding date on which the stock transfer books are open.
3.3.7 Maximum
Percentage. A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained
in this subsection 3.3.7; however, no holder of a Warrant shall be subject to this subsection 3.3.7 unless he, she or it makes such election.
If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall
not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such
person’s affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 4.99% or 9.99% (or such
other amount as such person may specify) (each, a “Maximum Percentage”) of the shares of Common Stock outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially
owned by such person and its affiliates shall include the number of shares of Common Stock issuable upon exercise of the Warrant with
respect to which the determination of such sentence is being made, but shall exclude the shares of Common Stock that would be issuable
upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially owned by such person and its affiliates and (y) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by such person and its
affiliates (including, without limitation, any convertible notes or convertible preferred shares or warrants) subject to a limitation
on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of
this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). For purposes of the Warrant, in determining the number of outstanding shares of Common Stock,
the holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent annual report
on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other public filing with the SEC as the case may be, (2) a
more recent public announcement by the Company, or (3) any other notice by the Company or the Warrant Agent setting forth the number of
shares of Common Stock outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall,
within two (2) business days, confirm orally and in writing to such holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of equity
securities of the Company by the holder and its affiliates since the date as of which such number of outstanding shares of Common Stock
was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease the Maximum Percentage
applicable to such holder to any other percentage specified in such notice; provided, however, that any such increase shall not be effective
until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Stock
Dividends, Splits. If, after the date hereof, and subject to the provisions of Section 4.5 below, the number of outstanding
shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a forward or reverse split of
shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split or similar event, the
number of shares of Common Stock issuable on exercise of each Warrant shall be increased or decreased in proportion to such increase
or decrease in outstanding shares of Common Stock. A rights offering to all holders of the shares of Common Stock entitling holders
to purchase shares of Common Stock at a price less than the fair market value shall be deemed a stock dividend of a number of shares
of Common Stock equal to the product of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable
under any other equity securities sold in such rights offering that are convertible into or exercisable for the shares of Common
Stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Common Stock paid in such rights offering divided
by (y) the fair market value. For purposes of this subsection 4.1, if the rights offering is for securities convertible into or
exercisable for shares of Common Stock, in determining the price payable for the shares of Common Stock, there shall be taken into
account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion.
4.2 Aggregation
of Shares. If, after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination or reclassification of shares of Common Stock or other similar event, then, on the
effective date of such consolidation, combination, reclassification or similar event, the number of shares of Common Stock issuable on
exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3 Extraordinary
Dividends. If the Company, at any time while the Warrants (or rights to purchase the Warrants) are outstanding and unexpired, shall
pay a dividend or make a distribution in cash, securities or other assets to the holders of the shares of Common Stock on account of such
shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a)
as described in subsection 4.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the conversion rights of the holders
of the shares of Common Stock in connection with a proposed initial business combination or vote to extend the time period to complete
an initial business combination, (d) as a result of the repurchase of shares of Common Stock by the Company in connection with an initial
business combination or as otherwise permitted by the Investment Management Trust Agreement between the Company and the Warrant Agent
dated of even date herewith or (e) in connection with the Company’s liquidation and the distribution of its assets upon its failure
to consummate a business combination (any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount
of cash and the fair market value (as determined by the Company’s board of directors, in good faith) of any securities or other
assets paid on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.3, “Ordinary
Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share basis with the per share amounts
of all other cash dividends and cash distributions paid on the shares of Common Stock during the 365-day period ending on the date of
declaration of such dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections
of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number
of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units in
the Public Offering).
4.4 Adjustments
in Exercise Price.
4.4.1 Whenever
the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Sections 4.1 and 4.2 above,
the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price, immediately prior to such adjustment, by
a fraction, (a) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants
immediately prior to such adjustment, and (b) the denominator of which shall be the number of shares of Common Stock so purchasable
immediately thereafter.
4.4.2 If
(i) the Company issues additional shares of Common Stock or equity-linked securities for capital raising purposes in connection with the
closing of its initial business combination at an issue price or effective issue price of less than $9.20 per share of Common Stock (with
such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of
any such issuance to the Company’s initial stockholders or their affiliates, without taking into account any founder shares (as
defined in the Prospectus) or Private Warrants held by them, as applicable, prior to such issuance) (the “newly issued price”),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of the Company’s initial business combination on the date of the completion of its initial business combination
(net of redemptions), and (z) the volume-weighted average trading price of the Common Stock during the 20 trading day period starting
on the trading day prior to the day on which the Company completes its initial business combination (such price, the “Market Value”)
is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher
of the Market Value and the newly issued price and the $16.50 per share redemption trigger price will be adjusted (to the nearest cent)
to be equal to 165% of the higher of the Market Value and the newly issued price.
4.5 Replacement
of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change covered by Sections 4.1, 4.2 or 4.3 hereof or one that solely affects the par value of such shares of Common
Stock), or, in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding
shares of Common Stock), or, in the case of any sale or conveyance to another corporation or entity of the assets or other property of
the Company as an entirety or substantially as an entirety, in connection with which the Company is dissolved, the Registered Holders
shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and
in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights
represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Registered Holder would have
received if such Registered Holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification
or reorganization also results in a change in shares of Common Stock covered by Sections 4.1, 4.2 or 4.3, then such adjustment shall be
made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.5. The provisions of this Section 4.5 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced
to less than the par value per share issuable upon exercise of the Warrant.
4.6 Notices
of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the
Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment
and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth
in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified
in Sections 4.1 – 4.5 the Company shall give written notice to each Registered Holder, at the last address set
forth for such Registered Holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such event.
4.7 Form
of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant
to this Warrant Agreement. However, the Company may, at any time, in its sole discretion, make any change in the form of Warrant that
the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.
4.8 Notice
of Certain Transactions. In the event that the Company shall (a) offer to holders of all its shares of Common Stock rights to
subscribe for or to purchase any securities convertible into shares of Common Stock or shares of stock of any class or any other securities,
rights or options, (b) issue any rights, options or warrants entitling all the holders of shares of Common Stock to subscribe for
shares of Common Stock, or (c) make a tender offer, redemption offer or exchange offer with respect to the shares of Common Stock,
the Company shall send to the Registered Holders a notice of such action or offer. Such notice shall be mailed to the Registered Holders
at their addresses as they appear in the Warrant Register, which shall specify the record date for the purposes of such dividend, distribution
or rights, or the date such issuance or event is to take place and the date of participation therein by the holders of shares of Common
Stock, if any such date is to be fixed, and shall briefly indicate the effect of such action on the shares of Common Stock and on the
number and kind of any other shares of stock and on other property, if any, and the number of shares of Common Stock and other property,
if any, issuable upon exercise of each Warrant and the Warrant Price after giving effect to any adjustment pursuant to this Section 4
which would be required as a result of such action. Such notice shall be given as promptly as practicable after the Company has taken
any such action.
5. Transfer
and Exchange of Warrants.
5.1 Transfer
of Warrants. Prior to the Detachment Date, the Warrants may be transferred or exchanged only together with the Unit in which such
Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore,
each transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. From
and after the Detachment Date, this Section 5.1 will have no further force and effect.
5.2 Registration
of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant into the Warrant Register,
upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions
for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant
shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to
time upon the Company’s request.
5.3 Procedure
for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer,
and, thereupon, the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the
Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that, in the event a Warrant surrendered
for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and shall issue new Warrants in exchange therefor
until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether
the new Warrants must also bear a restrictive legend.
5.4 Fractional
Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance
of a warrant certificate for a fraction of a warrant.
5.5 Service
Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.
5.6 Warrant
Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms
of this Warrant Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever
required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6. Redemption.
6.1 Redemption.
Not less than all of the outstanding Warrants may be redeemed, in whole and not in part, at the option of the Company, at any time from
and after the Warrants become exercisable, and prior to their expiration, at the office of the Warrant Agent, upon the notice referred
to in Section 6.2, at the price of $0.01 per Warrant (“Redemption Price”); provided that the last sales price
of the shares of Common Stock has been equal to or greater than $16.50 per share (subject to adjustment for splits, dividends, recapitalizations
and other similar events), for any twenty (20) trading days within a thirty (30) trading day period ending on the third business
day prior to the date on which notice of redemption is given and provided further that there is a current registration statement in effect
with respect to the shares of Common Stock underlying the Warrants for each day in the aforementioned 30-day trading period and continuing
each day thereafter until the Redemption Date (defined below). For avoidance of doubt, if and when the warrants become redeemable by the
Company under this Section, the Company may exercise its redemption right, even if it is unable to register or qualify the Warrant Shares
for sale under all applicable state securities laws.
6.2 Date
Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a
date for the redemption (the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the Registered Holders of the Warrants to be redeemed
at their last addresses as they shall appear on the Warrant Register. Any notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Registered Holder received such notice.
6.3 Exercise
After Notice of Redemption. The Warrants may be exercised in accordance with Section 3 of this Warrant Agreement at any time
after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the Redemption Date;
provided that the Company may require the Registered Holder who desires to exercise the Warrant to elect cashless exercise as set forth
under Section 3.3.2, and such Registered Holder must exercise the Warrants on a cashless basis if the Company so requires. On and after
the Redemption Date, the Registered Holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants,
the Redemption Price.
6.4 No
Other Rights to Cash Payment. Except for a redemption in accordance with this Section 6, no Registered Holder of any Warrant
shall be entitled to any cash payment whatsoever from the Company in connection with the ownership, exercise or surrender of any Warrant
under this Warrant Agreement.
7. Other
Provisions Relating to Rights of Registered Holders of Warrants.
7.1 No
Rights as Stockholder. A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company,
including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent
or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other
matter.
7.2 Lost,
Stolen Mutilated or Destroyed Warrants. If any Warrant is lost, stolen, mutilated or destroyed, the Company and the Warrant Agent
may, on such terms as to indemnity or otherwise as they may in their discretion impose (which terms shall, in the case of a mutilated
Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor and date as the Warrant so lost, stolen, mutilated
or destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation
of Shares of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares
of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.
7.4 Registration
of Shares of Common Stock. The Company agrees that as soon as practicable after the closing of a business combination, it shall use
its best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of Common Stock
issuable upon exercise of the Warrants, and to cause the same to become effective and to maintain the effectiveness of such registration
statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of this Warrant
Agreement. In addition, the Company agrees to use its best efforts to register the shares of Common Stock issuable upon exercise of the
Warrants under state blue sky laws, to the extent an exemption is not available.
8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes. The Company will, from time to time, promptly pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated
to pay any transfer taxes in respect of the Warrants or such shares.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be
discharged from all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the
Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall
appoint, in writing, a successor Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment
within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the
Registered Holder of the Warrant (who shall, with such notice, submit his, her or its Warrant for inspection by the Company), then
the Registered Holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the
appointment of a successor Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a
corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the
Borough of Manhattan, City and State of New York, and be authorized under such laws to exercise corporate trust powers and subject
to supervision or examination by federal or state authorities. After appointment, any successor Warrant Agent shall be vested with
all the authority, powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with like effect as if
originally named as Warrant Agent hereunder, without any further act or deed; but, if for any reason it becomes necessary or
appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to
such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and, upon request of
any successor Warrant Agent, the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more
fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities,
duties and obligations.
8.2.2 Notice
of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor Warrant Agent and the transfer agent for the shares of Common Stock not later than the effective date of any such appointment.
8.2.3 Merger
or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated
or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant
Agent under this Warrant Agreement without any further act on the part of the Company or the Warrant Agent.
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The Company agrees to pay the Warrant Agent reasonable remuneration for its services as Warrant Agent hereunder and will reimburse the
Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 Further
Assurances. The Company agrees to perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged and
delivered, all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Warrant Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement. Whenever, in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary
or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established
by a statement signed by the Chief Executive Officer, Chief Financial Officer or Chairman of the Board of the Company and delivered to
the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the
provisions of this Warrant Agreement.
8.4.2 Indemnity.
The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to
indemnify the Warrant Agent and hold it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees,
for anything done or omitted by the Warrant Agent in the execution of this Warrant Agreement, except as a result of the Warrant Agent’s
gross negligence, willful misconduct or bad faith.
8.4.3 Exclusions.
The Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity
or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under
the provisions of Section 4 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment; nor shall it, by any act hereunder, be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Warrant Agreement or any
Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and non-assessable.
8.5 Acceptance
of Agency. The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the
terms and conditions herein set forth and, among other things, shall account promptly to the Company with respect to Warrants exercised
and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company’s
shares of Common Stock through the exercise of Warrants.
8.6 Waiver.
The Warrant Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”) in
or to any distribution of the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof,
by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment
or satisfaction for any Claim against the Trust Account for any reason whatsoever.
9. Miscellaneous
Provisions.
9.1 Successors.
All the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns.
9.2 Notices.
Any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the Registered Holder
of any Warrant to or on the Company shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed
(until another address is filed in writing by the Company with the Warrant Agent) as follows:
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Attn: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Greenberg Traurig,
LLP
1750 Tysons
Boulevard
Suite 1000
McLean, VA
22102
Attn: Jason
T. Simon, Esq.
Any notice, statement or demand authorized by
this Warrant Agreement to be given or made by the Registered Holder of any Warrant or by the Company to or on the Warrant Agent shall
be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Any notice, sent pursuant to this Warrant Agreement
shall be effective, if delivered by hand, upon receipt thereof by the party to whom it is addressed, if sent by overnight courier, on
the next business day of the delivery to the courier, and if sent by registered or certified mail on the third day after registration
or certification thereof.
9.3 Applicable
Law. The validity, interpretation, and performance of this Warrant Agreement and of the Warrants shall be governed in all respects
by the laws of the State of New York, without giving effect to conflict of laws. Subject to applicable law, the Company and the Warrant
Agent hereby agree that any action, proceeding or claim against either of them arising out of or relating in any way to this Warrant
Agreement may 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 irrevocably submits to such jurisdiction, which jurisdiction shall be an exclusive forum for any such action, proceeding
or claim. Notwithstanding the foregoing, the provisions of this paragraph 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. Any person or entity purchasing or otherwise acquiring any interest in the Warrants shall be deemed to have notice
of and to have consented to the forum provisions in this Section 9.3. If any action, the subject matter of which is within the scope
the forum provisions above, is filed in a court other than a court located within 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 warrant holder, such warrant holder shall
be deemed to have consented to: (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 Enforcement
Action by service upon such warrant holder’s counsel in the Foreign Action as agent for such warrant holder.
The Company and the Warrant Agent hereby waive any objection that such courts represent an inconvenient forum.
Any such process or summons
to be served upon the Company or the Warrant Agent may be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party receiving such service in any action, proceeding or claim.
9.4 Persons
Having Rights under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of
the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties
hereto and the Registered Holders of the Warrants and, for the purposes of Sections 2.5 hereof, the Representative and
the underwriters, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation,
promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall
be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5 Examination
of the Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant
Agent in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent
may require any such Registered Holder to submit his, her or its Warrant for inspection.
9.6 Counterparts-
Facsimile Signatures. This Warrant Agreement may be executed in any number of counterparts, and each of such counterparts shall, for
all purposes, be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Facsimile
signatures shall constitute original signatures for all purposes of this Warrant Agreement.
9.7 Effect
of Headings. The section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect
the interpretation thereof
9.8 Amendments.
This Warrant Agreement and any Warrant certificate may be amended by the parties hereto by executing a supplemental warrant agreement,
without the consent of any of the Warrant holders, for the purpose of (i) curing any ambiguity, or curing, correcting or supplementing
any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this Warrant
Agreement that is not inconsistent with the provisions of this Warrant Agreement or the Warrant certificates, (ii) evidencing the
succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company contained in
this Warrant Agreement and the Warrants, (iii) evidencing and providing for the acceptance of appointment by a successor Warrant
Agent with respect to the Warrants, (iv) adding to the covenants of the Company for the benefit of the Registered Holders or surrendering
any right or power conferred upon the Company under this Warrant Agreement, or (viii) amending this Warrant Agreement and the Warrants
in any manner that the Company may deem to be necessary or desirable and that will not adversely affect the interests of the Registered
Holders in any material respect. All other modifications or amendments to this Warrant Agreement, including any amendment to increase
the Warrant Price or shorten the Exercise Period, shall require the written consent of the Registered Holders of a majority of the then
outstanding Warrants. Notwithstanding the foregoing, the Company may extend the duration of the Exercise Period in accordance with Section 3.2
without such consent.
9.9 Severability.
This Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Warrant Agreement has
been duly executed by the parties hereto as of the day and year first above written.
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Sanjeev Satyal
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Title:
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Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
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Title:
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[Signature Page to Warrant
Agreement]
Exhibit A
Form of Warrant
Exhibit 5.1
September 7, 2021
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
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Re:
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Monterey Bio Acquisition Corporation
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Registration Statement on Form S-1
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Ladies and Gentlemen:
Monterey Bio Acquisition Corporation, a Delaware
corporation (the “Company”), has filed with the Securities and Exchange Commission a Registration Statement on Form
S-1, as amended (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Act”).
The Registration Statement relates to the underwritten public offering by the Company of up to 11,500,000 units of the Company (the “Units”)
(including up to 1,500,000 Units subject to the Underwriters’ (as defined below) option to purchase additional Units), each Unit
consisting of:
(i) one
share of the Company’s common stock, par value $0.0001 per share (“Common Stock,” and the shares of Common Stock
underlying the Units, the “Shares”), for an aggregate of up to 11,500,000 Shares (including up to 1,500,000 Shares
included in the Units subject to the Underwriters’ option to purchase additional Units); and
(ii) one
warrant (“Warrant”) with each Warrant entitling the holder to purchase one share of Common Stock, for an
aggregate of up to 11,500,000 Warrants (including up to 1,500,000 Warrants included in the Units subject to the Underwriters’ option
to purchase additional Units) to be issued under a Warrant Agreement (the “Warrant Agreement”) to be entered into by
the Company and Continental Stock Transfer & Trust Company, as Warrant Agent, pursuant to the terms of an underwriting agreement (the
“Underwriting Agreement”) to be executed by the Company and Chardan Capital Markets LLC, as representative of the several
underwriters named therein (the “Underwriters”). We have acted as counsel to the Company in connection with the preparation
and filing of the Registration Statement and this opinion is being furnished in accordance with the requirements of Item 601(b)(5) of
Regulation S-K under the Act.
We have examined copies of such corporate records,
agreements, documents and other instruments of the Company and other certificates and documents of officials of the Company, public officials,
and others, as we have deemed appropriate for purposes of this letter. We have assumed the genuineness of all signatures, the legal capacity
of all natural persons, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents
of all copies submitted to us as conformed, certified, or reproduced copies. We have also assumed that (i) upon sale and delivery
of the Units, the Shares, and the Warrants, the certificates representing such Units, Shares, and Warrants will conform to the specimens
thereof filed as exhibits to the Registration Statement and will have been duly countersigned by the transfer agent and duly registered
by the registrar or, if uncertificated, valid book-entry notations for the issuance of the Units, the Shares, and the Warrants in uncertificated
form will have been duly made in the register of the Company and (ii) at the time of execution, countersigning, issuance, and delivery
of the Warrants, the Warrant Agreement will be a valid and binding obligation of the Warrant Agent, enforceable against the Warrant Agent
in accordance with its terms. In addition, in providing the opinions herein, we have relied, with respect to matters related to the Company’s
existence, upon the certificates referenced above.
Based upon the foregoing, and subject to the assumptions,
exceptions, qualifications, and limitations stated herein, we are of the opinion that:
1. When the Underwriting
Agreement and the Warrant Agreement have been duly executed and delivered by the respective parties thereto and the Units, the
Shares, and the Warrants have been issued and delivered in accordance with the Underwriting Agreement against payment in full of the
consideration payable therefor as determined by the Board of Directors of the Company or a duly authorized committee thereof and as
contemplated by the Underwriting Agreement, the Units and the Shares and Warrants included in the Units will be duly authorized,
validly issued, fully paid and non-assessable.
2. When
the Underwriting Agreement and the Warrant Agreement have been duly executed and delivered by the respective parties thereto and the Warrants
have been duly executed by the Company and duly countersigned by the Warrant Agent in accordance with the terms of the Warrant Agreement
and delivered to and paid for by the Underwriters pursuant to the terms of the Underwriting Agreement, the Warrants will be valid and
binding obligations of the Company, enforceable against the Company in accordance with their terms.
3. When the Underwriting Agreement has been duly
executed and delivered by the respective parties thereto and the Units have been duly executed by the Company and delivered by Continental
Stock Transfer & Trust Company, as transfer agent, the Units will be valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms.
The
opinions and other matters in this letter are qualified in their entirety and subject to the following:
A. We express no opinion
as to the laws of any jurisdiction other than (i) the laws of the State of New York and (ii) the General Corporation Law of the State
of Delaware. As used herein, the term “General Corporation Law of the State of Delaware” includes the statutory provisions
contained therein and all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting these laws.
B. The matters expressed
in this letter are subject to and qualified and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally; and (ii) general principles of
equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability
of specific performance or injunctive relief (regardless of whether considered in a proceeding in equity or at law).
C. This opinion letter is limited to the matters
expressly stated herein and no opinion is to be inferred or implied beyond the opinions expressly set forth herein. We undertake no, and
hereby disclaim any, obligation to make any inquiry after the date hereof or to advise you of any changes in any matter set forth herein,
whether based on a change in the law, a change in any fact relating to the Company or any other person or any other circumstance.
We hereby consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference to us under the caption “Legal Matters” in the prospectus
comprising a part of the Registration Statement. In giving this consent, we do not thereby admit that we are included within the category
of persons whose consent is required by Section 7 of the Act and the rules and regulations promulgated thereunder.
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Very truly yours,
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/s/ Greenberg Traurig, LLP
Greenberg Traurig, LLP
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Exhibit 10.1
________, 2021
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Chardan Monterey Investments LLC
17 State Street, 21st Floor
New York, NY 10004
NorthStar Bio Ventures, LLC
[Address]
Re: Initial
Public Offering
Gentlemen:
This letter is being delivered
to you in accordance with (A) the Securities Assignment Agreement entered into by and between Chardan Monterey Investments LLC (the “Chardan
Co-Sponsor”), a Delaware limited liability company and NorthStar Bio Ventures LLC, a Delaware limited liability company
(the “NorthStar Co-Sponsor” and together with the Chardan Co-Sponsor, the “Co-Sponsors”)
and (B) the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between Monterey Bio Acquisition
Corporation, a Delaware corporation (the “Company”) and Chardan Capital Markets LLC, as representative (the
“Representative”) of the Underwriters named in Schedule A thereto (the “Underwriters”),
relating to an underwritten initial public offering (the “IPO”) of the Company’s units (the “Units”),
each comprised of one share of Common Stock of the Company, par value $0.0001 per share (the “Common Stock”)
and one warrant, with each warrant being exercisable to purchase one share of Common Stock at a price of $11.50 per full share
(“Warrant”). Certain capitalized terms used herein are defined in paragraph 15 hereof.
In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed with the IPO, and in recognition of the benefit that such
IPO will confer upon each Co-Sponsor as a stockholder of the Company, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each Co-Sponsor hereby agrees with the Company as follows:
1. If
the Company solicits approval of its stockholders of a Business Combination, each Co-Sponsor will vote all shares of Common Stock beneficially
owned by it, whether acquired before, in or after the IPO, in favor of such Business Combination.
2. To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 1,500,000 Units (as described
in the Registration Statement), (x) NorthStar Co-Sponsor agrees that it shall forfeit, at no cost, a number of Founder Shares in the
aggregate equal to 281,250 multiplied by a fraction, (i) the numerator of which is 1,500,000 minus the number of Units purchased
by the Underwriters upon the exercise of their over-allotment option and (ii) the denominator of which is 1,500,000 and (y) Chardan
Co-Sponsor agrees that it shall forfeit, at no cost, a number of Founder Shares in the aggregate equal to 93,750 multiplied by a fraction,
(i) the numerator of which is 1,500,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment
option and (ii) the denominator of which is 1,500,000. All references in this letter to Founder Shares of the Company being forfeited
shall take effect as a contribution of such Founder Shares to the Company’s capital as a matter of Delaware law. The forfeiture
will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the number of Founder
Shares will equal an aggregate of 20.0% of the Company’s issued and outstanding IPO Shares and Founder Shares after the IPO. Each
Co-Sponsor further agrees that to the extent that the size of the IPO is increased or decreased, the Company will effect a capitalization
or stock repurchase or redemption, as applicable, immediately prior to the consummation of the IPO in such amount as to maintain the
number of Founder Shares at 20.0% of the Company’s issued and outstanding IPO Shares and Founder Shares upon the consummation of
the IPO. In connection with such increase or decrease in the size of the IPO, then (A) the references to 1,500,000 in the numerator
and denominator of the formula in the first sentence of this paragraph shall be changed to a number equal to 15.0% of the number of shares
of Class A Common Stock included in the Units issued in the IPO, (B) the reference to 281,250 and 93,750 in the formula set forth
in the first sentence of this paragraph shall be adjusted to, respectively, the total number of Founder Shares that NorthStar Co-Sponsor
would have to return to the Company in order for the number of Founder Shares that NorthStar Co-Sponsor owns (together with the Insiders)
to equal an aggregate of 13.1% of the Company’s issued and outstanding IPO Shares and Founder Shares after the IPO and the total
number of Founder Shares that Chardan Co-Sponsor would have to return to the Company in order for the number of Founder Shares that Chardan
Co-Sponsor owns to equal an aggregate of 4.4% of the Company’s issued and outstanding IPO Shares and Founder Shares after the
IPO.
3.
Each Co-Sponsor agrees that the Founder Shares and Private Warrants held by it, and any shares of Common Stock issued upon conversion
or exercise thereof, shall not be sold during the IPO, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of
any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of such securities
by any person for a period of 180 days immediately following the date of effectiveness of the Registration Statement or commencement of
sales of the IPO, except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners; provided
that all securities so transferred remain subject to the foregoing lockup restriction for the remainder of the time period.
4. (a)
In the event that the Company fails to consummate a Business Combination within 12 months (or up to 21 months, if the time to complete a Business Combination
is extended as described in the Registration Statement) from the closing of the Company’s IPO,
the Co-Sponsors shall take all reasonable steps to (i) cause the Trust Fund to be liquidated and distributed to the holders of IPO Shares
and (ii) cause the Company to liquidate as promptly as reasonably possible but not more than five business days after the date the Company
is required to consummate a Business Combination.
(b) Each Co-Sponsor hereby
waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets
of the Company as a result of such liquidation with respect to any shares it owns, including its Insider Shares, IPO Shares and Private
Warrants purchased during or after the offering, if any, (“Claim”) and hereby waives any Claim such Co-Sponsor
may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse against
the Trust Fund for any reason whatsoever. Each Co-Sponsor acknowledges and agrees that there will be no distribution from the Trust Fund
with respect to any Common Stock underlying the Private Warrants, all rights of which will terminate on the Company’s liquidation.
(c) In the event of the liquidation
of the Trust Fund, the Co-Sponsors agree to indemnify and hold harmless the Company against any and all loss, liability, claims, damage
and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing
or defending against any litigation, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a
result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted
for, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount of funds
in the Trust Fund; provided, that such indemnity shall not apply if such vendor or other person has executed an agreement
waiving any claims against the Trust Fund.
(d)
In the event that the Company does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient
to complete such liquidation, the Co-Sponsors agree to advance such funds necessary to complete such liquidation and agrees not to seek
repayment for such expenses.
5. Each Co-Sponsor will
place into escrow all of its Insider Shares pursuant to the terms of a Stock Escrow Agreement which the Company will enter into with
the Co-Sponsors and an escrow agent acceptable to the Company. Each Co-Sponsor agrees that during the escrow period, such Co-Sponsor
shall not sell or transfer its Insider Shares except (1) to any persons (including their affiliates and stockholders) participating
in the private placement of the Private Warrants, officers, directors, stockholders, employees and members of each Co-Sponsor and
their affiliates, (2) amongst initial stockholders or to the Company’s officers, directors and employees, (3) if a holder is
an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of
the holder’s immediate family or to a trust, the beneficiary of which is a holder or a member of a holder’s immediate
family, for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant to a qualified
domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of the Company’s
securities, (8) by private sales at prices no greater than the price at which the shares were originally purchased or (9) for the
cancellation of up to 375,000 shares of Common Stock subject to forfeiture to the extent that the Underwriters’ over-allotment
option is not exercised in full or in part or in connection with the consummation of the Company’s initial Business
Combination, in each case (except for clause 9 of this Section 5 or with the prior consent of the Representative) where the
transferee agrees to the terms of the escrow agreement and this insider letter.
6. Each Co-Sponsor agrees that
until the Company consummates a Business Combination, such Co-Sponsor’s Private Warrants will be subject to the transfer restrictions
described in the Private Placement Warrants Purchase Agreement relating to such Co-Sponsor’s Private Warrants.
7. In order to minimize potential
conflicts of interest which may arise from multiple affiliations, each Co-Sponsor agrees to present to the Company for its consideration,
prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of the consummation
by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary and contractual obligations
such Co-Sponsor might have.
8. Each Co-Sponsor acknowledges
and agrees that prior to entering into a Business Combination with a target business that is affiliated with any Insiders of the Company
or their affiliates, including any company that is a portfolio company of, or otherwise affiliated with, or has received financial investment
from, an entity with which any Insider or their affiliates is affiliated, such transaction must be approved by a majority of the Company’s
disinterested independent directors and the Company must obtain an opinion from an independent investment banking firm that such Business
Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.
9. Neither the Co-Sponsors,
any member of the family of the Co-Sponsors, nor any affiliate of the Co-Sponsors will be entitled to receive or accept a finder’s
fee or any other compensation in the event the Co-Sponsor, any member of the family of the Co-Sponsor or any affiliate of the Co-Sponsor
originates a Business Combination.
10. Each Co-Sponsor’s
FINRA Questionnaire previously furnished to the Company and/or the Representative is true and accurate in all material respects. Each
Co-Sponsor represents and warrants that:
(a) it
has never had a petition under the federal bankruptcy laws or any state insolvency law been filed by or against (i) it or any partnership
in which it was a general partner at or within two years before the time of filing; or (ii) any corporation or business association of
which it was an executive officer at or within two years before the time of such filing;
(b) it
has never had a receiver, fiscal agent or similar officer been appointed by a court for its business or property, or any such partnership;
(c) it
has never been convicted of fraud in a civil or criminal proceeding;
(d) it
has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations
and minor offenses);
(e) it
has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining or otherwise limiting it from (i) acting as a futures commission merchant, introducing
broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by
the Commodity Futures Trading Commission (“CFTC”) or an associated person of any of the foregoing, or as an
investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company,
bank, savings and loan association or insurance company, or from engaging in or continuing any conduct or practice in connection with
any such activity; or (ii) engaging in any type of business practice; or (iii) engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any violation of federal or state securities or federal commodities
laws;
(f) it
has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state
authority barring, suspending or otherwise limiting for more than 60 days its right to engage in any activity described in 9(e)(i) above,
or to be associated with persons engaged in any such activity;
(g) it
has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities
law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated;
(h) it
has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities law,
where the judgment in such civil action or finding by the CFTC has not been subsequently reversed, suspended or vacated;
(i) it
has never been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or finding, not
subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities law
or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary
or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and desist order, or
removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity;
(j) it
has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated, or any self-regulatory
organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over
its members or persons associated with a member;
(k) it
has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security; (ii) involving the
making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal
securities dealer, investment advisor or paid solicitor of purchasers of securities;
(l) it
was never subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a
state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency
or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration
that is based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct;
(m) it
has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time of such sale, restrained
or enjoined it from engaging or continuing to engage in any conduct or practice: (i) in connection with the purchase or sale of any security;
(ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker,
dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
(n) it
has never been subject to any order of the SEC that orders it to cease and desist from committing or causing a future violation of: (i)
any scienter-based anti-fraud provision of the federal securities laws, including, but not limited to, Section 17(a)(1) of the Securities
Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 206(1) of the Advisers Act or any other rule or regulation
thereunder; or (ii) Section 5 of the Securities Act;
(o) it
has never been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC that was the
subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently, the subject of an investigation
or proceeding to determine whether a stop order or suspension order should be issued;
(p) it
has never been subject to a United States Postal Service false representation order, or is currently subject to a temporary
restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a
scheme or device for obtaining money or property through the mail by means of false representations;
(q) it
is not subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a state
authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency or officer
of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration that
bars the Co-Sponsor from: (i) association with an entity regulated by such commission, authority, agency or officer; (ii) engaging in
the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities;
(r) it
is not subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (the “Exchange
Act”) or section 203(e) or 203(f) of the Investment Advisers Act of 1940 (the “Advisers Act”) that: (i) suspends or
revokes the Co-Sponsor’s registration as a broker, dealer, municipal securities dealer or investment adviser; (ii) places limitations
on the activities, functions or operations of, or imposes civil money penalties on, such person; or (iii) bars the Co-Sponsor from being
associated with any entity or from participating in the offering of any penny stock; and
(s) it
has never been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities self-regulatory
organization (e.g., a registered national securities exchange or a registered national or affiliated securities association) for any act
or omission to act constituting conduct inconsistent with just and equitable principles of trade.
11. Each Co-Sponsor has full
right and power, without violating any agreement by which he, she or it is bound, to enter into this letter agreement and to serve as
a director or officer of the Company, as applicable.
12. Each Co-Sponsor hereby waives
its right to exercise conversion rights with respect to any shares of Common Stock owned or to be owned by the Co-Sponsor, directly or
indirectly, whether purchased by the Co-Sponsor prior to the IPO, in the IPO or in the aftermarket, and agrees that he, she or it will
not seek conversion with respect to or otherwise sell, such shares in connection with any vote to approve a Business Combination with
respect thereto, a vote to amend the provisions of the Company’s Amended and Restated Certificate of Incorporation, or a tender
offer by the Company prior to a Business Combination.
13. Each Co-Sponsor hereby agrees
to not propose, or vote in favor of, an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect
to stockholder’s rights or the Company’s pre-Business Combination activities (including the substance or timing within which
the Company has to complete a business combination) of a Business Combination unless the Company offers holders of IPO Shares the right
to receive their pro rata portion of the funds then held in the Trust Fund upon approval of any amendment.
14. In connection with Section
5-1401 of the General Obligations Law of the State of New York, this letter agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to principles of conflicts of law that would result in the application of the substantive
law of another jurisdiction. The parties hereto agree that any action, proceeding or claim arising out of or relating in any way to this
letter agreement shall be resolved through final and binding arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association (“AAA”). The arbitration shall be brought before the AAA International Center
for Dispute Resolution’s offices in New York City, New York, will be conducted in English and will be decided by a panel of three
arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be final and enforceable
by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and arbitration services,
together with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed
by the arbitrators.
15. As used herein, (i) a
“Business Combination” shall mean a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii)
“Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the
IPO; (iii) “Insider Shares” shall mean all of the shares of Common Stock of the Company acquired by
an Insider prior to the IPO and the purchase of the Private Warrants; (iv) “Founder Shares” shall mean all
of the shares of Common Stock acquired by the Co-Sponsors prior to the consummation of the IPO; (v) “IPO
Shares” shall mean the shares of Common Stock issued in the Company’s IPO; (vi) “Private
Warrants” shall mean the warrants purchased in the private placements taking place simultaneously with the
consummation of the Company’s IPO; (vii) “Registration Statement” means the registration statement
on Form S-1 filed by the Company with respect to the IPO; and (viii) “Trust Fund” shall mean the trust
fund into which a portion of the net proceeds of the Company’s IPO will be deposited.
16. Any notice, consent or request
to be given in connection with any of the terms or provisions of this letter agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or electronic mail.
If to the Representative:
Chardan Capital Markets, LLC
17 State Street, 21st Floor
New York, NY 10004
Attn: Jonas Grossman
Email: jgrossman@chardan.com
Copy (which copy shall not constitute notice)
to:
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Ari Edelman; Edward P. Bromley III
Email: aedelman@reedsmith.com; ebromley@reedsmith.com
If to Chardan Monterey Investments LLC:
17 State Street, 21st Floor
New York, NY 10004
Attn: Hilary Senner
Email: HSenner@chardan.com
Copy (which copy shall not constitute notice)
to:
Chardan Monterey Investments LLC
17 State Street, 21st Floor
New York, NY 10004
Attn: Caitlin Maloney
Email: cmaloney@chardan.com
If to NorthStar Bio Ventures LLC:
[Address]
Attn: Sandip Patel
Email: spatel@montereybio.com
Copy (which copy shall not constitute notice)
to:
Greenberg Traurig, LLP
1750 Tysons Boulevard, Suite 1000
McLean, Virginia 22102
Attn: Jason Simon
Email: simonj@gtlaw.com
If to the Company:
Monterey Bio Acquisition Corporation
17 State Street, 21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Email: sanjeev@montereybio.com
Copy (which copy shall not constitute notice)
to:
Greenberg Traurig, LLP
1750 Tysons Boulevard, Suite 1000
McLean, Virginia 22102
Attn: Jason Simon
Email: simonj@gtlaw.com
17. No party hereto may assign
either this letter agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other
party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign
any interest or title to the purported assignee. This letter agreement shall be binding on the parties hereto and any successors and assigns
thereof.
18. Nothing in this letter agreement
shall be construed to confer upon, or give to, any person or entity other than the parties hereto, any right, remedy or claim under or
by reason of this Letter Agreement or of any covenant, condition, stipulation, promise or agreement hereof. All covenants, conditions,
stipulations, promises and agreements contained in this letter agreement shall be for the sole and exclusive benefit of the parties hereto
and their successors, heirs, personal representatives and assigns and permitted transferees; provided, however, that the Representative
shall benefit from the provisions set forth in paragraph 5, which such paragraph shall not be amended or modified without the written
consent of the Representative.
18. Each Co-Sponsor acknowledges
and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in
proceeding with the IPO. Nothing contained herein shall be deemed to render the Underwriters a representative of, or a fiduciary with
respect to, the Company, its stockholders or any creditor or vendor of the company with respect to the subject matter hereof.
[Signature page to follow]
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Sincerely,
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NORTHSTAR BIO VENTURES LLC
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By:
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Name:
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Title:
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CHARDAN MONTEREY INVESTMENTS LLC
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By:
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Name:
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Title:
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Acknowledged and Agreed:
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Sanjeev Satyal
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Title
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Chief Executive Officer
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[Signature Page to Insider Letter (Co-Sponsors)]
EXHIBIT
10.2
________, 2021
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Chardan Capital Markets, LLC
17 State Street, 21st Floor
New York, NY 10004
Re: Initial
Public Offering
Gentlemen:
This letter is being delivered
to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between
Monterey Bio Acquisition Corporation, a Delaware corporation (the “Company”) and Chardan Capital Markets, LLC,
as representative (the “Representative”) of the Underwriters named in Schedule A thereto (the “Underwriters”),
relating to an underwritten initial public offering (the “IPO”) of the Company’s units (the “Units”),
each comprised of one share of Common Stock of the Company, par value $0.0001 per share (the “Common Stock”)
and one warrant, with each warrant being exercisable to purchase one share of Common Stock at a price of $11.50 per full share
(“Warrant”). Certain capitalized terms used herein are defined in paragraph 12 hereof.
In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed with the IPO, and in recognition of the benefit that such
IPO will confer upon the undersigned as a stockholder of the Company, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agrees with the Company as follows:
1.
If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all shares of Common
Stock beneficially owned by him or her, whether acquired before, in or after the IPO, in favor of such Business Combination.
2. (a)
In the event that the Company fails to consummate a Business Combination within 12 months (or up to 21 months, if the time to complete a Business Combination
is extended as described in the Registration Statement) from the closing of the Company’s IPO,
the undersigned shall take all reasonable steps to (i) cause the Trust Fund to be liquidated and distributed to the holders of IPO Shares
and (ii) cause the Company to liquidate as promptly as reasonably possible but not more than five business days after the date we are
required to consummate a Business Combination.
(b) The undersigned hereby
waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets
of the Company as a result of such liquidation with respect to any shares he or she owns, including his or her Insider Shares, IPO Shares
and Private Warrants purchased during or after the offering, if any, (“Claim”) and hereby waives any Claim the
undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the Company and will not seek recourse
against the Trust Fund for any reason whatsoever.
3. The undersigned will
place into escrow all of his or her Insider Shares pursuant to the terms of a Stock Escrow Agreement which the Company will enter
into with the undersigned and an escrow agent acceptable to the Company. The undersigned agrees that during the escrow period (as
described in the Registration Statement), the undersigned shall not sell or transfer its Insider Shares except (1) to any persons
(including their affiliates and stockholders) participating in the private placement of the Private Warrants, officers, directors,
stockholders, employees and members of the co-sponsors and their affiliates, (2) amongst initial stockholders or to the
Company’s officers, directors and employees, (3) if a holder is an entity, as a distribution to its, partners, stockholders or
members upon its liquidation, (4) by bona fide gift to a member of the holder’s immediate family or to a trust, the
beneficiary of which is a holder or a member of a holder’s immediate family, for estate planning purposes, (5) by virtue of
the laws of descent and distribution upon death, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to
secure obligations incurred in connection with purchases of the Company’s securities, or (8) by private sales at prices no
greater than the price at which the shares were originally purchased, in each case (except with the prior consent of the
Representative) where the transferee agrees to the terms of the escrow agreement and this insider letter
4. In order to minimize potential
conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration,
prior to presentation to any other person or entity, any suitable opportunity to acquire a target business, until the earlier of the consummation
by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing fiduciary and contractual obligations
the undersigned might have.
5. The undersigned acknowledges
and agrees that prior to entering into a Business Combination with a target business that is affiliated with any Insiders of the Company
or their affiliates, including any company that is a portfolio company of, or otherwise affiliated with, or has received financial investment
from, an entity with which any Insider or their affiliates is affiliated, such transaction must be approved by a majority of the Company’s
disinterested independent directors and the Company must obtain an opinion from an independent investment banking firm that such Business
Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.
6. Except as set forth in the
Registration Statement, neither the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will
be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family
of the undersigned or any affiliate of the undersigned originates a Business Combination.
7. The undersigned agrees to
be a director or officer of the Company, as applicable, until the earlier of the consummation by the Company of a Business Combination
or the liquidation of the Company. The undersigned’s biographical information previously furnished to the Company and the Representative
is true and accurate in all material respects, does not omit any material information with respect to the undersigned’s biography
and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities
Act of 1933, as amended. The undersigned’s FINRA Questionnaire and Director and Officer Questionnaire previously furnished
to the Company and the Representative is true and accurate in all material respects. The undersigned represents and warrants that, except
as disclosed in the undersigned’s Director and Officer Questionnaire:
(a) he
has never had a petition under the federal bankruptcy laws or any state insolvency law been filed by or against (i) him or her or any
partnership in which he or she was a general partner at or within two years before the time of filing; or (ii) any corporation or business
association of which he or she was an executive officer at or within two years before the time of such filing;
(b) he
or she has never had a receiver, fiscal agent or similar officer been appointed by a court for his or her business or property, or any
such partnership;
(c) he
or she has never been convicted of fraud in a civil or criminal proceeding;
(d) he
or she has never been convicted in a criminal proceeding or named the subject of a pending criminal proceeding (excluding traffic violations
and minor offenses);
(e) he
or she has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining or otherwise limiting him or her from (i) acting as a futures
commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in
or continuing any conduct or practice in connection with any such activity; or (ii) engaging in any type of business practice;
or (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with
any violation of federal or state securities or federal commodities laws;
(f) he
or she has never been the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or
state authority barring, suspending or otherwise limiting for more than 60 days his or her right to engage in any activity described in
9(e)(i) above, or to be associated with persons engaged in any such activity;
(g) he
or she has never been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state
securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended or vacated;
(h) he
or she has never been found by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities
law, where the judgment in such civil action or finding by the CFTC has not been subsequently reversed, suspended or vacated;
(i) he
or she has never been the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree or finding,
not subsequently reversed, suspended or vacated, relating to an alleged violation of (i) any Federal or State securities or commodities
law or regulation, (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to,
a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and desist
order, or removal or prohibition order or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business
entity;
(j) he
or she has never been the subject of, or party to, any sanction or order, not subsequently reversed, suspended or vacated, or any self-regulatory
organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over
its members or persons associated with a member;
(k) he
or she has never been convicted of any felony or misdemeanor: (i) in connection with the purchase or sale of any security; (ii) involving
the making of any false filing with the SEC; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer, municipal
securities dealer, investment advisor or paid solicitor of purchasers of securities;
(l) he
was never subject to a final order of a state securities commission (or an agency of officer of a state performing like functions); a
state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency
or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration
that is based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct;
(m) he
or she has never been subject to any order, judgment or decree of any court of competent jurisdiction, that, at the time of such sale,
restrained or enjoined him or her from engaging or continuing to engage in any conduct or practice: (i) in connection with the purchase
or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business
of an underwriter, broker, dealer, municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;
(n) he
or she has never been subject to any order of the SEC that orders him or her to cease and desist from committing or causing a future violation
of: (i) any scienter-based anti-fraud provision of the federal securities laws, including, but not limited to, Section 17(a)(1) of the
Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Section 206(1) of the Advisers Act or any other rule
or regulation thereunder; or (ii) Section 5 of the Securities Act;
(o) he
or she has never been named as an underwriter in any registration statement or Regulation A offering statement filed with the SEC that
was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is, currently, the subject of an investigation
or proceeding to determine whether a stop order or suspension order should be issued;
(p) he
or she has never been subject to a United States Postal Service false representation order, or is currently subject to a temporary restraining
order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for
obtaining money or property through the mail by means of false representations;
(q) he
or she is not subject to a final order of a state securities commission (or an agency of officer of a state performing like functions);
a state authority that supervises or examines banks, savings associations, or credit unions; a state insurance commission (or an agency
or officer of a state performing like functions); an appropriate federal banking agency; the CFTC; or the National Credit Union Administration
that bars the undersigned from: (i) association with an entity regulated by such commission, authority, agency or officer; (ii) engaging
in the business of securities, insurance or banking; or (iii) engaging in savings association or credit union activities;
(r)
he or she is not subject to an order of the SEC entered pursuant to section 15(b) or 15B(c) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or section 203(e) or 203(f) of the Investment Advisers Act of
1940, as amended (the “Advisers Act”) that: (i) suspends or revokes the undersigned’s registration as a broker,
dealer, municipal securities dealer or investment adviser; (ii) places limitations on the activities, functions or operations of, or
imposes civil money penalties on, such person; or (iii) bars the undersigned from being associated with any entity or from
participating in the offering of any penny stock; and
(s) he
or she has never been suspended or expelled from membership in, or suspended or barred from association with a member of, a securities
self-regulatory organization (e.g., a registered national securities exchange or a registered national or affiliated securities association)
for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade.
8. The undersigned has full
right and power, without violating any agreement by which he or she is bound, to enter into this letter agreement and to serve as a director
or officer of the Company, as applicable.
9. The undersigned hereby waives
his or her right to exercise conversion rights with respect to any shares of Common Stock owned or to be owned by the undersigned, directly
or indirectly, whether purchased by the undersigned prior to the IPO, in the IPO or in the aftermarket, and agrees that he or she will
not seek conversion with respect to or otherwise sell, such shares in connection with any vote to approve a Business Combination with
respect thereto, a vote to amend the provisions of the Company’s Amended and Restated Certificate of Incorporation, or a tender
offer by the Company prior to a Business Combination.
10. The undersigned hereby agrees
to not propose, or vote in favor of, an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect
to stockholder’s rights or the Company’s pre-Business Combination activities (including the substance or timing within which
the Company has to complete a business combination) of a Business Combination unless the Company offers holders of IPO Shares the right
to receive their pro rata portion of the funds then held in the Trust Fund upon approval of any amendment.
11. In connection with Section
5-1401 of the General Obligations Law of the State of New York, this letter agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to principles of conflicts of law that would result in the application of the substantive
law of another jurisdiction. The parties hereto agree that any action, proceeding or claim arising out of or relating in any way to this
letter agreement shall be resolved through final and binding arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association (“AAA”). The arbitration shall be brought before the AAA International Center
for Dispute Resolution’s offices in New York City, New York, will be conducted in English and will be decided by a panel of three
arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be final and enforceable
by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and arbitration services,
together with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or as otherwise directed
by the arbitrators.
12. As used herein, (i) a
“Business Combination” shall mean a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii)
“Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the
IPO; (iii) “Insider Shares” shall mean all of the shares of Common Stock of the Company acquired by
an Insider prior to the IPO and the purchase of the Private Warrants; (iv) “IPO Shares” shall mean the
shares of Common Stock issued in the Company’s IPO; (v) “Private Warrants” shall mean the warrants
purchased in the private placements taking place simultaneously with the consummation of the Company’s IPO; (vi)
“Registration Statement” means the registration statement on Form S-1 filed by the Company with respect to
the IPO; and (vii) “Trust Fund” shall mean the trust fund into which a portion of the net proceeds of the
Company’s IPO will be deposited.
13. Any notice, consent or request
to be given in connection with any of the terms or provisions of this letter agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or electronic mail.
If to the Representative:
Chardan Capital Markets, LLC
17 State Street, 21st Floor
New York, NY 10004
Attn: Jonas Grossman
Email: jgrossman@chardan.com
Copy (which copy shall not constitute notice)
to:
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Ari Edelman; Edward P. Bromley III
Email: aedelman@reedsmith.com; ebromley@reedsmith.com
If to the Company:
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Email: sanjeev@montereybio.com
Copy (which copy shall not constitute notice)
to:
Greenberg Traurig, LLP
1750 Tysons Boulevard, Suite 1000
McLean, Virginia 22102
Attn: Jason Simon
Email: simonj@gtlaw.com
14. No party hereto may assign
either this letter agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other
party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign
any interest or title to the purported assignee. This letter agreement shall be binding on the parties hereto and any successors and assigns
thereof.
15. The undersigned acknowledges
and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in
proceeding with the IPO. Nothing contained herein shall be deemed to render the Underwriters a representative of, or a fiduciary with
respect to, the Company, its stockholders or any creditor or vendor of the company with respect to the subject matter hereof.
[Signature page to follow]
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Sincerely,
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By:
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Name:
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Sanjeev Satyal
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By:
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Name:
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William McKeever
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By:
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Name:
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Jonas Grossman
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By:
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Name:
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Frances K. Heller
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By:
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Name:
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James R. Neal
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By:
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Name:
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Sandip I. Patel, Esq.
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Acknowledged
and Agreed:
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MONTEREY BIO ACQUISITION
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CORPORATION
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By:
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Name:
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Sanjeev Satyal
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Title
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Chief Executive Officer
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[Signature Page to Insider Letter]
Exhibit 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Agreement is made as
of [●], 2021 by and between Monterey Bio Acquisition Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (“Trustee”).
WHEREAS, the Company’s
registration statement on Form S-1, No. 333-[__] (“Registration Statement”) for its initial public offering of securities
(“IPO”) has been declared effective as of the date hereof (“Effective Date”) by the Securities and Exchange Commission
(capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Registration Statement); and
WHEREAS, Chardan Capital Markets
LLC (“Chardan”) is acting as the underwriter in the IPO; and
WHEREAS, as described in the
Registration Statement, and in accordance with the Company’s Amended and Restated Certificate of Incorporation, $101,000,000 ($116,150,000
if the over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a trust account for the
benefit of the Company and the holders of the Company’s common stock, par value $.0001 per share (“Common Stock”), issued
in the IPO as hereinafter provided (the proceeds to be delivered to the Trustee will be referred to herein as the “Property”;
the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the “Public Stockholders,” and
the Public Stockholders and the Company will be referred to together as the “Beneficiaries”); and
WHEREAS, if a Business Combination is not consummated within 12 months
from the date of the closing of the IPO, the Company’s insiders or their affiliates may, but are not obligated to, extend the period
of time to consummate a Business Combination up to three times by an additional three months each time (for a total of up to 21 months
to complete a Business Combination); provided that, pursuant to the Company’s Amended and Restated Certificate of Incorporation,
the only way to extend the time available for the Company to consummate its initial Business Combination is for the Company’s insiders
or their affiliates or designees, upon five days’ advance notice prior to each applicable deadline, to deposit into the Trust Account
$1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per unit in either case, or an aggregate of $3,000,000,
or $3,450,000 if the over-allotment option is exercised in full, if the time to consummate a Business Combination is extended to a full
21 months), on or prior to the date of the applicable deadline; and
WHEREAS, the Company and the
Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
THEREFORE, IT IS AGREED:
1. Agreements and
Covenants of Trustee. The Trustee hereby agrees and covenants to:
(a) Hold the Property in trust
for the Beneficiaries in accordance with the terms of this Agreement in a segregated trust account (“Trust Account”) established
by the Trustee at JPMorgan Chase Bank, N.A. in the United States, maintained by Trustee, (or at another U.S. chartered commercial bank with consolidated assets
of $100 billion or more) and at a brokerage institution selected by the
Trustee that is reasonably satisfactory to the Company;
(b) Manage, supervise and administer
the Trust Account subject to the terms and conditions set forth herein;
(c) In a timely manner, upon
the instruction of the Company, invest and reinvest the Property (i) in United States government treasury bills, notes or bonds having
a maturity of 185 days or less and/or (ii) in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act of 1940, as amended, and that invest solely in U.S. treasuries, as determined by the Company, it being understood that the
Trust Account will earn no interest while the account funds are uninvested awaiting the Company’s instructions hereunder; while the account funds are invested or uninvested, the
Trustee may earn bank credits and other consideration;
(d) Collect and receive, when
due, all principal and income arising from the Property, which shall become part of the “Property,” as such term is used herein;
(e) Promptly notify the Company
and Chardan of all communications received by it with respect to any Property requiring action by the Company;
(f) Supply any necessary information
or documents as may be requested by the Company (or its authorized agents) in connection with the Company’s preparation of the tax
returns relating to assets held in the Trust Account or in connection with the preparation or completion of the audit of the Company’s
financial statements by the Company’s auditors;
(g) Participate in any plan
or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the Company to
do so;
(h) Render to the Company monthly
written statements of the activities of and amounts in the Trust Account reflecting all receipts and disbursements of the Trust Account;
and
(i) Commence liquidation
of the Trust Account only after and promptly after (x) receipt of, and only in accordance with, the terms of a letter from the
Company (“Termination Letter”), in a form substantially similar to that attached hereto as either Exhibit A or Exhibit
B, as applicable, signed on behalf of the Company by its President, Chief Executive Officer, Chief Financial Officer, Chairman of
the Board, Secretary or other authorized officer of the Company and, in the case of a Termination Letter in a form substantially
similar to that attached hereto as Exhibit A, and complete the liquidation of the Trust Account and distribute the Property in the
Trust Account, including interest not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest
to pay dissolution expenses), only as directed in the Termination Letter and the other documents referred to therein, or (y) upon
the date which is (1) 12 months (or up to 21 months, as applicable) after the closing of the IPO and (2) such later date as may be
approved by the Company’s stockholders in accordance with the Company’s Amended and Restated Certificate of
Incorporation if a Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall
be liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the
Trust Account, including interest not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest
to pay dissolution expenses) shall be distributed to the Public Stockholders of record as of such date; and
(j) Upon
written request from the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D
(“Stockholder Redemption Withdrawal Instruction”), the Trustee shall distribute to the
remitting brokers on behalf of Public Stockholders redeeming shares of Common Stock the amount required to pay for redeemed shares of
Common Stock from Public Stockholders in connection with a stockholder vote to approve an amendment to the Company’s Amended and
Restated Certificate of Incorporation to affect the substance or timing of the Company’s obligation to redeem all shares of Common
Stock included in the Units sold in the IPO if the Company does not complete a Business Combination within the time period set forth
in the Company’s Amended and Restated Certificate of Incorporation. The written request of the Company referenced above shall constitute
presumptive evidence that the Company is entitled to distribute said funds, and the Trustee shall have no responsibility to look beyond
said request.
2. Limited
Distributions of Income from Trust Account.
(a) Upon written request from
the Company, which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C (a “Tax Payment
Withdrawal Instruction”), the Trustee shall distribute to the Company the amount of interest income earned on the Trust Account
requested by the Company to cover any income or other tax obligation owed by the Company.
(b) The limited distributions
referred to in Section 2(a) above shall be made only from income collected on the Property. Except as provided in Section 2(a) above,
no other distributions from the Trust Account shall be permitted except in accordance with Sections 1(i) and (j) hereof.
(c) The Company shall provide
Chardan with a copy of any Termination Letters and/or any other correspondence that it issues to the Trustee with respect to any proposed
withdrawal from the Trust Account promptly after such issuance.
3. Agreements and
Covenants of the Company. The Company hereby agrees and covenants to:
(a) Give all instructions to
the Trustee hereunder in writing, signed by the Company’s President, Chief Executive Officer, Chief Financial Officer, Chairman
of the Board, Secretary or other authorized officer of Company. In addition, except with respect to its duties under paragraphs 1(i),
1(j) and 2(a) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or
instruction which it in good faith believes to be given by any one of the persons authorized above to give written instructions, provided
that the Company shall promptly confirm such instructions in writing;
(b) Subject to the
provisions of Sections 5 and 7(g) of this Agreement, hold the Trustee harmless and indemnify the Trustee from and against, any and
all expenses, including reasonable counsel fees and disbursements, or loss suffered by the Trustee in connection with any claim,
potential claim, action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim
or demand which in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any
income earned from investment of the Property, except for expenses and losses resulting from the Trustee’s gross negligence or
willful misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit
or proceeding, pursuant to which the Trustee intends to seek indemnification under this paragraph, it shall notify the Company in
writing of such claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall have the right to conduct
and manage the defense against such Indemnified Claim, provided, that the Trustee shall obtain the consent of the Company with
respect to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee may not agree to settle any
Indemnified Claim without the prior written consent of the Company, which consent shall not be unreasonably withheld. The Company
may participate in such action with its own counsel;
(c) Pay the Trustee an initial
acceptance fee, an annual fee and a transaction processing fee for each disbursement made pursuant to Section 2(a) as set forth on Schedule
A hereto, which fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property shall
not be used to pay such fees except for disbursements made to the Company pursuant to Sections 1(i) and (j) solely in connection with
the consummation of a Business Combination. The Company shall pay the Trustee the initial acceptance fee and first year’s fee at
the consummation of the IPO and thereafter on the anniversary of the Effective Date. Except as set forth in this Section 3(c) and Section
3(b) hereof, the Company shall not be responsible for any other fees or charges of the Trustee;
(d) In connection with any vote
of the Company’s stockholders regarding a Business Combination, provide to the Trustee an affidavit or certificate of a firm regularly
engaged in the business of soliciting proxies and/or tabulating shareholder votes verifying the vote of the Company’s stockholders
regarding such Business Combination; and
(e) In the event that the Company
directs the Trustee to commence liquidation of the Trust Account pursuant to Section 1(i), the Company agrees that it will not direct
the Trustee to make any payments that are not specifically authorized by this Agreement.
4. Limitations of
Liability. The Trustee shall have no responsibility or liability to:
(a) Take any action with respect
to the Property, other than as directed in paragraphs 1 and 2 hereof and the Trustee shall have no liability to any party except for liability
arising out of its own gross negligence or willful misconduct;
(b) Institute any proceeding
for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with respect
to, any of the Property unless and until it shall have received instructions from the Company given as provided herein to do so and the
Company shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;
(c) Change the investment of
any Property, other than in compliance with paragraph 1(c);
(d) Refund any depreciation
in principal of any Property;
(e) Assume that the authority
of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation,
or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(f) The other parties hereto
or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the
exercise of its own best judgment, except for its gross negligence or willful misconduct. The Trustee may rely conclusively and shall
be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Trustee),
statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Trustee, in good
faith, to be genuine and to be signed or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand,
or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument
delivered to the Trustee signed by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall
give its prior written consent thereto;
(g) Verify the correctness of
the information set forth in the Registration Statement or to confirm or assure that any acquisition made by the Company or any other
action taken by it is as contemplated by the Registration Statement;
(h) File local, state and/or
federal tax returns or information returns with any taxing authority on behalf of the Trust Account and payee statements with the Company
documenting the taxes, if any, payable by the Company or the Trust Account, relating to the income earned on the Property;
(i) Pay any taxes on behalf
of the Trust Account (it being expressly understood that the Property shall not be used to pay any such taxes and that such taxes, if
any, shall be paid by the Company from funds not held in the Trust Account or released to it under Section 2(a) hereof);
(j) Imply obligations, perform
duties, inquire or otherwise be subject to the provisions of any agreement or document other than this agreement and that which is expressly
set forth herein; and
(k) Verify calculations, qualify
or otherwise approve Company requests for distributions pursuant to Sections 1(i), 1(j) or 2(a) above.
5. Trust Account
Waiver. The Trustee has no right of set-off or any right, title, interest or claim of any kind (“Claim”) to, or to
any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may
have now or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without
limitation, under Section 3(b) or Section 3(c) hereof, the Trustee shall pursue such Claim solely against the Company and its assets
outside the Trust Account and not against the Property or any monies in the Trust Account.
6. Termination.
This Agreement shall terminate as follows:
(a) If the Trustee gives written
notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor
trustee during which time the Trustee shall act in accordance with this Agreement. At such time that the Company notifies the Trustee
that a successor trustee has been appointed by the Company and has agreed to become subject to the terms of this Agreement, the Trustee
shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer of copies of the
reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however, that, in the event
that the Company does not locate a successor trustee within ninety days of receipt of the resignation notice from the Trustee, the Trustee
may submit an application to have the Property deposited with any court in the State of New York or with the United States District Court
for the Southern District of New York and upon such deposit, the Trustee shall be immune from any liability whatsoever; or
(b) At such time that the Trustee
has completed the liquidation of the Trust Account in accordance with the provisions of paragraph 1(i) hereof, and distributed the Property
in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Paragraph 3(b).
7. Miscellaneous.
(a) The Company and the Trustee
each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred from the Trust
Account. The Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized
persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained access
to such information, or of any change in its authorized personnel. In executing funds transfers, the Trustee will rely upon all information
supplied to it by the Company, including account names, account numbers and all other identifying information relating to a beneficiary,
beneficiary’s bank or intermediary bank. The Trustee shall not be liable for any loss, liability or expense resulting from any
error in the information or transmission of the wire.
(b) This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of another jurisdiction. It may be executed in several original
or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.
(c) This Agreement contains
the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. Except for Sections 1(i) and 1(j)
(which may only be amended with the approval of the holders of a majority of the outstanding shares of Common Stock sold in the IPO),
this Agreement or any provision hereof may only be changed, amended or modified by a writing signed by each of the parties hereto; provided,
however, that no such change, amendment or modification may be made without the prior written consent of Chardan. As to any claim, cross-claim
or counterclaim in any way relating to this Agreement, each party waives the right to trial by jury. The Trustee may require from Company
counsel an opinion as to the propriety of any proposed amendment.
(d) The parties hereto consent
to the jurisdiction and venue of any state or federal court located in the [City of New York, Borough of Manhattan], for purposes of resolving
any disputes hereunder.
(e) Any notice, consent or request
to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent by express mail
or similar private courier service, by certified mail (return receipt requested), by hand delivery, facsimile transmission or by electronic
mail:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Email: fwolf@continentalstock.com; cgonzalez@continentalstock.com
if to the Company, to:
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Attn: Sanjeev Satyal, Chief Executive Officer
Email: sanjeev@montereybio.com
in either case with a copy (which copy shall not constitute
notice) to:
Chardan Capital Markets LLC
17 State Street, 21st Floor
New York, NY 10004
Attn: Jonas Grossman
Email: jgrossman@chardan.com
and
Greenberg
Traurig, LLP
1750 Tysons
Boulevard, Suite 1000
McLean,
VA 22102
Attn: Jason
T. Simon, Esq.
Email: simonj@gtlaw.com
and
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Ari Edelman, Edward P. Bromley III
Email: aedelman@reedsmith.com;
ebromley@reedsmith.com
(f) This Agreement may not be
assigned by the Trustee without the prior consent of the Company.
(g) Each of the Trustee and
the Company hereby represents that it has the full right and power and has been duly authorized to enter into this Agreement and to perform
its respective obligations as contemplated hereunder.
(h) Each of the Company and
the Trustee hereby acknowledge that Chardan is a third party beneficiary of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have duly executed this Investment
Management Trust Agreement as of the date first written above.
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
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By:
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Name: Francis E. Wolf, Jr.
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Title: Vice President
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name: Sanjeev Satyal
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Title: Chief Executive Officer
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[Signature Page to Investment Management Trust
Agreement]
SCHEDULE A
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Fee Item
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Time and method of payment
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Amount
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Initial acceptance fee
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Initial closing of IPO by wire transfer
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$3,500.00
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Annual fee
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First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check
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$10,000.00
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Transaction processing fee for disbursements to Company under Section 2
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Deduction by Trustee from accumulated income following disbursement made to Company under Section 2
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$250.00
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Paying Agent services as required pursuant to sections 1(i) and 1(j)
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Billed to Company upon delivery of service pursuant to sections 1(i) and (j)
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Market Rate
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EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, N.Y. 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account - Termination Letter
Gentlemen:
Pursuant to paragraph 1(i)
of the Investment Management Trust Agreement between Monterey Bio Acquisition Corporation (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of [______________], 2021 (“Trust Agreement”), this is to advise
you that the Company has entered into an agreement with [__________________] (“Target Business”) to consummate a business
combination with Target Business (“Business Combination”) on or about [insert date]. The Company shall notify
you at least 72 hours in advance of the actual date of the consummation of the Business Combination (“Consummation Date”).
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Trust Agreement.
In accordance with the terms
of the Trust Agreement, we hereby authorize you to liquidate the Trust Account investments and to transfer the proceeds
to the above-referenced account at [●] to the effect that, on the Consummation Date, all of funds held in the Trust Account will
be immediately available for transfer to the account or accounts that the Company shall direct on the Consummation Date. It is acknowledged
and agreed that while the funds are on deposit in the trust operating account at JPMorgan Chase Bank, N.A. awaiting distribution, the
Company will not earn any interest or dividends.
On the Consummation Date (i)
counsel for the Company shall deliver to you written notification that the Business Combination has been consummated and (ii) the Company
shall deliver to you (a) a certificate of the Chief Executive Officer, which verifies the vote of the Company’s stockholders
in connection with the Business Combination if a vote is held and (b) joint written instructions from the Company and Chardan Capital
Markets LLC with respect to the transfer of the funds held in the Trust Account (“Instruction Letter”). You are hereby directed
and authorized to transfer the funds held in the Trust Account immediately upon your receipt of the counsel’s letter and the Instruction
Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be
liquidated by the Consummation Date without penalty, you will notify the Company of the same and the Company shall direct you as to whether
such funds should remain in the Trust Account and distributed after the Consummation Date to the Company. Upon the distribution of all
the funds in the Trust Account pursuant to the terms hereof, the Trust Agreement shall be terminated.
In
the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified
you on or before the original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from
the Company, the funds held in the Trust Account shall be reinvested as provided in the Trust Agreement on the business day immediately
following the Consummation Date as set forth in the notice.
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Very truly yours,
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Title:
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cc: Chardan Capital Markets LLC
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, N.Y. 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account - Termination Letter
Gentlemen:
Pursuant to paragraph 1(i)
of the Investment Management Trust Agreement between Monterey Bio Acquisition Corporation (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of [______________], 2021 (“Trust Agreement”), this is to advise
you that the Company has been unable to effect a Business Combination with a Target Business within the time frame specified in the Company’s
Amended and Restated Certificate of Incorporation, as described in the Company’s prospectus relating to its IPO. Capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the Trust Agreement.
In accordance with the
terms of the Trust Agreement, we hereby authorize you to liquidate all the Trust Account investments and to transfer the total
proceeds to the trust operating account at J.P. Morgan Chase Bank, N.A. to await distribution to the Public Stockholders. The
Company has selected [____________, 20__]1 as the
effective date for the purpose of determining when the Public Stockholders will be entitled to receive their share of the
liquidation proceeds. It is acknowledged that no interest will be earned by the Company on the liquidation proceeds while on deposit
in the trust operating account at J.P. Morgan Chase Bank, N.A. You agree to be the Paying Agent of record and
in your separate capacity as Paying Agent, to distribute said funds directly to the Public Stockholders in accordance with the terms
of the Trust Agreement and the Amended and Restated Certificate of Incorporation of the Company. Upon the distribution of all the
funds in the Trust Account, your obligations under the Trust Agreement shall be terminated.
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Very truly yours,
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Title:
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cc: Chardan Capital Markets LLC
1 12 months from the closing of the IPO or at a later date,
if extended.
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, N.Y. 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account - Tax Payment Withdrawal Instruction
Gentlemen:
Pursuant to paragraph 2(a)
of the Investment Management Trust Agreement between Monterey Bio Acquisition Corporation (“Company”) and Continental Stock
Transfer & Trust Company (“Trustee”), dated as of [______________], 2021 (“Trust Agreement”), the Company
hereby requests that you deliver to the Company [$_______] of the interest income earned on the Property as of the date hereof. The Company
needs such funds to pay for its tax obligations. In accordance with the terms of the Trust Agreement, you are hereby directed and authorized
to transfer (via wire transfer) such funds promptly upon your receipt of this letter to the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Title:
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cc: Chardan Capital Markets LLC
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
Re: Trust
Account - Stockholder Redemption Withdrawal Instruction
Dear Mr. Wolf and Ms. Gonzalez:
Pursuant to Section 1(j) of the Investment
Management Trust Agreement between Monterey Bio Acquisition Corporation (the “Company”) and Continental Stock Transfer &
Trust Company (the “Trustee”), dated as of _________, 2021 (the “Trust Agreement”), the Company hereby requests
that you deliver to the redeeming Public Stockholders of the Company $[_____] of the principal and interest income earned on the Property
as of the date hereof to a segregated account held by you on behalf of the Beneficiaries for distribution to the Public Stockholders who
have requested redemption of their shares of Common Stock. Capitalized terms used but not defined herein shall have the meanings
set forth in the Trust Agreement.
The Company needs such funds to pay its Public
Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a stockholder vote
to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to affect the substance or timing of
the Company’s obligation to redeem all shares of Common Stock included in the Units sold in the IPO if the Company does not complete
a Business Combination within the time period set forth in the Company’s Amended and Restated Certificate of Incorporation. As
such, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter into
a segregated account held by you on behalf of the Beneficiaries.
[WIRE INSTRUCTION INFORMATION]
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Title:
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cc: Chardan Capital Markets LLC
Exhibit 10.4
STOCK ESCROW AGREEMENT
This STOCK ESCROW AGREEMENT,
dated as of [●], 2021 (“Agreement”), by and among MONTEREY BIO ACQUISITION CORPORATION, a Delaware corporation
(“Company”), the initial stockholders listed on the signature pages hereto (collectively, the “Initial Stockholders”),
and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York limited purpose trust company (“Escrow Agent”).
WHEREAS, the Company has entered
into an Underwriting Agreement, dated as of [●], 2021 (“Underwriting Agreement”), with Chardan Capital Markets,
LLC (“Chardan”) acting as representative of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to purchase 10,000,000 units (“Units”) of the
Company, plus an additional 1,500,000 Units if the Underwriters exercise their over-allotment option in full. Each Unit consists of one
share of common stock of the Company, par value $0.0001 per share (the “Common Stock”), and one warrant, with each
warrant entitling the holder thereof to purchase one share of Common Stock at an exercise price of $11.50 per share, all
as more fully described in the Company’s prospectus, dated [●], 2021 (“Prospectus”), comprising part of
the Company’s Registration Statement on Form S-1 (File No. 333-[__]) under the Securities Act of 1933, as amended (“Registration
Statement”), declared effective on [●], 2021 (“Effective Date”).
WHEREAS, the Initial Stockholders
have agreed as a condition of the sale of the Units to deposit their Insider Shares (as defined in the Prospectus), as set forth opposite
their respective names on Exhibit A attached hereto (collectively “Escrow Shares”), in escrow as hereinafter
provided.
WHEREAS, the Company and the
Initial Stockholders desire that the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed as hereinafter provided.
IT IS AGREED:
1. Appointment of
Escrow Agent. The Company and the Initial Stockholders hereby appoint the Escrow Agent to act in accordance with and subject to the
terms of this Agreement, and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such
terms.
2. Deposit of Escrow
Shares. On or prior to the date hereof, each of the Initial Stockholders delivered to the Escrow Agent certificates representing such
Initial Stockholder’s respective Escrow Shares, together with applicable share powers, to be held and disbursed subject to the terms
and conditions of this Agreement. Each of the Initial Stockholders acknowledges that the certificate representing such Initial Stockholder’s
Escrow Shares is legended to reflect the deposit of such Escrow Shares under this Agreement.
3. Disbursement of
the Escrow Shares.
3.1 The Escrow Agent shall
hold the Escrow Shares during the period (the “Escrow Period”) commencing on the date hereof and (i) for 50% of
the Escrow Shares, ending on the earlier of (x) six months after the date of the consummation of the Company’s initial
business combination (as described in the Registration Statement, hereinafter a “Business Combination”) and (y) the date
on which the closing price of the Common Stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends,
reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the Company’s
initial Business Combination and (ii) for the remaining 50% of the Escrow Shares, ending six months after the date of the
consummation of an initial Business Combination. The Company shall promptly provide notice of the consummation of a Business
Combination to the Escrow Agent. Upon completion of the Escrow Period, the Escrow Agent shall disburse such amount of each Initial
Stockholder’s Escrow Shares (and any applicable share power) to such Initial Stockholder; provided, however, that if the
Escrow Agent is notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the
Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Shares; provided further,
however, that if, within six months after the Company consummates an initial Business Combination, the Company (or the surviving
entity) subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the
stockholders of such entity having the right to exchange their shares of Common Stock for cash, securities or other property, then
the Escrow Agent will, upon receipt of a notice executed by the Chairman of the Board, Chief Executive Officer or other authorized
officer of the Company, in form reasonably acceptable to the Escrow Agent, certifying that such transaction is then being
consummated or such conditions have been achieved, as applicable, release the Escrow Shares to the Initial Stockholders. The Escrow
Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this
Section 3.1.
3.2 Notwithstanding Section
3.1, if the Underwriters do not exercise their over-allotment option to purchase an additional 1,500,000 Units of the Company in full
within 45 days of the date of the Prospectus (as described in the Underwriting Agreement), NorthStar Bio Ventures, LLC and Chardan Monterey
Investments LLC (together, the “Co-Sponsors”) agree that the Escrow Agent shall return to the Company for cancellation, at
no cost, the number of Escrow Shares held by the Co-Sponsors listed on Exhibit B determined by multiplying (a) 281,250
in the case of NorthStar Bio Ventures, LLC and 93,750 in the case of Chardan Monterey Investments, LLC, by (b) a fraction, (i) the numerator
of which is 1,500,000 minus the number of shares of Common Stock purchased by the Underwriters upon the exercise of their over-allotment
option, and (ii) the denominator of which is 1,500,000. The Company shall promptly provide notice to the Escrow Agent of the expiration
or termination of the Underwriters’ over-allotment option and the number of Units, if any, purchased by the Underwriters in connection
with their exercise thereof.
4. Rights of Initial
Stockholders in Escrow Shares.
4.1 Voting Rights as
a Stockholder. Subject to the terms of the Insider Letters described in Section 4.4 hereof and except as herein provided, the Initial
Stockholders shall retain all of their rights as stockholders of the Company during the Escrow Period, including, without limitation,
the right to vote such shares.
4.2 Dividends and Other
Distributions in Respect of the Escrow Shares. During the Escrow Period, all dividends payable in cash with respect to the Escrow
Shares shall be paid to the Initial Stockholders, but all dividends payable in stock or other non-cash property (“Non-Cash Dividends”)
shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term “Escrow Shares”
shall be deemed to include the Non-Cash Dividends distributed thereon, if any.
4.3 Restrictions on
Transfer. During the Escrow Period, the only permitted transfers of the Escrow Shares will be to (1) any person (including their affiliates
and stockholders) participating in the private placement of the private warrants, officers, directors, stockholders, employees and members
of NorthStar Bio Ventures, LLC and Chardan Monterey Investments LLC and their respective affiliates, (2) to the Company’s pre-IPO
stockholders or their respective affiliates, or to the Company’s offices, directors, advisors and employees (3) if the Initial Stockholder
is an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona fide gift to a member of the
Initial Stockholder’s immediate family or to a trust, the beneficiary of which is the Initial Stockholder or a member of the Initial
Stockholder’s immediate family for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death of
the Initial Stockholder, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in
connection with purchases of the Company’s securities, (8) by private sales at prices no greater than the price at which the Insider
Shares were originally purchased or (9) for the cancellation of up to 375,000 shares of Common Stock subject to forfeiture to the extent
that the Underwriters’ over-allotment is not exercised in full or in part or in connection with the consummation of our initial
Business Combination, in each case (except for clause 9 or with our prior consent) on the condition that such transfers may be implemented
only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement and of the Insider
Letter (as defined below) signed by the Initial Stockholder transferring the Escrow Shares.
4.4 Insider Letters.
Each of the Initial Stockholders has executed a letter agreement with Chardan and the Company, the form of which is filed as an exhibit
to the Registration Statement (“Insider Letter”), respecting the rights and obligations of such Initial Stockholder
in certain events, including but not limited to the liquidation of the Company.
5. Concerning the
Escrow Agent.
5.1 Good Faith
Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its
own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion
or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not
only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any
information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper
person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or
rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.
5.2 Indemnification.
The Escrow Agent shall be indemnified and held harmless by the Company from and against any expenses, including counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly
or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Shares held by it
hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the
receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall
notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may
commence an action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Shares or
it may deposit the Escrow Shares with the clerk of any appropriate court or it may retain the Escrow Shares pending receipt of a final,
non-appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the
Escrow Shares are to be disbursed and delivered. The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns
or is discharged pursuant to Sections 5.5 or 5.6 below.
5.3 Compensation.
The Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder. The Escrow Agent
shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the administration of its duties hereunder
including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental
charges.
5.4 Further Assurances.
From time to time on and after the date hereof, the Company and the Initial Stockholders shall deliver or cause to be delivered to the
Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably
request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself
that it is protected in acting hereunder.
5.5 Resignation.
The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto
written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective at such time
that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company, the Escrow Shares held hereunder. If no new
escrow agent is so appointed within the 60 day period following the giving of such notice of resignation, the Escrow Agent may deposit
the Escrow Shares with any court it reasonably deems appropriate.
5.6 Discharge of Escrow
Agent. The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested in writing at any
time by the other parties hereto, jointly, provided, however, that such resignation shall become effective only upon acceptance of appointment
by a successor escrow agent as provided in Section 5.5.
5.7 Liability. Notwithstanding
anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own
willful misconduct.
5.8 Waiver. The
Escrow Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date
hereof, by and between the Company and the Escrow Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.
6. Miscellaneous.
6.1 Governing Law.
This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New
York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
6.2 Third Party Beneficiaries.
Each of the Initial Stockholders hereby acknowledges that Chardan is a third party beneficiary of this Agreement and this Agreement may
not be modified or changed without the prior written consent of Chardan.
6.3 Entire Agreement.
This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and, except as expressly
provided herein, may not be changed or modified except by an instrument in writing signed by the party to the charged.
6.4 Headings. The
headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.
6.5 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors
and assigns.
6.6 Notices. Any
notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or be mailed,
certified or registered mail, or by private national courier service, return receipt requested, postage prepaid, and shall be deemed given
when so delivered personally or, if mailed, two days after the date of mailing, as follows:
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If to the Company, to:
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Monterey Bio Acquisition Corporation
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17 State Street
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21st Floor
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New York, NY 10004
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Attn: Chief Executive Officer
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Email: sanjeev@montereybio.com
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If to a Stockholder, to his address set forth in Exhibit
A.
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and if to the Escrow Agent, to:
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Continental Stock Transfer & Trust Company
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1 State Street, 30th Floor
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New York, New York 10004
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Attn: [●]
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Email: [●]
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A copy (which copy shall not constitute notice) sent hereunder shall be sent to:
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Chardan Capital Markets LLC
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17 State Street, 21st Floor
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New York, NY 10004
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Attn: Jonas Grossman
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Email: jgrossman@chardan.com
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and:
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Greenberg
Traurig, LLP
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1750 Tysons Boulevard,
Suite 1000
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McLean, Virginia 22102
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Attn: Jason Simon
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Email:
simonj@gtlaw.com
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The parties may change the
persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner
provided herein for giving notice.
6.7 Liquidation of the
Company. The Company shall give the Escrow Agent written notification of the liquidation and dissolution of the Company in the event
that the Company fails to consummate a Business Combination within the time period specified in the Prospectus.
[Signature Page Follows]
WITNESS the execution of this
Agreement as of the date first above written.
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COMPANY:
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name: Sanjeev Satyal
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Title: Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
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Title:
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INITIAL STOCKHOLDERS:
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NORTHSTAR BIO VENTURES, LLC
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By:
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Name:
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Title:
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CHARDAN MONTEREY INVESTMENTS LLC
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By:
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Name:
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Title:
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Sanjeev Satyal
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William McKeever
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Jonas Grossman
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Frances K. Heller
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James R. Neal
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Sandip I. Patel, Esq.
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[Signature Page to Escrow Agreement]
EXHIBIT A
Initial Stockholders
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Name of Initial Stockholder
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Number
of Shares
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NorthStar Bio Ventures, LLC
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1,912,500
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Chardan Monterey Investments LLC
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637,500
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Sanjeev Satyal
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150,000
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William McKeever
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35,000
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Jonas Grossman
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35,000
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Frances K. Heller
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35,000
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James R. Neal
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35,000
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Sandip I. Patel, Esq
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35,000
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EXHIBIT B
Escrow Shares
NorthStar Bio Ventures, LLC – 1,912,500
Chardan Monterey Investments LLC – 637,500
Exhibit 10.5
REGISTRATION AND STOCKHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND STOCKHOLDER
RIGHTS AGREEMENT (this “Agreement”) is entered into as of [●], 2021, by and among Monterey Bio Acquisition
Corporation, a Delaware corporation (the “Company”) and the undersigned parties listed under Investor on the
signature page hereto (each, an “Investor” and collectively, the “Investors”).
WHEREAS, the Investors and
the Company desire to enter into this Agreement to provide the Investors with certain rights relating to the registration of the securities
held by them as of the date hereof.
NOW, THEREFORE, in consideration
of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
The following capitalized terms used herein have the following meanings:
“Agreement”
means this Agreement, as amended, restated, supplemented, or otherwise modified from time to time.
“Board”
means the board of directors of the Company.
“Business Combination”
means the acquisition of direct or indirect ownership through a merger, share exchange, asset acquisition, share purchase, recapitalization,
reorganization or other similar type of transaction, of one or more businesses or entities.
“Commission”
means the Securities and Exchange Commission, or any other Federal agency then administering the Securities Act or the Exchange Act.
“Common Stock”
means the common stock, par value $0.0001 per share, of the Company.
“Company”
is defined in the preamble to this Agreement.
“Demand Registration”
is defined in Section 2.1.1.
“Demanding Holder”
is defined in Section 2.1.1.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as
the same shall be in effect at the time.
“Form S-3”
is defined in Section 2.3.
“Indemnified Party”
is defined in Section 4.3.
“Indemnifying
Party” is defined in Section 4.3.
“Initial Shares” means all of the
outstanding shares of Common Stock issued prior to the consummation of the Company’s initial public offering.
“Investor”
is defined in the preamble to this Agreement.
“Investor Indemnified
Party” is defined in Section 4.1.
“Maximum Number
of Shares” is defined in Section 2.1.4.
“Notices”
is defined in Section 7.4.
“Piggy-Back Registration”
is defined in Section 2.2.1.
“Private Warrants”
means the aggregate of up to 5,450,000 Warrants NorthStar Bio Ventures, LLC and Chardan Monterey Investments LLC, each an Investor, are
privately purchasing simultaneously with the consummation of the Company’s initial public offering.
“Register,”
“Registered” and “Registration” mean a registration effected by preparing and filing
a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations
promulgated thereunder, and such registration statement becoming effective.
“Registrable Securities”
means (i) the Initial Shares and (ii) the Private Warrants (and underlying shares of Common Stock). Registrable Securities include any
warrants, shares of capital stock or other securities of the Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such Initial Shares and Private Warrants (and underlying shares of Common Stock). As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities when: (a) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed
of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution
of them shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding, or (d) the Registrable
Securities are freely saleable under Rule 144 without volume limitations.
“Registration
Statement” means a registration statement filed by the Company with the Commission in compliance with the Securities Act
and the rules and regulations promulgated thereunder for a public offering and sale of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities (other than a registration statement on Form S-4 or Form S-8,
or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets
of another entity).
“Release Date”
means the date on which the Initial Shares are disbursed from escrow pursuant to Section 3 of that certain Stock Escrow Agreement dated
as of [●], 2021 by and among the Investors and Continental Stock Transfer & Trust Company.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
“Underwriter”
means a securities dealer who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s
market-making activities.
“Warrant(s)”
means the warrants of the Company.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1 Request
for Registration. At any time and from time to time on or after (i) the date that the Company consummates a Business Combination
with respect to the Private Warrants or (ii) three months prior to the Release Date with respect to all other Registrable
Securities, but prior to the five-year anniversary of the effective date of the Company’s Form S-1 Registration Statement
(File No. 333-[●]) (the “Effective Date”), the holders of a majority-in-interest of the Initial
Shares, may make a written demand for registration under the Securities Act of all or part of their Private Warrants or other
Registrable Securities, as the case may be (a “Demand Registration”). Any demand for a Demand Registration
shall specify the number of shares of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof.
The Company will notify all holders of Registrable Securities of the demand, and each holder of Registrable Securities who wishes to
include all or a portion of such holder’s Registrable Securities in the Demand Registration (each such holder including shares
of Registrable Securities in such registration, a “Demanding Holder”) shall so notify the Company within
fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders shall
be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.4 and the provisos set
forth in Section 3.1.1. The Company shall not be obligated to effect more than two (2) Demand Registrations under this Section 2.1.1
in respect of all Registrable Securities.
2.1.2 Effective Registration.
A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such
Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect
thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities
pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency
or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless
and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding
Holders thereafter elect to continue the offering; provided, further, that the Company shall not be obligated to file a second Registration
Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.
2.1.3 Underwritten
Offering. If a majority-in-interest of the Demanding Holders so elect and such holders so advise the Company as part of their written
demand for a Demand Registration, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form
of an underwritten offering. In such event, the right of any holder to include its Registrable Securities in such registration shall be
conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities
in the underwriting to the extent provided herein. All Demanding Holders proposing to distribute their Registrable Securities through
such underwriting shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such
underwriting by a majority-in-interest of the holders initiating the Demand Registration.
2.1.4 Reduction of
Offering. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the
Company and the Demanding Holders in writing that the dollar amount or number of shares of Registrable Securities which the Demanding
Holders desire to sell, taken together with all other shares of Common Stock or other securities which the Company desires to sell and
the shares of Common Stock, if any, as to which registration has been requested pursuant to written contractual piggy-back registration
rights held by other shareholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that
can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability
of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number of
Shares”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand
Registration has been requested by the Demanding Holders (pro rata in accordance with the number of shares that each such person has requested
be included in such registration, regardless of the number of shares held by each such person (such proportion is referred to herein as
“Pro Rata”)) that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clause (i), the shares of Common Stock or other securities that
the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (iii) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (i) and (ii), the shares of Common Stock or other securities for the
account of other persons that the Company is obligated to register pursuant to written contractual arrangements with such persons and
that can be sold without exceeding the Maximum Number of Shares.
2.1.5 Withdrawal.
If a majority-in-interest of the Demanding Holders disapprove of the terms of any underwriting or are not entitled to include all of their
Registrable Securities in any offering, such majority-in-interest of the Demanding Holders may elect to withdraw from such offering by
giving written notice to the Company and the Underwriter or Underwriters of their request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand Registration. If the majority-in-interest of the Demanding
Holders withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration
provided for in Section 2.1.
2.2 Piggy-Back Registration.
2.2.1 Piggy-Back Rights.
If at any time on or after the date the Company consummates a Business Combination the Company proposes to file a Registration Statement
under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable
for, or convertible into, equity securities, by the Company for its own account or for shareholders of the Company for their account (or
by the Company and by shareholders of the Company including, without limitation, pursuant to Section 2.1), other than a Registration Statement
(i) filed in connection with any employee stock option or other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company’s existing shareholders, (iii) for an offering of debt that is convertible into equity securities of the Company
or (iv) for a dividend reinvestment plan, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable
Securities as soon as practicable but in no event less than ten (10) days before the anticipated filing date, which notice shall describe
the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed
managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable Securities as such holders may request in writing within five
(5) days following receipt of such notice (a “Piggy-Back Registration”). The Company shall cause such Registrable
Securities to be included in such registration and shall use its best efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and
conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance
with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute their securities through
a Piggy-Back Registration that involves an Underwriter or Underwriters shall enter into an underwriting agreement in customary form with
the Underwriter or Underwriters selected for such Piggy-Back Registration. Notwithstanding the provisions set forth in the immediately
preceding sentences, the right to a Piggy-Back Registration set forth under this Section 2.2.1 with respect to the Registrable Securities
shall terminate on the seventh anniversary of the Effective Date.
2.2.2 Reduction of
Offering. If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises
the Company and the holders of Registrable Securities in writing that the dollar amount or number of shares of Common Stock which the
Company desires to sell, taken together with the shares of Common Stock, if any, as to which registration has been demanded pursuant to
written contractual arrangements with persons other than the holders of Registrable Securities hereunder, the Registrable Securities as
to which registration has been requested under this Section 2.2, and the shares of Common Stock, if any, as to which registration has
been requested pursuant to the written contractual piggy-back registration rights of other shareholders of the Company, exceeds the Maximum
Number of Shares, then the Company shall include in any such registration:
(a) If the
registration is undertaken for the Company’s account: (A) first, the shares of Common Stock or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clause (A), the shares of Common Stock or other securities, if any, comprised of Registrable
Securities, as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights
of such security holders, Pro Rata, that can be sold without exceeding the Maximum Number of Shares; and (C) third, to the extent that
the Maximum Number of shares has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other securities
for the account of other persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights
with such persons and that can be sold without exceeding the Maximum Number of Shares;
(b) If
the registration is a “demand” registration undertaken at the demand of persons other than either the holders of
Registrable Securities, (A) first, the shares of Common Stock or other securities for the account of the demanding persons that can
be sold without exceeding the Maximum Number of Shares; (B) second, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clause (A), the shares of Common Stock or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (C) third, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clauses (A) and (B), collectively the shares of Common Stock or other securities comprised of Registrable
Securities, Pro Rata, as to which registration has been requested pursuant to the terms hereof, that can be sold without exceeding
the Maximum Number of Shares; and (D) fourth, to the extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A), (B) and (C), the shares of Common Stock or other securities for the account of other persons that the Company
is obligated to register pursuant to written contractual arrangements with such persons, that can be sold without exceeding the
Maximum Number of Shares.
2.2.3 Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration
Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand pursuant to written
contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration Statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 3.3.
2.2.4 Registrations
on Form S-3. The holders of Registrable Securities may at any time and from time to time, request in writing that the Company register
the resale of any or all of such Registrable Securities on Form S-3 or any similar short-form registration which may be available at such
time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through
an underwritten offering. Upon receipt of such written request, the Company will promptly give written notice of the proposed registration
to all other holders of Registrable Securities, and, as soon as practicable thereafter, effect the registration of all or such portion
of such holder’s or holders’ Registrable Securities as are specified in such request, together with all or such portion of
the Registrable Securities or other securities of the Company, if any, of any other holder or holders joining in such request as are specified
in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the
Company shall not be obligated to effect any such registration pursuant to this Section 2.3: (i) if Form S-3 is not available for such
offering; or (ii) if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled
to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at any aggregate price to
the public of less than $500,000. Registrations effected pursuant to this Section 2.3 shall not be counted as Demand Registrations effected
pursuant to Section 2.1.
3. REGISTRATION PROCEDURES.
3.1 Filings; Information.
Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall use
its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution
thereof as expeditiously as practicable, and in connection with any such request:
3.1.1 Filing Registration
Statement. The Company shall use its best efforts to, as expeditiously as possible after receipt of a request for a Demand Registration
pursuant to Section 2.1, prepare and file with the Commission a Registration Statement on any form for which the Company then qualifies
or which counsel for the Company shall deem appropriate and which form shall be available for the sale of all Registrable Securities to
be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its best efforts to cause such
Registration Statement to become effective and use its best efforts to keep it effective for the period required by Section 3.1.3; provided,
however, that the Company shall have the right to defer any Demand Registration for up to thirty (30) days, and any Piggy-Back Registration
for such period as may be applicable to deferment of any demand registration to which such Piggy-Back Registration relates, in each case
if the Company shall furnish to the holders a certificate signed by the President or Chairman of the Company stating that, in the good
faith judgment of the Board, it would be materially detrimental to the Company and its shareholders for such Registration Statement to
be effected at such time; provided further, however, that the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 365-day period in respect of a Demand Registration hereunder.
3.1.2 Copies.
The Company shall, prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge
to the holders of Registrable Securities included in such registration, and such holders’ legal counsel, copies of such Registration
Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in such Registration Statement (including each preliminary prospectus),
and such other documents as the holders of Registrable Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities owned by such holders.
3.1.3 Amendments and
Supplements. The Company shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements
to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement
effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by
such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration
Statement or such securities have been withdrawn.
3.1.4 Notification.
After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) business days after such filing,
notify the holders of Registrable Securities included in such Registration Statement of such filing, and shall further notify such holders
promptly and confirm such advice in writing in all events within two (2) business days of the occurrence of any of the following: (i)
when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective;
(iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent
the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such
Registration Statement or any prospectus relating thereto or for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of the securities covered
by such Registration Statement, such prospectus will not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading, and promptly make available to the holders
of Registrable Securities included in such Registration Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement thereto, including documents incorporated by reference,
the Company shall furnish to the holders of Registrable Securities included in such Registration Statement and to the legal counsel for
any such holders, copies of all such documents proposed to be filed sufficiently in advance of filing to provide such holders and legal
counsel with a reasonable opportunity to review such documents and comment thereon, and the Company shall not file any Registration Statement
or prospectus or amendment or supplement thereto, including documents incorporated by reference, to which such holders or their legal
counsel shall object.
3.1.5 State Securities
Laws Compliance. The Company shall use its best efforts to (i) register or qualify the Registrable Securities covered by the Registration
Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the holders of Registrable
Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action
necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental
authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that
may be necessary or advisable to enable the holders of Registrable Securities included in such Registration Statement to consummate the
disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or subject itself
to taxation in any such jurisdiction.
3.1.6 Agreements
for Disposition. The Company shall enter into customary agreements (including, if applicable, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of the Company in any underwriting agreement which are made to
or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such registration statement. No holder of Registrable Securities included in such registration
statement shall be required to make any representations or warranties in the underwriting agreement except, if applicable, with
respect to such holder’s organization, good standing, authority, title to Registrable Securities, lack of conflict of such
sale with such holder’s material agreements and organizational documents, and with respect to written information relating to
such holder that such holder has furnished in writing expressly for inclusion in such Registration Statement.
3.1.7 Cooperation.
The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting officer of the
Company and all other officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities
hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering
and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential
investors.
3.1.8 Records.
The Company shall make available for inspection by the holders of Registrable Securities included in such Registration Statement, any
Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional
retained by any holder of Registrable Securities included in such Registration Statement or any Underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility,
and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with
such Registration Statement.
3.1.9 Opinions and
Comfort Letters. Upon request, the Company shall furnish to each holder of Registrable Securities included in any Registration Statement
a signed counterpart, addressed to such holder, of (i) any opinion of counsel to the Company delivered to any Underwriter and (ii) any
comfort letter from the Company’s independent public accountants delivered to any Underwriter. In the event no legal opinion is
delivered to any Underwriter, the Company shall furnish to each holder of Registrable Securities included in such Registration Statement,
at any time that such holder elects to use a prospectus, an opinion of counsel to the Company to the effect that the Registration Statement
containing such prospectus has been declared effective and that no stop order is in effect.
3.1.10 Earnings Statement.
The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its
shareholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
3.1.11 Listing.
The Company shall use its best efforts to cause all Registrable Securities included in any registration to be listed on such exchanges
or otherwise designated for trading in the same manner as similar securities issued by the Company are then listed or designated or, if
no such similar securities are then listed or designated, in a manner satisfactory to the holders of a majority of the Registrable Securities
included in such registration.
3.1.12 Road Show.
If the registration involves the registration of Registrable Securities involving gross proceeds in excess of $5,000,000, the Company
shall use its reasonable efforts to make available senior executives of the Company to participate in customary “road show”
presentations that may be reasonably requested by the Underwriter in any underwritten offering.
3.2 Obligation to Suspend
Distribution. Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iv),
or, in the case of a resale registration on Form S-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant to a
written insider trading compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders”
covered by such program to transact in the Company’s securities because of the existence of material non-public information, each
holder of Registrable Securities included in any registration shall immediately discontinue disposition of such Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities until such holder receives the supplemented or amended prospectus
contemplated by Section 3.1.4(iv) or the restriction on the ability of “insiders” to transact in the Company’s securities
is removed, as applicable, and, if so directed by the Company, each such holder will deliver to the Company all copies, other than permanent
file copies then in such holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of
receipt of such notice.
3.3 Registration Expenses.
The Company shall bear all costs and expenses incurred in connection with any Demand Registration pursuant to Section 2.1, any Piggy-Back
Registration pursuant to Section 2.2, and any registration on Form S-3 effected pursuant to Section 2.3, and all expenses incurred in
performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue
sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities);
(iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of its officers
and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section
3.1.11; (vi) Financial Industry Regulatory Authority fees; (vii) fees and disbursements of counsel for the Company and fees and expenses
for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of
any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration and (ix) the reasonable fees and expenses of one legal counsel selected by the holders
of a majority-in-interest of the Registrable Securities included in such registration. The Company shall have no obligation to pay any
underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting
discounts or selling commissions shall be borne by such holders. Additionally, in an underwritten offering, all selling shareholders and
the Company shall bear the expenses of the Underwriter pro rata in proportion to the respective amount of shares each is selling in such
offering.
3.4 Information.
The holders of Registrable Securities shall provide such information as may reasonably be requested by the Company, or the managing Underwriter,
if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect
the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company’s
obligation to comply with Federal and applicable state securities laws.
4. INDEMNIFICATION
AND CONTRIBUTION.
4.1 Indemnification
by the Company. The Company agrees to indemnify and hold harmless each Investor and each other holder of Registrable Securities, and
each of their respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each person, if any,
who controls an Investor and each other holder of Registrable Securities (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) (each, an “Investor Indemnified Party”), from and against any expenses, losses, judgments,
claims, damages or liabilities, whether joint or several, arising out of or based upon any untrue statement (or allegedly untrue statement)
of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the Registration Statement, or any amendment
or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact
required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities
Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company
in connection with any such registration; and the Company shall promptly reimburse the Investor Indemnified Party for any legal and any
other expenses reasonably incurred by such Investor Indemnified Party in connection with investigating and defending any such expense,
loss, judgment, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent
that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement
or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, or summary prospectus,
or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein. The Company also shall indemnify any Underwriter of the Registrable Securities, their officers,
affiliates, directors, partners, members and agents and each person who controls such Underwriter on substantially the same basis as that
of the indemnification provided above in this Section 4.1.
4.2 Indemnification
by Holders of Registrable Securities. Each selling holder of Registrable Securities will, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held by such selling holder,
indemnify and hold harmless the Company, each of its directors and officers and each Underwriter (if any), and each other selling
holder and each other person, if any, who controls another selling holder or such Underwriter within the meaning of the Securities
Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims,
judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly
untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was
registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained in the
Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission
or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not
misleading, if the statement or omission was made in reliance upon and in conformity with information furnished in writing to the
Company by such selling holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each
other selling holder or controlling person for any legal or other expenses reasonably incurred by any of them in connection with
investigation or defending any such loss, claim, damage, liability or action. Each selling holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to the amount of any net proceeds actually received by
such selling holder.
4.3 Conduct of Indemnification
Proceedings. Promptly after receipt by any person of any notice of any loss, claim, damage or liability or any action in respect of
which indemnity may be sought pursuant to Section 4.1 or 4.2, such person (the “Indemnified Party”) shall, if a claim in respect
thereof is to be made against any other person for indemnification hereunder, notify such other person (the “Indemnifying
Party”) in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the
Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying
Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such
failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party,
then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with
all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice
from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying
Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection
with the defense thereof other than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified
Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no
more than one such separate counsel) to represent the Indemnified Party and its controlling persons who may be subject to liability arising
out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and
expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party,
representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.
No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement
of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.
4.4 Contribution.
4.4.1 If the indemnification
provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion
as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions
or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations.
The relative fault of any Indemnified Party and any Indemnifying Party shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
4.4.2 The parties hereto
agree that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding Section
4.4.1.
4.4.3 The amount paid
or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified
Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, no holder
of Registrable Securities shall be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment
of any underwriting fees, discounts, commissions or taxes) actually received by such holder from the sale of Registrable Securities which
gave rise to such contribution obligation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
5. RULE 144.
5.1 Rule 144. The
Company covenants that it shall file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take
such further action as the holders of Registrable Securities may reasonably request, all to the extent required from time to time to enable
such holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided
by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
6. MISCELLANEOUS.
6.1 Other Registration
Rights. The Company represents and warrants that, except as disclosed in the Company’s registration statement on Form S-1 (File
No. 333-[●]), no person, other than the holders of the Registrable Securities, has any right to require the Company to register
any shares of the Company’s capital stock for sale or to include shares of the Company’s capital stock in any registration
filed by the Company for the sale of shares of capital stock for its own account or for the account of any other person.
6.2 Limitation on Registration
Rights. Notwithstanding anything herein to the contrary, with respect to the Private Warrants purchased by it, Chardan Monterey Investments
LLC may not, (i) have more than one (1) Demand Registration at the Company’s expense, (ii) exercise a Demand Registration more than
five (5) years from the Effective Date, and (iii) exercise a Piggy-Back Registration more than seven (7) years from the Effective Date,
as long as Chardan Monterey Investments LLC or any of its related persons are beneficial owners of the Private Warrants held by Chardan
Monterey Investments LLC.
6.3 Assignment; No Third
Party Beneficiaries. This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated
by the Company in whole or in part. This Agreement and the rights, duties and obligations of the holders of Registrable Securities hereunder
may be freely assigned or delegated by such holder of Registrable Securities in conjunction with and to the extent of any transfer of
Registrable Securities by any such holder. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit
of each of the parties, to the permitted assigns of the Investors or holder of Registrable Securities or of any assignee of the Investors
or holder of Registrable Securities. This Agreement is not intended to confer any rights or benefits on any persons that are not party
hereto other than as expressly set forth in Article 4 and this Section 7.3.
6.4 Notices. All
notices, demands, requests, consents, approvals or other communications (collectively, “Notices”) required or
permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served,
delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed
as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed
given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided, that if such
service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next
business day. Notice otherwise sent as provided herein shall be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day delivery.
To the Company:
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Attn: Chief Executive Officer
with a copy to:
Greenberg Traurig, LLP
1750 Tysons Blvd.
Suite 1000
McLean, VA 22102
Attn: Jason T. Simon, Esq.
To an Investor, to the address set forth below such Investor’s
name on Exhibit A hereto.
6.5 Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to
such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.6 Counterparts.
This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
6.7 Entire Agreement.
This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and
thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous
agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.
6.8 Term. This Agreement
shall terminate on the seven-year anniversary of the date hereof.
6.9 Modifications and
Amendments. No amendment, modification or termination of this Agreement shall be binding upon any party unless executed in writing
by such party.
6.10 Titles and Headings.
Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this
Agreement. No amendment, modification or termination of this Agreement shall be binding upon the holders of the Registrable Securities
unless executed in writing by the holders of the majority Registrable Securities.
6.11 Waivers and Extensions.
Any party to this Agreement may waive any right, breach or default which such party has the right to waive, provided that such waiver
will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional.
No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or
acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
6.12 Remedies
Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed
under this Agreement, the Investor or any other holder of Registrable Securities may proceed to protect and enforce its rights by
suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction
against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal
or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or
remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in
addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity,
by statute or otherwise.
6.13 Governing Law.
This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of New York applicable
to agreements made and to be performed within the State of New York, without giving effect to any choice-of-law provisions thereof that
would compel the application of the substantive laws of any other jurisdiction.
6.14 Waiver of Trial
by Jury. Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or
other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement, the transactions
contemplated hereby, or the actions of the Investor in the negotiation, administration, performance or enforcement hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this
Registration and Stockholder Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first
written above.
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COMPANY:
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name: Sanjeev Satyal
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Title: Chief Executive officer
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INVESTORS:
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Sanjeev Satyal
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William McKeever
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Jonas Grossman
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Frances K. Heller
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James R. Neal
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Sandip I. Patel, Esq.
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NORTHSTAR BIO VENTURES, LLC
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By:
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Name:
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Title:
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CHARDAN MONTEREY INVESTMENTS LLC
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By:
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Name:
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Title:
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[Signature Page to Registration and Stockholder
Rights Agreement]
EXHIBIT A
Name and Address of Investor
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Sanjeev Satyal
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William McKeever
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Jonas Grossman
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Frances K. Heller
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James R. Neal
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Sandip I. Patel, Esq.
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NorthStar Bio Ventures, LLC
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Chardan Monterey Investments LLC
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Exhibit 10.6
INDEMNITY
AGREEMENT
THIS INDEMNITY AGREEMENT (this “Agreement”)
is made as of [●], 2021, by and between Monterey Bio Acquisition Corporation, a Delaware corporation (the “Company”),
and __________________ (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become
more reluctant to serve publicly-held corporations as directors, officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of such corporations;
WHEREAS, the Board of Directors of the Company
(the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to
maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from
certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based
corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may
be available to it in the future only at higher premiums and with more exclusions. At the same time, directors, officers and other persons
in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating
to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself. The
Amended and Restated Certificate of Incorporation (the “Charter”) and the Bylaws (the “Bylaws”)
of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to applicable provisions of the Delaware General Corporation Law (“DGCL”). The Charter, Bylaws and the DGCL
expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may
be entered into between the Company and members of the Board, officers and other persons with respect to indemnification, hold harmless,
exoneration, advancement and reimbursement rights;
WHEREAS, the uncertainties relating to such
insurance and to indemnification have increased the difficulty of attracting and retaining such persons;
WHEREAS, the Board has determined that the
increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders
and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary
for the Company contractually to obligate itself to indemnify, hold harmless, exonerate and to advance expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that
they will not be so protected against liabilities;
WHEREAS, this Agreement is a supplement
to and in furtherance of the Charter and Bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee may not be willing to
serve as an officer, director, advisor or in another capacity without adequate protection, and the Company desires Indemnitee to serve
in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company
on the condition that he or she be so indemnified.
NOW, THEREFORE, in consideration
of the premises and the covenants contained herein and subject to the provisions of the letter agreement, dated the date hereof, among
the Company, Indemnitee and the other parties thereto, the Company and Indemnitee do hereby covenant and agree as follows:
TERMS AND CONDITIONS
1.
SERVICES TO THE COMPANY. In consideration of the Company’s covenants and obligations hereunder,
Indemnitee will serve or continue to serve as an officer, director, advisor, key employee or in any other capacity of the Company, as
applicable, for so long as Indemnitee is duly elected or appointed or retained or until Indemnitee tenders his or her resignation or until
Indemnitee is removed. The foregoing notwithstanding, this Agreement shall continue in full force and effect after Indemnitee has ceased
to serve as a director, officer, advisor, key employee or in any other capacity of the Company, as provided in Section 17. This Agreement,
however, shall not impose any obligation on Indemnitee or the Company to continue Indemnitee’s service to the Company beyond any
period otherwise required by law or by other agreements or commitments of the parties, if any.
2.
DEFINITIONS. As used in this Agreement:
(a)
References to “agent” shall mean any person who is or was a director, officer or employee of the Company or
a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity
as a director, officer, employee, advisor, fiduciary or other official of another corporation, partnership, limited liability company,
joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a
subsidiary of the Company.
(b)
The terms “Beneficial Owner” and “Beneficial Ownership” shall have the meanings set forth
in Rule 13d-3 promulgated under the Exchange Act (as defined below) as in effect on the date hereof.
(c)
(c) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement
of any of the following events:
(i)
Acquisition of Stock by Third Party. Other than an affiliate or member of NorthStar Bio Ventures,
LLC or Chardan Monterey Investments LLC (the “Co-Sponsors”), any Person (as defined below) is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the combined voting power of
the Company’s then outstanding securities entitled to vote generally in the election of directors, unless (1) the change in
the relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number
of outstanding shares of securities entitled to vote generally in the election of directors, or (2) such acquisition was approved
in advance by the Continuing Directors (as defined below) and such acquisition would not constitute a Change in Control under part (iii)
of this definition;
(ii)
Change in Board of Directors. Individuals who, as of the date hereof, constitute the Board,
and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote
of at least two thirds of the directors then still in office who were directors on the date hereof or whose election or nomination for
election was previously so approved (collectively, the “Continuing Directors”), cease for any reason to constitute
at least a majority of the members of the Board;
(iii)
Corporate Transactions. The effective date of a merger, share exchange, asset acquisition,
stock purchase, recapitalization, reorganization or similar business combination, involving the Company and one or more businesses (a
“Business Combination”), in each case, unless, following such Business Combination: (1) all or substantially all
of the individuals and entities who were the Beneficial Owners of securities entitled to vote generally in the election of directors immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of directors resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more Subsidiaries (as defined below)) in substantially the same proportions as their ownership
immediately prior to such Business Combination, of the securities entitled to vote generally in the election of directors; (2) other
than a member or an affiliate of the Co-Sponsors, no Person (excluding any corporation resulting from such Business Combination) is the
Beneficial Owner, directly or indirectly, of 15% or more of the combined voting power of the then outstanding securities entitled to vote
generally in the election of directors of the surviving corporation except to the extent that such ownership existed prior to the Business
Combination; and (3) at least a majority of the board of directors of the corporation resulting from such Business Combination were
Continuing Directors at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business
Combination;
(iv)
Liquidation. The approval by the stockholders of the Company of a complete liquidation of
the Company or an agreement or series of agreements for the sale or disposition by the Company of all or substantially all of the Company’s
assets, other than factoring the Company’s current receivables or escrows due (or, if such stockholder approval is not required,
the decision by the Board to proceed with such a liquidation, sale, or disposition in one transaction or a series of related transactions);
or
(v)
Other Events. There occurs any other event of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A (or any successor rule) (or a response to any similar item on any similar schedule
or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.
(d)
“Corporate Status” describes the status of a person who is or was a director, officer, trustee, general partner,
manager, managing member, fiduciary, employee or agent of the Company or of any other Enterprise (as defined below) which such person
is or was serving at the request of the Company.
(e)
“Delaware Court” shall mean the Court of Chancery of the State of Delaware.
(f)
“Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding
(as defined below) in respect of which indemnification is sought by Indemnitee.
(g)
“Enterprise” shall mean the Company and any other corporation, constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger to which the Company (or any of its wholly owned subsidiaries) is a party, limited
liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving
at the request of the Company as a director, officer, trustee, general partner, managing member, fiduciary, employee or agent.
(h)
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(i)
“Expenses” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever,
including, without limitation, all reasonable attorneys’ fees and costs, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, fees of private investigators and professional advisors, duplicating costs, printing and binding costs,
telecommunication charges, postage, delivery service fees, fax transmission charges, secretarial services and all other disbursements,
obligations or expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, settlement or appeal of, or otherwise participating in, a Proceeding (as defined below), including reasonable compensation
for time spent by Indemnitee for which he or she is not otherwise compensated by the Company or any third party. Expenses also shall include
Expenses incurred in connection with any appeal resulting from any Proceeding (as defined below), including without limitation the principal,
premium, security for, and other costs relating to any cost bond, supersedes a bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(j)
References to “fines” shall include any excise tax assessed on Indemnitee with respect to any employee benefit
plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee, agent
or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with
respect to an employee benefit plan, its participants or beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.
(k)
“Independent Counsel” shall mean a law firm or a member of a law firm with significant experience in matters
of corporation law and that neither presently is, nor in the past five years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement,
or of other indemnitees under similar indemnification agreements); or (ii) any other party to the Proceeding (as defined below) giving
rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall
not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest
in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
(l)
The term “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act as in
effect on the date hereof; provided, however, that “Person” shall exclude: (i) the Company; (ii) any Subsidiaries
(as defined below) of the Company; (iii) any employment benefit plan of the Company or of a Subsidiary (as defined below) of the
Company or of any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company; and (iv) any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or of a Subsidiary (as defined below) of the Company or of a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock of the Company.
(m) The
term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation,
alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or otherwise and whether of a civil (including intentional or unintentional
tort claims), criminal, administrative or investigative or related nature, in which Indemnitee was, is, will or might be involved as
a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action
(or failure to act) taken by him or her or of any action (or failure to act) on his or her part while acting as a director or
officer of the Company, or by reason of the fact that he or she is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent of any other Enterprise, in each case whether or
not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or
advancement of expenses can be provided under this Agreement.
(n)
The term “Subsidiary,” with respect to any Person, shall mean any corporation, limited liability company, partnership,
joint venture, trust or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by that Person.
(o)
The phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to: (a) to
the fullest extent authorized or permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by
agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and (b) to the fullest extent authorized
or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which
a corporation may indemnify its officers and directors.
3.
INDEMNITY IN THIRD-PARTY PROCEEDINGS. To the fullest extent permitted by applicable law, the
Company shall indemnify, hold harmless and defend Indemnitee in accordance with the provisions of this Section 3 if Indemnitee was, is,
or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding, other than a Proceeding
by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this
Section 3, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses, judgments, liabilities, fines, penalties
and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect
of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually, and reasonably incurred by Indemnitee or on his
or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding,
had no reasonable cause to believe that his or her conduct was unlawful; provided, in no event shall Indemnitee be entitled to be indemnified,
held harmless or advanced any amounts hereunder in respect of any Expenses, judgments, liabilities, fines, penalties and amounts paid
in settlement (if any) that Indemnitee may incur by reason of his or her own actual fraud or intentional misconduct. Indemnitee shall
not be found to have committed actual fraud or intentional misconduct for any purpose of this Agreement unless or until a court of competent
jurisdiction shall have made a finding to that effect.
4.
INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. To the fullest extent permitted by
applicable law, the Company shall indemnify, hold harmless and exonerate Indemnitee in accordance with the provisions of this Section
4 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness, deponent or otherwise) in any Proceeding
by or in the right of the Company to procure a judgment in its favor by reason of Indemnitee’s Corporate Status. Pursuant to this
Section 4, Indemnitee shall be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by him
or her or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company. No indemnification, hold harmless
or exoneration for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have
been finally adjudged by a court of competent jurisdiction to be liable to the Company, unless and only to the extent that any court in
which the Proceeding was brought or the Delaware Court shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification, to be held harmless or
to exoneration.
5. INDEMNIFICATION
FOR EXPENSES OF A PARTY WHO IS WHOLLY OR PARTLY SUCCESSFUL. Notwithstanding any other provisions
of this Agreement except for Section 27, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate
Status, a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any
claim, issue or matter therein, in whole or in part, the Company shall, to the fullest extent permitted by applicable law,
indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by him or her in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding, the Company shall, to the fullest extent permitted by
applicable law, indemnify, hold harmless and exonerate Indemnitee against all Expenses actually and reasonably incurred by him or
her or on his or her behalf in connection with each successfully resolved claim, issue or matter. If Indemnitee is not wholly
successful in such Proceeding, the Company also shall, to the fullest extent permitted by applicable law, indemnify, hold harmless
and exonerate Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim,
issue, or matter on which Indemnitee was successful. For purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to
such claim, issue or matter.
6.
INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding any other provision of this Agreement
except for Section 27, to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness or deponent in any Proceeding
to which Indemnitee was or is not a party or threatened to be made a party, he or she shall, to the fullest extent permitted by applicable
law, be indemnified, held harmless and exonerated against all Expenses actually and reasonably incurred by him or her or on his or her
behalf in connection therewith.
7.
ADDITIONAL INDEMNIFICATION, HOLD HARMLESS AND EXONERATION RIGHTS. Notwithstanding any limitation
in Sections 3, 4, or 5, except for Section 27, the Company shall, to the fullest extent permitted by applicable law, indemnify, hold harmless
and exonerate Indemnitee if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or
in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments,
fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding. No
indemnification, hold harmless or exoneration rights shall be available under this Section 7 on account of Indemnitee’s conduct
which constitutes a breach of Indemnitee’s duty of loyalty to the Company or its stockholders or is an act or omission not in good
faith or which involves intentional misconduct or a knowing violation of the law.
8.
CONTRIBUTION IN THE EVENT OF JOINT LIABILITY.
(a)
To the fullest extent permissible under applicable law, if the indemnification, hold harmless and/or exoneration rights provided
for in this Agreement are unavailable to Indemnitee in whole or in part for any reason whatsoever, the Company, in lieu of indemnifying,
holding harmless or exonerating Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for judgments,
liabilities, fines, penalties, amounts paid or to be paid in settlement and/or for Expenses, in connection with any Proceeding without
requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have
at any time against Indemnitee.
(b)
The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would
be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(c)
The Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee from any claims for contribution which may
be brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.
9.
EXCLUSIONS. Notwithstanding any provision in this Agreement (except for section 27), the Company
shall not be obligated under this Agreement to make any indemnification, advance expenses, hold harmless or exoneration payment in connection
with any claim made against Indemnitee:
(a)
for which payment has actually been received by or on behalf of Indemnitee under any insurance policy or other indemnity or advancement
provision, except with respect to any excess beyond the amount actually received under any insurance policy, contract, agreement, other
indemnity or advancement provision or otherwise;
(b)
for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act (or any successor rule) or similar provisions of state statutory law or common
law; or
(c)
except as otherwise provided in Sections 14(f) and (g) hereof, prior to a Change in Control, in connection with any Proceeding
(or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee
against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or
any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, hold harmless or exoneration
payment, in its sole discretion, pursuant to the powers vested in the Company under applicable law. Indemnitee shall seek payments or
advances from the Company only to the extent that such payments or advances are unavailable from any insurance policy of the Company covering
Indemnitee.
10.
ADVANCES OF EXPENSES; DEFENSE OF CLAIM.
(a)
Notwithstanding any provision of this Agreement to the contrary except for Section 27, and to the fullest extent not prohibited
by applicable law, the Company shall pay the Expenses incurred by Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding within ten (10) days after the receipt by the Company of a statement or statements
requesting such advances from time to time, prior to the final disposition of any Proceeding. Advances shall, to the fullest extent permitted
by law, be unsecured and interest free. Advances shall, to the fullest extent permitted by law, be made without regard to Indemnitee’s
ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to be indemnified, held harmless or exonerated
under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing a Proceeding to
enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances
claimed. To the fullest extent required by applicable law, such payments of Expenses in advance of the final disposition of the Proceeding
shall be made only upon the Company’s receipt of an undertaking, by or on behalf of Indemnitee, to repay the advanced amounts to
the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company under the provisions of this
Agreement, the Charter, the Bylaws of the Company, applicable law or otherwise. If it shall be determined by a final judgment or other
final adjudication that Indemnitee was not so entitled to indemnification, any advancement shall be returned to the Company (without interest)
by the Indemnitee. This Section 10(a) shall not apply to any claim made by Indemnitee for which an indemnification, hold harmless or exoneration
payment is excluded pursuant to Section 9 but shall apply to any Proceeding referenced in Section 9(b) prior to a final determination
that Indemnitee is liable therefor.
(b)
The Company will be entitled to participate in the Proceeding at its own expense.
(c)
The Company shall not settle any action, claim or Proceeding (in whole or in part) which would impose any Expense, judgment, fine,
penalty or limitation on Indemnitee without Indemnitee’s prior written consent.
11.
PROCEDURE FOR NOTIFICATION AND APPLICATION FOR INDEMNIFICATION.
(a)
Indemnitee agrees to notify promptly the Company in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding, claim, issue or matter therein which may be subject to indemnification,
hold harmless or exoneration rights, or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company
shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement, or otherwise.
(b)
Indemnitee may deliver to the Company a written application to indemnify, hold harmless or exonerate Indemnitee in accordance with
this Agreement. Such application(s) may be delivered from time to time and at such time(s) as Indemnitee deems appropriate in his or her
sole discretion. Following such a written application for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification
shall be determined according to Section 12(a) of this Agreement.
12.
PROCEDURE UPON APPLICATION FOR INDEMNIFICATION.
(a)
A determination, if required by applicable law, with respect to Indemnitee’s entitlement to indemnification shall be made
in the specific case by one of the following methods, which shall be at the election of Indemnitee: (i) by a majority vote of the
Disinterested Directors, even though less than a quorum of the Board, (ii) by a committee of such directors designated by majority
vote of such directors, (iii) if there are no Disinterested Directors or if such directors so direct, by Independent Counsel in a
written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (iv) by vote of the stockholders. The Company
promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification,
including a description of any reason or basis for which indemnification has been denied. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall reasonably
cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged
or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.
Any costs or Expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Company hereby agrees to indemnify and to hold Indemnitee harmless therefrom.
(b)
In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a)
hereof, the Independent Counsel shall be selected as provided in this Section 12(b). The Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising
it of the identity of the Independent Counsel so selected and certifying that the Independent Counsel so selected meets the requirements
of “Independent Counsel” as defined in Section 2 of this Agreement. If the Independent Counsel is selected by the
Board, the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected
and certifying that the Independent Counsel so selected meets the requirements of “Independent Counsel” as defined
in Section 2 of this Agreement. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after
such written notice of selection shall have been received, deliver to the Company or to Indemnitee, as the case may be, a written objection
to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected
does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection
shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected
shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not
serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such
objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification
pursuant to Section 11(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee
may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s
selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Delaware Court, and the
person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section
12(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional
conduct then prevailing).
(c)
The Company agrees to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless such
Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
13.
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a)
In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination
shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 11(b) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection
with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company
(including by the Disinterested Directors or Independent Counsel) to have made a determination prior to the commencement of any action
pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct,
nor an actual determination by the Company (including by the Disinterested Directors or Independent Counsel) that Indemnitee has not met
such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.
(b)
If the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled
to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor,
the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made
and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission
of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification,
or (ii) a final judicial determination that any or all such indemnification is expressly prohibited under applicable law; provided,
however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person,
persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time
for the obtaining or evaluating of documentation and/or information relating thereto.
(c) The
termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely
affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner
which he or she reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.
(d)
For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action
is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee
by the directors, manager, or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise,
its Board, any committee of the Board or any director, trustee, general partner, manager or managing member, or on information or records
given or reports made to the Enterprise, its Board, any committee of the Board or any director, trustee, general partner, manager or managing
member, by an independent certified public accountant or by an appraiser or other expert selected by the Enterprise, its Board, any committee
of the Board or any director, trustee, general partner, manager or managing member. The provisions of this Section 13(d) shall not be
deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed or found to have met the applicable
standard of conduct set forth in this Agreement.
(e)
The knowledge and/or actions, or failure to act, of any other director, officer, trustee, partner, manager, managing member, fiduciary,
agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under
this Agreement.
14.
REMEDIES OF INDEMNITEE.
(a)
In the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advancement of Expenses, to the fullest extent permitted by applicable law, is not timely
made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant
to Section 12(a) of this Agreement within 30 days after receipt by the Company of the request for indemnification, (iv) payment
of indemnification is not made pursuant to Sections 5, 6, 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days
after receipt by the Company of a written request therefor, (v) a contribution payment is not made in a timely manner pursuant to
Section 8 of this Agreement, (vi) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten
(10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vii) payment to Indemnitee
pursuant to any hold harmless or exoneration rights under this Agreement or otherwise is not made in accordance with this Agreement within
ten (10) days after receipt by the Company of a written request therefor, Indemnitee shall be entitled to an adjudication by the
Delaware Court to such indemnification, hold harmless, exoneration, contribution or advancement rights. Alternatively, Indemnitee, at
his or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules
and Mediation Procedures of the American Arbitration Association. Except as set forth herein, the provisions of Delaware law (without
regard to its conflict of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee’s right to seek
any such adjudication or award in arbitration.
(b)
In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as
a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.
(c) In
any judicial proceeding or arbitration commenced pursuant to this Section 14, Indemnitee shall be presumed to be entitled to be
indemnified, held harmless, exonerated to receive advancement of Expenses under this Agreement and the Company shall have the burden
of proving Indemnitee is not entitled to be indemnified, held harmless, exonerated and to receive advancement of Expenses, as the
case may be, and the Company may not refer to or introduce into evidence any determination pursuant to Section 12(a) of this
Agreement adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or arbitration pursuant to this
Section 14, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 10 until a final
determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all rights of appeal have been
exhausted or lapsed).
(d)
If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement
not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under
applicable law.
(e)
The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that
the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this Agreement.
(f)
The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if requested
by Indemnitee, shall (within ten (10) days after the Company’s receipt of such written request) pay to Indemnitee, to the fullest
extent permitted by applicable law, such Expenses which are incurred by Indemnitee in connection with any judicial proceeding or arbitration
brought by Indemnitee: (i) to enforce his or her rights under, or to recover damages for breach of, this Agreement or any other indemnification,
hold harmless, exoneration, advancement or contribution agreement or provision of the Charter, or the Bylaws now or hereafter in effect;
or (ii) for recovery or advances under any insurance policy maintained by any person for the benefit of Indemnitee, regardless of
the outcome and whether Indemnitee ultimately is determined to be entitled to such indemnification, hold harmless or exoneration right,
advancement, contribution or insurance recovery, as the case may be (unless such judicial proceeding or arbitration was not brought by
Indemnitee in good faith).
(g)
Interest shall be paid by the Company to Indemnitee at the legal rate under Delaware law for amounts which the Company indemnifies,
holds harmless or exonerates, or advances, or is obliged to indemnify, hold harmless or exonerate or advance for the period commencing
with the date on which Indemnitee requests indemnification, to be held harmless, exonerated, contribution, reimbursement or advancement
of any Expenses and ending with the date on which such payment is made to Indemnitee by the Company.
15.
SECURITY. Notwithstanding anything herein to the contrary, except for Section 27, to the extent
requested by Indemnitee and approved by the Board, the Company may at any time, and from time to time, provide security to Indemnitee
for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security,
once provided to Indemnitee, may not be revoked or released without the prior written consent of Indemnitee.
16. NON-EXCLUSIVITY;
SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The
rights of Indemnitee as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a resolution of directors,
or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any Proceeding (regardless of when such Proceeding is first threatened, commenced or
completed) or claim, issue or matter therein arising out of, or related to, any action taken or omitted by such Indemnitee in his or
her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by
statute or judicial decision, permits greater indemnification, hold harmless or exoneration rights or advancement of Expenses than
would be afforded currently under the Charter, the Bylaws or this Agreement, then this Agreement (without any further action by the
parties hereto) shall automatically be deemed to be amended to require that the Company indemnify the Indemnitee to the fullest
extent permitted by law. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other right or remedy.
(b)
The DGCL, the Charter and the Bylaws permit the Company to purchase and maintain insurance or furnish similar protection or make
other arrangements including, but not limited to, providing a trust fund, letter of credit, or surety bond (“Indemnification
Arrangements”) on behalf of Indemnitee against any liability asserted against him or her or incurred by or on behalf of him
or her or in such capacity as a director, officer, employee or agent of the Company, or arising out of his or her status as such, whether
or not the Company would have the power to indemnify him or her against such liability under the provisions of this Agreement or under
the DGCL, as it may then be in effect. The purchase, establishment, and maintenance of any such Indemnification Arrangement shall not
in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided
herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights
and obligations of the Company or the other party or parties thereto under any such Indemnification Arrangement.
(c)
To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers,
trustees, partners, managers, managing members, fiduciaries, employees, or agents of the Company or of any other Enterprise which such
person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director, officer, trustee, partner, manager, managing member, fiduciary,
employee or agent under such policy or policies. If, at the time the Company receives notice from any source of a Proceeding as to which
Indemnitee is a party or a participant (as a witness, deponent or otherwise), the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter use commercially reasonable efforts to cause such insurers to pay, on behalf of Indemnitee,
all amounts payable as a result of such Proceeding in accordance with the terms of such policies.
(d)
In the event of any payment under this Agreement, the Company, to the fullest extent permitted by law, shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
No such payment by the Company shall be deemed to relieve any insurer of its obligations.
(e) The
Company’s obligation to indemnify, hold harmless, exonerate or advance Expenses hereunder to Indemnitee who is or was serving
at the request of the Company as a director, officer, trustee, partner, manager, managing member, fiduciary, employee or agent of
any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification, hold harmless or
exoneration payments or advancement of expenses from such Enterprise. Notwithstanding any other provision of this Agreement to the
contrary except for Section 27, (i) Indemnitee shall have no obligation to reduce, offset, allocate, pursue or apportion any
indemnification, hold harmless, exoneration, advancement, contribution or insurance coverage among multiple parties possessing such
duties to Indemnitee prior to the Company’s satisfaction and performance of all its obligations under this Agreement, and
(ii) the Company shall perform fully its obligations under this Agreement without regard to whether Indemnitee holds, may
pursue or has pursued any indemnification, advancement, hold harmless, exoneration, contribution or insurance coverage rights
against any person or entity other than the Company.
(f)
Notwithstanding anything contained herein, the Company is the primary indemnitor, and any indemnification or advancement obligation
of the Sponsor or its affiliates or members or any other Person is secondary.
17. DURATION
OF AGREEMENT. All agreements and obligations of the Company contained herein shall continue during
the period Indemnitee serves as a director or officer of the Company or as a director, officer, trustee, partner, manager, managing member,
fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which
Indemnitee serves at the request of the Company and shall continue thereafter so long as Indemnitee shall be subject to any possible
Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement)
by reason of his or her Corporate Status, whether or not he or she is acting in any such capacity at the time any liability or expense
is incurred for which indemnification or advancement can be provided under this Agreement.
18. SEVERABILITY.
If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any
Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is
not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the
fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested thereby.
19. ENFORCEMENT
AND BINDING EFFECT.
(a)
The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby
in order to induce Indemnitee to serve as a director, officer or key employee of the Company, and the Company acknowledges that Indemnitee
is relying upon this Agreement in serving as a director, officer or key employee of the Company.
(b)
Without limiting any of the rights of Indemnitee under the Charter or Bylaws of the Company as they may be amended from time to
time, this Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The
indemnification, hold harmless, exoneration and advancement of expenses rights provided by or granted pursuant to this Agreement
shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the
Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a
director, officer, trustee, general partner, manager, managing member, fiduciary, employee or agent of any other Enterprise at the
Company’s request, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.
(d)
The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise)
to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
(e)
The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate,
impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties
hereto agree that Indemnitee may, to the fullest extent permitted by law, enforce this Agreement by seeking, among other things, injunctive
relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive
relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he or she may
be entitled. The Company and Indemnitee further agree that Indemnitee shall, to the fullest extent permitted by law, be entitled to such
specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions,
without the necessity of posting bonds or other undertaking in connection therewith. The Company acknowledges that in the absence of a
waiver, a bond or undertaking may be required of Indemnitee by a court of competent jurisdiction, and the Company hereby waives any such
requirement of such a bond or undertaking to the fullest extent permitted by law.
20. MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the Company and Indemnitee. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.
21. NOTICES.
All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly
given (i) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
on such delivery, or (ii) if mailed by certified or registered mail with postage prepaid, on the third (3rd) business day after
the date on which it is so mailed:
(a)
If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide
in writing to the Company.
(b)
If to the Company, to:
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Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Attn: Chief Executive Officer
E-mail: sanjeev@montereybio.com
With a copy, which shall not constitute notice, to:
Greenberg Traurig, LLP
1750 Tysons Boulevard, Suite 1000
McLean, Virginia 22102
Attn: Jason Simon, Esq.
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E-mail: simonj@gtlaw.com
or to any other address as may have been furnished
to Indemnitee in writing by the Company.
22. APPLICABLE
LAW AND CONSENT TO JURISDICTION. This Agreement and the legal relations among the parties shall be
governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws
rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, to the fullest extent
permitted by law, the Company and Indemnitee hereby irrevocably and unconditionally: (a) agree that any action or proceeding arising
out of or in connection with this Agreement shall be brought only in the Delaware Court and not in any other state or federal court in
the United States of America or any court in any other country; (b) consent to submit to the exclusive jurisdiction of the Delaware
Court for purposes of any action or proceeding arising out of or in connection with this Agreement; (c) waive any objection to the
laying of venue of any such action or proceeding in the Delaware Court; and (d) waive, and agree not to plead or to make, any claim
that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum, or is subject
(in whole or in part) to a jury trial. To the fullest extent permitted by law, the parties hereby agree that the mailing of process and
other papers in connection with any such action or proceeding in the manner provided by Section 21 or in such other manner as may be
permitted by law, shall be valid and sufficient service thereof.
23. IDENTICAL
COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all
purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
24. MISCELLANEOUS.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
25. PERIOD
OF LIMITATIONS. No legal action shall be brought and no cause of action shall be asserted by or in
the right of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished
and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern.
26. ADDITIONAL
ACTS. If for the validation of any of the provisions in this Agreement any act, resolution, approval
or other procedure is required to the fullest extent permitted by law, the Company undertakes to cause such act, resolution, approval
or other procedure to be affected or adopted in a manner that will enable the Company to fulfill its obligations under this Agreement.
27. WAIVER
OF CLAIMS TO TRUST ACCOUNT. Notwithstanding anything contained herein to the contrary, Indemnitee hereby
agrees that it does not have any right, title, interest or claim of any kind (each, a “Claim”) in or to any monies
in the trust account established in connection with the Company’s initial public offering for the benefit of the Company and holders
of shares issued in such offering, and hereby waives any Claim it may have in the future as a result of, or arising out of, any services
provided to the Company and will not seek recourse against such trust account for any reason whatsoever. Accordingly, Indemnitee acknowledges
and agrees that any indemnification provided hereto will only be able to be satisfied by the Company if (i) the Company has sufficient
funds outside of the trust account to satisfy its obligations hereunder or (ii) the Company consummates a Business Combination.
28. MAINTENANCE OF INSURANCE. The Company shall use commercially reasonable efforts to obtain and
maintain in effect during the entire period for which the Company is obligated to indemnify Indemnitee under this Agreement, one or more
policies of insurance with reputable insurance companies to provide the officers and directors of the Company with coverage for losses
from wrongful acts and omissions and to ensure the Company’s performance of its indemnification obligations under this Agreement.
Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available
for any such director or officer under such policy or policies. In all such insurance policies, Indemnitee shall be named as an insured
in such a manner as to provide Indemnitee with the same rights and benefits as are accorded to the most favorably insured of the Company’s
directors and officers.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
caused this Indemnity Agreement to be signed as of the day and year first above written.
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Sanjeev Satyal
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Title:
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Chief Executive Officer
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INDEMNITEE
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By:
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Name:
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Address:
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[Signature Page to Indemnity Agreement]
Exhibit 10.7
THIS PROMISSORY NOTE (THIS “NOTE”)
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN
ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE MAKER THAT SUCH REGISTRATION IS NOT
REQUIRED.
PROMISSORY NOTE
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Principal Amount: Up to $300,000
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Dated as of April 28, 2021
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Monterey Bio Acquisition Corporation, a
Delaware corporation (the “Maker”), promises to pay to the order of NorthStar Bio Ventures, LLC, a Delaware limited
liability company, or its registered assigns or successors in interest (the “Payee”),
or order, the principal sum of Three Hundred Thousand Dollars ($300,000), or such lesser amount as shall have been advanced by Payee to
Maker and shall remain unpaid under this Note, in lawful money of the United States of America, on the terms and conditions described
below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined
by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this
Note.
1. Principal. The
principal balance of Note shall be payable on the earlier of: (i) September 30, 2021 and (ii) the date on which Maker consummates an initial
public offering of its securities (the “IPO”). The principal balance may be prepaid at any time. Under no circumstances
shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally
for any obligations or liabilities of the Maker hereunder.
2.
Interest. No interest shall accrue on the unpaid principal balance of this Note.
3. Drawdown
Requests. The principal of this Note may be drawn down from time to time prior to the earlier of: (i) September 30, 2021 and
(ii) the date on which Maker consummates the IPO, upon request from Maker to Payee (each, a “Drawdown Request”). Payee
shall fund each Drawdown Request within two (2) business days after receipt of a Drawdown Request; provided, however, that the
maximum amount of drawdowns collectively under this Note is Three Hundred Thousand Dollars ($300,000). Once an amount is drawn down under
this Note, it shall not be available for future Drawdown Requests even if prepaid. No fees, payments or other amounts shall be due to
Payee in connection with, or as a result of, any Drawdown Request by Maker.
4. Application
of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under
this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally
to the reduction of the unpaid principal balance of this Note.
5. Events
of Default. The following shall constitute an event of default (“Event of Default”):
(a) Failure
to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days of
the date specified in Section 1 above.
(b) Voluntary
Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization,
rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the
making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become
due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(c) Involuntary
Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an
involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation
of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
6. Remedies.
(a) Upon
the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this Note to be
due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become
immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon
the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this Note, and all other sums
payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part
of Payee.
7. Waivers. Maker
and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and
notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms
of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal,
or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for
any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may
be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ
in whole or in part in any order desired by Payee.
8. Unconditional
Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party,
and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to
by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect
to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties
hereto without notice to Maker or affecting Maker’s liability hereunder.
9. Notices.
All notices, statements or other documents which are required or contemplated by this Agreement shall be in writing and delivered:
(i) personally or sent by first class registered or certified mail, overnight courier service to the address designated in writing
by such party, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be
designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party
or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so
transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following
receipt of written confirmation, if sent by facsimile or electronic mail, one (1) business day after delivery to an overnight
courier service or five (5) days after mailing if sent by mail.
10. Construction. THIS
NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
11. Severability. Any
provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12. Trust
Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or
claim of any kind (“Claim”) in or to any distribution of or from the trust account to be established in which the proceeds
of the IPO and the proceeds of the sale of the units issued in private placements to occur prior to the consummation of the IPO are to
be deposited, as described in greater detail in the registration statement and prospectus to be filed with the Securities and Exchange
Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against
the trust account for any reason whatsoever.
13. Amendment;
Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of
the Maker and the Payee.
14. Assignment. No
assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise)
without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF,
Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first
above written.
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MONTEREY
BIO ACQUISITION CORPORATION
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By:
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/s/
Sanjeev Satyal
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Name:
Sanjeev Satyal
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Title:
Chief Executive Officer
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[SIGNATURE
PAGE TO PROMISSORY NOTE]
Exhibit 10.8
[●], 2021
Monterey Bio Acquisition Corporation
17 State Street
21st Floor
New York, NY 10004
Ladies and Gentlemen:
Monterey Bio Acquisition Corporation
(the “Company”), a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition,
stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Business
Combination”), intends to register its securities under the Securities Act of 1933, as amended (“Securities Act”), in
connection with its initial public offering (“IPO”), pursuant to a registration statement on Form S-1 (“Registration
Statement”).
The undersigned hereby commits
that it will purchase an aggregate of [●] warrants of the Company (“Private Warrants”), at a price of $1.00 per warrant
for an aggregate purchase price of $[●] (the “Private Warrant Purchase Price”).
At least twenty-four (24)
hours prior to the effective date of the Registration Statement, the undersigned will cause the Private Warrant Purchase Price to be delivered
to Greenberg Traurig, LLP, as escrow agent, by wire transfer as set forth in the instructions attached as Exhibit A to hold in a non-interest
bearing account until the Company consummates the IPO.
The consummation of the purchase
and issuance of the Private Warrants shall occur simultaneously with the consummation of the IPO. Simultaneously with the consummation
of the IPO, Continental Stock Transfer & Trust Company (“Continental”) shall deposit $[●] of the Private Warrant
Purchase Price, without interest or deduction, into the trust account (“Trust Account”) established by the Company for the
benefit of the Company’s public stockholders and the remaining $[●] shall be used by the Company for working capital, each
as described in the Registration Statement.
Each of the Company and the
undersigned acknowledges and agrees that Greenberg Traurig, LLP is serving hereunder solely as a convenience to the parties to facilitate
the purchase of the Private Warrants.
Additionally, the undersigned
agrees:
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not to propose, or vote in favor of, prior to or unrelated to an initial Business Combination, an amendment to the Company’s
Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem
100% of the Company’s shares of common stock sold in the IPO if the Company does not complete an initial Business Combination within
12 months (or up to 21 months, if the time to complete a Business
Combination is extended as described in the prospectus relating to the IPO) from the closing of the IPO, unless the Company provides the holders of shares of common stock sold in the IPO with the opportunity
to redeem their shares of common stock 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 the Company to pay the Company’s franchise and income taxes, divided by the number of then outstanding shares of common stock
sold in the IPO;
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the undersigned will not participate in any liquidation distribution with respect to the Private Warrants (but will participate in
liquidation distributions with respect to any units or common stock purchased by the undersigned in the IPO or in the open market) if
the Company fails to consummate a Business Combination;
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that the Private Warrants and underlying securities will not be transferable until 30 days after the consummation of a Business Combination
except (i) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers
or directors and any members or affiliates of the Company’s co-sponsors, (ii) by gift to a member of an individual’s immediate
family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or
to a charitable organization, (iii) by virtue of the laws of descent and distribution upon death, (iv) pursuant to a qualified domestic
relations order, (v) by private sales or transfers made in connection with the consummation of an initial Business Combination at prices
no greater than the price at which the Private Warrants were originally purchased, (vi) in the event of the Company’s liquidation
prior to the completion of its initial Business Combination, (vii) by virtue of the laws of Delaware or [●]’s liability company
agreement upon dissolution of [●], or (viii) to the Company for cancellation in connection with the consummation of a Business Combination,
in each case (except for clauses (vi) and (viii)) where the transferee agrees to the terms of the transfer restrictions; and
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the Private Warrants will include any additional terms or restrictions as is customary in other similarly structured blank check company
offerings or as may be reasonably required by the underwriters in the IPO in order to consummate the IPO, each of which will be set forth
in the Registration Statement.
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The undersigned acknowledges
and agrees that the purchaser of the Private Warrants will execute agreements in form and substance typical for transactions of this nature
necessary to effectuate the foregoing agreements and obligations prior to the consummation of the IPO as are reasonably acceptable to
the undersigned, including but not limited to an insider letter.
The undersigned also acknowledges
to be bound by the terms of the private warrants described in the warrant agreement between the Company and Continental that will be executed
in connection with the Company’s IPO.
The undersigned hereby represents
and warrants that:
(a) it has been advised
that the Private Warrants have not been registered under the Securities Act;
(b) it will be acquiring
the Private Warrants for its account for investment purposes only;
(c) it has no present
intention of selling or otherwise disposing of the Private Warrants in violation of the securities laws of the United States;
(d) it is an “accredited
investor” as defined by Rule 501 of Regulation D promulgated under the Securities Act;
(e) it has had both the
opportunity to ask questions and receive answers from the officers and directors of the Company and all persons acting on its behalf concerning
the terms and conditions of the offer made hereunder;
(f) it is familiar with
the proposed business, management, financial condition and affairs of the Company;
(g) it has full power,
authority and legal capacity to execute and deliver this letter and any documents contemplated herein or needed to consummate the transactions
contemplated in this letter; and
(h) this letter constitutes
its legal, valid and binding obligation, and is enforceable against it.
This letter agreement constitutes
the entire agreement between the undersigned and the Company with respect to the purchase of the Private Warrants, and supersedes all
prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to the same.
[SIGNATURE PAGE FOLLOWS]
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Sincerely,
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Very truly yours,
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[_____]
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By:
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Name:
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Title:
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Accepted and Agreed:
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MONTEREY BIO ACQUISITION CORPORATION
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By:
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Name:
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Sanjeev Satyal
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Title:
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Chief Executive Officer
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Exhibit A
Wire Instructions
Exhibit 10.9
MONTEREY
BIO ACQUISITION CORPORATION
17 State Street
21st Floor
New York, NY 10004
[●], 2021
[●]
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Re:
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Administrative Services Agreement
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Ladies and Gentlemen:
This letter agreement by and between Monterey Bio
Acquisition Corporation (the “Company”) and [●] (“Provider”), dated as of the date hereof,
will confirm our agreement that, commencing on the effective date (the “Effective Date”) of the Registration Statement
on Form S-1 filed with the U.S. Securities and Exchange Commission (the “Registration Statement”) for the Company’s
initial public offering and continuing until the earlier of the consummation by the Company of an initial business combination or the
Company’s liquidation (in each case as described in the Registration Statement) (such earlier date hereinafter referred to as the
“Termination Date”):
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i.
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Provider shall make available, or cause to be made available, to the Company, at 17 State Street, 21st Floor, New York, NY 10004 (or
any successor location of Provider), certain office space, utilities, general and administrative services and secretarial support as may
be reasonably required by the Company. In exchange therefor, the Company shall pay Provider the sum of $10,000 per month on the Effective
Date and continuing monthly thereafter until the Termination Date; and
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ii.
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Provider hereby irrevocably waives any and all right, title, interest, causes of action and claims of any kind as a result of, or
arising out of, this letter agreement (each, a “Claim”) in or to, and any and all right to seek payment of any amounts
due to it out of, the trust account established for the benefit of the public stockholders of the Company and into which substantially
all of the proceeds of the Company’s initial public offering will be deposited (the “Trust Account”), and hereby
irrevocably waives any Claim it may have in the future, which Claim would reduce, encumber or otherwise adversely affect the Trust Account
or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction of
any Claim against the Trust Account or any monies or other assets in the Trust Account for any reason whatsoever.
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This letter agreement constitutes the entire agreement
and understanding of the parties hereto in respect of its subject matter and supersedes all prior understandings, agreements, or representations
by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions
contemplated hereby.
This letter agreement may not be amended, modified
or waived as to any particular provision, except by a written instrument executed by all parties hereto.
No party hereto may assign either this letter agreement
or any of its rights, interests, or obligations hereunder without the prior written approval of the other party. Any purported assignment
in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the
purported assignee.
This letter agreement constitutes the entire relationship
of the parties hereto, and any litigation between the parties (whether grounded in contract, tort, statute, law or equity) shall be governed
by, construed in accordance with, and interpreted pursuant to the laws of the State of New York, without giving effect to its choice of
laws principles.
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Very truly yours,
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MONTEREY BIO
ACQUISITION CORPORATION
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By:
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Name:
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Title:
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AGREED TO AND ACCEPTED BY:
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[●]
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By:
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Name:
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Title:
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[Signature
Page to Administrative Services Agreement]
Exhibit 14.1
CODE OF ETHICS
OF
MONTEREY BIO ACQUISITION CORPORATION
The Board of Directors of
Monterey Bio Acquisition Corporation (the “Company”) has adopted this code of ethics (the “Code”), which is applicable
to all directors, officers and employees of the Company, with the intent to:
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promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships;
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promote the full, fair, accurate, timely and understandable disclosure in reports and documents that the
Company files with, or submits to, the Securities and Exchange Commission (the “SEC”), as well as in other public communications
made by or on behalf of the Company;
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promote compliance with applicable governmental laws, rules and regulations;
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require prompt internal reporting of breaches of, and accountability for adherence to, this Code.
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This Code may be amended only
by resolution of the Company’s Board of Directors In this Code, references to the “Company” include, in appropriate
context, the Company’s subsidiaries, if any.
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2.
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Honest, Ethical and Fair Conduct
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Each person owes a duty to
the Company to act with integrity. Integrity requires, among other things, being honest, fair and candid. Deceit, dishonesty and subordination
of the Company’s interests to personal interests are inconsistent with integrity. Service to the Company should never be subordinated
to personal gain or advantage.
Each person must:
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Act with integrity, including being honest and candid while still maintaining the confidentiality of the
Company’s information where required or in the Company’s interests.
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Observe all applicable governmental laws, rules and regulations.
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Comply with the requirements of applicable accounting and auditing standards, as well as Company policies,
in order to maintain a high standard of accuracy and completeness in the Company’s financial records and other business-related
information and data.
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Adhere to a high standard of business ethics and not seek competitive advantage through unlawful or unethical
business practices.
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Deal fairly with the Company’s customers, suppliers, competitors and employees.
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Refrain from taking advantage of anyone through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts or any other unfair-dealing practice.
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Protect the assets of the Company and ensure their proper use.
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Refrain from taking for themselves personally opportunities that are discovered through the use of corporate
assets and refrain from using corporate assets, information, or position for general personal gain outside the scope of employment with
the Company.
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Avoid conflicts of interest, wherever possible, except under guidelines or resolutions approved by the
Board of Directors (or the appropriate committee of the Board of Directors). Anything that would be a conflict for a person subject to
this Code also will be a conflict if it is related to a member of his or her family or a close relative. Examples of conflict of interest
situations include, but are not limited to, the following:
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any significant ownership interest in any supplier or customer;
o
any consulting or employment relationship with any customer, supplier, or competitor;
o
any outside business activity that detracts from an individual’s ability to devote appropriate time and attention
to his or her responsibilities with the Company;
o
the receipt of any money, non-nominal gifts or excessive entertainment from any company with which the Company has current
or prospective business dealings;
o
being in the position of supervising, reviewing, or having any influence on the job evaluation, pay, or benefit of any close
relative;
o
selling anything to the Company or buying anything from the Company, except on the same terms and conditions as comparable
officers or directors are permitted to so purchase or sell; and
o
any other circumstance, event, relationship or situation in which the personal interest of a person subject to this Code
interferes, or even appears to interfere, with the interests of the Company as a whole.
The Company strives to ensure
that the contents of and the disclosures in public communications and in the reports and documents that the Company files with the SEC
shall be full, fair, accurate, timely and understandable in accordance with applicable disclosure standards, including standards of materiality,
where appropriate. Each person must:
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not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether
within or outside the Company, including to the Company’s independent auditors, governmental regulators, self-regulating organizations
and other governmental officials, as appropriate; and
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in relation to his or her area of responsibility, properly review and critically analyze proposed disclosure
for accuracy and completeness.
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In addition to the foregoing,
the Chief Executive Officer and Chief Financial Officer of the Company and each subsidiary of the Company (or persons performing similar
functions), if any, and each other person that typically is involved in the financial reporting of the Company must familiarize himself
or herself with the disclosure requirements applicable to the Company as well as the business and financial operations of the Company.
Each person must promptly
bring to the attention of the Chairman of the Audit Committee of the Company’s Board of Directors (or the Chairman of the Company’s
Board of Directors if no Audit Committee exists) any information he or she may have concerning (a) significant deficiencies in the design
or operation of internal and/or disclosure controls which could adversely affect the Company’s ability to record, process, summarize
and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant
role in the Company’s financial reporting, disclosures, or internal controls.
It is the Company’s
obligation and policy to comply with all applicable governmental laws, rules and regulations. It is the personal responsibility of each
person to, and each person must, adhere to the standards and restrictions imposed by those laws, rules, and regulations, including those
relating to accounting and auditing matters.
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5.
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Reporting and Accountability
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The Board of Directors or
Audit Committee, if one exists, of the Company is responsible for applying this Code to specific situations in which questions are presented
to it and has the authority to interpret this Code in any particular situation. Any person who becomes aware of any existing or potential
breach of this Code is required to notify the Chairman of the Board of Directors or Audit Committee promptly. Failure to do so is itself
a breach of this Code.
Specifically, each person
must:
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Notify the Chairman promptly of any existing or potential violation of this Code.
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Not retaliate against any other person for reports of potential violations that are made in good faith.
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The Company will follow the following procedures in investigating and enforcing this Code and in reporting
on the Code:
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The Board of Directors or Audit Committee, if one exists, will take all appropriate action to investigate any breaches reported
to it.
o
If the Audit Committee (if one exists) determines by majority decision that a breach has occurred, it will inform the Board
of Directors.
o
Upon being notified that a breach has occurred, the Board of Directors by majority decision will take or authorize such
disciplinary or preventive action as it deems appropriate, after consultation with the Audit Committee (if one exists) and/or the Company’s
counsel, up to and including dismissal or, in the event of criminal or other serious violations of law, notification of the SEC or other
appropriate law enforcement authorities.
No person following the above
procedure shall, as a result of following such procedure, be subject by the Company or any officer or employee thereof to discharge, demotion
suspension, threat, harassment or, in any manner, discrimination against such person in terms and conditions of employment.
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6.
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Waivers and Amendments
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Any waiver (defined below)
or an implicit waiver (defined below) from a provision of this Code for the principal executive officer, principal financial officer,
principal accounting officer or controller, and persons performing similar functions or any amendment (as defined below) to this Code
is required to be disclosed in the Company’s Annual Report on Form 10-K or in a Current Report on Form 8-K filed with the SEC.
A “waiver” means
the approval by the Company’s Board of Directors of a material departure from a provision of the Code. An “implicit waiver”
means the Company’s failure to take action within a reasonable period of time regarding a material departure from a provision of
the Code that has been made known to an executive officer of the Company. An “amendment” means any amendment to this Code
other than minor technical, administrative or other non-substantive amendments hereto.
All persons should note that
it is not the Company’s intention to grant or to permit waivers from the requirements of this Code. The Company expects full compliance
with this Code.
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7.
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Other Policies and Procedures
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Any other policy or procedure
set out by the Company in writing or made generally known to employees, officers or directors of the Company prior to the date hereof
or hereafter are separate requirements and remain in full force and effect.
All inquiries and questions
in relation to this Code or its applicability to particular people or situations should be addressed to the Company’s Secretary.
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this Registration
Statement of Monterey Bio Acquisition Corporation on Form S-1 of our report dated May 21, 2021, except for Note 8 as to which the date
is September 7, 2021, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with
respect to our audit of the financial statements of Monterey Bio Acquisition Corporation as of December 31, 2020 and for the period from
July 23, 2020 (inception) through December 31, 2020, which report appears in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
New York, NY
September 7, 2021
Exhibit 99.1
AUDIT COMMITTEE
CHARTER
of
Monterey Bio Acquisition
Corporation
The purposes of the Audit
Committee (the “Audit Committee”) of the Board of Directors (“Board”) of Monterey Bio Acquisition
Corporation (the “Company”) are to assist the Board in monitoring: (1) the integrity of the annual, quarterly, and other financial
statements of the Company, (2) the independent auditor’s qualifications and independence, (3) the performance of the Company’s
independent auditor, and (4) the compliance by the Company with legal and regulatory requirements. The Audit Committee also shall review
and approve all related-party transactions.
The Audit Committee shall
prepare the report required by the rules of the Securities and Exchange Commission (“Commission”) to be included in
the Company’s annual proxy statement.
The Audit Committee shall
consist of no fewer than three members, absent a temporary vacancy. The Audit Committee shall meet the “Audit Committee Requirements”
of The Nasdaq Stock Market LLC and the independence and experience requirements of Section 10A(m)(3) of the Securities Exchange Act of
1934 (“Exchange Act”) and the rules and regulations of the Commission.
The members of the Audit Committee
shall be appointed by the Board. Audit Committee members may be replaced by the Board. There shall be a chairperson of the Audit Committee
which shall also be appointed by the Board. The chairperson of the Audit Committee shall be a member of the Audit Committee and, if present,
shall preside at each meeting of the Audit Committee. He or she shall advise and counsel with the executives of the Company, and shall
perform such other duties as may from time to time be assigned to him by the Audit Committee or the Board.
The Audit Committee shall
meet as often as it determines, but not less frequently than quarterly. The Audit Committee shall meet periodically with management and
the independent auditor in separate executive sessions. The Audit Committee may request any officer or employee of the Company or the
Company’s outside counsel or independent auditor to attend a meeting of the Audit Committee or to meet with any members of, or consultants
to, the Audit Committee.
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IV.
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Committee Authority and Responsibilities
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The Audit Committee shall
have the sole authority to appoint or replace the independent auditor. The Audit Committee shall be directly responsible for determining
the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the
independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent
auditor shall report directly to the Audit Committee.
The Audit Committee shall
pre-approve all auditing services and permitted non-audit services to be performed for the Company by its independent auditor, including
the fees and terms thereof (subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the
Exchange Act which are approved by the Audit Committee prior to the completion of the audit). The Audit Committee may form and delegate
authority to subcommittees of the Audit Committee consisting of one or more members when appropriate, including the authority to grant
pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be
presented to the full Audit Committee at its next scheduled meeting.
The Audit Committee
shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting, or other
advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to
(i) the independent auditor for the purpose of rendering or issuing an audit report and (ii) any advisors employed by the Audit
Committee.
The Audit Committee shall
make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval. The Audit Committee annually shall review the Audit Committee’s own performance.
The Audit Committee shall:
Financial Statement and Disclosure Matters
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1.
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Meet with the independent auditor prior to the audit to review the scope, planning, and staffing of the
audit.
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2.
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Review and discuss with management and the independent auditor the annual audited financial statements,
and recommend to the Board whether the audited financial statements should be included in the Company’s Annual Report on Form 10-K
(or the annual report to shareholders if distributed prior to the filing of the Form 10-K).
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3.
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Review and discuss with management and the independent auditor the Company’s quarterly financial
statements prior to the filing of its Form 10-Q, including the results of the independent auditor’s review of the quarterly financial
statements.
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4.
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Discuss with management and the independent auditor, as appropriate, significant financial reporting issues
and judgments made in connection with the preparation of the Company’s financial statements, including:
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(a)
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any significant changes in the Company’s selection or application of accounting principles;
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(b)
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the Company’s critical accounting policies and practices;
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(c)
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all alternative treatments of financial information within GAAP that have been discussed with management
and the ramifications of the use of such alternative accounting principles;
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(d)
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any major issues as to the adequacy of the Company’s internal controls and any special steps adopted
in light of material control deficiencies; and
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(e)
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any material written communications between the independent auditor and management, such as any management
letter or schedule of unadjusted differences.
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5.
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Discuss with management the Company’s earnings press releases generally, including the use of “pro
forma” or “adjusted” non-GAAP information, and any financial information and earnings guidance provided to analysts
and rating agencies. Such discussion may be general and include the types of information to be disclosed and the types of presentations
to be made.
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6.
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Discuss with management and the independent auditor the effect on the Company’s financial statements
of (i) regulatory and accounting initiatives and (ii) off-balance sheet structures.
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7.
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Discuss with management the Company’s major financial risk exposures and the steps management has
taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.
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8.
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Discuss with the independent auditor the matters required to be discussed under the standards and related
rules of the Public Company Accounting Oversight Board relating to the conduct of the audit, including any difficulties encountered in
the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements
with management.
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9.
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Review disclosures made to the Audit Committee by the Company’s Chief Executive Officer and Chief
Financial Officer (or individuals performing similar functions) during their certification process for the Form 10-K and Form 10-Qs about
any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting
and any fraud involving management or other employees who have a significant role in the Company’s internal control over financial
reporting.
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Oversight of the Company’s Relationship with the Independent
Auditor
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10.
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At least annually, obtain and review a report from the independent auditor, consistent with the rules
of the Public Company Accounting Oversight Board, regarding (a) the independent auditor’s internal quality-control procedures, (b)
any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation
by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the
firm, (c) any steps taken to deal with any such issues and (d) all relationships between the independent auditor and the Company. Evaluate
the qualifications, performance and independence of the independent auditor, including whether the auditor’s quality controls are
adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, and taking
into account the opinions of management and the internal auditor. The Audit Committee shall present its conclusions with respect to the
independent auditor to the Board.
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11.
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Verify the rotation of the lead (or coordinating) audit partner having primary responsibility for the
audit and the audit partner responsible for reviewing the audit as required by law. Consider whether, in order to assure continuing auditor
independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.
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12.
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Oversee the Company’s hiring of employees or former employees of the independent auditor who participated
in any capacity in the audit of the Company.
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13.
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Be available to the independent auditor during the year for consultation purposes.
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Compliance Oversight Responsibilities
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14.
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Obtain assurance from the independent auditor that Section 10A(b) of the Exchange Act has not been implicated.
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15.
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Review and approve all related-party transactions and reimbursement of expenses incurred by the Company’s
management team in identifying potential target businesses.
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16.
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Inquire and discuss with management the Company’s compliance with applicable laws and regulations
and with the Company’s Code of Ethics in effect at such time, if any, and, where applicable, recommend policies and procedures for
future compliance.
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17.
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Establish procedures (which may be incorporated in the Company’s Code of Ethics, in effect at such
time, if any) for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting
controls or reports which raise material issues regarding the Company’s financial statements or accounting policies.
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18.
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Discuss with management and the independent auditor any correspondence with regulators or governmental
agencies and any published reports that raise material issues regarding the Company’s financial statements or accounting policies.
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19.
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Discuss with the Company’s General Counsel and/or outside counsel the status of legal matters that
may have a material impact on the financial statements or the Company’s compliance policies.
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20.
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Review and approve all payments made to the Company’s officers and directors or its or their affiliates.
Any payments made to members of the Audit Committee will be reviewed and approved by the Board, with the interested director or directors
abstaining from such review and approval.
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Limitation of Audit Committee’s Role
While the Audit Committee
has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally
accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent
auditor.
exhibit
99.2
COMPENSATION COMMITTEE
CHARTER
OF
Monterey Bio Acquisition
Corporation
The Compensation Committee
(the “Committee”) is appointed by the Board of Directors (the “Board”) of Monterey Bio Acquisition
Corporation (the “Company”) for the purposes of, among other things, (a) discharging the Board’s responsibilities
relating to the compensation of the Company’s chief executive officer (the “CEO”) and other executive officers
of the Company, (b) administering or delegating the power to administer the Company’s incentive compensation and equity-based compensation
plans, and (c) if required by applicable rules and regulations, issuing a “Compensation Committee Report” to be included in
the Company’s annual report on Form 10-K or proxy statement, as applicable.
In addition to such other duties as the Board may
from time to time assign, the Committee shall:
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·
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Establish, review, and approve the overall executive compensation philosophy and policies of the Company,
including the establishment, if deemed appropriate, of performance-based incentives that support and reinforce the Company’s long-term
strategic goals, organizational objectives, and stockholder interests.
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·
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Review and approve the Company’s goals and objectives relevant to the compensation of the CEO, annually
evaluate the CEO’s performance in light of those goals and objectives and, based on this evaluation, determine the CEO’s compensation
level, including, but not limited to, salary, bonus or bonus target levels, long and short-term incentive and equity compensation, retirement
plans, and deferred compensation plans as the Committee deems appropriate. In determining the long-term incentive component of the CEO’s
compensation, the Committee shall consider, among other factors, the Company’s performance and relative stockholder return, the
value of similar incentive awards to CEOs at comparable companies, and the awards given to the Company’s CEO in past years. The
CEO shall not be present during voting and deliberations relating to CEO compensation.
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·
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Determine the compensation of all other executive officers, including, but not limited to, salary, bonus
or bonus target levels, long and short-term incentive and equity compensation, retirement plans, and deferred compensation plans, as the
Committee deems appropriate. Members of senior management may report on the performance of the other executive officers of the Company
and make compensation recommendations to the Committee, which will review and, as appropriate, approve the compensation recommendations.
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·
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Receive and evaluate performance target goals for the senior officers and employees (other than executive
officers) and review periodic reports from the CEO as to the performance and compensation of such senior officers and employees.
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·
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Administer or delegate the power to administer the Company’s incentive and equity-based compensation
plans, including the grant of stock options, restricted stock, and other equity awards under such plans.
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·
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Review and make recommendations to the Board with respect to the adoption of, and amendments to, incentive
compensation and equity-based plans and approve for submission to the stockholders all new equity compensation plans that must be approved
by stockholders pursuant to applicable law.
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·
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Review and approve any annual or long-term cash bonus or incentive plans in which the executive officers
of the Company may participate.
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·
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Review and approve for the CEO and the other executive officers of the Company any employment agreements,
severance arrangements, and change in control agreements or provisions.
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·
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Review and approve all special perquisites, special cash payments and other special compensation and benefit
arrangements for the Company’s executive officers and employees.
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·
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Review, evaluate and recommend changes, if appropriate, to the remuneration for directors.
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·
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Review and discuss with the Company’s management the Compensation Discussion and Analysis set forth
in Securities and Exchange Commission Regulation S-K, Item 402, if required, and, based on such review and discussion, determine whether
to recommend to the Board of Directors of the Company that the Compensation Discussion and Analysis be included in the Company’s
annual report or proxy statement for the annual meeting of stockholders.
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·
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Provide the Compensation Committee Report for the Company’s annual report or proxy statement for
the annual meeting of stockholders, if required.
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·
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Conduct an annual performance evaluation of the Committee. In conducting such review, the Committee shall
evaluate and address all matters that the Committee considers relevant to its performance, including at least the following: (a) the adequacy,
appropriateness, and quality of the information received from management or others; (b) the manner in which the Committee’s recommendations
were discussed or debated; (c) whether the number and length of meetings of the Committee were adequate for the Committee to complete
its work in a thorough and thoughtful manner; and (d) whether this Charter appropriately addresses the matters that are or should be within
its scope.
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The Committee shall be comprised
of two or more members (including a chairperson), all of whom shall be “independent directors,” as such term is defined in
the rules and regulations of The Nasdaq Stock Market LLC (“Nasdaq”), except that the Committee may have as one of its
members a “non-independent director” under exceptional and limited circumstances pursuant to the exemption under Rule 5605(d)(2)(B)
of Nasdaq. At least two of the Committee members shall be “non-employee directors” as defined by Rule 16b-3 under the Securities
Exchange Act of 1934 (the “Exchange Act”). The members of the Committee and the chairperson shall be selected by the
Board and serve at the pleasure of the Board. A Committee member (including the chairperson) may be removed at any time, with or without
cause, by the Board.
The Committee shall have authority
to delegate any of its responsibilities to one or more subcommittees as the Committee may from time to time deem appropriate. If at any
time the Committee includes a member who is not a “non employee director” within the meaning of Rule 16b-3 under the Exchange
Act, then a subcommittee comprised entirely of individuals who are “non-employee directors” may be formed by the Committee
for the purpose of ratifying any grants of awards under any incentive or equity-based compensation plan for the purposes of complying
with the exemption requirements of Rule 16b-3 of the Exchange Act; provided that any such grants shall not be contingent on such ratification.
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IV.
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MEETINGS AND OPERATIONS
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The Committee shall meet
as often as necessary, but at least once annually, to enable it to fulfill its responsibilities. The Committee shall meet at the
call of its chairperson or a majority of its members. The Committee may meet by telephone conference call or by any other means
permitted by law or the Company’s Bylaws. A majority of the members of the Committee shall constitute a quorum. The Committee
shall act on the affirmative vote of a majority of members present at a meeting at which a quorum is present. Subject to the
Company’s Bylaws, the Committee may act by unanimous written consent of all members in lieu of a meeting. The Committee shall
determine its own rules and procedures, including designation of a chairperson pro tempore in the absence of the chairperson, and
designation of a secretary. The secretary need not be a member of the Committee and shall attend Committee meetings and prepare
minutes. The Secretary of the Company shall be the Secretary of the Committee unless the Committee designates otherwise. The
Committee shall keep written minutes of its meetings, which shall be recorded or filed with the books and records of the Company.
Any member of the Board shall be provided with copies of such Committee minutes if requested.
The Committee may ask members
of management, employees, outside counsel, or others whose advice and counsel are relevant to the issues then being considered by the
Committee to attend any meetings (or a portion thereof) and to provide such pertinent information as the Committee may request.
The chairperson of the Committee
shall be responsible for leadership of the Committee, including preparing the agenda which shall be circulated to the members prior to
the meeting date, presiding over Committee meetings, making Committee assignments, and reporting the Committee’s actions to the
Board. Following each of its meetings, the Committee shall deliver a report on the meeting to the Board, including a description of all
actions taken by the Committee at the meeting.
If at any time during the
exercise of his or her duties on behalf of the Committee, a Committee member has a direct conflict of interest with respect to an issue
subject to determination or recommendation by the Committee, such Committee member shall abstain from participation, discussion, and resolution
of the instant issue, and the remaining members of the Committee shall advise the Board of their recommendation on such issue. The Committee
shall be able to make determinations and recommendations even if only one Committee member is free from conflicts of interest on a particular
issue.
The Committee has the authority,
to the extent it deems appropriate, to conduct or authorize investigations into or studies of matters within the Committee’s scope
of responsibilities and to retain one or more compensation consultants to assist in the evaluation of CEO or executive compensation or
other matters. The Committee shall have the sole authority to retain and terminate any such consulting firm, and to approve the firm’s
fees and other retention terms. The Committee shall evaluate whether any compensation consultant retained or to be retained by it has
any conflict of interest in accordance with Item 407(e)(3)(iv) of Regulation S-K. The Committee shall also have the authority, to the
extent it deems necessary or appropriate, to retain legal counsel or other advisors. In retaining compensation consultants, outside counsel,
and other advisors, the Committee must take into consideration factors specified in the Nasdaq listing rules. The Company will provide
for appropriate funding, as determined by the Committee, for payment of any such investigations or studies and the compensation to any
consulting firm, legal counsel, or other advisors retained by the Committee.
Exhibit 99.3
Consent of Director Nominee
Monterey Bio Acquisition Corporation
Pursuant to Rule 438 of Regulation
C promulgated under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Registration
Statement on Form S-1 (the “Registration Statement”) of Monterey Bio Acquisition Corporation (the “Company”),
the undersigned hereby consents to being named and described as a director nominee in the Registration Statement and any amendment or
supplement to any prospectus included in such Registration Statement, any amendment to such Registration Statement or any subsequent Registration
Statement filed pursuant to Rule 462(b) under the Securities Act and to the filing or attachment of this consent with such Registration
Statement and any amendment or supplement thereto.
IN WITNESS WHEREOF, the undersigned
has executed this consent as of April 25, 2021.
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/s/ Frances Heller
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Name:
Frances Heller
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Exhibit 99.4
Consent of Director Nominee
Monterey Bio Acquisition Corporation
Pursuant to Rule 438 of Regulation
C promulgated under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Registration
Statement on Form S-1 (the “Registration Statement”) of Monterey Bio Acquisition Corporation (the “Company”),
the undersigned hereby consents to being named and described as a director nominee in the Registration Statement and any amendment or
supplement to any prospectus included in such Registration Statement, any amendment to such Registration Statement or any subsequent Registration
Statement filed pursuant to Rule 462(b) under the Securities Act and to the filing or attachment of this consent with such Registration
Statement and any amendment or supplement thereto.
IN WITNESS WHEREOF, the undersigned
has executed this consent as of April 14, 2021.
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/s/ James R. Neal
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Name: James R. Neal
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