As filed with the U.S. Securities and Exchange Commission on October 1, 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
LAVA Medtech Acquisition Corp.
(Exact name of registrant as specified in its charter)
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Delaware
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6770
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86-2973712
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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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303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Telephone: 781-530-3868
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Anthony Natale
Chief Executive Officer
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Telephone: 781-530-3868
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
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Ari Edelman, Esq.
Edward P. Bromley III, Esq.
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 521-5400
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Gregg A. Noel, Esq.
Ann Beth Stebbins, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 1400
Palo Alto, CA 94301
Telephone: (650) 470-4500
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
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 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 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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☒
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Smaller reporting company
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☒
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Emerging growth company
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☒
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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 to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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)
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Amount of
Registration
Fee
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Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-half of one redeemable warrant(2)
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11,500,000 Units
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$
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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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10,661
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Shares of Class A common stock included as part of the units(3)
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11,500,000 Shares
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—
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—
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—(4)
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Redeemable warrants included as part of the units(3)
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5,750,000 Warrants
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—
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—
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—(4)
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Shares of Class A common stock underlying warrants included as part of units
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5,750,000 Shares
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$
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11.50
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66,125,000
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$
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6,130(5)
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Total
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$
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181,125,000
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$
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16,791
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(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the “Securities Act”).
(2)
Includes 1,500,000 units, consisting of 1,500,000 shares of Class A common stock and 750,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3)
Pursuant to Rule 416, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(4)
No fee pursuant to Rule 457(g).
(5)
Calculated pursuant to Rule 457(g) under the Securities Act.
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 preliminary 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 preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 1, 2021
PRELIMINARY PROSPECTUS
$100,000,000
LAVA Medtech Acquisition Corp.
10,000,000 Units
LAVA Medtech Acquisition Corp. is a newly incorporated blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Only whole warrants are exercisable. The warrants will become exercisable 30 days after the completion of our initial business combination and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. We have also granted the underwriters a 45-day option to purchase up to an additional 1,500,000 units to cover over-allotments, if any.
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock 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 described below 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 shares of Class A common stock that were sold as part of the units in this offering, which we refer to collectively as our public shares throughout this prospectus, subject to the limitations described herein. If we have not completed our initial business combination within 18 months from the closing of this offering we will 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, subject to applicable law and as further described herein.
Our sponsor, LAVA Medtech Sponsor LP, a Delaware limited partnership (which we refer to as our “sponsor” throughout this prospectus) has committed to purchase an aggregate of 7,500,000 warrants (or 8,175,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per warrant ($7,500,000 in the aggregate or $8,175,000 in the aggregate if the underwriters’ 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 throughout this prospectus as the private placement warrants. Each private placement warrant is exercisable to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as provided herein.
Prior to this offering, our sponsor purchased 2,875,000 shares of our Class B common stock (up to 375,000 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised). We refer to these shares of Class B common stock as the founder shares throughout this prospectus. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of the business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of share of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this offering, plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the business
combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination. Holders of the Class B common stock will have the right to elect all of our directors prior to our initial business combination. On any other matter submitted to a vote of our stockholders, holders of the Class B common stock and holders of the Class A common stock will vote together as a single class, except as required by applicable law or the applicable exchange rules then in effect.
Currently, there is no public market for our units, Class A common stock or warrants. We intend to apply to list our units on the Nasdaq Global Market (“Nasdaq”) under the symbol “LVACU” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless RBC Capital Markets, LLC (the “Representative”) informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission, or the SEC, containing an audited balance sheet reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities comprising the units begin separate trading, we expect that the Class A common stock and warrants will be listed on Nasdaq under the symbols “LVAC” and “LVACW,” respectively.
We are an “emerging growth company” and “smaller reporting company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 35 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
Neither 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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Per Unit
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Total
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Public offering price
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$
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10.00
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$
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100,000,000
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Underwriting discounts and commissions(1)
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$
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0.55
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$
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5,500,000
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Proceeds, before expenses, to us
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$
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9.45
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$
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94,500,000
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(1)
Includes $0.35 per unit, or $3,500,000 (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full) in the aggregate payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also “Underwriting” for a description of compensation and other items payable to the underwriters.
Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $102,500,000 or $117,875,000 if the underwriters’ over-allotment option is exercised in full ($10.25 per unit), will be deposited into a U.S.-based trust account at Morgan Stanley, with Continental Stock Transfer & Trust Company acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about , 2021.
RBC Capital Markets
, 2021.
TABLE OF CONTENTS
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. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
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Page
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1
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33
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35
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73
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78
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79
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81
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82
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89
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124
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134
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137
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155
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166
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175
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175
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175
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F-1
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Trademarks
This prospectus contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. 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, or the context otherwise requires, references to “we,” “us,” “our,” “company,” or “our company” are to LAVA Medtech Acquisition Corp., a Delaware corporation and references to:
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“amended and restated certificate of incorporation” are to our certificate of incorporation to be in effect upon completion of this offering;
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“founder shares” are to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to this offering and, unless the context otherwise requires, our Class A common stock issued upon conversion thereof as provided herein;
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“initial stockholders” are to holders of our founder shares prior to this offering;
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“management” or our “management team” are to our officers and directors, and “directors” are to our current directors and director nominees;
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“common stock” are to our Class A common stock and our Class B common stock, collectively;
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“equity-linked securities” are to any securities of our company which are convertible into, exchangeable for, or exercisable for common stock of our company;
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“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering;
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“public shares” are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
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“public stockholders” are to the holders of our public shares, including our sponsor, officers and directors to the extent our sponsor, officers or directors purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares;
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“sponsor” are to LAVA Medtech Sponsor LP, a Delaware limited partnership;
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“warrants” are to our redeemable warrants, which includes the public warrants as well as the private placement warrants to the extent they are no longer held by the initial purchasers of the private placement warrants or their permitted transferees; and,
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
Our Company
We are a newly incorporated blank check company, incorporated on March 31, 2021, as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target, currently do not have any specific business combination under consideration and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns. As such, we intend to focus our investment efforts on
industries that complement our management team’s background within healthcare and healthcare-related industries, primarily in the United States and Canada. Specifically, we intend to prioritize innovative, development- or early commercial-stage companies focused on clinically-impactful and high growth opportunities within medical devices, diagnostics, and digital health (comprehensively referred to as “MedTech”), which we believe are opportunity-rich, but somewhat overlooked areas relative to the strategies of most other blank check companies currently outstanding, particularly those focused on the healthcare sector. We believe our management team’s decades of relevant operational and healthcare venture investing background is substantial and can have a transformative impact on a target MedTech business.
Within the MedTech sector, we believe our management team is uniquely positioned to identify attractive company opportunities for investment. Our team, which has been investing together for approximately fifteen years, has developed significant MedTech expertise and demonstrated meaningful investment success across a wide number of now public and acquired MedTech companies, including: MAKO Surgical (IPO, subsequently acquired by Stryker); Inspire Medical (NYSE: INSP); Axonics (Nasdaq: AXNX); Spirox (acquired by Entellus Medical); Entellus Medical (acquired by Stryker); Avedro (IPO, subsequently acquired by Glaukos); ev3 (acquired by Covidien/Medtronic); U-Systems (acquired by GE Healthcare); Xlumena (acquired by Boston Scientific); ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew), Tornier (acquired by Wright Medical); Wright Medical (acquired by Stryker); Xomed Surgical (acquired by Medtronic); Outset Medical (Nasdaq: OM); and Silk Road Medical (Nasdaq: SILK), among others.
Our management team and affiliates of our team and sponsor have invested approximately $1 billion into over 150 private and public healthcare companies that have realized approximately $50 billion in aggregate exit value in the form of public monetizations and strategic sales. We will utilize our broad and proprietary professional network, cultivated over two-decades of experience investing in, operating, and growing MedTech businesses, to identify high-quality suitable investment opportunities, beyond the large number of targets already known to us. Once identified, we will utilize a highly selective and strategic investment process, as we historically have done with our venture and growth equity investments, which focuses on assessing and prioritizing promising and unique targets.
Our sponsor is an affiliate of Lumira Ventures (“Lumira”), a leading North American healthcare venture capital firm with a two-decade track record of successfully investing in medical technologies, digital health, and biotechnology companies whose products have the potential to transform the lives of patients worldwide while lowering the cost of healthcare delivery. In addition to our own MedTech sector expertise and deep relationships with executives, advisors, investors, corporate partners, and other intermediaries, we intend to leverage the broad Lumira platform, including its in-house team, additional long-standing industry relationships, extensive public markets experience, and proprietary database of over 12,000 curated healthcare investment opportunities, to effect a business combination with an attractive target and to position it for long-term shareholder value creation in the public markets.
Lumira Ventures
Lumira Ventures was founded in 2007 after its management spun-out from and acquired MDS Capital, a corporate venture capital group established in 1989. Lumira has built a track record as a leading North American healthcare venture capital firm, investing in innovative companies across the healthcare landscape. Lumira is the largest healthcare venture capital firm in Canada (by assets under management and size of team), and one of the most active healthcare investors in the U.S., often in geographies which have not historically been the focus of most healthcare venture capital firms. The firm has one of the industry’s most active MedTech investment teams, with a proven track record of identifying and building emerging sector leaders into high-value public companies and successful M&A acquisition targets for strategic counterparties. Lumira’s MedTech investment team has reviewed
approximately 1,200 MedTech companies since 2007 and has backed category leaders to high-multiple exits throughout market cycles. In 2021, with strong support from existing and new investors, the firm raised its newest life sciences fund, Lumira Ventures IV. Our management team includes certain Lumira investment professionals. See “Management” for more information.
Lumira’s goal is to partner with entrepreneurs to build companies, from the seed through growth stages, whose products deliver significant improvements in the daily lives of patients worldwide while simultaneously lowering the cost of healthcare delivery. The Lumira team has backed dozens of transformative North America-based healthcare companies that have delivered more than 30 approved therapies for patients, impacting the lives of over 1 billion patients worldwide and generating more than $75 billion in cumulative revenue.
Guided by a senior team of healthcare investment professionals who average over 27 years of industry experience, Lumira’s team has invested in more than 100 healthcare companies via multiple funds and today oversees approximately $500 million of assets under management. The firm has an in-house team of 18 investment professionals, back-office personnel and advisors and venture partners located in offices in Toronto, Boston, Montreal and Vancouver. Investors in its venture funds include sovereign wealth funds, pension plans, asset management firms, foundations, family offices and corporate strategic investors.
Management Team and Board of Directors
Our management team is led by Dr. Anthony Natale, our Chief Executive Officer and a Director; Richard “Dick” Emmitt, our Chairman and Director Nominee; Gerry Brunk, our President and a Director; Dr. Daniel Hétu, our Executive Vice President; and Vasco Larcina, our Chief Financial Officer. Our management team is further supported by our board of directors including Peter van der Velden and Fritz A. LaPorte, who are Director Nominees. Our management team and directors have worked and invested together continuously for approximately 15 years.
Management Team
Anthony “Tony” Natale, MD, MBA, our Chief Executive Officer and a Director, has over 20 years of experience in healthcare venture capital and MedTech entrepreneurship as a physician, inventor, founder, operator, and investor. As a Managing Partner at Aperture Venture Partners since 2010, Dr. Natale focuses on identifying and investing in high-potential MedTech companies. He works alongside entrepreneurs to build out management teams, establish effective corporate governance, and implement successful product development, commercialization, and exit strategies.
Prior to Aperture, Dr. Natale was a partner at Prism VentureWorks from 2006 to 2010, and MDS Capital, Lumira’s predecessor firm, from 2002 to 2006, where he made and managed investments in the MedTech sector. He has held pivotal roles at venture-backed healthcare companies throughout his career, including currently as Executive Chairman at ENT Specialty Partners and Acting Chief Executive Officer at XII Medical, and previously as co-founder and / or founding investor at MAKO Surgical (IPO, subsequently acquired by Stryker), Avedro (IPO, subsequently acquired by Glaukos), ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew), Xlumena (acquired by Boston Scientific), and Spirox (acquired by Entellus Medical), and as an investor in many additional companies that have had successful exits, including Inspire Medical (NYSE: INSP), Axonics (Nasdaq: AXNX), BioHaven (Nasdaq: BHVN), Otonomy (Nasdaq: OTIC), and Entellus Medical (acquired by Stryker). Dr. Natale currently serves on the board of directors of Venus Concept Inc. (Nasdaq: VERO)
Dr. Natale trained in general surgery and otolaryngology/head and neck surgery at the University of Connecticut and Hartford Hospital. He received his BA from the University of Virginia, MD from the University of Florida, and MBA from Yale University.
Richard “Dick” Emmitt, MBA, our Chairman and Director Nominee, is widely regarded as one of the most experienced and successful investors in the medical device industry. Mr. Emmitt is a Senior Partner of InnovaHealth Partners, a New York-based private equity firm focused on the MedTech industry. He also is a General Partner and a co-founder in 1988 of The Vertical Group, a New Jersey-based MedTech focused investment firm. Mr. Emmitt’s background includes all stages of private equity, venture capital, and pubic equity markets. Among his former investments and board of director memberships are companies in virtually all major sectors of the MedTech industry: American Medical Systems (acquired by Endo Pharma and now a part of Boston Scientific); ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew); ev3 (acquired by Covidien/Medtronic); Galil Medical (acquired by BTG/Boston Scientific); Lifecell (acquired by KCI); OsteoBiologics (acquired by Smith & Nephew); SciMed Life Systems (acquired by Boston Scientific); Tornier (acquired by Wright Medical); Velocimed (acquired by Saint Jude); Wright Medical (acquired by Stryker); and Xomed Surgical (acquired by Medtronic). Additionally, his investments also include Outset Medical (Nasdaq: OM) and Silk Road Medical (Nasdaq: SILK).
Prior to his career as a venture capital and private equity investor, Mr. Emmitt was an investment analyst recognized as one of the leading experts on the health care industry by Institutional Investor Magazine. Mr. Emmitt received a BA in Economics from Bucknell University and an MBA from The Rutgers School of Business.
Gerry Brunk, MBA, our President and a Director, is a Managing Director and Co-head of the MedTech practice at Lumira. With over 28 years of investment, consulting and entrepreneurial experience in the healthcare industry, Mr. Brunk has helped build MedTech and biotech companies at all stages of development. He manages Lumira’s Boston office, which he established when he joined MDS Capital in 2002. Mr. Brunk has been responsible for Lumira’s investments in Bardy Diagnostics MAKO Surgical (IPO, subsequently acquired by Stryker), Cardiac Dimensions, Corvia Medical, Endotronix, HistoSonics, KAI Pharmaceuticals (acquired by Amgen), Pharmasset (acquired by Gilead Sciences), Satsuma Pharmaceuticals (Nasdaq: STSA) and Engage Therapeutics (acquired by UCB), among others.
Prior to joining Lumira, Mr. Brunk was an entrepreneur in the life sciences sector, founding and serving in a variety of management and board capacities at several venture capital-funded companies. Earlier in his career, he was an engagement manager in The Boston Consulting Group’s healthcare practice, where he advised pharmaceutical and MedTech companies on strategic and operational issues including portfolio management, new product launches, R&D productivity, mergers and acquisitions. Mr. Brunk began his career as a member of the investment banking group of Credit Suisse First Boston where his clients included both public and private healthcare companies. He serves on the Board of Directors of Southeast Life Sciences, the review board of the Ivy Foundation Biomedical Innovation Fund at the University of Virginia, and is a mentor for the Stanford University Biodesign program. He received his BA from the University of Virginia and MBA from Stanford University Graduate School of Business.
Daniel Hetu, MD, MBA, our Executive Vice President, is a Managing Director and Co-head of the MedTech practice at Lumira, and has been since 2007.With over 20 years of investment banking, corporate development, and licensing and investment experience, Dr. Hétu has been involved with life sciences companies at all stages of development in North America and overseas. He manages Lumira’s Montreal office and has invested in and served on the boards of numerous companies, including OpSens Medical (TSX: OPS), U-Systems (acquired by GE Healthcare), Cardiac Dimensions, IMV (TSX: IMV), Resonant Medical (acquired by Elekta) and XyloCor Therapeutics.
As an experienced senior executive with expertise in financing and corporate business development, Dr. Hétu previously spent 10 years at Shire Pharmaceuticals and at Biochem Pharma prior to its acquisition by Shire. As Vice President of Business Development (North America) and Vice President of Corporate Development, he led several financing, licensing and M & A transactions in the
therapeutics, vaccine, and diagnostics sectors. Prior to joining Biochem Pharma, Dr. Hétu was an investment banker at Burns Fry (now BMO Nesbitt Burns) where he was involved in M&A and financing transactions across various industrial sectors. He received his MD from Université de Sherbrooke and MBA from HEC Montréal.
Vasco Larcina, CPA, CA, our Chief Financial Officer, has over 20 years of senior financial management and audit experience. He is Chief Financial Officer at Lumira where he is responsible for the financial management of the firm and the investment funds it manages, and has been since the firm’s inception in 2007. Mr. Larcina oversees financial and legal operations, ensuring that the appropriate controls are in place to manage the activities of Lumira and its managed funds through the strategic evaluation, development and implementation of financial policies, systems and procedures developed in consideration of external reporting, risk, and governance, as well as, regulatory and tax compliance.
Prior to joining Lumira, Mr. Larcina worked as an external auditor with KPMG and has gained internal audit and operational audit experience with Enbridge Gas Distribution, a regulated public utility company, where he provided the internal control input for a major customer information system development project. He received his HBA from the Ivey School of Business at the University of Western Ontario and is a member of the Chartered Professional Accountants of Ontario.
Director Nominees
Peter van der Velden, MBA, MSc., one of our Director Nominees, is a venture capital veteran, who for the past 31 years has been involved in building innovative, technology-centric companies from start-up through to expansion. In 2005, he joined MDS Capital as Chief Executive Officer and after restructuring the firm, he led its subsequent buyout from MDS Laboratory Services. Mr. van der Velden has invested in and helped to build MedTech and biotech companies at all stages of development. He joined Lumira in 2007 and is based in Toronto, Canada. Mr. van der Velden is currently Lumira’s Managing General Partner, responsible for the day-to-day operations of the business, fund raising, and human resources. Along with Mr. Brunk, Mr. van der Velden has been responsible for Lumira’s investments in Bardy Diagnostics and HistoSonics. He led or managed the firm’s investments in Alveolus (acquired by Merit Medical), Spinal Kinetics (acquired by Orthofix), Aurinia Pharmaceuticals (Nasdaq: AUPH), Forbius (Acquired by Bristol Myers Squibb) and his is currently on the boards of Exact Imaging, AmacaThera, Edesa Biotech (Nasdaq: EDSA), and Medexus Pharmaceuticals (TSXV: MDP.V)
Mr. van der Velden is a frequently solicited lecturer at universities and conferences on themes related to venture capital, innovation and healthcare. He has actively worked with the Canadian Federal and Provincial governments on policy matters related to venture capital and healthcare innovation. In addition to investee company board roles, he has been very active on a wide variety of stakeholder and industry boards and advisory groups, including as, President and Chairman of the Canadian Venture and Private Equity Association.
Mr. van der Velden’s past board and advisory roles include: the Ontario Health Innovation Council, the World Health Innovation Network, the SickKids Commercialization Advisory Board, the Office of the Chief Health Innovation Strategist, the Ontario Scale-up Vouchers Program, and Life Sciences Ontario.
Prior to joining Lumira, Mr. van der Velden ran a boutique merchant bank (Fusion Capital Partners), was a partner in a buyout partnership (Bedford Partners) and served as Vice President Business Development for a venture capital-backed drug delivery company, Hyal Pharmaceutical Corp. He started his career with Connaught Laboratories, Inc., a Canadian vaccine manufacturer, and from there transitioned to an investing role at Vencap Equities Alberta Ltd., a venture capital firm. Mr. van der Velden received his MBA from the Schulich School of Business and his M.Sc. and B.Sc from Queen’s University.
Fritz A. LaPorte, one of our Director Nominees, is a Partner at Dovere Advisory Group, LLC, which he co-founded in October 2014 to guide earlier stage, growth companies, primarily operating in the medical devices and healthcare sectors, in creating and sustaining value while concurrently reducing risk. Mr. LaPorte co-founded MAKO Surgical, an orthopedic surgical robotics company, in November 2004, and served as Senior Vice President, Chief Financial Officer, and Treasurer through its IPO and eventual acquisition by Stryker in 2013.
Mr. LaPorte subsequently served as Vice President and Chief Financial Officer of Stryker Corporation — Stryker MAKO Business Unit from December 2013 to June 2014 to assist in the integration of MAKO into Stryker. He also sits on the board of directors at Venus Concept Inc. (Nasdaq: VERO), a leading medical aesthetics company, where he also serves as Audit Committee Chair, and Holy Cross Hospital in Fort Lauderdale, Florida where he also serves as a member of the finance committee. Mr. LaPorte holds a BBA in Accounting from Florida Atlantic University.
Past performance of our management team and its affiliates is not a guarantee either (i) of success with respect to any business combination we may consummate, or (ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management team or its affiliates as indicative of our future performance. None of our officers or directors has had experience with special purpose acquisition companies. In addition, for a list of members of our management team and entities for which a conflict of interest may or does exist between such persons and the company, as well as the priority 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”.
Business Strategy
Our acquisition and value creation strategy is to identify, acquire, and, after our initial business combination, build a company in the public markets that complements the experience and expertise of our management team and of Lumira to build long-term stockholder value. We will also apply the expertise of our management team and sponsor to provide us with a distinctive competitive advantage in sourcing and cultivating high quality targets. Key components of our business strategy include:
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Focus on white-space opportunity with limited competition: Few healthcare SPACs are exclusively focused on MedTech and we believe we are appropriately-sized to target very promising pre-public companies generally not suitable for competing SPACs, many of which are capitalized at a level we believe limits the pool of emerging, high-growth companies they can acquire at attractive valuations.
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Utilize proprietary industry knowledge to curate promising targets: We will leverage longstanding, active relationships with company management teams, boards, and investors to identify a shortlist of high-quality potential targets within the MedTech space. We believe our network, reputation and existing target pipeline will enable timely target identification, negotiation and closing.
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Leverage management experience and full resources of the Lumira platform to build a high-value company: Our broader team possesses a multi-decade track record of investing together to build high-value, category-leading private and public MedTech companies. We will capitalize on their experience to drive stronger operational performance at our target company post-combination.
Acquisition Criteria
Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial
business combination with a target business that does not meet these criteria and guidelines. We intend to acquire one or more businesses that:
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Addresses significant unmet clinical needs and/or achieves cost reductions in large and growing markets;
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Demonstrates early commercial traction, or a clear path to near-term commercial launch;
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Possesses high gross margin potential;
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Has highly differentiated competitive advantages with robust intellectual property protection;
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Is led by a strong, public-ready management team with demonstrated track record of value creation;
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Is an actionable target with an aligned board and investor syndicate;
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Articulates compelling use of proceeds and public equity growth capital; and
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Has multiple catalysts for value creation after de-SPACing combination.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as on other considerations, factors, and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
MedTech Market Opportunity
We believe the MedTech sector, and its medical devices, diagnostics, and digital health sub-sectors, represent an attractive target market given its size, growth profile, concentration of breakthrough technological innovations, favorable demographics, and target-rich environment of high quality pre-public companies. Our focus on MedTech allows us to capitalize on the unique, sector-specific investing experience of our management team and we believe this industry is attractive for a number of reasons:
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Large and Growing Market Opportunity: The healthcare industry represents a massive market opportunity. Total U.S. national health expenditure exceeded $3.8 trillion in 2019, and the Center for Medicare and Medicaid Services estimates that total healthcare spending will nearly double to $6.2 trillion by 2028. Within MedTech, our subsectors of focus each target large addressable markets with robust growth rates. Medical devices, diagnostics, and digital health address North American market sizes of approximately $170 billion, $30 billion, and $60 billion respectively as of 2020, each poised to expand at a mid-single digit or higher compound annual growth rate in the next five years. The MedTech arena is a particularly dense sector with thousands of private companies operating in the three aforementioned subsectors as of April 2021.
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Area of High Innovation and Favorable Growth Drivers: The MedTech sector is rooted in research-driven innovation, with sustained R&D investment throughout the last decade that has been fueled by the rise of connected devices, growing cost constraints on the healthcare system, and increased customer demand for a more patient-centered healthcare experience. In 2019, MedTech R&D grew by 11.5%, returning to pre-2008 financial crisis levels of double digit growth. Consistent innovation has allowed the sector to usher unprecedented shifts in healthcare paradigms, including the transition from minimally invasive to non-invasive surgery, the advent of next generation genetic sequencing tools that facilitate earlier diagnosis and more personalized therapeutic benefits, and the rapid adoption of telehealth and related novel care models among others.
In addition, the COVID-19 global pandemic has significantly altered the healthcare services paradigm in a way that creates further opportunities which MedTech is well-positioned to exploit. In volatile and uncertain economic times, prudent investments in healthcare can be an effective defensive measure. As the healthcare landscape transforms, MedTech remains poised to respond to industry trends and accelerate its evolution.
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Unprecedented Market Appetite: High growth MedTech companies have been well received by the market with scarcity and strategic consolidation driving robust valuations. In the past five years, there have been only 52 MedTech IPOs compared to 243 biotech IPOs. The dearth of new, high-quality assets coming to market, coupled with an accelerating pace of M&A, has left a depleted universe of MedTech companies to which public investors can allocate capital. Such market conditions have allowed MedTech companies to command premium valuations and outperform leading indices. Following the COVID-19 driven downturn in the broader market, MedTech valuations were up 50% by August 2020 compared to January 2019; exceeding the rebound for broader composite indices such as the New York Stock Exchange and the S&P 500 (up 15% and 40%, respectively, over the same period). Publicly traded high-growth MedTech companies, that we believe share similar characteristics with the type of companies we intend to target, have traded near record multiples of approximately 14-times forward year revenue as a multiple of enterprise value as of April 2021.
Our Competitive Advantages
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Intimate knowledge of the target universe: Our management team and sponsor review more than 600 new investment opportunities per year. With a sharp focus on the MedTech industry, Lumira tracks opportunities from inception through later-stage financings, often following promising companies closely for multiple years. Through our management team’s relationship with Lumira and an active cadence of investment discussions with potential target companies, our broader team has an expansive list of non-brokered relationships with decision makers at these companies, including their boards of directors and key shareholders. These relationships lead to proactive updates with attractive investment opportunities and regular portfolio reviews with investment peers. We believe the depth and currency of these relationships provides us with a competitive advantage in identifying promising acquisition targets, and gives us proprietary insights that can help negotiate and close a successful acquisition.
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Extensive experience with all phases of the investment lifecycle: Each member of the management team is an accomplished investor with an excellent track record of identifying, sourcing, and executing transactions. The team has decades of experience as entrepreneurs, operating executives, and investors in the MedTech space. Our Chief Executive Officer, Dr. Natale, has held critical roles in multiple MedTech companies and has built a portfolio of healthcare investments that achieved a cumulative aggregate exit value of over $17 billion, in the form of public monetization and strategic sales. Our Chairman, Mr. Emmitt, is widely regarded as one of the most experienced and successful investors in the medical device industry, with extensive experience across private equity, venture capital, and public equity markets. We believe the collective experience of our management team will not only facilitate a smooth combination process, but also be of meaningful value to the post-initial business combination management team by offering assistance to grow the business in the public space and create stockholder value.
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Proven Partners: Initially cultivated through their previous work together at MDS Capital, Lumira’s predecessor firm, beginning in 2002 and continuing through many co-investments over the ensuing years, our Chief Executive Officer, Dr. Natale; our President and a Director Mr. Brunk; and Director Nominee, Mr. van der Velden have a longstanding history of successful co-investment and value creation within the healthcare sector. Additionally, our Chairman, Mr. Emmitt, and our Chief Executive Officer, Dr. Natale, have successfully co-invested and collaborated on company development for approximately 15 years.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. We will also utilize our operational and capital planning experience.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, or from an independent accounting firm, that our initial business combination is fair to our company from a financial point of view.
Members of our management team may directly or indirectly own shares of our common stock and/or private placement warrants following this offering, and, accordingly, 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 was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current 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 in the case of a non-compete restriction, may not present such opportunity to us at all. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management — Conflicts of Interest.” Our amended and restated 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. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination.
Initial Business Combination
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. If our board of directors is not able to independently determine the fair market value of the target
business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such 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 such 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 business 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 or acquires 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. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would 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 our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. 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 taken into account for purposes of the 80% fair market value test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, these rules will not be applicable to us.
Our amended and restated certificate of incorporation will require the affirmative vote of a majority of our board of directors, which must include a majority of our independent directors, to approve our initial business combination (or such other vote as the applicable law or stock exchange rules then in effect may require).
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Corporate Information
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012, or 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, or 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 prior June 30th, 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 that is held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th.
Our executive offices are located at 303 Wyman Street, Suite 300, Waltham, Massachusetts 02451, and our telephone number is 781-530-3868. . Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus. You should not rely on any such information in making your decision whether to invest in our securities.
The Offering
In making your decision 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” in this prospectus.
10,000,000 units (or 11,500,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:
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one share of Class A common stock; and
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one-half of one warrant.
Units: “LVACU”
Class A Common Stock: “LVAC”
Warrants: “LVACW”
Proposed Nasdaq symbols
Trading commencement and separation of Class A common stock and warrants
The units will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the Representative informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.
Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K
In no event will shares of Class A 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 of the company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly, and no later than four business days, after the closing of this offering. 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.
Units:
Number outstanding before this offering
0
Number outstanding after this offering
10,000,000(1)
Common stock:
Number outstanding before this offering
2,875,000(2)(4)
Number outstanding after this offering
12,500,000(1)(3)(4)
Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
7,500,000(1)
Number of warrants to be outstanding after this offering and the private placement
12,500,000(1)
(1)
Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of 375,000 founder shares.
(2)
Consists solely of founder shares and includes up to 375,000 founder shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. Except as otherwise specified, the rest of this prospectus has been drafted to give effect to the full forfeiture of these 375,000 founder shares.
(3)
Includes 10,000,000 public shares and 2,500,000 founder shares.
(4)
Founder shares are classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution.”
Each whole warrant is exercisable to purchase one share of Class A common stock. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
$11.50 per share, subject to adjustment as provided herein. In addition, 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 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 respective affiliates, without taking into account any founder shares held by them, as applicable, prior to such issuance) (the “Newly Issued Price”), (x) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (y) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, then 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 $18.00 per share redemption trigger prices described below under “Redemption of warrants for cash” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable 30 days after the completion of our initial business combination provided that we have an effective registration statement under the Securities Act covering the issuance of shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities or blue sky laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
If our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement.
The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.
Redemption of warrants for
cash
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and
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if, and only if, the last reported sale price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.
We will not redeem the warrants unless a registration statement under the Securities Act covering the issuance of shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
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 determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (as defined below) over the exercise price of the warrants by (y) the fair market value and (B) 0.361 per warrant. The “fair market value” shall mean the average last reported sale price of shares of the Class A common stock for the 10 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. For the avoidance of doubt, no shares shall be issued
when the market price of the common stock is less than the exercise price at the time of exercise. Please see the section entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” for additional information.
Except as described below, none of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Election of directors; voting rights
Our amended and restated certificate of incorporation will provide that, prior to our initial business combination, only holders of our founder shares (our Class B common stock) will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or the applicable rules of Nasdaq then in effect, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.
In March 2021, our sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering costs on our behalf in consideration of 2,875,000 founder shares. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. As such, our initial stockholders will collectively own 20% of our outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend, share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering. Up to 375,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:
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only holders of the founder shares have the right to vote on the election of directors prior to our initial business combination;
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the founder shares are subject to certain transfer restrictions, as described in more detail below;
our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with (x) the completion of our initial business combination and (y) a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (ii) 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 18 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame).
If we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and directors have agreed, pursuant to such letter agreement, 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 our initial stockholders’ founder shares, we would need 3,750,001, or approximately 37.5% (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option), or 625,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and no exercise of the underwriter’s over-allotment option), of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved (or, if the applicable rules of Nasdaq then in effect require approval by a majority of the votes cast by public stockholders, we would need 5,000,001 of public shares sold in this offering to be voted in favor of a transaction (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option) in order to have such an initial business combination approved).
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the founder shares are automatically convertible into our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and
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the founder shares are entitled to registration rights.
Transfer restrictions on founder shares
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earliest to occur of: (A) one year after the completion of our initial business combination; (B) subsequent to our initial business combination, if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial business combination; and (C) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”). We refer to such transfer restrictions throughout this prospectus as the lock-up.
Founder shares conversion and anti-dilution rights
We have 2,875,000 shares of Class B common stock, par value $0.0001 per share, outstanding. The shares of Class B common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of shares of common stock outstanding upon the completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination.
Private placement warrants
Our sponsor has committed to purchase an aggregate of 7,500,000 private placement warrants (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per warrant ($7,500,000 in the aggregate or $8,175,000 in the aggregate if the underwriters’ over-allotment option is
exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account such that at the time of closing $102,500,000 (or $117,875,000 if the underwriters exercise their over-allotment option in full) will be held in the trust account. If we do not complete our initial business combination within 18 months from the closing of this offering, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will not be redeemable by us so long as they are held by our sponsor or its permitted transferees. The private placement warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees. If the private placement warrants are held by holders other than the sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
Transfer restrictions on private placement warrants
The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”).
Proceeds to be held in trust account
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the $107,500,000 in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or $123,175,000 if the underwriters’ over-allotment option is exercised in full, $102,500,000 ($10.25 per unit), or $117,875,000 ($10.25 per unit) if the underwriters’ over-allotment option is exercised in full (including $3,500,000 (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions), will be deposited into a U.S.-based trust account at Morgan Stanley, with Continental Stock Transfer & Trust Company acting as trustee, and $800,000 will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The funds in the trust account will be invested only in specified U.S. government treasury bills or in specified money market funds.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Anticipated expenses and funding sources
Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay our taxes and/or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. Based upon current interest rates, we expect the trust account to generate approximately $102,500 of interest annually (assuming an interest rate of 0.1% per year). Unless and until we complete our initial business combination, we may pay our expenses only from:
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the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $2,200,000 in working capital after the payment of approximately $800,000 in expenses relating to this offering; and
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any loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds or invest in us, and provided any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of a business combination.
Conditions to completing our initial business combination
There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. 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. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm. 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 business 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 or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial 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 taken into account for purposes of Nasdaq’s 80% fair market value test.
Permitted purchases of public shares and warrants by our affiliates
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares or warrants such persons may purchase. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our sponsor, directors, officers, advisors or their affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Subsequent to the consummation of this
offering, we will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information; and (ii) to clear all trades with a designated officer prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our sponsor, directors, officers, advisors or their affiliates will be restricted from making any purchases if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
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 $10.25 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 underwriters. The redemption rights will 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. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
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. 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 require us to seek stockholder approval under applicable law or 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 amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirements or we choose to seek stockholder approval for business or other reasons.
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 amended and restated 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.
Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our shares of Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.
In the event 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 may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001, after payment of the deferred underwriting commission (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 such initial business combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, 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.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
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 (or, if the applicable rules of Nasdaq then in effect require, a majority of the outstanding shares of common stock held by public stockholders are voted in favor of the business transaction). Unless restricted by Nasdaq rules, 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 capital stock of our company entitled to vote at such a meeting. Unless restricted by Nasdaq rules, our initial stockholders will count toward this quorum. Pursuant to the terms of a letter agreement entered into with us, our sponsor, officers and directors have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least 20% of our outstanding common stock entitled to vote
thereon. These quorum and voting thresholds and the letter agreement may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem their public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an 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 Class A 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 Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternative business combination.
Tendering stock certificates in connection with a tender offer or redemption rights
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 tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve our initial business combination in the event we distribute proxy materials, 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, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, 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 will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.
Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold stockholder vote
Notwithstanding the foregoing redemption rights, if we seek stockholders approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that 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 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% 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 sponsor or its affiliates 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 15% 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 15% of the shares sold in this offering) for or against our initial business combination. Our sponsor, officers and directors have, pursuant to a letter agreement entered into with us, waived their right to have any founder shares or public shares redeemed in connection with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from an initial stockholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver. However, to the extent any such affiliate acquires public shares in this offering or thereafter through open market purchases, it would be a public stockholder and subject to the 15% limitation in connection with any such redemption right.
Redemption rights in connection with proposed amendments to our amended and restated certificate of incorporation
Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity, other than amendments relating to the appointment of directors, which require the approval of holders of a majority of at least 90% of our outstanding common stock entitled to vote thereon (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders, as described herein), may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon. In all other instances our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the Delaware General Corporation Law, or DGCL, or applicable stock exchange rules. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A 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. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).
Release of funds in trust account on closing of our initial business combination
On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public stockholders who properly exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt, 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 or used for redemptions of our Class A common stock, 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.
Redemption of public shares and distribution and liquidation if no initial business combination
Our sponsor, officers and directors have agreed that we will have only 18 months from the closing of this offering to complete our initial business combination. If we have not completed our initial business combination within such 18-month 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); 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. 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 18-month time period.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 18 months from the closing of this offering. However, if our sponsor, officers and directors acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 18 month time frame.
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination and subsequently liquidate and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Limited payments to insiders
There will be no restrictions on payments made to insiders. We expect that some or all of the following payments will be made to our sponsor, officers or directors, or our or their affiliates; however: none of them will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:
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Repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
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Payment to our sponsor of a total of $5,000 per month, for up to 18 months, for office space, administrative and support services;
•
Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
•
Repayment of loans which may be made by our sponsor, an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $2,000,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants.
These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.
Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or our or their affiliates.
Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current 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. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management — Conflicts of Interest.” Our amended and restated 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. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the trust account to below (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the
interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to 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. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such eventuality. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all third parties, service providers (other than our independent auditors), 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 monies held in the trust account.
Risks
We are a newly incorporated company that has conducted no operations and has 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 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. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, 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 of This Offering to Those 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” in this prospectus.
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 is presented.
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|
|
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June 30, 2021
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|
|
|
|
|
Actual
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|
|
As Adjusted
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|
|
Balance Sheet Data:
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|
|
|
|
|
|
|
|
|
Working capital (deficiency)
|
|
|
|
$
|
(70,363)
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|
|
|
|
$
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2,224,000
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|
|
|
Total assets
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|
|
|
$
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94,363
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|
|
|
|
$
|
102,724,000
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|
|
|
Total liabilities
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|
|
|
$
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70,363
|
|
|
|
|
$
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17,350,003
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|
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Value of Class A common stock subject to possible redemption
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|
|
|
$
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—
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|
|
|
|
$
|
102,500,000
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|
|
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Stockholders’ equity (deficit)
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|
|
|
$
|
24,000
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|
|
|
|
$
|
(15,126,003)
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|
|
If no business combination is completed within 18 months 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 (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they 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 18-month time period.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
Some statements contained in this prospectus are forward-looking in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’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,” “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.
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. There can be no assurance that future developments affecting us will 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, the following risks, uncertainties and other factors:
•
our being a company with no operating history and no revenue;
•
our ability to select an appropriate target business or businesses;
•
our ability to complete our initial business combination;
•
our expectations around the performance of a prospective target business or businesses;
•
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
•
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;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses;
•
our ability to consummate an initial business combination due to the continued uncertainty resulting from the COVID-19 pandemic;
•
the ability of our officers and directors to generate a number of potential business combination opportunities;
•
our public securities’ potential liquidity and trading;
•
the lack of a market for our securities;
•
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
•
the trust account not being subject to claims of third parties; or
•
our financial performance following this offering;
•
risks and uncertainties related to the financial services industry or businesses providing technology services to the financial industry; and
•
the other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.
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.
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
Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may choose not to hold a stockholder vote before we complete our initial business combination if the business combination would not require stockholder approval under applicable law or stock exchange listing requirement. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek stockholder approval to complete such a transaction. Except for as required by applicable law or stock exchange listing requirement, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of a majority of our issued and outstanding public shares do not approve of the business combination we complete.
Please see the section entitled “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our sponsor, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, 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 our initial stockholders’ founder shares, we would need 3,750,001, or approximately 37.5% (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option), or 625,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and no exercise of the underwriter’s over-allotment option), of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved (or, if the applicable rules of Nasdaq then in effect require approval by a majority of the votes cast by public stockholders, we would need 5,000,001 of public shares sold in the offering to be voted in favor of a transaction (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option) in order to have an initial business combination approved). We expect that our initial stockholders and their permitted transferees will own at least 20% of our outstanding common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that
the necessary stockholder approval will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder approval. Accordingly, if we do not seek stockholder approval, 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 initial 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 a business combination with a target.
We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay and the payment of the deferred underwriting commissions. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (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. 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 will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholder to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing may
involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.
The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 18 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a 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 complete our initial business combination within the prescribed time frame, 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 $10.25 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed that we must complete our initial business combination within 18 months from the closing of this offering. We may not be able to find a suitable target business and complete 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. If we have not completed our initial business combination within such 18-month 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 $10.25 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 $10.25 per share” and other risk factors herein.
The recent coronavirus (COVID-19) pandemic and the impact on businesses and debt and equity markets could have a material adverse effect on our search for a business combination, and any target business with which we ultimately consummate a business combination.
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout the world, including the United States and Europe. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to the coronavirus, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. The coronavirus pandemic has resulted in a widespread health crisis that has adversely impacted the economies and financial markets worldwide, business operations and the conduct of commerce generally. There is no way of being certain how long these adverse impacts will last. The coronavirus, or other disease outbreaks, could have a material adverse effect on the business of any potential target business with which we consummate a business combination. Furthermore, we may be unable to complete a business combination if concerns relating to the coronavirus pandemic 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 the coronavirus 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 coronavirus pandemic and the actions to contain the coronavirus or treat its impact, among others. If the disruptions posed by the coronavirus or other matters of global concern continue for an extensive period of time, it could have a material adverse effect on our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination.
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.
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. Such a purchase may 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 sponsor, directors, officers, advisors 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. The price per share paid in any such transaction may be different than the amount
per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Business Strategy — Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination — Tendering stock certificates in connection with a tender offer or redemption rights.”
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 or warrants, potentially at a loss.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business combination, and then only in connection with those public shares that such stockholder properly elected to redeem, subject to the limitations described herein; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law and as further described herein. In addition, if we have not completed our initial business combination within 18 months from the closing of this offering for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond 18 months from the closing of this offering before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet of the company 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 do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeemed and, in the event we seek stockholder approval of our initial business combination, we make purchases of our Class A common stock, potentially reducing the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for at least the 18 months following the closing of this offering, 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 18 months following the closing of this offering, assuming that our initial business
combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering and potential loans from certain of our affiliates are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
We believe that, upon the closing of this offering, the funds available to us outside of the trust account, will be sufficient to allow us to operate for at least the 18 months following the closing of this offering; however, we cannot assure you that our estimate is accurate. 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 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 have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we may depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $2,200,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $800,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $800,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. None of our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to, or invest in, us in such circumstances. Any such advances may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we have not completed our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
Subsequent to our completion of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. 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. Accordingly, any securityholders who choose to remain securityholders following our initial business combination could suffer a reduction in the value of their securities. Such securityholders are unlikely to have a remedy for such reduction in value.
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 $10.25 per share.
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 third parties, service providers (other than our independent auditors), 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. Making such a request of potential target businesses may make our acquisition proposal less attractive to them, and to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
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 have not completed our initial business combination within the prescribed timeframe, 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 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.25 per share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) 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 (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to 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. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.25 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per public share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by third parties and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.25 per share.
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, a bankruptcy 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 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 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 by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing 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, 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 petition or an involuntary bankruptcy petition 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. 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 would be reduced.
If we have not consummated our initial business combination within 18 months of the closing of this offering, our public stockholders may be forced to wait beyond such 18 months before redemption from our trust account.
If we have not consummated our initial business combination within 18 months from the closing of this offering, we will distribute the aggregate amount then on deposit in the trust account (less up to $100,000 of the net interest earned thereon to pay dissolution expenses), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public stockholders from the trust account shall be effected automatically by function of our amended and certificate of incorporation prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors may be forced to wait beyond the initial 18 months before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated certificate of incorporation, and only then in cases where investors have properly sought to redeem their common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we have not completed our initial business combination with the required time period and do not amend certain provisions of our amended and restated certificate of incorporation prior thereto.
Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
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 our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering may be considered a liquidating distribution under Delaware law. If a 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 liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution 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. However, it is our intention to redeem our public shares as soon as reasonably possible following the 18th month from the closing of this offering in the event we do not complete our business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we will not be complying with Section 280, 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 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution 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 likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. 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 beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering is not considered a liquidating 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 liquidating distribution.
We may not hold an annual meeting of stockholders until after the consummation of our initial business combination. Our public stockholders will not have the right to elect directors prior to the consummation of our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purpose of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. In addition, as holders of our shares of Class A common stock, our public stockholders will not have the right to vote on the election of directors. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
Because we are not limited to a particular industry or 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’s operations.
We may seek to complete a business combination with an operating company in any industry, sector or location. However, we will not, under our amended and restated certificate of incorporation,
be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. 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 cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. 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. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any securityholders who choose to remain securityholders following our initial business combination could suffer a reduction in the value of their securities. Such securityholders are unlikely to have a remedy for such reduction in value of their securities.
As the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This could increase the cost of our initial business combination and could even result in our inability to find a 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 potential targets for special purpose acquisition companies have already entered into an initial business combination, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many such 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.
We may seek acquisition opportunities in industries or sectors that may be outside of our management’s areas of expertise.
We will consider a business combination outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors related to such acquisition. Accordingly, any securityholders who choose
to remain securityholders following our initial business combination could suffer a reduction in the value of their securities. Such securityholders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and 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 a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if 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, 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 have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. 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.
We are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that the price we are paying is fair to our company 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.
Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include target historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. 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 as issued by the International Accounting Standards Board, or IFRS, 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. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial 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. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules), and the agreement relating to our initial business combination may have additional net tangible asset or cash requirements. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A 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, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination but that some of our stockholders may not support.
In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our charter or governing instruments, including their warrant agreements, in order to effectuate our initial business combination.
Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of at least 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-business combination activity, other than amendments relating to the appointment of directors, which require the approval of holders of a majority of at least 90% of our outstanding common stock entitled to vote thereon (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders, as described herein), may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our common stock entitled to vote thereon. In all other instances our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree.
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.
Although we believe that the net proceeds of this offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have
not yet selected any target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from 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. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. 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. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial stockholders will own 20% of our outstanding shares of common stock (assuming they do not purchase any units in this offering). In addition, the founder shares, all of which are held by our initial stockholders, will entitle the holders to elect all of our directors prior to our initial business combination. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. As a result, you will not have any influence over the election of directors prior to our initial business combination.
Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation or bylaws and approval of major corporate transactions. If our initial stockholders purchase any additional shares of Class A common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote at least until the completion of our initial business combination.
Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
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 complete 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 have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
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 the company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Delaware law. However, we believe the ability of such individuals to remain with us after the completion 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 completion of our initial business combination. We cannot assure you that any of our key personnel will 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 affect 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’s 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 skills, qualifications or abilities we suspected. 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. Accordingly, any securityholders who choose to remain securityholders following
our initial business combination could suffer a reduction in the value of their securities. Such securityholders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidates’ key personnel upon the completion 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 members of the management of an acquisition candidate will not wish to remain in place.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our 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 following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, 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 an 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 is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
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our inability to pay dividends on our 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 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;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and
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other purposes and other disadvantages compared to our competitors who have less debt.
We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.
The net proceeds from this offering and the sale of the private placement warrants will provide us with approximately $107,500,000 (or $123,175,000 if the underwriters’ over-allotment option is exercised
in full) that we may use to complete our initial business combination (after payment of $3,500,000, or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account, and excludes estimated offering expenses of $800,000).
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. 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 completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. 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:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. 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 complete our initial business combination with a private company about which little information is available, which may result in a business combination with a business that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally 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 a business combination with a business that is not as profitable as we suspected, if at all.
If we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations.
We may pursue a business combination with a target business in any geographic location. If we effect our initial business combination with a company with operations or opportunities outside of the
United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with difficult commercial and legal requirements of the overseas market;
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rules and regulations regarding currency redemption;
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complex 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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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles;
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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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rates of inflation;
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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, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriation of assets.
We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such combination or, if we complete such combination, our operations might suffer, either of which may adversely impact our results of operations and financial condition.
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.
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 $10.25 per share or which approximates the per-share amounts in our trust account at such time, which is generally approximately $10.25. 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.
We may engage the underwriter or its affiliates to provide additional services to us after this offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction. The underwriter is entitled to receive deferred commissions that will released from the trust only on a completion of an initial business combination. These financial incentives may cause the underwriter to have potential conflicts of interest in rendering any such additional services to us after this offering, including, for example, in connection with the sourcing and consummation of an initial business combination.
We may engage the underwriter or its affiliates to provide additional services to us after this offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing. We may pay the underwriter or its affiliates fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with the underwriter or its affiliates and no fees or other compensation for such services will be paid to the underwriter or its affiliates prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriting compensation in connection with this offering. The underwriter is also entitled to receive deferred commissions that are conditioned on the completion of an 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.
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.
Risks Relating to our Sponsor and Management Team
We are dependent upon our officers and directors and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, Gerry Brunk, our President and a Director, and Anthony Natale, our Chief Executive Officer and a Director, and our other officers and directors. We believe that our success depends on the continued service of our officers and directors, at least until we have completed our initial business combination. 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. Moreover, certain of our officers and directors have time and attention requirements for other employers, including third parties with which they are affiliated. 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.
Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel 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, we cannot assure you that our assessment of these individuals will 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 officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. Our officers and directors also serve or may in the future serve as officers and board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to
our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’ other business affairs, please see “Management — Directors and Executive Officers.”
Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are, or may in the future become, affiliated with entities that are engaged in a similar business, including another blank check company that may have acquisition objectives that are similar to ours or that is focused on a particular industry even before we have entered into a definitive agreement regarding our initial business combination. Therefore, our sponsor and directors and officers are 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 acquisition target.
Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties. 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. Our amended and restated 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 their capacity as our director or officer 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.
For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Management — Directors and Executive Officers,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our officers, directors, securityholders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, officers, securityholders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us, including the formation of, or participation in, one or more other blank check companies. Accordingly, such persons or entities may have a conflict between their interests and ours.
We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors. Our
officers and directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such 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 a business combination as set forth in “Proposed Business — Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, 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.
Since our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
In March 2021, our sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering costs on our behalf in consideration of 2,875,000 founder shares. As such, our sponsor will own 20% of our outstanding shares after this offering (assuming it does not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend, share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable to purchase one share of our Class A common stock, for a purchase price of $7,500,000 in the aggregate (or $8,175,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), or $1.00 per warrant. The private placement warrants will also be worthless if we do not complete a business combination. Each private placement warrant may be exercised for one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.
The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that: (i) only holders of the founder shares have the right to vote on the election of directors prior to our initial business combination; (ii) the founder shares are subject to certain transfer restrictions; (iii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with (1) the completion of our initial business combination and (2) a stockholder vote to amend our amended and restated certificate of incorporation (x) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (y) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (B) 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 18 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (iv) the founder shares are automatically
convertible into our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein; and (v) the founder shares are entitled to registration rights.
The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire less than 100% of the outstanding equity interests or assets of a target business, but we will only complete such 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 business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns or acquires 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. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a controlling 100% interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. 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 our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include two-year director terms and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may discourage transactions that could involve payment of a premium over prevailing market prices for our securities.
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will, subject to certain exceptions, be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware 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) for which the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision may limit or make more costly a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. 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. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. 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.
If our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following our initial business combination, any or all of our management could resign from their positions as officers of the company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with United States securities laws. If new management is unfamiliar with United States securities 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.
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
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We intend to apply to have our units listed on Nasdaq. We expect that our units will be listed on Nasdaq on or promptly after the date of this prospectus. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be separately listed on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in Nasdaq listing standards, we cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 400 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
•
a limited availability of market quotations for our securities;
•
reduced liquidity for our securities;
•
a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
•
a limited amount of news and analyst coverage; and
•
a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units and eventually our Class A common stock and warrants will be listed on Nasdaq, our units, Class A common stock and warrants will qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
If we seek stockholder approval of our initial 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 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that 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 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. As a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.25 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations 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. government 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 that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.25 per share.
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 with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are not currently subject to.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with a maturity of 185 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under 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 a business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.25 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.25 per share on the redemption of their shares. 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 $10.25 per share” and other risk factors herein.
We may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation will authorize the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0001 per share, 15,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 90,000,000 and 12,500,000 (assuming in each case that the underwriters have not exercised their over-allotment option) authorized but unissued
shares of Class A and Class B common stock, respectively, available for issuance, which amount takes into account the shares of Class A common stock reserved for issuance upon exercise of outstanding warrants but not the conversion of the Class B common stock. Shares of Class B common stock are automatically convertible into shares of our Class A common stock at the time of our initial business combination initially at a one-for-one ratio but subject to adjustment as set forth herein. Immediately after this offering, there will be no shares of preferred stock outstanding.
We may issue a substantial number of additional shares of common stock or preferred stock in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and certificate of incorporation will provide, among other things, that 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 as a class with our public shares on any initial business combination. The issuance of additional shares of common stock or preferred stock:
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may significantly dilute the equity interest of investors in this offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change in control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and
•
may not result in adjustment to the exercise price of our warrants.
The grant of registration rights to our initial stockholders and holders of our private placement warrants may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, at or after the time of our initial business combination, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares, after those shares convert to our Class A common stock. In addition, holders of our private placement warrants and their permitted transferees can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A common stock issuable upon exercise of such warrants. 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 Class A 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 stockholders 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 Class A common stock that is expected when the securities owned by our initial stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted transferees are registered for resale.
Our sponsor paid an aggregate of $25,000, or approximately $0.009 per founder share, and, accordingly, you will experience immediate and substantial dilution upon the purchase of our Class A common stock.
The difference between the public offering price per share (allocating all of the unit purchase price to the Class A common stock and none to the warrant included in the unit) and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, and (ii) maximum redemption by public shareholders for a pro rata share of the trust account in connection with an initial business combination, you and the other public stockholders will incur an immediate and substantial dilution of approximately 158.8% (or $15.88 per share, assuming full exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $(5.88) (as decreased by the value of approximately 11,500,000 shares of Class A common stock that may be redeemed for cash) and the initial offering price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the shares of Class B common stock result in the issuance of the shares of Class A common stock on a greater than one-to-one basis upon conversion of the shares of Class B common stock at the time of our initial business combination. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants.
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 to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
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. In addition, the
warrant agreement provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the rules and regulations promulgated thereunder. 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 (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 in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. 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 may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant; provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of such redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants. Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Our warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 5,000,000 shares of our Class A common stock (or up to 5,750,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $11.50 per share (subject to adjustment as provided herein), as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement warrants to purchase an aggregate of 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) shares of Class A common stock at $11.50 per share (subject to adjustment as provided herein). Prior to this offering, our sponsor purchased an aggregate of 2,875,000 founder shares in a private placement. The founder shares are convertible into shares of
Class A common stock on a one-for-one basis, subject to adjustment as provided herein. In addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital loans, up to $2,000,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
To the extent we issue shares of Class A common stock for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance, will increase the number of outstanding shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, (iii) they may be exercised by the holders on a cashless basis, and (iv) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights.
Because each unit contains one-half of one warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one warrant. Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares of Class A common stock, only a whole warrant may be exercised at any given time. This is different from other offerings similar to ours whose units include one share of common stock and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
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
(i)
we issue additional shares of Class A 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;
(ii)
the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and
(iii)
the Market Value is below $9.20 per share,
then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described below under “Redemption of warrants for cash” will be adjusted (to the nearest cent) to be equal to
180% 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. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.
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 representatives of 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 Class A 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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our capital structure;
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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; and
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other factors as were deemed relevant.
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.
There is currently no market for our securities. 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. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
We are registering the offer and sale of the Class A common stock underlying the public warrants under the Securities Act, however we cannot assure you that such registration will be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
While we have registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act as part of the registration statement of which this prospectus forms a part we do not plan on keeping a prospectus current until required to do so pursuant to the warrant agreement.
Under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our
best efforts to file, and within 60 business days following our initial business combination to have declared effective, a post-effective amendment to the registration statement covering the issuance of such shares and we will use our best effforts to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration or redemption of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the offer and sale of the shares issuable upon exercise of the warrants is not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. Notwithstanding the above, if our Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Exercising the warrants on a cashless basis could have the effect of reducing the potential “upsize” of the holder’s investment in our company because the warrant holders will hold a smaller number of shares of Class A common stock upon a cashless exercise of the warrants it holds. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to effect registration or qualification of the underlying securities under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants. We will use our best efforts to register or qualify the offer and sale of such shares under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering.
Since our sponsor paid only approximately $0.009 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.
In March 2021, we issued 2,875,000 founder shares to our sponsor in exchange for a capital contribution of $25,000, or approximately $0.009 per share. Certain of our officers and directors have a significant economic interest in our sponsor. 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.
General Risk Factors
We are a newly incorporated 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 newly incorporated company with no operating results, and we will not commence operations until obtaining funding through this offering. 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 a 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.
Past performance by our management team and their respective affiliates, may not be indicative of future performance of an investment in the company.
Information regarding performance by, or businesses associated with our management team and their respective affiliates is presented for informational purposes only. Past performance by our management team and their respective affiliates 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.
You should not rely on the historical record of the performance of our management team’s performance or the performance of their respective affiliates as indicative of our future performance or of an investment in the company or the returns the company will, or is likely to, generate going forward. Our management has no experience in operating special purpose acquisition companies.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, investments and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. 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 may also change from time to time and those changes could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, 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.
We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
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 standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. 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.
Data privacy and security breaches, including, but not limited to, those resulting from cyber incidents or attacks, acts of vandalism or theft, computer viruses and/or misplaced or lost data, could result in information theft, data corruption, operational disruption, reputational harm, criminal liability and/or financial loss.
In searching for targets for our initial business combination, we may 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 privacy and 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 privacy or security protection, we may not be sufficiently protected against such occurrences and therefore could be liable for privacy and security breaches, including potentially those caused by any of our subcontractors. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents or other incidents that result in a privacy or security breach. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to reputational harm, criminal liability and/or financial loss.
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 that is held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th. 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.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political, social and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target
business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and 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.
In addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing and the coronavirus pandemic and other related events could have a material adverse effect on our ability to raise adequate financing, 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.
USE OF PROCEEDS
We are offering 10,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.
|
|
|
|
Without
Over-Allotment
Option
|
|
|
Over-Allotment
Option Fully
Exercised
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross proceeds from units offered to public(1)
|
|
|
|
$
|
100,000,000
|
|
|
|
|
$
|
115,000,000
|
|
|
|
Gross proceeds from private placement warrants offered in the private
placement
|
|
|
|
|
7,500,000
|
|
|
|
|
|
8,175,000
|
|
|
|
Total gross proceeds
|
|
|
|
$
|
107,500,000
|
|
|
|
|
$
|
123,175,000
|
|
|
|
Estimated offering expenses(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2.0% of gross proceeds from units offered
to public, excluding deferred portion)(3)
|
|
|
|
$
|
2,000,000
|
|
|
|
|
$
|
2,300,000
|
|
|
|
Legal fees and expenses
|
|
|
|
|
250,000
|
|
|
|
|
|
250,000
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
75,000
|
|
|
|
|
|
75,000
|
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
75,000
|
|
|
|
|
|
75,000
|
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
150,000
|
|
|
|
|
|
150,000
|
|
|
|
Printing and engraving expenses
|
|
|
|
|
50,000
|
|
|
|
|
|
50,000
|
|
|
|
Miscellaneous expenses
|
|
|
|
|
200,000
|
|
|
|
|
|
200,000
|
|
|
|
Total estimated offering expenses (other than underwriting commissions)
|
|
|
|
$
|
800,000
|
|
|
|
|
$
|
800,000
|
|
|
|
Proceeds after estimated offering expenses
|
|
|
|
$
|
104,700,000
|
|
|
|
|
$
|
120,075,000
|
|
|
|
Held in trust account(3)
|
|
|
|
$
|
102,500,000
|
|
|
|
|
$
|
117,875,000
|
|
|
|
% of public offering size
|
|
|
|
|
102.5%
|
|
|
|
|
|
102.5%
|
|
|
|
Not held in trust account(2)
|
|
|
|
$
|
2,200,000
|
|
|
|
|
$
|
2,200,000
|
|
|
The following table shows the use of the approximately $2,200,000 of net proceeds not held in the trust account.(5)
|
|
|
|
Amount
|
|
|
% of Total
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination(4)
|
|
|
|
$
|
500,000
|
|
|
|
|
|
22.72%
|
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
150,000
|
|
|
|
|
|
6.81%
|
|
|
|
Payment for office space, administrative and support services ($5,000 per month for up to 18 months)
|
|
|
|
|
90,000
|
|
|
|
|
|
4.09%
|
|
|
|
Directors and officers insurance
|
|
|
|
|
700,000
|
|
|
|
|
|
31.81%
|
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
150,000
|
|
|
|
|
|
6.81%
|
|
|
|
Other miscellaneous expenses (including franchise taxes, if needed)
|
|
|
|
|
610,000
|
|
|
|
|
|
27.77%
|
|
|
|
Total
|
|
|
|
$
|
2,200,000
|
|
|
|
|
|
100.0%
|
|
|
(1)
Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)
A portion of the offering expenses will be paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. As of June 30, 2021, there was $54,363 in outstanding
borrowings under the promissory note provided by our sponsor. These loans will be repaid upon completion of this offering out of the $800,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account. These expenses are estimates only. In the event that offering expenses are less than as set forth in this table, any such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.
(3)
The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $3,500,000, which constitutes the underwriters’ deferred commissions (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account, and the remaining funds, less amounts used to pay any redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4)
These expenses 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 a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. 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 not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. Based on current interest rates, we would expect the trust account to generate approximately $102,500 of interest annually; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.1% per annum based upon current yields of securities in which the trust account may be invested. In addition, in order to fund working capital deficiencies or to finance transaction costs in connection with an intended initial business combination, our sponsor, or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans by our sponsor, affiliate of our sponsor, or certain of our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or affiliates of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
(5)
Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the $107,500,000 in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or $123,175,000 if the underwriters’ over-allotment option is exercised in full, $102,500,000 ($10.25 per unit), or $117,875,000 ($10.25 per unit) if the underwriters’ over-allotment option is exercised in full (including $3,500,000 (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions), will be deposited into a U.S.-based trust account at Morgan Stanley, with Continental Stock Transfer & Trust Company acting as trustee.
The funds in the trust account will 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. Based on current interest rates, we estimate that the interest earned on the trust account will be approximately $102,500 per year, assuming an interest rate of 0.1% per year. We will not be permitted to withdraw any of the principal or interest held in the trust account except for the withdrawal of interest to pay our taxes, if any, the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law. Based on current interest rates, we expect that interest earned on the trust account will be sufficient to pay our taxes.
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 equity or debt, 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 or used for redemptions of our Class A common stock, 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 the post-transaction company, 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.
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 a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or any of their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.
We will enter into an agreement with an affiliate of our sponsor pursuant to which we will pay our sponsor a total of $5,000 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Prior to the closing of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses related to the organization of our company and this offering. As of June 30, 2021, there was $54,363 in outstanding borrowings under the promissory note provided by our sponsor. This loan is non-interest bearing, unsecured and due at the earlier of December 31, 2021 and the closing of this offering. This loan will be repaid upon the completion of this offering out of the $800,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In addition, in order to fund working capital deficiencies or to finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates may also purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
We may not redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules) and the agreement for our initial business combination may require 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 so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or the related business combination, and instead may search for an alternate business combination.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business combination, and then only in connection with those public shares that such stockholder properly elected to redeem, subject to the limitations described herein; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law and as further described herein. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (i) to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with (x) the completion of our initial business combination and (y) a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (ii) 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 18 months from the closing of this offering within the prescribed time frame. However, if our sponsor, officers and directors acquire public, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.
DIVIDEND POLICY
We have not paid any cash dividends on our 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 cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering. 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 of Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock 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 placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. 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 Class A common stock which may be redeemed for cash), by the number of outstanding shares of our Class A common stock.
At June 30, 2021, our net tangible book value was $(70,363), or approximately $(0.03) per share of Class B common stock (or $(0.02) if the underwriters’ over-allotment option is exercised). After giving effect to the sale of 10,000,000 shares of Class A common stock included in the units we are offering by this prospectus (or 11,500,000 if the underwriters’ over-allotment option is exercised), the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at June 30, 2021 would have been $(15,126,003) or $(6.05) per share (or $16,897,503 or $(5.88) per share if the underwriters’ over-allotment option is exercised), representing an immediate increase in net tangible book value (as decreased by the value of the approximately 10,000,000 shares of Class A common stock that may be redeemed for cash or 11,500,000 assuming full exercise of the underwriters’ over-allotment option) of $(6.02) per share (or $(5.86) per share if the underwriters’ over-allotment option is exercised) to our initial stockholders as of the date of this prospectus and an immediate dilution of $10.00 per share or 100% to our public stockholders not exercising their redemption rights. Total dilution to public stockholders from this offering will be $16.05 per share or 160.5%. The dilution to new investors if the underwriters exercise the over-allotment option in full would be an immediate dilution of $15.88 per share or 158.8%.
The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
|
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Public offering price
|
|
|
|
$
|
10.00
|
|
|
|
|
$
|
10.00
|
|
|
|
Net tangible book value before this offering
|
|
|
|
$
|
(0.03)
|
|
|
|
|
$
|
(0.02)
|
|
|
|
Increase attributable to public stockholders and sale of the private placement warrants
|
|
|
|
$
|
(6.02)
|
|
|
|
|
$
|
(5.86)
|
|
|
|
Pro forma net tangible book value after this offering
|
|
|
|
$
|
(6.05)
|
|
|
|
|
$
|
(5.88)
|
|
|
|
Dilution to public stockholders
|
|
|
|
$
|
16.05
|
|
|
|
|
$
|
15.88
|
|
|
|
Percentage of dilution to public stockholders
|
|
|
|
|
160.5
|
|
|
|
|
|
158.8
|
|
|
For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $102,500,000 because holders of up to 100.0% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per-share redemption price equal to the amount in the trust account 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 shares of Class A common stock sold in this offering. The effect of accounting for our warrants as a liability may decrease the pro-forma net tangible book value after this offering and the sale of private placement warrants, which could increase the
dilution to the public stockholders noted above, as well as decrease the amount of Class A common stock subject to redemption.
The following table sets forth information with respect to our initial stockholders and the public stockholders:
|
|
|
|
Shares purchased
|
|
|
Total consideration
|
|
|
Average
Price per
Share
|
|
|
|
Shares
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Initial shareholders(1)
|
|
|
|
|
2,500,000
|
|
|
|
|
|
19.2%
|
|
|
|
|
$
|
25,000
|
|
|
|
|
|
0.02%
|
|
|
|
|
$
|
0.01
|
|
|
|
Private units (including underlying shares of rights)(2)
|
|
|
|
|
500,000
|
|
|
|
|
|
3.8%
|
|
|
|
|
$
|
5,000,000
|
|
|
|
|
|
4.76%
|
|
|
|
|
$
|
10.00
|
|
|
|
Public stockholders (including underlying shares of rights)(3)
|
|
|
|
|
10,000,000
|
|
|
|
|
|
76.9%
|
|
|
|
|
$
|
100,000,000
|
|
|
|
|
|
95.22%
|
|
|
|
|
$
|
10.00
|
|
|
|
Total
|
|
|
|
|
13,000,000
|
|
|
|
|
|
100.0%
|
|
|
|
|
$
|
105,025,000
|
|
|
|
|
|
100.00%
|
|
|
|
|
|
|
|
|
(1)
Assumes the full forfeiture of 375,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is not exercised.
(2)
Assumes conversion of the shares of Class B common stock into shares of Class A common stock on a one-for-one basis. The dilution to public stockholders would increase to the extent that the anti-dilution provisions of the shares of Class B common stock result in the issuance of the shares of Class A common stock on a greater than one-to-one basis upon such conversion.
The pro forma net tangible book value per share after this offering is calculated as follows(1):
|
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible book value before this offering
|
|
|
|
$
|
(70,363)
|
|
|
|
|
$
|
(70,363)
|
|
|
|
Net proceeds from this offering and sale of the private placement warrants, net of expenses
|
|
|
|
|
102,200,000
|
|
|
|
|
|
117,200,000
|
|
|
|
Plus: Offering costs accrued in advance, excluded from tangible book value
|
|
|
|
|
94,363
|
|
|
|
|
|
94,363
|
|
|
|
Less: Deferred underwriting commissions
|
|
|
|
|
(3,500,000)
|
|
|
|
|
|
(4,025,000)
|
|
|
|
Less: Warrant liability(1)
|
|
|
|
|
(13,850,003)
|
|
|
|
|
|
(15,096,503)
|
|
|
|
Less: Proceeds held in trust subject to redemption
|
|
|
|
|
(102,500,000)
|
|
|
|
|
|
(117,875,000)
|
|
|
|
|
|
|
|
$
|
(15,126,003)
|
|
|
|
|
$
|
(16,897,503)
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock outstanding prior to this offering
|
|
|
|
|
2,875,000
|
|
|
|
|
|
2,875,000
|
|
|
|
Less: Class B common stock forfeited if over-allotment is not exercised
|
|
|
|
|
(375,000)
|
|
|
|
|
|
—
|
|
|
|
Class A common stock included in the public units offered
|
|
|
|
|
10,000,000
|
|
|
|
|
|
11,500,000
|
|
|
|
Less: Shares subject to redemption
|
|
|
|
|
(10,000,000)
|
|
|
|
|
|
(11,500,000)
|
|
|
|
|
|
|
|
|
2,500,000
|
|
|
|
|
|
2,875,000
|
|
|
(1)
We will account for the 7,500,000 private warrants to be issued in connection with this offering (assuming the underwriters’ over-allotment option is not exercised) as a liability because the warrants do not meet the criteria for equity treatment. Accordingly, we will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations. The effect of accounting for these warrants as a liability may increase the pro forma liabilities and decrease the amount of Class A common stock subject to redemption.
CAPITALIZATION
The following table sets forth our capitalization at June 30, 2021, and as adjusted to give effect to the sale of our 10,000,000 units in this offering for $100,000,000 (or $10.00 per unit) and the sale of 7,500,000 private placement warrants for $7,500,000 (or $1.00 per warrant) and the application of the estimated net proceeds derived from the sale of such securities:
|
|
|
|
June 30, 2021
|
|
|
|
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Deferred underwriting commissions
|
|
|
|
$
|
—
|
|
|
|
|
$
|
3,500,000
|
|
|
|
Warrant liability(2)
|
|
|
|
|
—
|
|
|
|
|
|
13,850,003
|
|
|
|
Notes payable(3)
|
|
|
|
|
54,363
|
|
|
|
|
|
—
|
|
|
|
Class A common stock, subject to redemption(4)
|
|
|
|
|
—
|
|
|
|
|
|
102,500,000
|
|
|
|
Stockholders’ equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued or outstanding (actual and as adjusted)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Class B common stock, $0.0001 par value 10,000,000 shares (authorized)
and 15,000,000 (as adjusted); 2,875,000(5) shares outstanding (actual);
2,500,000(5) shares outstanding (as adjusted)
|
|
|
|
|
287
|
|
|
|
|
|
250
|
|
|
|
Additional paid-in capital(6)
|
|
|
|
|
24,713
|
|
|
|
|
|
—
|
|
|
|
Accumulated deficit
|
|
|
|
|
(1,000)
|
|
|
|
|
|
(15,126,253)
|
|
|
|
Total stockholders’ equity (deficit)
|
|
|
|
|
24,000
|
|
|
|
|
|
(15,126,003)
|
|
|
|
Total capitalization
|
|
|
|
$
|
78,363
|
|
|
|
|
$
|
104,724,000
|
|
|
(1)
Assumes the full forfeiture of 375,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is not exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination.
(2)
We will account for the 7,500,000 private warrants to be issued in connection with this offering (assuming the underwriters’ over-allotment option is not exercised) as a liability because the warrants do not meet the criteria for equity treatment. Accordingly, we will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statement of operations.
(3)
Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses related to the organization of our company and this offering. As of June 30, 2021 we have borrowed $54,363 under the promissory note.
(4)
Upon the completion of our initial business combination, we will provide our public shareholders with the opportunity to redeem their public shares for a cash per-share price equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes. While redemptions cannot cause our net tangible assets to fall below $5,000,001, all Class A shares are redeemable and classified as such on the balance sheet until such date that a redemption event takes place.
(5)
Actual share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted share amount assumes no exercise of the underwriters’ over-allotment option.
(6)
The “as adjusted” additional paid-in capital calculation is adjusted to zero, with the off-setting balance recorded to accumulated deficit since additional paid-in capital cannot be less than zero.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a newly incorporated blank check company, incorporated as a Delaware corporation, and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns.
The issuance of additional shares of our stock in a business combination:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock;
•
may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;
•
could cause a change of control if a substantial number of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
•
may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;
•
may adversely affect prevailing market prices for our Class A common stock and/or warrants; and
•
may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:
•
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
•
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;
•
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
•
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
•
our inability to pay dividends on our common stock;
•
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 common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
•
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
•
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and
•
other purposes and other disadvantages compared to our competitors who have less debt.
As of June 30, 2021 and April 20, 2021 we held no cash, respectively, and deferred offering costs of $94,363 and $25,000, respectively. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
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 funds invested in specified U.S. government treasury bills or in specified money market funds 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 no cash and a working capital deficit of $(70,363). 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 prior to the completion of this offering through receipt of $25,000 from the sale of the founder shares to our sponsor and up to $300,000 under the promissory note provided by our sponsor. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of approximately $800,000 and underwriting commissions of $2,000,000 ($2,300,000 if the underwriters’ over-allotment option is exercised in full) (excluding deferred underwriting commissions of $3,500,000 (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full)), and (ii) the sale of the private placement warrants for a purchase price of $7,500,000 (or $8,175,000 if the underwriters’ over-allotment option is exercised in full), will be $107,500,000 (or $123,175,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $102,500,000 or $117,875,000 if the underwriters’ over-allotment option is exercised in full, including $3,500,000 (or up to $4,025,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions will be deposited into the trust account. The funds in the trust account will be invested only in specified U.S. government treasury bills or in specified money market funds. The remaining $2,200,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $800,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,200,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. This reimbursement will have the effect of increasing the proceeds available to us outside of the trust account.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay our taxes, if any. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us $2,200,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination and to pay taxes, if needed.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $500,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $150,000 for legal and accounting fees related to regulatory reporting obligations; $700,000 for directors’ and officers’ insurance; $150,000 for Nasdaq continued listing fees; $90,000 for office space, administrative and support services; and approximately $610,000 for general working capital that will be used for miscellaneous expenses (including franchise taxes, if needed).
These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision 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 entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in
our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are 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 complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
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 reporting requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company as defined in the JOBS Act, would we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we intend 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 independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm 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. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
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staffing for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation of accounts;
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proper recording of expenses and liabilities in the period to which they relate;
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evidence of internal review and approval of accounting transactions;
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documentation of processes, assumptions and conclusions underlying significant estimates; and
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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 expenses 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 registered public accounting firm to audit and render an opinion on such report when required by
Section 404 of the Sarbanes-Oxley Act. 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 and the sale of the private placement warrants held in the trust account will be invested 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. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Related Party Transactions
In March 2021, our sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering on our behalf in consideration of 2,875,000 founder shares. As such, our initial stockholders will collectively own 20% of our outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend, share contribution back to capital or other appropriate mechanism, as applicable with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering. Up to 375,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. Our sponsor does not intend to purchase any units in this offering.
We will enter into an agreement with an affiliate of our sponsor pursuant to which we will pay our sponsor a total of $5,000 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
We may pay our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination, which may be paid from the proceeds held in the trust account upon consummation of an initial business combination. These individuals and entities will be reimbursed for any reasonable out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors, advisors or our or any of their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of reasonable out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the closing of this offering, our sponsor has loaned us up to $300,000 to be used for a portion of the expenses related to the organization of our company and this offering. As of June 30, 2021, there was $54,363 in outstanding borrowings under the promissory note provided by our sponsor. This loan is non-interest bearing, unsecured and due at the earlier of December 31, 2021 and the closing of this offering. This loan will be repaid upon the completion of this offering out of the $800,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In addition, in order to fund working capital deficiencies or to finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds
of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Our sponsor has committed to purchase an aggregate of 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.00 per warrant ($7,500,000 in the aggregate or $8,175,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us. (ii) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, (iii) they may be exercised by the holders on a cashless basis, and (iv) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights.
Pursuant to a registration rights agreement we will enter into with our initial stockholders and initial purchasers of the private placement warrants on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of warrants issued upon conversion of working capital loans, if any, will be entitled to make up to three demands, excluding short form registration demands, that we register certain of our securities held by them for sale under the Securities Act. In addition, these holders will have certain “piggy-back” registration rights to include such securities in other registration statements filed by us and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement will provide that we will not permit any registration statement filed under the Securities Act to become effective until the securities covered thereby are released from their lock-up restrictions, as described herein. We will bear the costs and expenses of filing any such registration statements. See “Certain Relationships and Related Party Transactions.”
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
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 a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
General
We are a newly incorporated blank check company incorporated, on March 31, 2021, as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus as our initial business combination. We have not selected any business combination target, we currently do not have any specific business combination under consideration and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.
Although we may pursue an acquisition in any industry or geography, we intend to capitalize on the ability of our management team to identify, acquire and operate a business that may provide opportunities for attractive risk-adjusted returns. As such, we intend to focus our investment efforts on industries that complement our management team’s background within healthcare and healthcare-related industries, primarily in the United States and Canada. Specifically, we intend to prioritize innovative, development- or early commercial-stage companies focused on clinically-impactful and high growth opportunities within medical devices, diagnostics, and digital health (comprehensively referred to as “MedTech”), which we believe are opportunity-rich, but somewhat overlooked areas relative to the strategies of most other blank check companies currently outstanding, particularly those focused on the healthcare sector. We believe our management team’s decades of relevant operational and healthcare venture investing background is substantial and can have a transformative impact on a target MedTech business.
Within the MedTech sector, we believe our management team is uniquely positioned to identify attractive company opportunities for investment. Our team, which has been investing together for approximately two decades, has developed significant MedTech expertise and demonstrated meaningful investment success across a wide number of now public and acquired MedTech companies, including MAKO Surgical (IPO, subsequently acquired by Stryker), Inspire Medical (NYSE: INSP); Axonics (Nasdaq: AXNX); Spirox (acquired by Entellus Medical); Entellus Medical (acquired by Stryker); Avedro (IPO, subsequently acquired by Glaukos); ev3 (acquired by Covidien/Medtronic); U-Systems (acquired by GE Healthcare); Xlumena (acquired by Boston Scientific); ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew), Tornier (acquired by Wright Medical); Wright Medical (acquired by Stryker); Xomed Surgical (acquired by Medtronic); Outset Medical (Nasdaq: OM); and Silk Road Medical (Nasdaq: SILK), among others.
Our management team and affiliates of our team and sponsor have invested approximately $1 billion into over 150 private and public healthcare companies that have realized approximately $50 billion in aggregate exit value in the form of public monetizations and strategic sales. We will utilize our broad and proprietary professional network, cultivated over two-decades of experience investing in, operating, and growing MedTech businesses, to identify high-quality suitable investment opportunities, beyond the large number of targets already known to us. Once identified, we will utilize a highly selective and strategic investment process, as we historically have done with our venture and growth equity investments, which focuses on assessing and prioritizing promising and unique targets.
Our sponsor is an affiliate of Lumira Ventures, or Lumira, a leading North American healthcare venture capital firm with a two-decade track record of successfully investing in medical technologies, digital health, and biotechnology companies whose products have the potential to transform the lives of patients worldwide while lowering the cost of healthcare delivery. In addition to our own MedTech sector expertise and deep relationships with executives, advisors, investors, corporate partners, and other intermediaries, we intend to leverage the broad Lumira platform, including its in-house team, additional long-standing industry relationships, extensive public markets experience, and proprietary
database of over 12,000 curated healthcare investment opportunities, to effect a business combination with an attractive target and to position it for long-term shareholder value creation in the public markets.
Lumira Ventures
Lumira Ventures was founded in 2007 after its management spun-out from and acquired MDS Capital, a corporate venture capital group established in 1989. Lumira has built a track record as a leading North American healthcare venture capital firm, investing in innovative companies across the healthcare landscape. Lumira is the largest healthcare venture capital firm in Canada (by assets under management and size of team), and one of the most active healthcare investors in the U.S., often in geographies which have not historically been the focus of most healthcare venture capital firms. The firm has one of the industry’s most active MedTech investment teams, with a proven track record of identifying and building emerging sector leaders into high-value public companies and successful M&A acquisition targets for strategic counterparties. Lumira’s MedTech investment team has reviewed approximately 1,200 MedTech companies since 2007 and has backed category leaders to high-multiple exits throughout market cycles. In 2021, with strong support from existing and new investors, the firm raised its newest life sciences fund, Lumira Ventures IV. Our management team includes certain Lumira investment professionals. See “Management” for more information.
Lumira’s goal is to partner with entrepreneurs to build companies, from the seed through growth stages, whose products deliver significant improvements in the daily lives of patients worldwide while simultaneously lowering the cost of healthcare delivery. The Lumira team has backed dozens of transformative North America-based healthcare companies that have delivered more than 30 approved therapies for patients, impacting the lives of over 1 billion patients worldwide and generating more than $75 billion in cumulative revenue.
Guided by a senior team of healthcare investment professionals who average over 27 years of industry experience, Lumira’s team has invested in more than 100 healthcare companies via multiple funds and today oversees approximately $500 million of assets under management. The firm has an in-house team of 18 investment professionals, back-office personnel and advisors and venture partners located in offices in Toronto, Boston, Montreal and Vancouver. Investors in its venture funds include sovereign wealth funds, pension plans, asset management firms, foundations, family offices and corporate strategic investors.
Management Team and Board of Directors
Our management team is led by Dr. Anthony Natale, our Chief Executive Officer and a Director; Richard “Dick” Emmitt, our Chairman and Director Nominee; Gerry Brunk our President and a Director, Dr. Daniel Hétu, our Executive Vice President; and Vasco Larcina, our Chief Financial Officer. Our management team is further supported by our board of directors including Peter van der Velden and Fritz A. LaPorte, who are Director Nominees. Our management team and directors have worked and invested together continuously for approximately 15 years.
Management Team
Anthony “Tony” Natale, MD, MBA, our Chief Executive Officer and a Director, has over 20 years of experience in healthcare venture capital and MedTech entrepreneurship as a physician, inventor, founder, operator, and investor. As a Managing Partner at Aperture Venture Partners since 2010, Dr. Natale focuses on identifying and investing in high-potential MedTech companies. He works alongside entrepreneurs to build out management teams, establish effective corporate governance, and implement successful product development, commercialization, and exit strategies.
Prior to Aperture, Dr. Natale was a partner at Prism Venture Works from 2006 to 2010, and MDS Capital from 2002 to 2006, Lumira’s predecessor firm, where he made and managed investments in the
MedTech sector. He has held pivotal roles at venture-backed healthcare companies throughout his career, including currently as Executive Chairman at ENT Specialty Partners and Acting Chief Executive Officer at XII Medical, and previously as co-founder and / or founding investor at MAKO Surgical (IPO, subsequently acquired by Stryker), Avedro (IPO, subsequently acquired by Glaukos), ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew), Xlumena (acquired by Boston Scientific), Spirox (acquired by Entellus Medical), and as an investor in many additional companies that have had successful exits, including Inspire Medical (NYSE: INSP), Axonics (Nasdaq: AXNX), BioHaven (Nasdaq: BHVN), Otonomy (Nasdaq: OTIC), and Entellus Medical (acquired by Stryker). Dr. Natale currently serves on the board of directors of Venus Concept Inc. (Nasdaq: VERO)
Dr. Natale trained in general surgery and otolaryngology/head and neck surgery at the University of Connecticut and Hartford Hospital. He received his BA from the University of Virginia, MD from the University of Florida, and MBA from Yale University.
Richard “Dick” Emmitt, MBA, our Chairman and Director Nominee, is widely regarded as one of the most experienced and successful investors in the medical device industry. Mr. Emmitt is a Senior Partner of InnovaHealth Partners, a New York-based private equity firm focused on the MedTech industry. He also is a General Partner and a co-founder in 1988 of The Vertical Group, a New Jersey-based MedTech focused investment firm. Mr. Emmitt’s background includes all stages of private equity, venture capital, and pubic equity markets. Among his former investments and board of director memberships are companies in virtually all major sectors of the MedTech industry: American Medical Systems (acquired by Endo Pharma and now a part of Boston Scientific); ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew); ev3 (acquired by Covidien/Medtronic); Galil Medical (acquired by BTG/Boston Scientific); Lifecell (acquired by KCI); OsteoBiologics (acquired by Smith & Nephew); SciMed Life Systems (acquired by Boston Scientific); Tornier (acquired by Wright Medical); Velocimed (acquired by Saint Jude); Wright Medical (acquired by Stryker); and Xomed Surgical (acquired by Medtronic). Additionally, his investments also include Outset Medical (Nasdaq: OM) and Silk Road Medical (Nasdaq: SILK).
Prior to his career as a venture capital and private equity investor, Mr. Emmitt was an investment analyst recognized as one of the leading experts on the health care industry by Institutional Investor Magazine. Mr. Emmitt received a BA in Economics from Bucknell University and an MBA from The Rutgers School of Business
Gerry Brunk, MBA, our President and a Director is a Managing Director and Co-head of the MedTech practice at Lumira. With over 28 years of investment, consulting and entrepreneurial experience in the healthcare industry, Mr. Brunk has helped build MedTech and biotech companies at all stages of development. He manages Lumira’s Boston office, which he established when he joined MDS Capital in 2002. Mr. Brunk has been responsible for Lumira’s investments in Bardy Diagnostics MAKO Surgical (IPO, subsequently acquired by Stryker), Cardiac Dimensions, Corvia Medical, Endotronix, HistoSonics, KAI Pharmaceuticals (acquired by Amgen), Pharmasset (acquired by Gilead Sciences), Satsuma Pharmaceuticals (Nasdaq: STSA) and Engage Therapeutics (acquired by UCB), among others.
Prior to joining Lumira, Mr. Brunk was an entrepreneur in the life sciences sector, founding and serving in a variety of management and board capacities at several venture capital-funded companies. Earlier in his career, he was an engagement manager in The Boston Consulting Group’s healthcare practice, where he advised pharmaceutical and MedTech companies on strategic and operational issues including portfolio management, new product launches, R&D productivity, mergers and acquisitions. Mr. Brunk began his career as a member of the investment banking group of Credit Suisse First Boston where his clients included both public and private healthcare companies. He serves on the Board of Directors of Southeast Life Sciences, the review board of the Ivy Foundation Biomedical Innovation Fund at the University of Virginia, and is a mentor for the Stanford University
Biodesign program. He received his BA from the University of Virginia and MBA from Stanford University Graduate School of Business.
Daniel Hétu, MD, MBA, our Executive Vice President, is a Managing Director and Co-head of the MedTech practice at Lumira, and has been since 2007. With over 20 years of investment banking, corporate development, and licensing and investment experience, Dr. Hétu has been involved with life sciences companies at all stages of development in North America and overseas. He manages Lumira’s Montreal office and has invested in and served on the boards of numerous companies, including OpSens Medical (TSX: OPS), U-Systems (acquired by GE Healthcare), Cardiac Dimensions, IMV (TSX: IMV), Resonant Medical (acquired by Elekta) and XyloCor Therapeutics.
As an experienced senior executive with expertise in financing and corporate business development, Dr. Hétu previously spent 10 years at Shire Pharmaceuticals and at Biochem Pharma prior to its acquisition by Shire. As Vice President of Business Development (North America) and Vice President of Corporate Development, he led several financing, licensing and M&A transactions in the therapeutics, vaccine, and diagnostics sectors. Prior to joining Biochem Pharma, Dr. Hétu was an investment banker at Burns Fry (now BMO Nesbitt Burns) where he was involved in M&A and financing transactions across various industrial sectors. He received his MD from Université de Sherbrooke and MBA from HEC Montréal.
Vasco Larcina, CPA, CA, our Chief Financial Officer, has over 20 years of senior financial management and audit experience. He is Chief Financial Officer at Lumira where he is responsible for the financial management of the firm and the investment funds it manages and has been since the firm’s inception in 2007. Mr. Larcina oversees financial and legal operations, ensuring that the appropriate controls are in place to manage the activities of Lumira and its managed funds through the strategic evaluation, development and implementation of financial policies, systems and procedures developed in consideration of external reporting, risk, and governance, as well as, regulatory and tax compliance.
Prior to joining Lumira, Mr. Larcina worked as an external auditor with KPMG and has gained internal audit and operational audit experience with Enbridge Gas Distribution, a regulated public utility company, where he provided the internal control input for a major customer information system development project. He received his HBA from the Ivey School of Business at the University of Western Ontario and is a member of the Chartered Professional Accountants of Ontario.
Director Nominees
Peter van der Velden, MBA, MSc., one of our Director Nominees, is a venture capital veteran who for the past 31 years has been involved in building innovative, technology-centric companies from start-up through to expansion. In 2005, he joined MDS Capital as Chief Executive Officer and after restructuring the firm, he led its subsequent buyout from MDS Laboratory Services. Mr. van der Velden has invested in and helped to build MedTech and biotech companies at all stages of development. He joined Lumira in 2007 and is based in Toronto, Canada. Mr. van der Velden is currently Lumira’s Managing General Partner, responsible for the day-to-day operations of the business, fund raising, and human resources. Along with Mr. Brunk, Mr. van der Velden has been responsible for Lumira’s investments in Bardy Diagnostics and HistoSonics. He led or managed the firm’s investments in Alveolus (acquired by Merit Medical), Spinal Kinetics (acquired by Orthofix), Aurinia Pharmaceuticals (Nasdaq: AUPH), Forbius (Acquired by Bristol Myers Squibb) and his is currently on the boards of Exact Imaging, AmacaThera, Edesa Biotech (Nasdaq: EDSA), and Medexus Pharmaceuticals (TSXV: MDP.V)
Mr. van der Velden is a frequently solicited lecturer at universities and conferences on themes related to venture capital, innovation and healthcare. He has actively worked with the Canadian Federal and Provincial governments on policy matters related to venture capital and healthcare
innovation. In addition to investee company board roles, he has been very active on a wide variety of stakeholder and industry boards and advisory groups, including as, President and Chairman of the Canadian Venture and Private Equity Association.
Mr. van der Velden’s past board and advisory roles include: the Ontario Health Innovation Council, the World Health Innovation Network, the SickKids Commercialization Advisory Board, the Office of the Chief Health Innovation Strategist, the Ontario Scale-up Vouchers Program, and Life Sciences Ontario.
Prior to joining Lumira, Mr. van der Velden ran a boutique merchant bank (Fusion Capital Partners), was a partner in a buyout partnership (Bedford Partners) and served as Vice President Business Development for a venture capital-backed drug delivery company, Hyal Pharmaceutical Corp. He started his career with Connaught Laboratories, Inc., a Canadian vaccine manufacturer, and from there transitioned to an investing role at Vencap Equities Alberta Ltd., a venture captial firm. Mr. van der Velden received his MBA from the Schulich School of Business and his M.Sc. and B.Sc from Queen’s University.
Fritz A. LaPorte, one of our Director Nominees, is a Partner at Dovere Advisory Group, LLC, which he co-founded in October 2014 to guide earlier stage, growth companies, primarily operating in the medical devices and healthcare sectors, in creating and sustaining value while concurrently reducing risk. Mr. LaPorte co-founded MAKO Surgical, an orthopedic surgical robotics company, in November 2004, and served as Senior Vice President, Chief Financial Officer, and Treasurer through its IPO and eventual acquisition by Stryker in 2013.
Mr. LaPorte subsequently served as Vice President and Chief Financial Officer of Stryker Corporation — Stryker MAKO Business Unit from December 2013 to June 2014 to assist in the integration of MAKO into Stryker. He also sits on the board of directors at Venus Concept Inc. (Nasdaq: VERO), a leading medical aesthetics company, where he also serves as Audit Committee Chair, and Holy Cross Hospital in Fort Lauderdale, Florida where he also serves as a member of the finance committee. Mr. LaPorte holds a BBA in Accounting from Florida Atlantic University.
Past performance of our management team and its affiliates is not a guarantee either (i) of success with respect to any business combination we may consummate, or (ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management team or its affiliates as indicative of our future performance. None of our officers or directors has had experience with special purpose acquisition companies. In addition, for a list of members of our management team and entities for which a conflict of interest may or does exist between such persons and the company, as well as the priority 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”.
Business Strategy
Our acquisition and value creation strategy is to identify, acquire, and, after our initial business combination, build a company in the public markets that complements the experience and expertise of our management team and of Lumira to build long-term stockholder value. We will also apply the expertise of our management team and sponsor to provide us with a distinctive competitive advantage in sourcing and cultivating high quality targets. Key components of our business strategy include:
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Focus on white-space opportunity with limited competition: Few healthcare SPACs are exclusively focused on MedTech and we believe we are appropriately-sized to target very promising pre-public companies generally not suitable for competing SPACs, many of which are capitalized at a level we believe limits the pool of emerging, high-growth companies they can acquire at attractive valuations.
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Utilize proprietary industry knowledge to curate promising targets: We will leverage longstanding, active relationships with company management teams, boards, and investors to identify a shortlist of high-quality potential targets within the MedTech space. We believe our network, reputation and existing target pipeline will enable timely target identification, negotiation and closing.
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Leverage management experience and full resources of the Lumira platform to build a high-value company: Our broader team possesses a multi-decade track record of investing together to build high-value, category-leading private and public MedTech companies. We will capitalize on their experience to drive stronger operational performance at our target company post-combination.
Acquisition Criteria
Consistent with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. We intend to seek to acquire one or more businesses that:
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Addresses significant unmet clinical needs and/or achieves cost reductions in large and growing markets;
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Demonstrates early commercial traction, or a clear path to near-term commercial launch;
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Possesses high gross margin potential;
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Has highly differentiated competitive advantages with robust intellectual property protection;
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Is led by a strong, public-ready management team with demonstrated track record of value creation;
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Is an actionable target with an aligned board and investor syndicate;
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Articulates compelling use of proceeds and public equity growth capital; and
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Has multiple catalysts for value creation after de-SPACing combination.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as on other considerations, factors, and criteria that our management may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of tender offer documents or proxy solicitation materials that we would file with the SEC.
MedTech Market Opportunity
We believe the MedTech sector, and its medical devices, diagnostics, and digital health sub-sectors, represent an attractive target market given its size, growth profile, concentration of breakthrough technological innovations, favorable demographics, and target-rich environment of high quality pre-public companies. Our focus on MedTech allows us to capitalize on the unique, sector-specific investing experience of our management team and we believe this industry is attractive for a number of reasons:
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Large and Growing Market Opportunity: The healthcare industry represents a massive market opportunity. Total U.S. national health expenditure exceeded $3.8 trillion in 2019, and the Center for Medicare and Medicaid Services estimates that total healthcare spending will nearly double to $6.2 trillion by 2028. Within MedTech, our subsectors of focus each target large
addressable markets with robust growth rates. Medical devices, diagnostics, and digital health address North American market sizes of approximately $170 billion, $30 billion, and $60 billion respectively as of 2020, each poised to expand at a mid-single digit or higher compound annual growth rate in the next five years. The MedTech arena is a particularly dense sector with thousands of private companies operating in the three aforementioned subsectors as of April 2021.
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Area of High Innovation and Favorable Growth Drivers: The MedTech sector is rooted in research-driven innovation, with sustained R&D investment throughout the last decade that has been fueled by the rise of connected devices, growing cost constraints on the healthcare system, and increased customer demand for a more patient-centered healthcare experience. In 2019, MedTech R&D grew by 11.5%, returning to pre-2008 financial crisis levels of double digit growth. Consistent innovation has allowed the sector to usher unprecedented shifts in healthcare paradigms, including the transition from minimally invasive to non-invasive surgery, the advent of next generation genetic sequencing tools that facilitate earlier diagnosis and more personalized therapeutic benefits, and the rapid adoption of telehealth and related novel care models among others.
In addition, the COVID-19 global pandemic has significantly altered the healthcare services paradigm in a way that creates further opportunities which MedTech is well-positioned to exploit. In volatile and uncertain economic times, prudent investments in healthcare can be an effective defensive measure. As the healthcare landscape transforms, MedTech remains poised to respond to industry trends and accelerate its evolution.
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Unprecedented Market Appetite: High growth MedTech companies have been well received by the market with scarcity and strategic consolidation driving robust valuations. In the past five years, there have been only 52 MedTech IPOs compared to 243 biotech IPOs. The dearth of new, high-quality assets coming to market, coupled with an accelerating pace of M&A, has left a depleted universe of MedTech companies to which public investors can allocate capital. Such market conditions have allowed MedTech companies to command premium valuations and outperform leading indices. Following the COVID-19 driven downturn in the broader market, MedTech valuations were up 50% by August 2020 compared to January 2019; exceeding the rebound for broader composite indices such as the New York Stock Exchange and the S&P 500 (up 15% and 40%, respectively, over the same period). Publicly traded high-growth MedTech companies, that we believe share similar characteristics with the type of companies we intend to target, have traded near record multiples of approximately 14-times forward year revenue as a multiple of enterprise value as of April 2021.
Our Competitive Advantages
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Intimate knowledge of the target universe: Our management team and sponsor review more than 600 new investment opportunities per year. With a sharp focus on the MedTech industry, Lumira tracks opportunities from inception through later-stage financings, often following promising companies closely for multiple years. Through our management team’s relationship with Lumira and an active cadence of investment discussions with potential target companies, our broader team has an expansive list of non-brokered relationships with decision makers at these companies, including their boards of directors and key shareholders. These relationships lead to proactive updates with attractive investment opportunities and regular portfolio reviews with investment peers. We believe the depth and currency of these relationships provides us with a competitive advantage in identifying promising acquisition targets, and gives us proprietary insights that can help negotiate and close a successful acquisition.
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Extensive experience with all phases of the investment lifecycle: Each member of the management team is an accomplished investor with an excellent track record of identifying, sourcing, and executing transactions. The team has decades of experience as entrepreneurs, operating executives, and investors in the MedTech space. Our Chief Executive Officer, Dr. Natale,
has held critical roles in multiple MedTech companies and has built a portfolio of healthcare investments that achieved a cumulative aggregate exit value of over $17 billion in the form of public monetization and strategic sales. Our Chairman, Mr. Emmitt, is widely regarded as one of the most experienced and successful investors in the medical device industry, with extensive experience across private equity, venture capital, and public equity markets. We believe the collective experience of our management team will not only facilitate a smooth combination process, but also be of meaningful value to the post-initial business combination management team by offering assistance to grow the business in the public space and create stockholder value.
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Proven Partners: Initially cultivated through their previous work together at MDS Capital, Lumira’s predecessor firm, beginning in 2002 and continuing through many co-investments over the ensuing years, our Chief Executive Officer, Dr. Natale; our President and a Director, Mr. Brunk; and Director Nominee, Mr. van der Velden have a longstanding history of successful co-investment and value creation within the healthcare sector. Additionally, our Chairman, Mr. Emmitt, and our Chief Executive Officer, Dr. Natale, have successfully co-invested and collaborated on company development for approximately 15 years.
Our Acquisition Process
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be made available to us. We will also utilize our operational and capital planning experience.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that our initial business combination is fair to our company from a financial point of view.
Members of our management team may directly or indirectly own shares of our common stock and/or private placement warrants following this offering, and, accordingly, 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 was included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current 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 in the case of a non-compete restriction, may not present such opportunity to us at all. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management — Conflicts of Interest.” Our amended and restated 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. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination.
Initial Business Combination
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. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such 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 such 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 business 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 or acquires 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. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would 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 our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. 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 taken into account for purposes of the 80% fair market value test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, these rules will not be applicable to us.
Our amended and restated certificate of incorporation will require the affirmative vote of a majority of our board of directors, which must include a majority of our independent directors to approve our initial business combination (or such other vote as the applicable law or stock exchange rules then in effect may require).
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Sourcing of Potential Business Combination Targets
We believe our management team’s significant operating and transaction experience and relationships with companies will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships around the world. This network has grown through the activities of our management team sourcing, acquiring, financing and selling businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience of our management team in executing transactions under varying economic and financial market conditions.
We believe that the network of contacts and relationships of our management team will provide us with important sources of acquisition opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions.
We may pay our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination, which may be paid from the proceeds held in the trust account upon consummation of an initial business combination.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business that is affiliated with our sponsor, officers or directors, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that our initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
As more fully discussed in “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us or in the case of a non-compete restriction, may not present such opportunity to us at all. All of our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being
a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,” as defined in the JOBS Act. 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 prior June 30th, 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.
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 that is held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th.
Financial Position
With funds available for a business combination initially in the amount of approximately $96,500,000 assuming no redemptions and after payment of $3,500,000 of deferred underwriting fees (or approximately $110,975,000 assuming no redemptions and after payment of up to $4,025,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), in each case, before estimated offering and working capital expenses, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.
Effecting our Initial Business Combination
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 sale of the private placement warrants, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt, 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 or used for redemptions of our Class A common stock, 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 the post-transaction company, 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.
We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion 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.
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 applicable law or we decide to do so for business or other reasons, 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.
Selection of a Target Business and Structuring of our Initial Business Combination
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. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, with respect to the satisfaction of such criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. 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 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 cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business, we expect to conduct a thorough due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will be 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 our initial 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.
Lack of Business Diversification
For an indefinite period of time after the completion 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 completing 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.
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’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will 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 cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve our Initial Business Combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated certificate of incorporation. However, we
will seek stockholder approval if it is required by applicable law or stock exchange rule, or we may decide to seek stockholder approval for business or other reasons.
Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding (other than in a public offering);
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any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 1% or more (or 5% or more if the related party involved is classified as such solely because such person is a substantial security holder); or
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the issuance or potential issuance of common stock will result in our undergoing a change of control.
The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors, including, but not limited to:
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the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;
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the expected cost of holding a stockholder vote;
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the risk that the stockholders would fail to approve the proposed business combination;
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other time and budget constraints of the company; and
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additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
Permitted Purchases of our Securities
In the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares or warrants such persons may purchase. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our sponsor, directors, officers, advisors or any of their affiliates determine to make any such purchases at the time of a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase shares or warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may 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. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: (i) refrain from
purchasing securities during certain blackout periods and when they are in possession of any material non-public information; and (ii) clear all trades with a designated officer prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In the event that our sponsor, directors, officers, advisors or any of 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. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or (ii) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float” of our securities may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors, advisors, and/or any of their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors, advisors or any of their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the business combination. Such persons would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, officers, directors, advisors or their affiliates will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will be restricted unless such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will be restricted from making purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
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 shares of Class A common stock 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 the 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 $10.25 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 underwriters. The redemption rights will 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. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of a tender offer. 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 require us to seek stockholder approval under applicable law or stock exchange listing requirement. 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 amended and restated certificate of incorporation would typically require stockholder approval. If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We currently intend to conduct redemptions pursuant to a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.
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 amended and restated 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.
Upon the public announcement of our initial business combination, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event 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 may not redeem public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (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 such initial business combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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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.
We expect that a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, unless otherwise required by applicable law, regulation or stock exchange rules, 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, officers and directors 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. These quorum and voting thresholds and agreements, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of a business combination.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) 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 Class A 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 Class A common stock submitted for redemption will be returned to the holders thereof and we instead may search for an alternative business combination.
Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that 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 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% 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 Excess Shares) for or against our initial business combination. Our sponsor, officers and directors have, pursuant to a letter agreement entered into with us, waived their right to have any founder shares or public shares redeemed in connection with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted transfer from an initial stockholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this waiver. However, to the extent any such affiliate acquires public shares in this offering or thereafter through open market purchases, it would be a public stockholder and subject to the 15% limitation in connection with any such redemption right.
Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights
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 tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, 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 will 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 tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder
vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. 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 fee of approximately $80.00 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 many blank check companies. In order to perfect redemption rights in connection with their business combinations, many 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 shares 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 the date set forth in the tender offer materials or two business days prior to the date of the stockholder meeting set forth in our proxy materials, as applicable (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 business combination with a different target until 18 months from the closing of this offering.
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our sponsor, officers and directors have agreed that we will have only 18 months from the closing of this offering to complete our initial business combination. If we have not completed our initial business combination within such 18-month 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); 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. 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 18-month time period.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 18 months from the closing of this offering. However, if our sponsor, officers and directors acquire public, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 18-month time period.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A 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. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock” rules).
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $2,200,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.25. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.25. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all third parties, service providers (other than our independent auditors), 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 have not completed our initial business combination within the prescribed time frame, 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 10 years following redemption. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) 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 (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to 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. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by third parties and prospective target businesses.
In the event that the proceeds in the trust account are reduced below (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.25 per share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all third parties, service providers (other than our independent auditors), 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 monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $800,000 from the proceeds of this offering and the sale of the private placement warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $800,000 we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $2,200,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
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 our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering may be considered a liquidating 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 liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution 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 our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering, is not considered a liquidating 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 liquidating distribution. If we have not completed our initial business combination within such 18-month 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); 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. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 18th month from the closing of this offering and, therefore, we do not intend to comply with those 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, 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 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or 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. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary bankruptcy petition 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. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.25 per share to our public stockholders. Additionally, if 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 some or all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business combination, and then only in connection with those public shares that such stockholder properly elected to redeem, subject to the limitations described herein; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law and as further described herein. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above.
Comparison of Redemption or Purchase Prices in Connection with our Initial Business Combination and if we Fail to Complete our Initial Business Combination.
The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we have not completed our initial business combination within 18 months from the closing of this offering.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted Purchases
of Public Shares by our
Affiliates
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Redemptions if we fail to
Complete an Initial
Business Combination
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Calculation of redemption price
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Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.25 per public share), 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 limitation that no redemptions will take place if all of the redemptions would
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If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Such purchases will be restricted except to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares or warrants in such transactions.
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If we have not completed our initial business combination within 18 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.25 per public share), including interest (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted Purchases
of Public Shares by our
Affiliates
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Redemptions if we fail to
Complete an Initial
Business Combination
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cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.
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Impact to remaining stockholders
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The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay our taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account).
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If the permitted purchases described above are made, there will be no impact to our remaining stockholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions
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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419
The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Escrow of offering proceeds
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The rules of Nasdaq provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a U.S. based trust account. $102,500,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into
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Approximately $800,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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a U.S.-based trust account at Morgan Stanley, with Continental Stock Transfer & Trust Company acting as trustee.
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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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$102,500,000 of the net offering proceeds and the sale of the private placement warrants held in trust will 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.
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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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Receipt of interest on escrowed funds
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Interest on proceeds from the trust account to be paid to stockholders is reduced by (i) any taxes and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
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Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
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Limitation on fair value or net assets of target business
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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.
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The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Trading of securities issued
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The units will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the Representative informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly and no later than four business days after the closing of this offering. 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, which will include an audited balance sheet of the company reflecting our receipt of the gross proceeds at the closing of this offering will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.
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No trading of the units or the underlying common stock and warrants 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 30 days after the completion of our initial business combination.
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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 provide our public stockholders with the opportunity to redeem their public shares for cash equal to
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A prospectus containing information pertaining to the business combination required by the SEC would be sent to
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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their pro rata share of 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, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange listing requirements to hold a stockholder vote. If we are not required by applicable law or stock exchange listing requirements and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to 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 and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public
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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 a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its 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 are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. 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 (or, if the applicable rules of Nasdaq then in effect require, a majority of the outstanding shares of common stock held by public stockholders are voted in favor of the business transaction).
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Additionally, each public stockholder may elect to redeem their public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
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Business combination deadline
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If we have not completed our initial business combination within such 18-month 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
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If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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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); 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.
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Release of funds
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Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account until the earliest of (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or
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The proceeds held in the escrow account are not 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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Terms of Our Offering
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Terms Under a Rule 419 Offering
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(A) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (iii) the redemption of all of our public shares if we have not completed our initial business combination within 18 months from the closing of this offering, subject to applicable law. The company will instruct the Trustee to pay amounts from the trust account directly to redeeming holders.
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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that 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 of the Exchange Act), will be restricted from redeeming its shares with respect Excess Shares (more than an aggregate of 15% of the shares sold in this offering), without our prior consent. Our public stockholders’ inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions.
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Most blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Tendering stock certificates in connection with a tender offer or redemption rights
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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 tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the business combination in the event we distribute proxy materials, 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 tender offer or proxy materials, as applicable, 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. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.
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In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership.
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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 private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these entities are well-established and have extensive experience identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to
various industries. Moreover, many of these competitors possess greater financial, technical, human and other resources or more local industry knowledge than we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Conflicts of Interest
We may pay our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination, which may be paid from the proceeds held in the trust account upon consummation of an initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current 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 in the case of a non-compete restriction, may not present such opportunity to us at all. We expect that if an opportunity is presented to one of our officers or directors in his or her capacity as an officer or director of one of those other entities, such opportunity would be presented to such other entity and not to us. For more information on the entities to which our officers and directors currently have fiduciary or contractual obligations, please refer to “Management — Conflicts of Interest.” Our amended and restated 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. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Indemnity
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) 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 (i) $10.25 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to 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. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such eventuality. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all third parties, service providers (other than our independent auditors), 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 monies held in the trust account.
Facilities
We currently maintain our executive offices at 303 Wyman Street, Suite 300, Waltham, Massachusetts 02451. Commencing on the date of this prospectus, we have agreed to pay an affiliate of our sponsor a total of $5,000 per month for office space, utilities and secretarial and administrative support. We consider our current office space adequate for our current operations.
Employees
We currently have four officers and do not intend to have any full-time employees prior to the completion of our initial business combination. Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that members of our management will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We will register our units, Class A common stock and warrants under the Exchange Act and 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 reports will contain financial statements audited and reported on by our independent registered public accounting firm.
We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. A target business 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.
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
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 prior June 30th, 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.
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 that is held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
MANAGEMENT
Directors, Executive Officers and Director Nominees
Our officers, directors and director nominees are as follows:
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Age
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Title
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Anthony Natale
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Chief Executive Officer and Director
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Richard Emmitt
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Chairman and Director Nominee
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Gerry Brunk
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President and Director
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Daniel Hetu
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Executive Vice President
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Vasco Larcina
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Chief Financial Officer
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Peter van der Velden
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Director nominee
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Fritz A. LaPorte
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Director nominee
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Anthony “Tony” Natale, MD, MBA, our Chief Executive Officer and a Director, has over 20 years of experience in healthcare venture capital and MedTech entrepreneurship as a physician, inventor, founder, operator, and investor. As a Managing Partner at Aperture Venture Partners since 2010, Dr. Natale focuses on identifying and investing in high-potential MedTech companies. He works alongside entrepreneurs to build out management teams, establish effective corporate governance, and implement successful product development, commercialization, and exit strategies.
Prior to Aperture, Dr. Natale was a partner at Prism Venture Works from 2006 to 2010, and MDS Capital from 2002 to 2006, Lumira’s predecessor firm, where he made and managed investments in the MedTech sector. He has held pivotal roles at venture-backed healthcare companies throughout his career, including currently as Executive Chairman at ENT Specialty Partners and Acting Chief Executive Officer at XII Medical, and previously as co-founder and / or founding investor at MAKO Surgical (IPO, subsequently acquired by Stryker), Avedro (IPO, subsequently acquired by Glaukos), ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew), Xlumena (acquired by Boston Scientific), Spirox (acquired by Entellus Medical), and Entellus Medical (acquired by Stryker), and as an investor in many additional companies that have had successful exits, including Inspire Medical (NYSE: INSP), Axonics (Nasdaq: AXNX), BioHaven (Nasdaq: BHVN) and Otonomy (Nasdaq: OTIC). Dr. Natale currently serves on the board of directors of Venus Concept Inc. (Nasdaq: VERO)
Dr. Natale trained in general surgery and otolaryngology/head and neck surgery at the University of Connecticut and Hartford Hospital. He received his BA from the University of Virginia, MD from the University of Florida, and MBA from Yale University. Dr. Natale is well qualified to serve on our Board of Directors because of his extensive experience in healthcare venture capital and his many years of management and leadership experience.
Richard “Dick” Emmitt, MBA, our Chairman and Director Nominee, is widely regarded as one of the most experienced and successful investors in the medical device industry. Mr. Emmitt is a Senior Partner of InnovaHealth Partners, a New York-based private equity firm focused on the MedTech industry. He also is a General Partner and a co-founder in 1988 of The Vertical Group, a New Jersey-based MedTech focused investment firm. Mr. Emmitt’s background includes all stages of private equity, venture capital, and pubic equity markets. Among his former investments and board of director memberships are companies in virtually all major sectors of the MedTech industry: American Medical Systems (acquired by Endo Pharma and now a part of Boston Scientific); ENTrigue Surgical (acquired by Arthrocare/Smith & Nephew); ev3 (acquired by Covidien/Medtronic); Galil Medical (acquired by BTG/Boston Scientific); Lifecell (acquired by KCI); OsteoBiologics (acquired by Smith & Nephew); SciMed Life Systems (acquired by Boston Scientific); Tornier (acquired by Wright Medical); Velocimed (acquired by Saint Jude); Wright Medical (acquired by Stryker); and Xomed Surgical
(acquired by Medtronic). Additionally, his investments also include Outset Medical (Nasdaq: OM) and Silk Road Medical (Nasdaq: SILK).
Prior to his career as a venture capital and private equity investor, Mr. Emmitt was an investment analyst recognized as one of the leading experts on the health care industry by Institutional Investor Magazine. Mr. Emmitt received a BA in Economics from Bucknell University and an MBA from The Rutgers School of Business. Mr. Emmitt is well qualified to serve on our Board of Directors because of his experience as a director of multiple public companies and his over 40 years of management and leadership positions in the medical device industry.
Gerry Brunk, MBA, our President and a Director, is a Managing Director and Co-head of the MedTech practice at Lumira. With over 28 years of investment, consulting and entrepreneurial experience in the healthcare industry, Mr. Brunk has helped build MedTech and biotech companies at all stages of development. He manages Lumira’s Boston office, which he established when he joined MDS Capital in 2002. Mr. Brunk has been responsible for Lumira’s investments in Bardy Diagnostics MAKO Surgical (IPO, subsequently acquired by Stryker), Cardiac Dimensions, Corvia Medical, Endotronix, HistoSonics, KAI Pharmaceuticals (acquired by Amgen), Pharmasset (acquired by Gilead Sciences), Satsuma Pharmaceuticals (Nasdaq: STSA) and Engage Therapeutics (acquired by UCB), among others.
Prior to joining Lumira, Mr. Brunk was an entrepreneur in the life sciences sector, founding and serving in a variety of management and board capacities at several venture capital-funded companies. Earlier in his career, he was an engagement manager in The Boston Consulting Group’s healthcare practice, where he advised pharmaceutical and MedTech companies on strategic and operational issues including portfolio management, new product launches, R&D productivity, mergers and acquisitions. Mr. Brunk began his career as a member of the investment banking group of Credit Suisse First Boston where his clients included both public and private healthcare companies. He serves on the Board of Directors of Southeast Life Sciences, the review board of the Ivy Foundation Biomedical Innovation Fund at the University of Virginia, and is a mentor for the Stanford University Biodesign program. He received his BA from the University of Virginia and MBA from Stanford University Graduate School of Business. Mr. Brunk is well qualified to serve on our Board of Directors because of his extensive management and investment experience in the healthcare and life sciences sectors.
Daniel Hétu, MD, MBA, our Executive Vice President, is a Managing Director and Co-head of the MedTech practice at Lumira, and has been since 2007. With over 20 years of investment banking, corporate development, and licensing and investment experience, Dr. Hétu has been involved with life sciences companies at all stages of development in North America and overseas. He manages Lumira’s Montreal office and has invested in and served on the boards of numerous companies, including OpSens Medical (TSX: OPS), U-Systems (acquired by GE Healthcare), Cardiac Dimensions, IMV (TSX: IMV), Resonant Medical (acquired by Elekta) and XyloCor Therapeutics.
As an experienced senior executive with expertise in financing and corporate business development, Dr. Hétu previously spent 10 years at Shire Pharmaceuticals and at Biochem Pharma prior to its acquisition by Shire. As Vice President of Business Development (North America) and Vice President of Corporate Development, he led several financing, licensing and M&A transactions in the therapeutics, vaccine, and diagnostics sectors. Prior to joining Biochem Pharma, Dr. Hétu was an investment banker at Burns Fry (now BMO Nesbitt Burns) where he was involved in M&A and financing transactions across various industrial sectors. He received his MD from Université de Sherbrooke and MBA from HEC Montréal.
Vasco Larcina, CPA, CA, our Chief Financial Officer, has over 20 years of senior financial management and audit experience. He is Chief Financial Officer at Lumira where he is responsible for the financial management of the firm and the investment funds it manages, and has been since the
firm’s inception in 2007. Mr. Larcina oversees financial and legal operations, ensuring that the appropriate controls are in place to manage the activities of Lumira and its managed funds through the strategic evaluation, development and implementation of financial policies, systems and procedures developed in consideration of external reporting, risk, and governance, as well as, regulatory and tax compliance.
Prior to joining Lumira, Mr. Larcina worked as an external auditor with KPMG and has gained internal audit and operational audit experience with Enbridge Gas Distribution, a regulated public utility company, where he provided the internal control input for a major customer information system development project. He received his HBA from the Ivey School of Business at the University of Western Ontario and is a member of the Chartered Professional Accountants of Ontario.
Director Nominees
Peter van der Velden, MBA, MSc., one of our Director Nominees, is a venture capital veteran who for the past 31 years has been involved in building innovative, technology-centric companies from start-up through to expansion. In 2005, he joined MDS Capital as Chief Executive Officer and after restructuring the firm, he led its subsequent buyout from MDS Laboratory Services. Mr. van der Velden has invested in and helped to build MedTech and biotech companies at all stages of development. He joined Lumira in 2007 and is based in Toronto, Canada. Mr. van der Velden is currently Lumira’s Managing General Partner, responsible for the day-to-day operations of the business, fund raising, and human resources. Along with Mr. Brunk, Mr. van der Velden has been responsible for Lumira’s investments in Bardy Diagnostics and HistoSonics. He led or managed the firm’s investments in Alveolus (acquired by Merit Medical), Spinal Kinetics (acquired by Orthofix), Aurinia Pharmaceuticals (Nasdaq: AUPH), Forbius (Acquired by Bristol Myers Squibb) and his is currently on the boards of Exact Imaging, AmacaThera, Edesa Biotech (Nasdaq: EDSA), and Medexus Pharmaceuticals (TSXV: MDP.V)
Mr. van der Velden is a frequently solicited lecturer at universities and conferences on themes related to venture capital, innovation and healthcare. He has actively worked with the Canadian Federal and Provincial governments on policy matters related to venture capital and healthcare innovation. In addition to investee company board roles, he has been very active on a wide variety of stakeholder and industry boards and advisory groups, including as, President and Chairman of the Canadian Venture and Private Equity Association.
Mr. van der Velden’s past board and advisory roles include: the Ontario Health Innovation Council, the World Health Innovation Network, the SickKids Commercialization Advisory Board, the Office of the Chief Health Innovation Strategist, the Ontario Scale-up Vouchers Program, and Life Sciences Ontario.
Prior to joining Lumira, Mr. van der Velden ran a boutique merchant bank (Fusion Capital Partners), was a partner in a buyout partnership (Bedford Capital) and served as Vice President Business Development for a venture capital-backed drug delivery company, Hyal Pharmaceutical Corp. He started his career with Connaught Laboratories, Inc., a Canadian vaccine manufacturer and from there transitioned to an investing role at Vencap Equities Alberta Ltd., a venture capital firm. Mr. van der Velden received his MBA from the Schulich School of Business and his M.Sc. and B.Sc from Queen’s University. Mr. van der Velden is well qualified to serve on our Board of Directors because of his many years of experience in venture capital investing and portfolio company management leadership positions.
Fritz A. LaPorte, one of our Director Nominees, is a Partner at Dovere Advisory Group, LLC, which he co-founded in October 2014 to guide earlier stage, growth companies, primarily operating in the medical devices and healthcare sectors, in creating and sustaining value while concurrently reducing risk. Mr. LaPorte co-founded MAKO Surgical, an orthopedic surgical robotics company, in
November 2004, and served as Senior Vice President, Chief Financial Officer, and Treasurer through its IPO and eventual acquisition by Stryker in 2013.
Mr. LaPorte subsequently served as Vice President and Chief Financial Officer of Stryker Corporation — Stryker MAKO Business Unit from December 2013 to June 2014 to assist in the integration of MAKO into Stryker. He also sits on the board of directors at Venus Concept Inc. (Nasdaq: VERO), a leading medical aesthetics company, where he also serves as Audit Committee Chair, and Holy Cross Hospital in Fort Lauderdale, Florida where he also serves as a member of the finance committee. Mr. LaPorte holds a BBA in Accounting from Florida Atlantic University. Mr. LaPorte is well qualified to serve on our Board of Directors because of his extensive leadership experience in healthcare and his experience as a board member of a public company.
Number, Terms of Office, Actions and Election of Officers and Director
Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect that our board of directors will consist of five members. Holders of our founder shares will have the right to elect all of our directors prior to consummation of our initial business combination and holders of our public shares will not have the right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the stockholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the remaining directors of our board or by a majority of the holders of our common stock (or, prior to our initial business combination, a majority of the holders of our founder shares). We may not hold an annual meeting of stockholders until after we consummate our initial business combination. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on Nasdaq. Subject to any other special rights applicable to the stockholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board that includes any directors representing our sponsor then on our board, or by a majority of the holders of our founder shares.
Our officers are elected by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws will provide that our officers may consist of a Chairman, Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as may be determined by the board of directors.
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. Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have three “independent directors” as defined in Nasdaq listing standards and applicable SEC rules. Our audit committee will be entirely composed of independent directors meeting Nasdaq’s additional requirements applicable to members of the audit committee. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Executive Officer and Director Compensation
We may pay our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination, which may be paid from the proceeds held in the trust account upon consummation of an initial business combination. These individuals and entities will be reimbursed for any reasonable out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, advisors or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time such materials are distributed, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers will be determined by a compensation committee constituted solely by independent directors.
The existence or terms of any employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Upon the effective date of the registration statement of which this prospectus forms a part, our board of directors will have two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent 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. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. The members of our audit committee will be Fritz A. LaPorte, Peter van der Velden and Richard Emmitt. Fritz A. LaPorte will serve as the chair of the audit committee.
Each member of the audit committee meets the financial literacy requirements of Nasdaq and our board of directors has determined that Fritz A. LaPorte qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We will adopt an audit committee charter, which will detail the purpose and principal functions of the audit committee, including:
•
assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditors;
•
reviewing the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;
•
pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
•
reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
•
setting clear hiring policies for employees or former employees of the independent auditors;
•
setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
•
obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s internal quality-control procedures and (2) 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;
•
meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
•
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
•
reviewing with management, the independent auditors, 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.
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. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent. The members of our compensation committee will be Peter van der Velden and Richard Emmitt. Peter van der Velden will serve as the chair of the compensation committee.
We will adopt a compensation committee charter, which will detail the purpose and responsibility of the compensation committee, including:
•
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 based on such evaluation;
•
reviewing and making recommendations to our board of directors with respect to (or approving, if such authority is so delegated by our board of directors) the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;
•
reviewing our executive compensation policies and plans;
•
implementing and administering our incentive compensation equity-based remuneration plans;
•
assisting management in complying with our proxy statement and annual report disclosure requirements;
•
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
•
producing a report on executive compensation to be included in our annual proxy statement; and
•
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent 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.
Director Nominations
We do not have a standing nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605 of Nasdaq rules, 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 will participate in the consideration and recommendation of director nominees are Peter van der Velden, Richard Emmitt and Fritz A. LaPorte. In accordance with Rule 5605 of Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.
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. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors.
Code of Ethics
Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will have adopted a Code of Ethics applicable to our directors, officers and employees. We will file a copy of our form of Code of Ethics and our audit committee charter as exhibits to the registration statement.
You will be able to review these documents by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. Please see “Where You Can Find Additional Information.”
Conflicts of Interest
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:
•
the corporation could financially undertake the opportunity;
•
the opportunity is within the corporation’s line of business; and
•
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current 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. Our amended and restated 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. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
Potential investors should also be aware of the following other potential conflicts of interest:
•
None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
•
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 us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management’s other affiliations, see “— Directors and Executive Officers.”
•
Our sponsor, 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 sponsor, 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 complete our initial business combination within 18 months from the closing of this offering. However, if our sponsor, officers and directors acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time period. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until the earliest to occur of: (A) one year after the completion of our initial business combination; (B) subsequent to our initial
business combination, if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial business combination; and (C) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property. With certain limited exceptions, the private placement warrants and the Class A common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor or its permitted transferees until 30 days after the completion of our initial business combination. Since our sponsor and 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.
•
Our officers and directors 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 to proceed with a particular business combination.
•
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.
The conflicts described above may not be resolved in our favor.
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.
Below is a table summarizing the entities to which our executive officers, directors and director nominees currently have fiduciary duties:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Anthony Natale
|
|
|
Aperture Venture Partners
XII Medical
Venus Concept Inc.
|
|
|
Venture capital fund
Medical technology company
Medical technology company
|
|
|
Managing Partner
Executive Officer
Director
|
|
|
Gerry Brunk
|
|
|
Lumira
|
|
|
Venture capital fund
|
|
|
Managing Director
|
|
|
Peter van der Velden
|
|
|
Lumira
|
|
|
Venture capital fund
|
|
|
Managing Partner
|
|
|
Daniel Hetu
|
|
|
Lumira
|
|
|
Venture capital fund
|
|
|
Managing Director
|
|
|
Vasco Larcina
|
|
|
Lumira
|
|
|
Venture capital fund
|
|
|
Executive Officer
|
|
|
Richard Emmitt
|
|
|
The Vertical Group
|
|
|
Venture capital firm
|
|
|
General Partner
|
|
|
Fritz A. LaPorte
|
|
|
Dovere Advisory Group
Venus Concept Inc.
|
|
|
Business advisory firm
Medical technology company
|
|
|
Partner
Director
|
|
|
|
|
|
Holy Cross Hospital
|
|
|
Hospital
|
|
|
Director
|
|
Accordingly, if any of the above executive officers, directors or director nominees becomes aware of a business combination opportunity which is suitable for any of the above entities to which he or she has current 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 may pay our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination, which may be paid from the proceeds held in the trust account upon consummation of an initial business combination.
We are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with such a business, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.
In addition, our sponsor or any of its affiliates may make additional investments in the company in connection with the initial business combination, although our sponsor and its affiliates have no obligation or current intention to do so. If our sponsor or any of its affiliates elect to make additional investments, such proposed investments could influence our sponsor’s motivation to complete an initial business combination.
In the event that we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and directors have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any founder shares held by them (and their permitted transferees will agree) and any public shares held by them in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation will provide that our officers and directors 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 amended and restated certificate of incorporation will provide that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL or 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.
We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also will permit us to maintain insurance on behalf of any officer, director, employee or agent for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgement in some circumstances and insures us against our obligations to indemnify our officers and directors. We believe that these provisions, the insurance and indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed 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 common stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by:
•
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
•
each of our officers, directors and director nominees that beneficially own shares of common stock; and
•
all our officers, directors and director nominees as a group.
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 or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.
The below table assumes that the underwriters do not exercise their over-allotment option, that our sponsor forfeits 375,000 founder shares, and that there are 12,500,000 shares of common stock outstanding after this offering.
In March 2021, our sponsor purchased 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued.
|
Name and Address of Beneficial Owner(1)
|
|
|
Number of
Shares Beneficially
Owned(2)
|
|
|
Approximate Percentage of
Outstanding Common Stock
|
|
|
|
Before
Offering
|
|
|
After
Offering(2)
|
|
|
LAVA Medtech Sponsor LP(3)
|
|
|
|
|
2,875,000
|
|
|
|
|
|
100.0%
|
|
|
|
|
|
20.0%
|
|
|
|
Lava Medtech Manager LLC(3)
|
|
|
|
|
2,875,000
|
|
|
|
|
|
100.0%
|
|
|
|
|
|
20.0%
|
|
|
|
Anthony Natale
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Gerry Brunk
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Peter van der Velden
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Daniel Hetu
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Vasco Larcina
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Richard “Dick” Emmitt
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
Fritz A. LaPorte
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
All directors, officers and director nominees as a group (7 individuals)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
*
Less than one percent.
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 303 Wyman Street, Suite 300, Waltham, Massachusetts 02451.
(2)
Interests shown consist solely of founder shares, classified as shares of Class B common stock. The founder shares will convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.”
(3)
Our sponsor is the record holder of such shares. LAVA Medtech Manager LLC is the general partner of our sponsor, and thus LAVA Medtech Manager LLC shares voting and dispositive power of such shares. There are three members of LAVA Medtech Manager LLC, which is
member-managed, and the approval of a majority of the members is required for any action taken by LAVA Medtech Manager LLC. As such, none of the members are deemed to have voting and dispositive control over such securities, and such members disclaim beneficial ownership of any shares other than to the extent they may have a pecuniary interest therein, directly or indirectly. Lumira has an indirect economic interest in our sponsor, but has no ownership interest in LAVA Medtech Manager LLC, and thus disclaims beneficial ownership of the securities held by our sponsor.
Immediately after this offering, our initial stockholders will beneficially own 20% of the then outstanding shares of common stock and will have the right to elect all of our directors prior to our initial business combination as a result of holding all of the founder shares. Holders of our public shares will not have the right to elect any directors to our board of directors prior to our initial business combination. In addition, because of their ownership block, our initial stockholders may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions. If we increase or decrease the size of this offering, we will effect a stock dividend, share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering.
Our sponsor has committed to purchase an aggregate of 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.00 per warrant ($7,500,000 in the aggregate or $8,175,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. If we do not complete our initial business combination within 18 months from the closing of this offering, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, (iii) they may be exercised by the holders on a cashless basis, and (iv) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights.
Our sponsor and our officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws. See “Certain Relationships and Related Party Transactions” for additional information regarding our relationships with our promoters.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the letter agreement with us to be entered into by our sponsor, officers and directors. Those lock-up provisions provide that such securities are not transferable, assignable or salable (i) in the case of the founder shares, until the earliest to occur of: (A) one year after the completion of our initial business combination; (B) subsequent to our initial business combination, if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial business combination; and (C) the date
following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the private placement warrants and the respective Class A common stock underlying such warrants, until 30 days after the completion of our initial business combination, except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor, or any affiliates of our sponsor, (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 a business combination at prices no greater than the price at which the securities were originally purchased; (f) in the event of our liquidation prior to our completion of our initial business combination; (g) by virtue of the laws of the State of Delaware or our sponsor’s limited liability company agreement upon dissolution of our sponsor; or (h) in the event of our liquidation, merger, capital stock exchange, reorganization 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 subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (e) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.
Registration Rights
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans, if any, will have registration rights to require us to register a sale of any of our securities held by them (in the case of the founder shares, only after conversion to our Class A common stock) pursuant to a registration rights agreement to be entered into on or prior to the closing of this offering. These holders will be entitled to make up to three demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have certain “piggy-back” registration rights to include such securities in other registration statements filed by us and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the costs and expenses incurred in connection with filing any such registration statements.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In March 2021, our sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering costs on our behalf in consideration of 2,875,000 founder shares. As such, our initial stockholders will collectively own 20% of our outstanding shares of common stock after this offering (assuming they do not purchase any units in this offering) and will have the right to elect all of our directors prior to our initial business combination. If we increase or decrease the size of this offering, we will effect a stock dividend, share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering. Up to 375,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants for a purchase price of $1.00 per warrant in a private placement that will occur simultaneously with the closing of this offering. As such, our sponsor’s interest in this transaction is valued at between $7,500,000 and $8,175,000 depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion of our initial business combination.
As more fully discussed in “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us or in the case of a non-compete restriction, may not present such opportunity to us at all. All of our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
We will enter into an agreement with an affiliate of our sponsor, pursuant to which we will pay a total of $5,000 per month for office space, administrative and support services to such affiliate. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes the maximum 18 months, our sponsor will be paid a total of $90,000 ($5,000 per month) for office space, administrative and support services and will be entitled to be reimbursed for any out-of-pocket expenses.
We may pay our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finder’s fee, consulting fee or other compensation in connection with identifying, investigating and completing our initial business combination, which may be paid from the proceeds held in the trust account upon consummation of an initial business combination. Our sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any reasonable out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.
Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or any of their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of reasonable out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the closing of this offering, our sponsor has loaned us up to $300,000 to be used for a portion of the expenses related to the organization of our company and this offering. As of June 30,
2021, there was $54,363 in outstanding borrowings under the promissory note provided by our sponsor. This loan is non-interest bearing, unsecured and due at the earlier of December 31, 2021 and the closing of this offering. This loan will be repaid upon the completion of this offering out of the $2,200,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.
In addition, in order to fund working capital deficiencies or to finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
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 our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
On or prior to the closing of this offering, we will enter into a registration rights agreement with respect to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any), which is described under the heading “Principal Stockholders — Registration Rights.”
Related Person Transaction Policy
We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
Prior to the consummation of this offering, we will adopt a written policy relating to the approval of related person transactions. A “related person transaction” is a transaction or arrangement or series of transactions or arrangements in which we participate (whether or not we are a party) and a related person has a direct or indirect material interest in such transaction. Our audit committee will review and approve or ratify all relationships and related person transactions between us and (i) our directors, director nominees or executive officers, (ii) any 5% record or beneficial owner of our common stock or (iii) any immediate family member of any person specified in (i) and (ii) above. The audit committee will review all related person transactions and, where the audit committee determines that such transactions are in our best interests, approve such transactions in advance of such transaction being given effect.
In the course of its review and approval or ratification of a related party transaction, the audit committee will, in its judgment, consider in light of the relevant facts and circumstances whether the
transaction is, or is not inconsistent with, our best interests, including consideration of various factors enumerated in the policy.
Any member of the audit committee who is a related person with respect to a transaction under review will not be permitted to participate in the discussions or approval or ratification of the transaction. Our policy also includes certain exceptions for transactions that need not be reported and provides the audit committee with the discretion to pre-approve certain transactions.
DESCRIPTION OF SECURITIES
As of the date hereof, our authorized capital stock consists of 100,000,000 shares of Class A common stock, $0.0001 par value each, 10,000,000 shares of Class B common stock, $0.0001 par value each and 1,000,000 shares of undesignated preferred stock, $0.0001 par value each. Pursuant to our amended and restated certificate of incorporation, our authorized capital stock will consist of 100,000,000 shares of Class A common stock, $0.0001 par value each, 15,000,000 shares of Class B common stock, $0.0001 par value each and 1,000,000 shares of undesignated preferred stock, $0.0001 par value each. The following description summarizes the material terms of our capital stock as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it may not contain all the information that is important to you.
Units
Each unit has an offering price of $10.00 and consists of one whole share of Class A common stock and one-half of one warrant. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Warrants must be exercised for one whole share of Class A common stock. The common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless the Representative informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon the separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.
In no event will the Class A 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 of the company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly and no later than four business days after the closing of this offering, which will include this audited balance sheet. 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
Upon the closing of this offering 12,500,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 375,000 founder shares by our sponsor), including:
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10,000,000 shares of our Class A common stock underlying the units being offered in this offering; and
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2,500,000 shares of Class B common stock held by our initial stockholders.
If we increase or decrease the size of this offering, we will effect a stock dividend, share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering.
Holders of the Class A common stock Class B common stock of record are entitled to one vote for each share held on all matters to be voted on by stockholders and will vote together as a single class, except as required by applicable law or the rules of Nasdaq then in effect; provided, that holders of our Class B common stock will have the right to elect all of our directors prior to our initial business combination and holders of our Class A common stock will not be entitled to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of at least 90% of our outstanding common stock entitled to vote thereon. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders (other than the election of directors), and the affirmative vote of a majority of our founder shares is required to approve the election of directors prior to our initial business combination. Directors are elected for a term of two years. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the founder shares voted for the election of directors can elect all of the directors prior to our initial business combination. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Because our amended and restated certificate of incorporation will authorize the issuance of up to 100,000,000 shares of Class A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent in lieu of such a meeting. In addition, as holders of our shares of Class A common stock, our public stockholders will not have the right to vote on the election of directors. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL. 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 $10.25 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 underwriters. The redemption rights will include the requirement that a beneficial owner must identify itself in order to validly redeem its shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Unlike some other blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is
not required by applicable law or stock exchange listing requirements, if a stockholder vote is not required by applicable law or stock exchange listing requirements and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a 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, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. 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 (or, if the applicable rules of Nasdaq then in effect require, a majority of the outstanding shares of common stock held by public stockholders are voted in favor of the business transaction). Unless restricted by Nasdaq rules, 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. Unless restricted by Nasdaq rules, our initial stockholders will count towards such quorum. However, the participation of our sponsor, officers, directors, advisors or any of their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination unless restricted by applicable Nasdaq rules. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. We intend to give approximately 30 days (but not 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.
If we seek stockholder approval in connection with our initial business combination, our sponsor, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, 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 our initial stockholders’ founder shares, we would need 3,750,001, or approximately 37.5% (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option), or 625,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and no exercise of the underwriter’s over-allotment option) of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved (or, if the applicable rules of Nasdaq then in effect require approval by a majority of the votes cast by public stockholders, we would need 5,000,001 of public shares sold in the offering to be voted in favor of a transaction (assuming all outstanding shares are voted and no exercise of the underwriter’s over-allotment option) in order to have such initial business combination approved). Additionally, each public stockholder may elect to redeem its public shares without voting, and if it does vote, irrespective of whether it votes for or against the proposed transaction. These quorum and voting thresholds and the letter agreement may make it more likely that we will consummate our initial business combination.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that 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 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares of common stock sold
in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. As a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our initial business combination within 18 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, 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); 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. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they 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 18 months from the closing of this offering. However, if our sponsor, officers and directors acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock.
Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of 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, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that: (i) only holders of the founder shares have the right to vote on the election of directors prior to our initial business combination; (ii) the founder shares are subject to certain transfer restrictions; (iii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with (1) the completion of our initial business combination and (2) a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in
connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (B) 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 18 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (iv) the founder shares are automatically convertible into our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein; and (v) the founder shares are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote any founder shares and any public shares held by them in favor of our initial business combination.
The shares of Class B common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of shares of common stock outstanding upon the completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination.
With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our sponsor, each of whom will be subject to the same transfer restrictions) until the earliest to occur of: (A) one year after the completion of our initial business combination; (B) subsequent to our initial business combination, if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial business combination; and (C) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Preferred Stock
Our amended and restated certificate of incorporation will authorize 1,000,000 shares of undesignated preferred stock and will provide that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock
without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Redeemable Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of our initial business combination. A warrant holder may exercise its warrants only for a whole number of share of Class A common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock underlying the warrants is then effective and a current prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit. In the event that state securities laws are not satisfied, the public warrants may not be exercisable; however, the private warrants may be exercisable due to an available exemption because they were sold in a private placement.
We have agreed that as soon as practicable, but in no event later than fifteen (15) business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement registering under the Securities Act, the shares of Class A common stock issuable upon exercise of the warrants. We will use our best efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Exercising the warrants on a cashless basis could have the
effect of reducing the potential “upsize” of the holder’s investment in our company because warrant holders will hold a smaller number of shares of Class A common stock upon a cashless exercise of the warrants it holds.
Redemptions of warrants for cash. Once the warrants become exercisable, we may redeem the warrants (except as described herein with respect to the private placement warrants):
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
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if, and only if, the last reported sale price of shares of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date we send to the notice of redemption to the warrant holders.
If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price after the redemption notice is issued.
Redemption procedures and cashless exercise. If we call the warrants for redemption as described above under “— Redemption of warrants for cash,” management will have the option to require any holder that wishes to exercise his, her or its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean the average last reported sale price of shares of the Class A common stock for the 10 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. For the avoidance of doubt, no shares shall be issued when the market price of the common stock is less than the exercise price at the time of exercise. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the warrants after our initial business combination. If we call our warrants for redemption and our management does not take advantage of this option, our sponsor and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis
using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.
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 9.8% (or such other amount as a holder may specify) of the shares of Class A common stock outstanding immediately after giving effect to such exercise.
Anti-dilution Adjustments. If the number of outstanding shares of our Class A common stock is increased by a stock dividend payable in shares of Class A common stock to all or substantially all holders of Class A common stock, or by a split-up of shares of Class A common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Class A common stock. A rights offering to holders of shares of Class A common stock entitling holders to purchase shares of Class A common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of Class A common stock equal to the product of (i) the number of shares of Class A 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 Class A common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Class A common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A common stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A common stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to all or substantially all holders of Class A common stock on account of such shares of Class A common stock (or other shares of our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of Class A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Class A common stock in respect of such event.
If the number of outstanding shares of our Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.
Whenever the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the
warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Class A common stock so purchasable immediately thereafter.
In case of any reclassification or reorganization of the outstanding shares of Class A common stock (other than those described above or that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will 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 our shares of Class A common stock 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 holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event.
The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
In addition, 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 (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 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 consummation of our initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, then 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 $18.00 per share redemption trigger prices described below under “Redemption of warrants for cash” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise their warrants and receive shares of Class A common stock. After the issuance of shares of Class A 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.
We have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors — 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.” This provision does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum. In addition, the warrant agreement provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the rules and regulations promulgated thereunder.
Private Placement Warrants
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants,” to our officers and directors and other persons or entities affiliated with the sponsor), (iii) they may be exercised by the holders on a cashless basis, and (iv) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean the average last reported sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of Class A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
Dividends
We have not paid any cash dividends on our 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. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this
offering in such amount as to maintain the number of founder shares at 20% of our outstanding shares of common stock upon the consummation of this offering. 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.
Our Transfer Agent and Warrant Agent
The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
Our Amended and Restated Certificate of Incorporation
Our amended and restated certificate of incorporation will contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of at least 65% of our common stock.
Our initial stockholders, who collectively will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation will provide, among other things, that:
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if we are unable to complete our initial business combination within 18 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, 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); and (ii) 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;
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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 as a class with our public shares on any initial business combination;
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although we do not currently intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, that such a business combination is fair to our company from a financial point of view;
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if a stockholder vote on our initial business combination is not required by applicable law or stock exchange rules and we do not decide to hold a stockholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our
initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above;
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so long as we obtain and maintain a listing for our securities on Nasdaq, 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);
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if our stockholders approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon such approval 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; and
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we will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.
Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws
We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:
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a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
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an affiliate of an interested stockholder; or
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an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:
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our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
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after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
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on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.
Our authorized but unissued 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 amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery in the State of Delaware 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) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. 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. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. 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.
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 received by the company secretary at our principal executive offices not later than the close of business on the 90th nor earlier than the close of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act,
proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. 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.
Securities Eligible for Future Sale
Immediately after this offering we will have 12,500,000 (or 14,375,000 if the underwriters’ over-allotment option is exercised in full) shares of common stock outstanding. Of these shares, the 10,000,000 shares of Class A common stock (or 11,500,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) sold in this offering 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 2,500,000 (or 2,875,000 if the underwriters’ over-allotment option is exercised in full) shares of Class B common stock and all 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and the shares of Class B common stock and private placement warrants are subject to transfer restrictions as set forth elsewhere in this prospectus. These restricted securities will be entitled to registration rights as more fully described below under “—Registration Rights.”
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of our 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 and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.
Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at 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 only a number of securities that does not exceed the greater of:
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1% of the total number of shares of our Class A common stock then outstanding, which will equal 100,000 shares immediately after this offering (or 115,000 if the underwriters exercise their over-allotment option in full), on an as converted basis; or
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the average weekly reported trading volume of the Class A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates 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
Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition 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 Current Reports on Form 8-K; 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.
As a result, our initial stockholders will be able to sell their founder shares and our sponsor will be able to sell its private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration Rights
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans, if any, will have registration rights to require us to register a sale of any of our securities held by them (in the case of the founder shares, only after conversion to our Class A common stock) pursuant to a registration rights agreement to be entered into on or prior to the closing of this offering. These holders will be entitled to make up to three demands, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have certain “piggy-back” registration rights to include such securities in other registration statements filed by us and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act.
Listing of Securities
We will apply to list our units, Class A common stock and warrants on Nasdaq under the symbols “LVACU,” “LVAC” and “LVACW,” respectively. We expect that our units will be listed on Nasdaq on or promptly after the effective date of the registration statement. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be listed separately and as a unit on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a discussion of certain U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our units, shares of our Class A 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 Class A common stock and one-half of one warrant components of the unit, as the case may be. As a result, the discussion below with respect to holders of Class A common stock and warrants should also apply to holders of units (as the deemed owners of the underlying Class A 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, is applicable only to holders who purchased units in this offering and assumes any distributions on our Class A common stock will be paid in U.S. dollars.
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).
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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our sponsor, founders, officers or directors;
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financial institutions or financial services entities;
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broker-dealers;
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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 stock by vote or value;
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insurance companies;
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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 our 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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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
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partnerships or other pass-through entities for U.S. federal income tax purposes and any beneficial owners of such entities; and
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tax-exempt entities.
If a partnership (or other entity classified as a partnership or other pass-through entities for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. Partnerships holding our securities and partners in such partnerships are urged to consult their own tax advisors.
We have not sought, and will not seek, a ruling from the Internal Revenue Service (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.
THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. WE URGE PROSPECTIVE HOLDERS TO CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF OUR SECURITIES, AS WELL AS THE APPLICATION OF ANY STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.
Personal Holding Company Status
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 (“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 sponsor 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 five or fewer 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 Class A common stock and one-half of one warrant to acquire one share of our Class A common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you will agree to adopt such treatment for tax purposes. 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 Class A common stock and the one-half of one warrant based on the relative fair market value of each at the time of issuance. No statutory, administrative or judicial authority directly addresses how to determine the fair market value of securities, such as the Class A common stock and the one-half of one warrant, that are included as part of a unit but that do not trade separately from the unit at such time (which will be the case on the date the units are issued pursuant to this offering). Under U.S. federal income tax law, each investor must make its own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult its tax advisor regarding the determination of value for these purposes. The price allocated to each share of Class A common stock and the fraction of the warrant should be the holder’s initial tax basis in such share or fraction of the 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 Class A common stock and one-half of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the Class A common stock and the one-half of one warrant based on their respective relative fair market values at the time of disposition (as determined by each such unit holder based on all the relevant facts and circumstances). The separation of the share of Class A common stock and the one-half of one warrant comprising a unit should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the units and a holder’s purchase price allocation are not binding on the 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 Class A 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 subject to U.S. federal income tax 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 U.S. persons (as defined in the U.S. Tax 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 U.S. person.
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 our Class A common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent the distribution is paid of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles).
Distributions in excess of such 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 Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of
the Class A common stock and will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below.
Dividends we pay to a U.S. holder that is taxable as a corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends the holder elected to treat 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” subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear, however, whether the redemption rights with respect to the Class A 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 Class A Common Stock and Warrants
Upon a sale or other taxable disposition of our Class A common stock or warrants which, in general, would include a redemption of Class A 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 Class A common stock or warrants so disposed of.
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 Class A common stock or warrants so disposed exceeds one year. It is unclear, however, whether the redemption rights with respect to the Class A 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 shares of Class A 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 are currently 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 Class A 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 Class A common stock or warrants based upon the then fair market values of the Class A common stock and the warrants included in the units) and (ii) the U.S. holder’s adjusted tax basis in its Class A common stock or warrants so disposed of. A U.S. holder’s adjusted tax basis in its Class A 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 Class A common stock or one-half of one warrant or, as discussed below, the U.S. holder’s initial basis for Class A common stock received upon exercise of warrants) less, in the case of a share of Class A common stock, any prior distributions treated as a return of capital.
Redemption of Class A Common Stock
In the event that a U.S. holder’s Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock,” or if we purchase a U.S. holder’s Class A common stock in an open market transaction, the treatment of the transaction (each of which we refer to as a “redemption”) for U.S. federal income tax purposes will depend on whether the redemption qualifies as sale of the Class A 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 Class A 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 Class A common stock generally will be treated as a sale of the Class A 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 Class A 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 Class A 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. Prior to our initial business combination the Class A common stock may not be treated as voting stock for this purpose and, consequently, this substantially disproportionate test may not be applicable. 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 shares owned by certain family members and the U.S. holder does not constructively own any other shares (including any stock constructively owned by the U.S. holder as a result of owning warrants). The redemption of the Class A common stock will not be essentially equivalent to a dividend with respect to a U.S. holder 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 Class A 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. A U.S. holder should consult its own tax advisors as to the allocation of any remaining basis.
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 gain or loss upon the exercise of a warrant. A U.S. holder’s tax basis in a share of our Class A 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 the units that is allocated to the warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price. The U.S. holder’s holding period for the Class A common stock received upon exercise of a warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the warrants and 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 deductibility of capital losses is subject to certain limitations.
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 gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. Although we expect a U.S. holder’s cashless exercise of our warrants (including after we provide notice of our intent to redeem warrants for cash) to be treated as a recapitalization, a cashless exercise could alternatively be treated as a taxable exchange in which gain or loss would be recognized.
In either tax-free situation, a U.S. holder’s tax basis in the Class A common stock received generally should equal the holder’s basis in the warrant exercised therefor. If the cashless exercise were not treated as a gain realization event, a U.S. holder’s holding period in the Class A common stock would be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of the warrant and will not include the period during which the U.S. holder held the warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Class A common stock would include the holding period of the warrant exercised therefore.
If a cashless exercise is treated in part as a taxable exchange in which gain or loss would be recognized, a U.S. holder could be deemed to have surrendered a number of warrants (the “surrendered warrants”) having an aggregate fair market value equal to the exercise price for the total number of warrants to be exercised (the “exercised warrants”). The U.S. holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the surrendered warrants and the U.S. holder’s adjusted 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 surrendered warrants. In this case, a U.S. holder’s tax basis in the shares of Class A common stock received would equal the sum of the U.S. holder’s tax basis in the exercised warrants (i.e., the portion of the U.S. holder’s purchase price for the units that is allocated to the warrants, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such exercised warrants. A U.S. holder’s holding period for the Class A common stock would commence on the date following the date of exercise (or possibly the date of exercise) of the warrants and will not include the period during which the U.S. holder held the warrants.
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 Class A 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 — Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants for cash” 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 Class A Common Stock and Warrants.”
Possible Constructive Distributions
The terms of the warrants provide for an adjustment to the number of shares of common stock for which the warrants may be exercised or to the exercise price of the warrants in certain events, as discussed in the section of this prospectus captioned “Description of Securities — Redeemable Warrants — Public Stockholders’ 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 Class A 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 Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case which is taxable to the holders of such shares as a distribution (as described under “U.S. Holders — Taxation of Distributions” above). 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 Class A 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.” A Non-U.S. holder is a beneficial owner of our units, shares of Class A common stock and 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;
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, and 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 Class A 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. Subject to the discussion below regarding effectively connected income, dividends paid to a Non-U.S. holder of Class A common stock will generally be subject to U.S. federal withholding at a rate of 30% of the gross amount of the dividends (or such lower rate specified by an applicable income tax treaty, provided the Non-U.S. holder furnishes a valid IRS W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate). 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 sale proceeds from warrants or other property subsequently paid or credited to such holder. See also “Non-U.S. Holders — Possible Constructive Distributions” for potential U.S. federal tax consequences with respect to constructive distributions. A Non-U.S. holder that does not timely furnish the required documentation, but that qualifies for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Distributions in amounts in excess of our current and accumulated earnings and profits will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our Class A common stock. Any remaining excess will be treated as gain realized from the sale or other disposition of the Class A common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below. In addition, if we determine that we are likely to be classified as a “United States real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits, including a distribution in redemption of shares of our Class A common stock.
If dividends paid to a Non-U.S. holder are effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. holder maintains a permanent establishment in the United States to which such dividends are attributable), the Non-U.S. holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. holder must furnish to us or the applicable withholding agent a valid IRS 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. Any such effectively connected dividends will be subject to regular U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. holder that is taxable as a corporation may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate) on such effectively connected dividends, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants
Subject to the discussion of FATCA and backup withholding below, 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 Class A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within the required time period 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 is attributable to a U. S. permanent establishment if an applicable treaty so provides); 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 Class A common stock, and, in the case where shares of our Class A common stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively (including through ownership of warrants), more than 5% of our Class A common stock 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 Class A common stock. There can be no assurance that our Class A common stock will be treated as regularly traded on an established securities market for this purpose. If we are or have been a “United States real property holding corporation” and you own warrants, you are urged to consult your own tax advisor regarding the application of these rules.
Unless an applicable income tax 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 U.S. 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 Class A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, if our Class A common stock will not be treated as regularly traded on an established securities market, a buyer of our shares of Class A 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 “U.S. 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 Class A Common Stock
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. holder’s Class A common stock pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Common Stock” generally will correspond to the U.S. federal income tax characterization of such a redemption of a U.S. holder’s Class A common stock, as described under “U.S. Holders — Redemption of Class A 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 or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants,” as applicable. It is possible that because the applicable withholding agent may not be able to determine the proper characterization of a redemption of a Non-U.S. holder’s Class A common stock, the withholding agent might treat the redemption as a distribution subject to withholding tax.
Exercise, Lapse or Redemption of a Warrant
The characterization for U.S. federal income tax purposes of the exercise, lapse or redemption of a warrant held by a Non-U.S. holder will generally correspond to the characterization described under “U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise or redemption results in a taxable exchange, the consequences would be similar to those described above in “Non-U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants.”
Possible Constructive Distributions.
The terms of each warrant provide for an adjustment to the number of shares of Class A 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 — Redeemable Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. Nevertheless, the Non-U.S. holders of the warrants would 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 warrantholders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Class A 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 Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case which is taxable to the holders of such shares as a distribution (as described under “Non-U.S. Holders — Taxation of Distributions” above). Such constructive distribution would be subject to U.S. federal income tax (including any applicable withholding) 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 without any corresponding receipt of cash.
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 Class A common stock and warrants. A Non-U.S. holder may have to comply with certification procedure 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. Amounts withheld as backup withholding may be credited against a U.S. holder’s U.S. federal income tax liability, and a holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
FATCA Withholding Taxes
Provisions commonly referred to as “FATCA” impose withholding (separate and apart from, but without duplication of, the withholding tax described above) at a rate of 30% on payments of dividends (including constructive dividends) on our Class A common stock paid to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied, or an exemption applies. The IRS has issued proposed regulations (on which taxpayers may rely until final regulations are issued) that would generally not apply these withholding requirements to gross proceeds from sales or other disposition proceeds from our securities. An intergovernmental agreement between the U.S. and an applicable foreign country may modify these requirements. Accordingly, the entity through which our common stock is held will affect the determination of whether such withholding is required. If FATCA withholding is imposed, under certain circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. holder might be required to file a U.S. federal income tax return to claim such refunds or credits (which may entail significant administrative burden). Non-U.S. holders are urged to consult their own tax advisers regarding the effects of FATCA on their investment in our securities.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER’S PARTICULAR SITUATION. HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR CLASS A COMMON STOCK AND WARRANTS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, ESTATE, NON-U.S. AND OTHER TAX LAWS AND TAX TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. OR OTHER TAX LAWS.
UNDERWRITING
RBC Capital Markets, LLC is acting as sole book-running manager of the offering. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter named below has severally agreed to purchase from us the following respective number of units at a public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus:
|
Underwriter
|
|
|
Number of
Units
|
|
|
RBC Capital Markets, LLC
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
10,000,000
|
|
|
The underwriting agreement provides that the obligations of the underwriters to purchase the units included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all of the units (other than those covered by the over-allotment option described below) if they purchase any of the units.
Units sold by the underwriters to the public will initially be offered at the initial public 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 from the initial public offering price not to exceed $ per unit. If all of the units are not sold at the initial offering price, the underwriters may change the offering price and the other selling terms. The Representative has advised us that the underwriters do not intend to make sales to discretionary accounts.
If the underwriters sell more units than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase up to 1,500,000 additional units at the public offering price less the underwriting discount. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional units approximately proportionate to that underwriter’s initial purchase commitment. Any units issued or sold under the option will be issued and sold on the same terms and conditions as the other units that are the subject of this offering.
We, our sponsor and our officers and directors have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of the Representative, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any units, warrants, shares of common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of common stock, subject to certain exceptions. The Representative in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, if (x) the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.
The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the
completion of our initial business combination (except with respect to permitted transferees as described herein under the section of this prospectus entitled “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”).
Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the Representative.
The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, Class A common stock or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, Class A common stock or warrants will develop and continue after this offering.
We expect our units to be listed on the Nasdaq under the symbol “LVACU” and, once the shares of Class A common stock and warrants begin separate trading, to have our shares of Class A common stock and warrants listed on the Nasdaq under the symbols “LVAC” and “LVACW”, respectively.
The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option.
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|
|
|
Paid by
LAVA Medtech Acquisition Corp.
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|
|
|
No Exercise
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|
|
Full Exercise
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|
|
Per Unit(1)
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|
|
|
$
|
0.55
|
|
|
|
|
$
|
0.55
|
|
|
|
Total(1)
|
|
|
|
$
|
5,500,000
|
|
|
|
|
$
|
6,325,000
|
|
|
(1)
Includes $0.35 per unit, or $3,500,000 (or up to $4,025,000 if the over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein.
In addition, we have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $30,000.
If we do not complete our initial business combination within 18 months from the closing of this offering, the trustee and the underwriters have agreed that (i) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account, and (ii) the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any interest earned on the funds held in the trust account and not previously released to us to pay our taxes, to the public stockholders.
In connection with the offering, the underwriters may purchase and sell units in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the over-allotment option, and stabilizing purchases.
•
Short sales involve secondary market sales by the underwriters of a greater number of units than they are required to purchase in the offering.
•
“Covered” short sales are sales of units in an amount up to the number of units represented by the underwriters’ over-allotment option.
•
“Naked” short sales are sales of units in an amount in excess of the number of units represented by the underwriters’ over-allotment option.
•
Covering transactions involve purchases of units either pursuant to the over-allotment option or in the open market after the distribution has been completed in order to cover short positions.
•
To close a naked short position, the underwriters must purchase units in the open market after the distribution has been completed. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the offering.
•
To close a covered short position, the underwriters must purchase units in the open market after the distribution has been completed or must exercise the over-allotment option. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option.
•
Stabilizing transactions involve bids to purchase units so long as the stabilizing bids do not exceed a specified maximum.
The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the units. They may also cause the price of the units to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.
We estimate that our portion of the total expenses of this offering payable by us will be $800,000, excluding underwriting discounts and commissions.
We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.
We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, but we may do so at our discretion. However, any of the underwriters may introduce us to potential target businesses, provide financial advisory services to us in connection with a business combination or assist us in raising additional capital in the future, including by acting as a placement agent in a private offering or underwriting or arranging debt financing. If any of the underwriters provide services to us after this offering, we may pay such 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 any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. We may pay the underwriters of this offering or any entity with which they are affiliated, a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination. Any fees we may pay the underwriters or their affiliates for services rendered to us after this offering may be contingent on the completion of a business combination and may include non-cash compensation. The underwriters or their affiliates that provide these services to us may have a potential conflict of interest given that the underwriters are entitled to the deferred portion of their underwriting compensation for this offering only if an initial business combination is completed within the specified timeframe.
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities, the underwriters and their respective affiliates, officers, directors and employees may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve or relate to assets, securities and/or instruments of ours (directly, as collateral securing other obligations or otherwise) and/or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
An affiliate of the underwriter has an indirect minority economic interest in a portion of the private placement warrants acquired by our sponsor. Such securities will be deemed to be underwriting compensation in connection with this offering and will be subject to the requirements of FINRA Rule 5110(g)(8). Such securities will not be exercisable more than five years from the commencement of sales of this offering, and the registration rights granted with respect to such private placement warrants will be subject to the limitations set forth in FINRA Rule 5110(g)(8)(B), (C) and (D).
Notice to Prospective Investors in Australia and the United Kingdom
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of the securities may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the securities without disclosure to investors under Chapter 6D of the Corporations Act.
The securities applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring securities must observe such Australian on-sale restrictions.
This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.
Notice to Prospective Investors in the Dubai International Financial Centre
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
Notice to Prospective Investors in the European Economic Area
In relation to each Member State of the European Economic Area (each a “Relevant State”), no units have been offered or will be offered pursuant to this offering to the public in that Relevant State prior to the publication of a prospectus in relation to the units which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that offers of units may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:
(a)
to any legal entity which is a qualified investor as defined under the Prospectus Regulation;
(b)
to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or
(c)
in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to any units in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any units to be offered so as to enable an investor to decide to purchase or subscribe for any units, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
Notice to Prospective Investors in Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document nor any other offering or marketing material relating to the offering, the company, the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”).
The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
Notice to Prospective Investors in the United Kingdom
In relation to the United Kingdom, no units have been offered or will be offered pursuant to an offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the units which has been approved by the Financial Conduct Authority in accordance with the UK Prospectus Regulation, except that offers of units may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:
•
to any legal entity which is a qualified investor as defined under the UK Prospectus Regulation;
•
to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus Regulation), subject to obtaining the prior consent of the Representatives; or
•
in any other circumstances falling within Article 1(4) of the UK Prospectus Regulation,
provided that no such offer of units shall require us or the underwriters or any of our or their respective representatives to publish a prospectus pursuant to Article 3 of the UK Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the EU Prospectus Regulation.
For the purposes of this provision: (i) the expression an “offer to the public” in relation to any units in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any units to be offered so as to enable an investor to decide to purchase or subscribe for any units; and (ii) the expression “UK Prospectus Regulation” means the UK version of Regulation (EU) No 2017/1129 as amended by The Prospectus (Amendment etc.) (EU Exit) Regulations 2019, which is part of U.K. law by virtue of the European Union (Withdrawal) Act 2018.
Notice to Prospective Investors in France
Neither this prospectus nor any other offering material relating to the units described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or by the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The units have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the units has been or will be:
•
released, issued, distributed or caused to be released, issued or distributed to the public in France; or
•
used in connection with any offer for subscription or sale of the units to the public in France.
Such offers, sales and distributions will be made in France only:
•
to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with, Article L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;
•
to investment services providers authorized to engage in portfolio management on behalf of third parties; or
•
in a transaction that, in accordance with article L.411-2-II-1b or 2b or 31b of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne).
The units may be resold directly or indirectly, only in compliance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.
Notice to Prospective Investors in Hong Kong
The units may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (i) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the units may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to units which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.
Notice to Prospective Investors in Japan
The units have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other entity organized under the laws of Japan.
Notice to Prospective Investors in Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the units may not be circulated or distributed, nor may the units be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.
Where the units are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
•
shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:
•
to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than $200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be
paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;
•
where no consideration is or will be given for the transfer; or
•
where the transfer is by operation of law.
Notification under Section 309B(1)(c) of the Securities and Futures Act, Chapter 289 of Singapore. The securities are “prescribed capital markets products” (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
Notice to Canadian Residents
Resale Restrictions
The distribution of units in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the units in Canada must be made under applicable securities laws which may 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. Purchasers are advised to seek legal advice prior to any resale of the securities.
Representations of Canadian Purchasers
By purchasing units in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
•
the purchaser is entitled under applicable provincial securities laws to purchase the units without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106 — Prospectus Exemptions,
•
the purchaser is a “permitted client” as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations,
•
where required by law, the purchaser is purchasing as principal and not as agent, and
•
the purchaser has reviewed the text above under Resale Restrictions.
Conflicts of Interest
Canadian purchasers are hereby notified that the underwriters are relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named herein may be 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 or a substantial portion of our assets and the assets of those persons may be 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.
Taxation and Eligibility for Investment
Canadian purchasers of units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under relevant Canadian legislation.
LEGAL MATTERS
Reed Smith LLP, New York, New York, is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus with respect to units and warrants. In connection with this offering, Skadden, Arps, Slate, Meagher & Flom LLP, Palo Alto, California, is acting as counsel to the underwriters.
EXPERTS
The financial statements of LAVA Medtech Acquisition Corp. as of April 20, 2021 and for the period March 31, 2021 (inception) through April 20, 2021, have been included herein in reliance upon the report (which contains an explanatory paragraph relating to the company’s ability to continue as a going concern as discussed in Note 1 to the financial statements) of Citrin Cooperman & Company, LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.
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.
LAVA MEDTECH ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENTS
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F-2
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F-3
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F-4
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F-5
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F-6
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F-7
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholder and Board of Directors of LAVA Medtech Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of LAVA Medtech Acquisition Corp. (the “Company”) as of April 20, 2021, and the related statements of operations, changes in stockholder’s equity and cash flows for the period from March 31, 2021 (inception) through April 20, 2021, and the related notes (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April 20, 2021 and the results of its operations and its cash flows for the period from March 31, 2021 (inception) through April 20, 2021, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company was recently formed and has no revenue and its business plan is dependent on the completion of a financing transaction, and the Company’s working capital as of April 20, 2021 is not sufficient for its planned activities for the upcoming year. These conditions that raise substantial about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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/ Citrin Cooperman & Company, LLP
We have served as the Company’s auditor since 2021.
New York, New York
October 1, 2021
Lava Medtech Acquisition Corp.
BALANCE SHEETS
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June 30, 2021
(unaudited)
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April 20, 2021
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ASSETS
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|
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OTHER ASSETS
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|
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Deferred offering costs
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$
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94,363
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|
|
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$
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25,000
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Total other assets
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|
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94,363
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|
|
|
|
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25,000
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|
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TOTAL ASSETS
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|
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|
$
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94,363
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|
|
|
|
$
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25,000
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|
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
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|
|
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CURRENT LIABILITIES
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Accounts payable and accrued expenses
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$
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1,000
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|
|
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$
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1,000
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|
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|
Accrued offering costs
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15,000
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|
|
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|
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—
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Note payable – related party
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54,363
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|
|
|
|
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—
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Total current liabilities
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70,363
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1,000
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|
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TOTAL LIABILITIES
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|
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|
70,363
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|
|
|
|
|
1,000
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COMMITMENTS AND CONTINGENCIES
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STOCKHOLDER’S EQUITY
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Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
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—
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—
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Class A common stock; $0.0001 par value; 100,000,000 shares authorized; none issued and outstanding
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—
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—
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Class B common stock; $0.0001 par value; 10,000,000 shares authorized; 2,875,000 issued and outstanding(1)
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287
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|
|
|
|
|
287
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|
|
|
Additional paid-in capital
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|
|
|
|
24,713
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|
|
|
|
|
24,713
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|
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Accumulated deficit
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|
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(1,000)
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|
|
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(1,000)
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Total stockholder’s equity
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24,000
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24,000
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TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
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|
$
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94,363
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|
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$
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25,000
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(1)
This number includes an aggregate of up to 375,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 4).
The accompanying notes are an integral part of these financial statements
Lava Medtech Acquisition Corp.
STATEMENTS OF OPERATIONS
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For the period
March 31, 2021
(inception)
through
June 30, 2021
(unaudited)
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For the period
March 31, 2021
(inception)
through
April 20, 2021
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EXPENSES
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General and administrative expenses
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|
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|
$
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1,000
|
|
|
|
|
$
|
1,000
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|
|
|
Total expenses
|
|
|
|
|
1,000
|
|
|
|
|
|
1,000
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|
|
|
NET LOSS
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|
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(1,000)
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(1,000)
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WEIGHTED AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED(1)
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2,500,000
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2,500,000
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BASIC AND DILUTED NET LOSS PER SHARE
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|
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|
$
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(0.00)
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|
|
|
|
$
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(0.00)
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(1)
This number excludes an aggregate of up to 375,000 shares of Class B common stock subject to forfeiture if the overallotment option is not exercised in full or in part by the underwriter (see Note 4).
The accompanying notes are an integral part of these financial statements
Lava Medtech Acquisition Corp.
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
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Common stock
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Additional
paid-in
capital
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Accumulated
deficit
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Total
stockholder’s
equity
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Class A
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Class B
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Shares
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Amount
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|
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Shares
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|
|
Amount
|
|
|
Balance, March 31, 2021 (inception)
|
|
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|
|
—
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|
|
|
|
$
|
—
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|
|
|
|
|
—
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|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Issuance of Class B common stock
to Sponsor(1)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
2,875,000
|
|
|
|
|
$
|
287
|
|
|
|
|
$
|
24,713
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|
|
|
|
|
—
|
|
|
|
|
|
25,000
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|
|
|
Net loss
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|
|
|
|
—
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|
|
|
|
|
—
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|
|
|
|
|
—
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|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
(1,000)
|
|
|
|
|
|
(1,000)
|
|
|
|
Balance, April 20, 2021
|
|
|
|
|
—
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|
|
|
|
$
|
—
|
|
|
|
|
|
2,875,000
|
|
|
|
|
$
|
287
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|
|
|
|
$
|
24,713
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|
|
|
|
$
|
(1,000)
|
|
|
|
|
$
|
24,000
|
|
|
|
Net loss
|
|
|
|
|
—
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|
|
|
|
|
—
|
|
|
|
|
|
—
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|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
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|
|
|
|
|
—
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|
|
|
Balance, June 30, 2021
(unaudited)
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|
|
|
|
—
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|
|
|
|
$
|
—
|
|
|
|
|
|
2,875,000
|
|
|
|
|
$
|
287
|
|
|
|
|
$
|
24,713
|
|
|
|
|
$
|
(1,000)
|
|
|
|
|
$
|
24,000
|
|
|
(1)
This number includes an aggregate of up to 375,000 shares of Class B common stock subject to forfeiture if the overallotment option is not exercised in full or in part by the underwriter (see Note 4).
The accompanying notes are an integral part of these financial statements
Lava Medtech Acquisition Corp.
STATEMENTS OF CASH FLOWS
|
|
|
|
For the period
March 31, 2021
(inception)
through
June 30, 2021
(unaudited)
|
|
|
For the period
March 31, 2021
(inception)
through
April 20, 2021
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(1,000)
|
|
|
|
|
$
|
(1,000)
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
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|
|
|
|
|
|
|
|
|
|
|
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|
|
Organizational expenses paid by affiliate
|
|
|
|
|
1,000
|
|
|
|
|
|
1,000
|
|
|
|
Net cash flows used in operating activities
|
|
|
|
|
—
|
|
|
|
|
|
—
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|
|
|
NET CHANGE IN CASH
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|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
CASH, BEGINNING OF PERIOD
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
CASH, END OF PERIOD
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
Supplemental disclosure of noncash activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment of deferred offering costs by note payable - related party
|
|
|
|
$
|
54,363
|
|
|
|
|
$
|
—
|
|
|
|
Deferred offering costs included in accrued offering costs
|
|
|
|
$
|
15,000
|
|
|
|
|
$
|
—
|
|
|
|
Payment of deferred offering costs by the Sponsor in exchange for the issuance of Class B common stock
|
|
|
|
$
|
25,000
|
|
|
|
|
$
|
25,000
|
|
|
The accompanying notes are an integral part of these financial statements
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS
June 30, 2021
Note 1 — Description of Organization, Business Operations and Going Concern
LAVA Medtech Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on March 31, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (the “Business Combination”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on industries that complement our management team’s background within healthcare and healthcare-related industries, primarily in the United States and Canada. The Company is an emerging growth company and, as such, the Company is subject to all the risks associated with emerging growth companies.
As of June 30, 2021, the Company had not commenced any operations. All activity for the period from March 31, 2021 (inception) through June 30, 2021, relates to the Company’s formation and the proposed initial public offering described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Proposed Public Offering. The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is LAVA Medtech Sponsor LP, a Delaware limited partnership (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering (the “Proposed Public Offering”) of 10,000,000 units (each, a “Unit” and collectively, the “Units”) 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 7,500,000 warrants (or 8,175,000 warrants if the underwriters’ over-allotment option is exercised in full) (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor that will close simultaneously with the Proposed Public Offering.
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 Private Placement Warrants, although substantially all 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 one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter the initial Business Combination. However, 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 $10.25 per Unit sold in the Proposed Public Offering will be held in a trust account (“Trust Account”), located in the United States at Morgan Stanley Smith Barney LLC, with Continental Stock Transfer & Trust Company acting as trustee, 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 180 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 paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 1 — Description of Organization, Business Operations and Going Concern (Continued)
Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company will provide its holders of the outstanding shares of its Class A common stock, par value $0.0001 (“Class A common stock”), sold in the Proposed Public Offering (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares (as defined below in Note 3) 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 (as defined below in Note 3) for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.25 per Public Share). The per-share amount to be distributed to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and most 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 prior to completing a Business Combination. If, however, stockholder approval of the transactions 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. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined below) have agreed to vote its Founder Shares (as defined below in Note 4) and any Public Shares purchased during or after the Proposed Public Offering in favor of a Business Combination. Subsequent to the consummation of the Proposed Public Offering, the Company will adopt an insider trading policy which will require insiders to: (i) refrain from purchasing shares during certain blackout periods and when they are in possession of any material non-public information and (ii) to clear all trades with the Company’s legal counsel prior to execution. In addition, the initial stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
Notwithstanding the foregoing, the Certificate of Incorporation provides that 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 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A common stock sold in the Proposed Public Offering, without the prior consent of the Company.
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 1 — Description of Organization, Business Operations and Going Concern (Continued)
The Company’s Sponsor, officers and directors (the “initial stockholders”) have agreed not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their shares of Class A common stock in conjunction with any such amendment.
If the Company is unable to complete a Business Combination within 18 months from the closing of the Proposed Public Offering (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 the Company’s franchise and income 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 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 laws.
The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the initial stockholders should acquire Public Shares in or after the Proposed Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive its rights to its deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.25 per share initially held in the Trust Account. To protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor 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. This liability will not apply with respect to any claims by a third party who executes a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or 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, if an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 1 — Description of Organization, Business Operations and Going Concern (Continued)
Going Concern Consideration
As of June 30, 2021 and April 20, 2021, the Company had no cash and a working capital deficit of $70,363 (unaudited) and $1,000, respectively. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period, which is one year from the issuance date of the financial statements. Management’s plans to address this need for capital through the Proposed Public Offering. The Company cannot assure that its plans to raise capital or to consummate an initial Business Combination will be successful. In addition, management is currently evaluating the impact of the COVID-19 pandemic on the industry and its effect on the Company’s financial position, results of its operations and/or closing the initial public offering or search for a target company.
These factors, among others, raise substantial doubt about the Company’s ability to continue as going concern one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the Company’s inability to consummate the Proposed Public Offering or its inability to continue as a going concern.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC.
The accompanying unaudited financial statements as of June 30, 2021 and for the period from March 31, 2021 (inception) through 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 period from March 31, 2021 (inception) through June 30, 2021 are not necessarily indicative of the results that may be expected for the period ending December 31, 2021, or any future period.
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (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 an emerging growth 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.
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 2 — Summary of Significant Accounting Policies (Continued)
This may make comparison of the Company’s financial statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Net Loss Per Common Share
The Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per 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. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of Class B common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). As of June 30, 2021 and April 20, 2021, 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 cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation limit of $250,000. As of June 30, 2021 and April 20, 2021, the Company has not experienced any losses on these accounts and management believes the Company is not exposed to any significant risks on such accounts.
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP stablishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
•
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
•
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
•
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 2 — Summary of Significant Accounting Policies (Continued)
techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB 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.
FASB 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. There were no unrecognized tax benefits as of June 30, 2021 or April 20, 2021. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties for the period from March 31, 2021 (date of inception) to June 30, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 2 — Summary of Significant Accounting Policies (Continued)
The provision for income taxes was deemed to be de minimis for the periods March 31, 2021 (inception) through June 30, 2021 and March 31, 2021 (inception) through April 20, 2021.
Deferred Offering Costs Associated with the Proposed Public Offering
Deferred offering costs will consist of direct costs incurred through the balance sheet date that are directly related to the Proposed Public Offering and that will be charged to stockholder’s equity upon the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. On June 30, 2021 and April 20, 2021, there were $94,363 (unaudited) and $25,000 of deferred offering costs, respectively.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on March 31, 2021, (inception). Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Note 3 — Public Offering
Pursuant to the Proposed Public Offering, the Company intends to offer for sale 10,000,000 units at a price of $10.00 per Unit for an aggregate of $100,000,000. Each Unit consists of one share of Class A common stock (such shares of Class A common stock included in the Units being offered, the “Public Shares”), and one half of a redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
Note 4 — Related Party Transactions
Founder Shares
On March 31, 2021, the Sponsor paid $25,000, or approximately $0.009 per share, to cover certain offering costs on our behalf in consideration of 2,875,000 shares (the “Founder Shares”) of the Company’s Class B common stock, par value $0.0001 (“Class B common stock”). The Founder Shares will automatically convert into shares of Class A common stock at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 7. Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment, at any time. The initial stockholders have agreed to forfeit up to 375,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 4 — Related Party Transactions (Continued)
Company’s issued and outstanding shares after the Proposed Public Offering. If the Company increases or decreases the size of the offering, the Company will affect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the Proposed Public Offering in such amount as to maintain the Founder Share ownership of the Company’s stockholders prior to the Proposed Public Offering at 20.0% of the Company’s issued and outstanding common stock upon the consummation of the Proposed Public Offering.
The initial stockholders will agree, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private Placement Warrants
The Sponsor has agreed to purchase an aggregate of 7,500,000 Private Placement Warrants (or 8,175,000 if the over-allotment option is exercised in full) at a price of $1.00 per Private Placement Warrant ($7,500,000 in the aggregate or $8,175,000 in the aggregate if the over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each whole Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. The proceeds from the Private Placement Warrants will be added to the proceeds from the Proposed Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.
The Sponsor and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related Party Loans
On March 31, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan is non-interest bearing and payable on the earlier of October 1, 2021 or the completion of the Proposed Public Offering. As of June 30, 2021 and April 20, 2021, the Company had $54,363 (unaudited) and $0 in borrowings under the Note, respectively.
In addition, to finance transaction costs in connection with a 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”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 4 — Related Party Transactions (Continued)
be repaid only out of funds held outside the Trust Account. If a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of June 30, 2021 and April 20, 2021, no Working Capital Loans were outstanding.
Support Services
The Company intends to pay an affiliate of the sponsor a fee of approximately $5,000 per month for office space and administrative support services following the consummation of the Proposed Public Offering until the earlier of the consummation of the Business Combination or liquidation.
Note 5 — Commitments & Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement to be signed on or before the date of the prospectus for the Proposed Public Offering. These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. 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 this prospectus 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 an underwriting discount of $0.20 per unit, or $2,000,000 in the aggregate (or 2,300,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. $0.35 per unit, or 3,500,000 in the aggregate (or 4,025,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely if the Company completes a Business Combination, subject to the terms of the underwriting agreement. A portion of the deferred underwriting commission may be allocated to third parties at the discretion of the Sponsor.
Note 6 — Warrants
The Company will account for the 7,500,000 Private Placement Warrants (or 8,175,000 Private Placement Warrants if the underwriters exercise their over-allotment option in full) to be issued in a
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 6 — Warrants (Continued)
private placement in connection with the Proposed Public Offering in accordance with the guidance contained in ASC 815-40. The Private Placement Warrants include a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. Because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares, this provision precludes the warrants from being indexed to the entity’s stock. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.
Note 7 — Stockholder’s Equity
Common Stock
Class A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of June 30, 2021 and April 20, 2021, there were no shares of Class A common stock issued or outstanding.
Class B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. As of June 30, 2021 and April 20, 2021, there were 2,875,000 shares of Class B common stock outstanding. Of the 2,875,000 shares of Class B common stock, an aggregate of up to 375,000 shares subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial stockholders will collectively own 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Proposed Public Offering and related to the closing of the initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Proposed Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 7 — Stockholder’s Equity (Continued)
Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2021, there were no shares of preferred stock issued or outstanding.
Warrants
The Public Warrants will become exercisable 30 days after the completion of a Business Combination. No warrants will be exercisable for cash unless the Company has 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 Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
Redemption of warrants when the price per Class A common stock equals or exceeds $18.00:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the private placement warrants) as follows:
•
in whole and not in part.
•
at a price of $0.01 per warrant.
•
upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the “30-day redemption period”: and
•
if, and only if, the last reported sale price (the “closing price”) of our Class A common stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Warrants — Public Stockholders’ Warrants — Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A common stock is available throughout the 30-day redemption period. When the warrants become redeemable by the Company we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
None of the private placement warrants will be redeemable by the Company so long as they are held by our sponsor or its permitted transferees.
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 7 — Stockholder’s Equity (Continued)
No fractional Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of Class A common stock to be issued to the holder. Please see the section entitled “Description of Securities — Warrants — Public Stockholders’ Warrants” for additional information.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
The Private Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Warrants and the shares of Common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public 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. However, the warrants will not be adjusted for issuances of shares of Common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if the Company issues additional shares of Common stock or equity-linked securities for capital raising purposes in connection with the closing of a 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 initial stockholders or their affiliates, without taking into account any Founder Shares held by them 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 a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of Common stock or equity-linked securities.
Note 8 — Subsequent Events
Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are issued or are available to be issued. These events and transactions either provide
LAVA Medtech Acquisition Corp.
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2021
Note 8 — Subsequent Events (Continued)
additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing the financial statements (that is, recognized subsequent events), or provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date (that is, non-recognized subsequent events).
In accordance with ASC 855, “Subsequent Events”, the Company has evaluated subsequent events through October 1, 2021, which was the date these financial statements were issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
In September 2021, the Company issued to our Sponsor an Amended and Restated Promissory Note, which extended the due date to December 31, 2021.
$100,000,000
10,000,000 Units
LAVA Medtech Acquisition Corp.
PROSPECTUS
, 2021
RBC Capital Markets
Until , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade shares of our Class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
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Legal fees and expenses
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$
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250,000
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|
|
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Accounting fees and expenses
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|
|
|
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75,000
|
|
|
|
|
SEC/FINRA Expenses
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|
|
|
|
75,000
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|
|
|
|
Nasdaq listing and filing fees
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|
|
|
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150,000
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|
|
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Printing and engraving expenses
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|
|
|
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50,000
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|
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Miscellaneous expenses
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|
|
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200,000
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|
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Total offering expenses
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$
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800,000
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|
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Item 14. Indemnification of Directors and Officers.
Our amended and restated certificate of incorporation will provide that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the DGCL.
Section 145 of the DGCL concerning the 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 of the corporation 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 directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise 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 informed 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 amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL or unless they violated their duty of loyalty to the company 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 their actions as directors. The effect of this provision of our amended and restated 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 amended and restated 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. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, 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 further limit or eliminate the liability of directors on a retroactive basis.
Our amended and restated certificate of incorporation will also provide 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 amended and restated 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 amended and restated 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 amended and restated 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 amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
Any repeal or amendment of provisions of our amended and restated 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 amended and restated 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 amended and restated certificate of incorporation.
Our bylaws include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our amended and restated 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 maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another corporation, partnership, joint venture, 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 such 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 an 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 to be filed as an exhibit to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, 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 to 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.
Item 15. Recent Sales of Unregistered Securities.
In March 2021, LAVA Medtech Sponsor LP, our sponsor, purchased an aggregate of 2,875,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.009 per share. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
In addition, our sponsor has committed to purchase from us an aggregate of 7,500,000 (or 8,175,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at $1.00 per warrant (for an aggregate purchase price of $7,500,000 or $8,175,000 in the aggregate if the underwriters’ over-allotment option is exercised in full). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a)
Exhibits.
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Exhibit
No.
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Description
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1.1
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3.1
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3.2
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3.3
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4.1
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4.2
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4.3
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4.4
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5.1
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10.1
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10.2
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10.3
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10.4
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Form of Registration and Shareholder Rights Agreement among the Registrant, Sponsor and certain security holders.***
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10.5
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Securities Subscription Agreement, dated September 30, 2021, between the Registrant and LAVAMedtech Sponsor LP.**
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10.6
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10.7
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10.8
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23.1
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23.2
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24
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99.1
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99.2
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99.3
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99.4
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99.5
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**
Filed herewith.
***
To be filed by amendment.
(b)
Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(b)
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 Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final adjudication of such issue.
(c)
The undersigned registrant hereby undertakes that:
(1)
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 of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
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.
(3)
For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(4)
For the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York City, New York, on the 1st day of October, 2021.
LAVA Medtech Acquisition Corp.
By:
/s/ Anthony Natale
Name:
Anthony Natale
Title:
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Anthony Natalie, Vasco Larcina, and Gerry Brunk their true and lawful attorney-in-fact, with full power of substitution and resubstitution for him and in their name, place and stead, in any and all capacities to sign any and all amendments including pre- and post-effective amendments to this registration statement, any subsequent registration statement for the same offering that may be filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and pre- or post-effective amendments thereto, 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 their 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/ Anthony Natale
Anthony Natale
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Chief Executive Officer, Director
(Principal Executive Officer)
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October 1, 2021
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/s/ Vasco Larcina
Vasco Larcina
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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October 1, 2021
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/s/ Gerry Brunk
Gerry Brunk
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President, Director
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October 1, 2021
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Exhibit 1.1
LAVA MEDTECH
aCQUISITION CORP.
10,000,000 Units
Underwriting Agreement
September [·],
2021
RBC Capital Markets, LLC
As Representative of the
several Underwriters listed
in Schedule 1 hereto
c/o RBC Capital Markets, LLC
200 Vesey Street
New York, New York 10281
Ladies and Gentlemen:
LAVA Medtech Acquisition Corp., a Delaware corporation
(the “Company”), proposes to sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”),
for whom you are acting as representative (the “Representative”), an aggregate of 10,000,000 units of the Company (the “Underwritten
Units”). The Company also proposes to grant to the Underwriters a 45-day option to purchase up to an additional 1,500,000 units
of the Company (the “Option Units”). The Underwritten Units and the Option Units are herein referred to as the “Public
Units.”
Each Public Unit consists of one share of the Company’s
Class A common stock, par value $0.0001 per share (the “Common Stock”), and one-half of one redeemable warrant, where
each whole warrant entitles the holder to purchase one share of Common Stock (the “Public Warrants”). The shares of Common
Stock and the Public Warrants included in the Public Units will not trade separately until the 52nd day following the date of the Prospectus
(as defined below) (or, if such date is not a business day (as defined below), the following business day) (unless the Representative
informs the Company of its decision to allow earlier separate trading), subject to (a) the Company’s filing of a Current Report
on Form 8-K with the Securities and Exchange Commission (the “Commission”) containing an audited balance sheet reflecting
the receipt by the Company of the gross proceeds of the Offering (as defined below) and (b) the Company having issued a press release
announcing when such separate trading will begin. No fractional Public Warrants will be issued upon separation of the Public Units, and
only whole Public Warrants will trade. Each whole Public Warrant entitles its holder, upon exercise, to purchase one share of Common Stock
at a price of $11.50 per share (subject to certain adjustments). The Public Warrants will become exercisable 30 days after the completion
of the Company’s initial Business Combination (as defined below) and will expire on the five-year anniversary of the date of the
completion of such initial Business Combination or earlier upon redemption or liquidation (as defined below); provided, however, that
pursuant to the Warrant Agreement (as defined below), a fractional Public Warrant may not be exercised, so that only a whole Public Warrant
may be exercised at any given time by a holder thereof. As used herein, the term “Business Combination” (as described more
fully in the Prospectus) shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses involving the Company.
The
Company has entered into an Investment Management Trust Agreement, effective as of [·],
2021 (the “Trust Agreement”), with Continental Stock Transfer & Trust Company (“CST”), as trustee (the
“Trustee”), in substantially the form filed as Exhibit 10.3 to the Registration Statement (as defined below), pursuant
to which proceeds from the sale of the Private Placement Warrants (as defined below) and proceeds of the Offering will be deposited and
held in a trust account (the “Trust Account”) for the benefit of the Company, the Underwriters and the Public Stockholders
(as defined below).
The
Company has entered into a Warrant Agreement, effective as of [·], 2021 (the “Warrant
Agreement”), with respect to the Public Warrants and the Private Placement Warrants (as defined below) with CST, as warrant agent,
in substantially the form filed as Exhibit 4.4 to the Registration Statement, pursuant to which CST will act as warrant agent in
connection with the issuance, registration, transfer, exchange, redemption, and exercise of the Public Warrants and the Private Placement
Warrants.
The Company has entered into a Securities Subscription
Agreement, dated as of [●], 2021 (the “Founder’s Purchase Agreement”), with LAVA Medtech Sponsor LP., a Delaware
limited partnership (the “Sponsor”), pursuant to which the Sponsor purchased an aggregate of 2,875,000 shares of the Company’s
Class B common stock, par value $0.0001 per share (the “Founder Shares”), for an aggregate purchase price of $25,000.
Up to 375,000 Founder Shares are subject to forfeiture depending on the extent to which the Underwriters’ over-allotment option
is exercised. The Founder Shares are substantially similar to the shares of Common Stock included in the Public Units, except as described
in the Registration Statement, the Pricing Disclosure Package (as defined below) and the Prospectus.
The
Company has entered into a Private Placement Warrants Purchase Agreement, effective as of [·],
2021 (the “Warrant Purchase Agreement”), with the Sponsor, in substantially the form filed as Exhibit 10.6 to the Registration
Statement, pursuant to which the Sponsor agreed to purchase an aggregate of 7,500,000 warrants (or up to 8,175,000 warrants if the over-allotment
option is exercised in full), each warrant (the “Private Placement Warrants”) consisting of one share of Common Stock, for
$1.00 per Private Placement Warrant. The Private Placement Warrants are substantially similar to the Public Warrants, except as described
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
The
Company has entered into a Registration Rights Agreement, dated as of [·], 2021
(the “Registration Rights Agreement”), with the Sponsor and certain security holders party thereto, in substantially the form
filed as Exhibit 10.4 to the Registration Statement, pursuant to which the Company has granted certain registration rights in respect
of the Private Placement Warrants and the shares of Common Stock underlying the Private Placement Warrants, the Founder Shares and certain
warrants (which will be substantially similar to the Private Placement Warrants), if any, that may be issued upon conversion of working
capital loans.
The
Company has caused to be duly executed and delivered a letter agreement, dated as of [·],
2021 (the “Insider Letter”), by and among the Sponsor and each of the Company’s officers and directors, in substantially
the form filed as Exhibit 10.2 to the Registration Statement.
The
Company has entered into an Administrative and Support Services Agreement, dated as of [·],
2021 (the “Administrative Services Agreement”), with the Sponsor, in substantially the form filed as Exhibit 10.8 to
the Registration Statement, pursuant to which the Company will, subject to the terms of the Administrative Services Agreement, pay to
the Sponsor a monthly fee of $5,000 for up to eighteen (18) months for office space and administrative and support services from the date
that the Public Units are first listed on The Nasdaq Capital Market (the “Nasdaq”) until the earlier of (x) the consummation
of an initial Business Combination and (y) the Liquidation.
The Trust Agreement, the Warrant Agreement, the
Founder’s Purchase Agreement, the Warrant Purchase Agreement, the Registration Rights Agreement, the Insider Letter and the Administrative
Services Agreement are collectively referred to herein as the “Transaction Documents.”
The Company hereby confirms its agreement with
the several Underwriters concerning the purchase and sale of the Public Units, as follows:
1. Registration
Statement. The Company has prepared and filed with the Commission under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement (File No. 333-[·]),
including a prospectus, relating to the Public Units and the Public Warrants and shares of Common Stock included therein. Such registration
statement, as amended at the time it became effective, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C
under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430 Information”),
is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means
each prospectus included in such registration statement (and any amendments thereto) before effectiveness, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the
time of its effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in the form
first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation
of sales of the Public Units. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement”
shall be deemed to include such Rule 462 Registration Statement.
At
or prior to the Applicable Time (as defined below), the Company had prepared the following information (collectively with the pricing
information set forth on Annex A, the “Pricing Disclosure Package”): a Preliminary Prospectus dated [·],
2021.
“Applicable
Time” means [·], New York City time, on [·],
2021.
2. Purchase
of the Public Units.
(a) The
Company agrees to issue and sell the Underwritten Units to the several Underwriters as provided in this underwriting agreement (this “Agreement”),
and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase at a price per unit of $9.80 (the “Purchase Price”) from the
Company the respective number of Underwritten Units set forth opposite such Underwriter’s name in Schedule 1 hereto.
(b) In
addition, the Company agrees to issue and sell the Option Units to the several Underwriters as provided in this Agreement, and the Underwriters,
on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, shall
have the option to purchase, severally and not jointly, from the Company the Option Units at a price per unit of $9.80 less an amount
per unit equal to any dividends or distributions declared by the Company and payable on the Underwritten Units but not payable on the
Option Units.
If any Option Units are to be purchased, the number
of Option Units to be purchased by each Underwriter shall be the number of Option Units which bears the same ratio to the aggregate number
of Option Units being purchased as the number of Underwritten Units set forth opposite the name of such Underwriter in Schedule 1 hereto
(or such number increased as set forth in Section 10 hereof) bears to the aggregate number of Underwritten Units being purchased
from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional units as the Representative
in its sole discretion shall make.
The Underwriters may exercise the option to purchase
Option Units at any time in whole, or from time to time in part, on or before the forty-fifth day following the date of the Prospectus,
by written notice from the Representative to the Company. Such notice shall set forth the aggregate number of Option Units as to which
the option is being exercised and the date and time when the Option Units are to be delivered and paid for, which may be the same date
and time as the Closing Date (as defined below) but shall not be earlier than the Closing Date nor later than the tenth full business
day after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 10 hereof).
Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.
(c) In
addition to the discount from the public offering price represented by the Purchase Price, the Company hereby agrees to pay to the Underwriters
a deferred discount of $0.35 per unit (including both Underwritten Units and Option Units) purchased hereunder (the “Deferred Discount”).
The Deferred Discount will be paid directly to the Representative, on behalf of the Underwriters, by the Trustee from amounts on deposit
in the Trust Account (without accrued interest) by wire transfer payable in same-day funds if and when the Company consummates an initial
Business Combination. The Underwriters hereby agree that if no Business Combination is consummated within the time period provided in
the Company’s Amended and Restated Certificate of Incorporation, as such time period may be extended, and the funds held under the
Trust Agreement are distributed to the holders of the shares of Common Stock included in the Public Units sold pursuant to this Agreement
(the “Public Stockholders”), (i) the Underwriters will forfeit any rights or claims to the Deferred Discount and (ii) the
Trustee is authorized to distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
(d) The
Company understands that the Underwriters intend to make a public offering of the Public Units (the “Offering”), and initially
to offer the Public Units on the terms set forth in the Pricing Disclosure Package. The Company acknowledges and agrees that the Underwriters
may offer and sell Public Units to or through any affiliate of an Underwriter.
(e) Payment
for the Public Units shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representative
in the case of the Underwritten Units, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue, Suite 1400,
Palo Alto, CA 94301 at 10:00 A.M. New York City time on [·], 2021, or at such other
time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Company
may agree upon in writing or, in the case of the Option Units, on the date and at the time and place specified by the Representative in
the written notice of the Underwriters’ election to purchase such Option Units. The Company shall not be obligated to sell or deliver
any of the Underwritten Units, except upon tender of payment by the Representative for all Underwritten Units. The time and date of such
payment for the Underwritten Units is referred to herein as the “Closing Date,” and the time and date for such payment for
the Option Units, if other than the Closing Date, is herein referred to as the “Additional Closing Date.”
Payment for the Public Units to be purchased on
the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representative for the respective
accounts of the several Underwriters of the Public Units to be purchased on such date in definitive or book-entry form registered in such
names and in such denominations as the Representative shall request in writing not later than two full business days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the sale of such Public Units
duly paid by the Company. Delivery of the Public Units shall be made through the facilities of The Depository Trust Company unless the
Representative shall otherwise instruct.
(f) The
Company acknowledges and agrees that the Representative and the other Underwriters are acting solely in the capacity of an arm’s
length contractual counterparty to the Company with respect to the Offering contemplated hereby (including in connection with determining
the terms of the Offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally,
neither the Representative nor any other Underwriter is advising the Company or any other person as to any legal, tax, investment, accounting
or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible
for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representative nor
the other Underwriters shall have any responsibility or liability to the Company with respect thereto. Any review by the Representative
and the other Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf of the Company. The Company acknowledges and agrees that
it will not claim that the Representative or any of the other Underwriters (i) has rendered advisory services of any nature or respect
or (ii) owes an agency, fiduciary or similar duty to the Company, in connection with the transactions contemplated hereby or the
process leading thereto. None of the activities of the Underwriters in connection with the transactions contemplated hereby constitute
a recommendation, investment advice or solicitation of any action by the Underwriters with respect to any entity or natural person.
3. Representations
and Warranties of the Company. The Company represents and warrants to each Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary
Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with the Securities
Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon
and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative
expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b) hereof.
(b) Pricing
Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did not, and as of the Closing Date and as of the Additional
Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly
for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b) hereof. No statement of material fact included in the Prospectus
has been omitted from the Pricing Disclosure Package and no statement of material fact included in the Pricing Disclosure Package that
is required to be included in the Prospectus has been omitted therefrom.
(c) Issuer
Free Writing Prospectus. Other than the Registration Statement, the Preliminary Prospectus and the Prospectus, the Company (including
its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, made, used, authorized, approved
or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in
Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Public Units other than
any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the
Securities Act.
(d) Form 8-A.
The Company has filed with the Commission a Form 8-A (file number 001-[·]), including
an amendment thereto, providing for the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
of the Public Units, the Common Stock and the Public Warrants, which registration is currently effective on the date hereof. The Public
Units and the shares of Common Stock and the Public Warrants included as part of the Public Units have been authorized for listing, subject
to official notice of issuance and evidence of satisfactory distribution, on the Nasdaq, and the Company knows of no reason or set of
facts that is likely to adversely affect such authorization.
(e) Emerging
Growth Company. From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier,
the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication)
through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of
the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written
communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act or Rule 163B under
the Securities Act.
(f) Testing-the-Waters
Materials. The Company (i) has not alone engaged in any Testing-the-Waters Communications other than Testing-the-Waters Communications
with the consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144A under
the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (ii) has
not authorized anyone other than the Representative to engage in Testing-the-Waters Communications. The Company reconfirms that the Representative
has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed or approved
for distribution any Written Testing-the-Waters Communications other than those listed on Annex B hereto. “Written Testing-the-Waters
Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under
the Securities Act. Any individual Written Testing-the-Waters Communication does not conflict with the information contained in the Registration
Statement or the Pricing Disclosure Package, complied in all material respects with the Securities Act, and when taken together with the
Pricing Disclosure Package as of the Applicable Time, did not, and as of the Closing Date and as of the Additional Closing Date, as the
case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
(g) Registration
Statement and Prospectus. The Registration Statement has been declared effective by the Commission. No order suspending the effectiveness
of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of
the Securities Act against the Company or related to the Offering has been initiated or threatened by the Commission; as of the applicable
effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective
amendment complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein
not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will comply in all material respects with the Securities Act and will not
contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or
warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Representative expressly for use in the Registration Statement and
the Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 7(b) hereof.
(h) Financial
Statements. The financial statements and the related notes and supporting schedules thereto included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus present fairly the financial position of the Company as of the dates indicated and the
results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared
in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby and the
requirements of Regulation S-X; the financial data set forth under the caption “Summary Financial Data” in the Registration
Statement, the Pricing Disclosure Package and the Prospectus has been prepared on a basis consistent with that of the financial statements
referred to above and present fairly the financial position of the Company as of the dates indicated and the results of operations and
the changes in their cash flows for the periods specified. All disclosures included in the Registration Statement, the Pricing Disclosure
Package and the Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations
of Commission), if any, comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent
applicable.
(i) No
Material Adverse Change. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, since
the date of the most recent financial statements of the Company included in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, (i) there has not been any change in the capital stock, short-term debt or long-term debt of the Company, or
any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or
any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties,
rights, assets, management, financial position, results of operations, liabilities, conditions or prospects of the Company; (ii) the
Company has not entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the
Company or incurred any liability or obligation, direct or contingent, that is material to the Company; and (iii) the Company has
not sustained any material loss or interference with its business from fire, explosion, flood, earthquakes, accident or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority.
(j) Organization
and Good Standing. The Company has been duly organized and is validly existing and in good standing under the laws of its jurisdiction
of organization, is duly qualified to do business and is in good standing in each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification, and has all power and authority necessary to own or hold its properties and
to conduct the business in which it is engaged, except where the failure to be so qualified or in good standing or have such power or
authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial
position, stockholders’ equity, results of operations or prospects of the Company or on the performance by the Company of its obligations
under the Transaction Documents (a “Material Adverse Effect”).
(k) Capitalization.
The Company has an authorized capitalization as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus
under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described
in or expressly contemplated by the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no outstanding
rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company or any contract, commitment, agreement, understanding or arrangement
of any kind relating to the issuance of any capital stock of the Company, any such convertible or exchangeable securities or any such
rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in
the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the outstanding securities of the
Company were at all relevant times either registered under the Securities Act, the applicable state securities and blue sky laws or, based
in part on the representations and warranties of the purchasers of such securities, exempt from such registration requirements.
(l) Due
Authorization. The Company has full right, power and authority to execute and deliver this Agreement and the other Transaction Documents
and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution
and delivery by it of this Agreement and each of the other Transaction Documents and the consummation by it of the transactions contemplated
hereby and thereby has been duly and validly taken.
(m) Underwriting
Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(n) The
Public Units. The Public Units to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued
and delivered and paid for as provided herein, will be duly and validly issued, will constitute valid and legally binding obligations
of the Company enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability,
and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus; and the
issuance of the Public Units is not subject to any preemptive or similar rights.
(o) The
Public Unit Shares. The shares of Common Stock included in the Public Units have been duly authorized by the Company and, when issued
and delivered against payment for the Public Units by the Underwriters pursuant to this Agreement, will be duly and validly issued and
delivered, will be fully paid and nonassessable, and will conform to the descriptions thereof in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
(p) The
Public Warrants. The Public Warrants included in the Public Units to be issued and sold by the Company hereunder have been duly authorized
by the Company and, when issued and delivered in the manner set forth in the Warrant Agreement against payment for the Public Units by
the Underwriters pursuant to this Agreement, will be duly and validly issued and delivered, will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability, and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package
and the Prospectus.
(q) The
Warrant Shares. The shares of Common Stock issuable upon exercise of the Public Warrants included in the Public Units and the Private
Placement Warrants have been duly authorized by the Company and, when issued and delivered against payment therefor pursuant to the Public
Warrants and the Private Placement Warrants, as applicable, and the Warrant Agreement, will be duly and validly issued and delivered,
will be fully paid and nonassessable and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure
Schedule and the Prospectus; and such shares of Common Stock have been duly authorized by the Company and validly reserved for issuance.
The holders of such shares of Common Stock will not be subject to personal liability by reason of being such holders; such shares of Common
Stock are not, and at the time such shares are issued will not be, subject to any preemptive or other similar contractual rights granted
by the Company; and all corporate action required to be taken for the authorization, issuance and sale of such shares of Common Stock
(other than such delivery at the time of issuance) has been duly and validly taken.
(r) The
Private Placement Warrants. The Private Placement Warrants to be issued and sold by the Company under the Warrant Purchase Agreement
have been duly authorized by the Company and, when issued and delivered against payment therefor by the Sponsor pursuant to the Warrant
Purchase Agreement, will be duly and validly issued and delivered, will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability,
and will conform to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(s) The
Private Placement Warrant Shares. The shares of Common Stock issuable upon exercise of the Private Placement Warrants have been duly
authorized by the Company and, when issued and delivered against payment for the Private Placement Warrants by the Sponsor pursuant to
the Warrant Purchase Agreement, will be duly and validly issued and delivered, will be fully paid and nonassessable, and will conform
to the descriptions thereof in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(t) The
Trust Agreement. The Trust Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.
(u) The
Warrant Agreement. The Warrant Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and
legally binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability.
(v) The
Founder’s Purchase Agreement. The Founder’s Purchase Agreement has been duly authorized, executed and delivered by the
Company and the Sponsor and constitutes a valid and legally binding obligation of the Company and the Sponsor enforceable against the
Company and the Sponsor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(w) The
Warrant Purchase Agreement. The Warrant Purchase Agreement has been duly authorized, executed and delivered by the Company and the
Sponsor and constitutes a valid and legally binding obligation of the Company and the Sponsor enforceable against the Company and the
Sponsor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
(x) The
Registration Rights Agreement. The Registration Rights Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.
(y) The
Insider Letter. The Insider Letter has been duly authorized, executed and delivered by the Company, the Sponsor and, to the Company’s
knowledge, each officer, director and director nominee of the Company and constitutes a valid and legally binding obligation of the Company,
the Sponsor and, to the Company’s knowledge, each officer, director and director nominee of the Company enforceable against the
Company, the Sponsor and, to the Company’s knowledge, each officer, director and director nominee of the Company in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability.
(z) The
Administrative Services Agreement. The Administrative Services Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.
(aa) Descriptions
of the Transaction Documents. Each Transaction Document conforms in all material respects to the description thereof contained in
the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(bb) No
Violation or Default. The Company is not (i) in violation of any provision in its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default,
in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any property or asset of
the Company is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default
or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(cc) No
Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents, the issuance and sale of the
Public Units and the consummation of the transactions contemplated by the Transaction Documents or the Pricing Disclosure Package and
the Prospectus will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute
a default under, result in the termination, modification or acceleration of, or result in the creation or imposition of any lien, charge
or encumbrance upon any property, right or asset of the Company pursuant to, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which the Company is bound or to which any property, right or asset
of the Company is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents
of the Company or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court
or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict,
breach, violation, default, lien, charge or encumbrance that would not, individually or in the aggregate, have a Material Adverse Effect.
(dd) No
Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and performance by the Company of each of the Transaction
Documents, the issuance and sale of the Public Units and the consummation of the transactions contemplated by the Transaction Documents,
except for the registration of the Public Units and the shares of Common Stock and the Public Warrants included in the Public Units under
the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required by the
Financial Industry Regulatory Authority, Inc. (“FINRA”) and under applicable state securities laws in connection with
the purchase and distribution of the Public Units by the Underwriters.
(ee) Legal
Proceedings. There are no legal, governmental or regulatory investigations, actions, demands, claims, suits, arbitrations, inquiries
or proceedings (“Actions”) pending to which the Company is or may be a party or to which any property of the Company is or
may be the subject that, individually or in the aggregate, if determined adversely to the Company, could reasonably be expected to have
a Material Adverse Effect; no such Actions are threatened or, to the knowledge of the Company, contemplated by any governmental or regulatory
authority or threatened by others; and (i) there are no current or pending Actions that are required under the Securities Act to
be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus that are not so described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus and (ii) there are no statutes, regulations or contracts or other documents
that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Registration Statement,
the Pricing Disclosure Package or the Prospectus that are not so filed as exhibits to the Registration Statement or described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus.
(ff) Independent
Accountant. Citrin Cooperman LLP, who has certified certain financial statements of the Company, is (i) an independent registered
public accounting firm with respect to the Company within the applicable rules and regulations adopted by the Commission and the
Public Company Accounting Oversight Board (United States) and as required by the Securities Act, (ii) in compliance with the applicable
requirements relating to the qualification of accountants under Regulation S-X and (iii) a registered public accounting firm as defined
by the Public Company Accounting Oversight Board (United States) whose registration has not been suspended or revoked and who has not
requested such registration to be withdrawn.
(gg) Disclosure.
There is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as required (and the Pricing Disclosure Package contains in all
material respects the same description of the foregoing matters contained in the Prospectus); and the statements in the Pricing Disclosure
Package and the Prospectus under the headings “Principal Stockholders,” “Certain Relationships and Related Party Transactions,”
“Description of Securities,” “Underwriting” and “United States Federal Income Tax Considerations”
insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are in all material respects
accurate and fair summaries of such legal matters, agreements, documents or proceedings. There are no business relationships or related
party transactions involving the Company or any other person required by the Securities Act to be described in the Registration Statement
or Prospectus that have not been described as required.
(hh) Investment
Company Act. The Company is not and, after giving effect to the offering and sale of the Public Units and the application of the proceeds
thereof as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, will not be required to register
as an “investment company” or an entity “controlled” by an “investment company” within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the
“Investment Company Act”).
(ii) Taxes.
The Company has paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date
hereof; and except as otherwise disclosed in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus, there
is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its properties or assets.
(jj) Licenses
and Permits. The Company possesses all licenses, sub-licenses, certificates, permits and other authorizations issued by, and
has made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that
are necessary for the ownership or lease of its properties or the conduct of its business as described in each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same would not, individually or in
the aggregate, have a Material Adverse Effect; and except as described in each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus, the Company has not received notice of any revocation or modification of any such license, sub-license, certificate,
permit or authorization or has any reason to believe that any such license, sub-license, certificate, permit or authorization will not
be renewed in the ordinary course.
(kk) Disclosure
Controls. The Company maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that complies with the requirements of the Exchange Act to the extent required by Rule 13a-15(e) of the Exchange
Act.
(ll) Cybersecurity;
Data Protection. To the Company’s knowledge, the Company’s information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate
and perform in all material respects as required in connection with the operation of the business of the Company as currently conducted,
and to the Company’s knowledge, are free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and
other corruptants. To the Company’s knowledge, the Company has implemented and maintained commercially reasonable controls, policies,
procedures, and safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy
and security of all IT Systems and data (including all personal, personally identifiable, sensitive, confidential or regulated data (“Personal
Data”)) used in connection with its business, and there have been no breaches, violations, outages or unauthorized uses of or accesses
to its IT Systems, except for those that have been remedied without material cost or liability or the duty to notify any other person,
nor any incidents under internal review or investigations relating to the same. To the Company’s knowledge, the Company is presently
in material compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator
or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems
and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification.
(mm) No
Unlawful Payments. Neither the Company nor any director, officer or employee of the Company nor, to the knowledge of the Company,
any agent, affiliate or other person associated with or acting on behalf of the Company has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in
furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government
official or employee, including of any government-owned or controlled entity or of a public international organization, or any person
acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political
office; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable
law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions,
or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law;
or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including,
without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit. The Company has
instituted, maintains and enforces, and will continue to maintain and enforce policies and procedures designed to promote and ensure compliance
with all applicable anti-bribery and anti-corruption laws.
(nn) Compliance
with Anti-Money Laundering Laws. The operations of the Company are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements, including those of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the applicable money laundering statutes of all jurisdictions where the Company conducts business, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively,
the “Anti-Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.
(oo) No
Conflicts with Sanctions Laws. Neither the Company nor any of its directors, officers, or employees, nor, to the knowledge of the
Company, any agent, affiliate or other person associated with or acting on behalf of the Company is currently the subject or the target
of any sanctions administered or enforced by the U.S. government, (including, without limitation, the Office of Foreign Assets Control
of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially
designated national” or “blocked person”), the United Nations Security Council, the European Union, Her Majesty’s
Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company located, organized or resident
in a country or territory that is the subject or target of Sanctions, including, without limitation, Crimea, Cuba, Iran, North Korea
and Syria (each, a “Sanctioned Country”); and the Company will not directly or indirectly use the proceeds of the Offering
hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity
(i) to fund or facilitate any activities of or business with any person that, at the time of such funding or facilitation, is the
subject or target of Sanctions, (ii) to fund or facilitate any activities of or business in any Sanctioned Country or (iii) in
any other manner that will result in a violation by any person (including any person participating in the transaction, whether as underwriter,
advisor, investor or otherwise) of Sanctions. For the past five years, the Company has not knowingly engaged in and are not now knowingly
engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target
of Sanctions or with any Sanctioned Country.
(pp) No
Registration Rights. No person has the right to require the Company to register any securities for sale under the Securities Act by
reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Public Units.
(qq) Compliance
with Nasdaq Rules. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s
officers, directors or director nominees, in their capacities as such, to comply with (as and when applicable), and immediately following
the initial effective date of the Registration Statement the Company will be in compliance with, the applicable requirements of the Nasdaq
Listing Rules. Further, there is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s
officers, directors or director nominees, in their capacities as such, to comply with (as and when applicable), and immediately following
the initial effective date of the Registration Statement the Company will be in compliance with, the phase-in requirements and all other
applicable provisions of The Nasdaq Stock Market LLC corporate governance requirements set forth in the Nasdaq Marketplace Rules.
(rr) Taxes. There
are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S. federal law or the
laws of any state, or any political subdivision thereof, or under the laws of any non-U.S. jurisdiction, required to be paid in connection
with the execution and delivery of this Agreement or the issuance or sale by the Company of the Public Units.
(ss) Questionnaires.
All information contained in the questionnaires (the “Questionnaires”) completed by the Company and the Sponsor and, to the
knowledge of the Company, the Company’s officers, directors and director nominees and provided to the Underwriters, is true and
correct and the Company has not become aware of any information that would cause the information disclosed in the Questionnaires completed
by the Company, the Sponsor or the Company’s officers, directors and director nominees to become inaccurate and incorrect.
(tt) Acquisition
Target Not Selected. Prior to the date hereof, the Company has not selected any Business Combination target and has not, nor, to its
knowledge, has anyone on its behalf, initiated any substantive discussions, directly or indirectly, with respect to a possible initial
Business Combination, or engaged or retained any agent or other representative to identify or locate any such Business Combination candidate.
(uu) No
Broker’s Fees. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there are
no claims, payments, arrangements, contracts, agreements or understandings relating to the payment of a brokerage commission or finder’s,
consulting, origination or similar fee by the Company, the Sponsor or any officer, director or director nominee of the Company with respect
to the sale of the Public Units hereunder or any other arrangements, agreements or understandings of the Company, the Sponsor or any such
officer, director or director nominee of the Company, or their respective affiliates, that may affect the Underwriters’ compensation,
as determined by FINRA.
(vv) No
Direct or Indirect Payments. Except as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
the Company has not made any direct or indirect payments (in cash, securities or by any other form that would be “underwriting compensation”
as defined in Rule 5110 of the FINRA Manual): (i) to 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 person that, to the Company’s knowledge, has been accepted by FINRA as a member of FINRA (a “Member”); or (iii) to
any person or entity that, to the Company’s knowledge, has any direct or indirect affiliation or association with any Member, within
the FINRA Review Period, as defined in Rule 5110(j)(20) of the Registration Statement, other than payments to the Underwriters pursuant
to this Agreement.
(ww) No
Investment Banking, Financial Advisory and/or Consulting Services. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, during the period beginning 180 days prior to the initial confidential submission of the Registration
Statement and ending on the initial effective date of the Registration Statement, no Member and/or any person associated or affiliated
with a Member has provided any investment banking, financial advisory and/or consulting services to the Company.
(xx) Affiliation
with FINRA. Except as disclosed in the Questionnaires provided to the Representative, to the Company’s knowledge, no officer,
director, director nominee 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 or a person associated or affiliated with a Member.
(yy) Ownership
of FINRA Member Securities. Except as disclosed in the Questionnaires provided to the Representative, to the Company’s knowledge,
no Company Affiliate is an owner of stock or other securities of any Member (other than securities purchased on the open market).
(zz) Non-Compete/Non-Solicitation.
Except as described in the Pricing Disclosure Package and the Prospectus, to the Company’s knowledge, none of the Sponsor, officers,
directors or director nominees of the Company is subject to a non-competition agreement or non-solicitation agreement with any employer,
prior employer or other entity that could materially affect its, his or her ability to be and act in the capacity of stockholder, officer
or director of the Company, as applicable.
(aaa) Related
Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company,
on the one hand, and any director, director nominee, officer, stockholder, special advisor, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the Securities Act or the Exchange Act to be described in the Registration
Statement, Pricing Disclosure Package or the Prospectus that is not 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, directors or director nominees of the Company or any of their respective family members. 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 officer, director or director nominee of the Company.
(bbb) No
Unlawful Influence. The Company has not offered, or caused the Underwriters to offer, the Public Units to any person or entity with
the intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company to alter the customer’s
or supplier’s level or type of business with the Company or such affiliate or (b) a journalist or publication to write or publish
favorable information about the Company or any such affiliate.
(ccc) Applicability
of Rule 419. Upon delivery and payment for the Public Units on the Closing Date and each Additional Closing Date, the Company
will not be subject to Rule 419 under the Securities Act and none of the Company’s outstanding securities will be deemed to
be a “penny stock” as defined in Rule 3a51-1 under the Exchange Act.
(ddd) Absence
of Manipulation. The Company has not taken, directly or indirectly, any action designed to or that would constitute 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 Public Units.
(eee) Margin
Rules. Neither the issuance, sale and delivery of the Public Units nor the application of the proceeds thereof by the Company as described
in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus will violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(fff) Statistical
and Market Data. Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and
market-related data included in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus is not based on
or derived from sources that are reliable and accurate in all material respects.
(ggg) Sarbanes-Oxley
Act. Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the Commission
thereunder (the “Sarbanes-Oxley Act”) have been applicable to the Company, there is and has been no failure on the part of
the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley
Act, including Section 402 related to loans and Sections 302 and 906 related to certifications.
(hhh) Status
under the Securities Act. At the time of filing the Registration Statement and any post-effective amendment thereto the Company was
an “ineligible issuer,” as defined in Rule 405 under the Securities Act solely because of subclause (B) of clause
(ii) of the definition thereof. The Company has paid the registration fee for the Offering pursuant to Rule 456 under the Securities
Act.
(iii) No
Ratings. There are (and prior to the Closing Date, will be) no debt securities, convertible securities or preferred stock issued
or guaranteed by the Company that are rated by a “nationally recognized statistical rating organization,” as such term is
defined in Section 3(a)(62) under the Exchange Act.
(jjj) Company
Ownership of Other Entities. The Company does not own, and since its incorporation has not owned, an interest in any corporation,
partnership, limited liability company, joint venture, trust or other entity.
4. Further
Agreements of the Company. The Company covenants and agrees with each Underwriter that:
(a) Required
Filings. The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and
Rule 430A, 430B or 430C under the Securities Act; and the Company will furnish copies of the Prospectus (to the extent not previously
delivered) to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next succeeding the date
of this Agreement in such quantities as the Representative may reasonably request.
(b) Delivery
of Copies. The Company will deliver, upon request, without charge, (i) to the Representative, signed copies of the Registration
Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith; and (ii) to
each Underwriter (A) a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits)
and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representative may reasonably request. As used herein, the term “Prospectus Delivery Period” means
such period of time after the first date of the public offering of the Public Units as in the opinion of counsel for the Underwriters
a prospectus relating to the Public Units is required by law to be delivered (or required to be delivered but for Rule 172 under
the Securities Act) in connection with sales of the Public Units by any Underwriter or dealer.
(c) Amendments
or Supplements. Before making, preparing, using, authorizing, approving, referring to or filing any amendment or supplement to the
Registration Statement, the Pricing Disclosure Package or the Prospectus, the Company will furnish to the Representative and counsel for
the Underwriters a copy of the proposed amendment or supplement for review and will not make, prepare, use, authorize, approve, refer
to or file any such proposed amendment or supplement to which the Representative reasonably objects.
(d) Notice
to the Representative. The Company will advise the Representative promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes effective;
(iii) when any supplement to the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters Communication or any
amendment to the Prospectus has been filed or distributed; (iv) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration
Statement or any other request by the Commission for any additional information, including, but not limited to, any request for information
concerning any Testing-the-Waters Communication; (v) of the issuance by the Commission or any other governmental or regulatory authority
of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus,
any of the Pricing Disclosure Package, the Prospectus or any Written Testing-the-Waters Communication or the initiation or threatening
of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of any event or development
within the Prospectus Delivery Period as a result of which the Prospectus, any of the Pricing Disclosure Package or any Written Testing-the-Waters
Communication as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Pricing Disclosure Package
or any Written Testing-the-Waters Communication is delivered to a purchaser, not misleading; and (vii) of the receipt by the Company
of any notice with respect to any suspension of the qualification of the Public Units for offer and sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any
such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus,
any of the Pricing Disclosure Package or the Prospectus or any Written Testing-the-Waters Communication or suspending any such qualification
of the Public Units and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.
(e) Ongoing
Compliance. (1) If during the Prospectus Delivery Period (i) any event or development shall occur or condition shall exist
as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company
will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission
and furnish to the Underwriters and to such dealers as the Representative may designate such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law and (2) if
at any time prior to the Closing Date (i) any event or development shall occur or condition shall exist as a result of which the
Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Pricing Disclosure
Package is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Pricing Disclosure Package
to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above,
file with the Commission (to the extent required) and furnish to the Underwriters and to such dealers as the Representative may designate
such amendments or supplements to the Pricing Disclosure Package as may be necessary so that the statements in the Pricing Disclosure
Package as so amended or supplemented will not, in the light of the circumstances existing when the Pricing Disclosure Package is delivered
to a purchaser, be misleading or so that the Pricing Disclosure Package will comply with law.
(f) Blue
Sky Compliance. The Company will qualify the Public Units for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representative shall reasonably request and will continue such qualifications in effect so long as required for distribution of
the Public Units; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity
or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(g) Earning
Statement. The Company will make generally available to its security holders and the Representative as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective
date” (as defined in Rule 158) of the Registration Statement.
(h) Clear
Market. For a period of 180 days after the date of the Prospectus, the Company will not (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the Commission a registration statement
under the Securities Act relating to, any Public Units, shares of Common Stock, Founder Shares, Public Warrants or any securities convertible
into or exercisable or exchangeable for any Public Units, Common Stock, Founder Shares or Public Warrants, or publicly disclose the intention
to undertake any of the foregoing, or (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of any Public Units, shares of Common Stock, Founder Shares or Public Warrants or any such other securities,
whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Public Units or such other
securities, in cash or otherwise, without the prior written consent of RBC Capital Markets, LLC, except, in each case, that the Company
may (a) issue and sell the Private Placement Warrants, (b) issue and sell the Option Units on exercise of the option provided
for in Section 2(b) hereof, (c) register with the Commission pursuant to the Registration Rights Agreement, in accordance
with the terms of the Registration Rights Agreement, the resale of the Founder Shares, the Private Placement Warrants and warrants that
may be issued upon conversion of working capital loans (and any shares of Common Stock issued or issuable upon the exercise of any such
Private Placement Warrants or warrants issued upon conversion of the working capital loans and upon conversion of the Founder Shares)
and (d) issue securities in connection with a Business Combination; provided that the foregoing restrictions shall not
apply to the forfeiture of any Founder Shares pursuant to their terms or any transfer of Founder Shares to a current or future independent
director of the Company (as long as such current or future independent director is subject to the terms of the Insider Letter with respect
to such Founder Shares at the time of such transfer; and as long as, to the extent any Section 16 of the Exchange Act reporting obligation
is triggered as a result of such transfer, any related Section 16 of the Exchange Act filing includes a practical explanation of
the transfer).
If the Representative, in its sole discretion,
agrees to release or waive the transfer restrictions set forth in the Insider Letter for an officer or director of the Company and provides
the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver,
the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit A hereto through
a major news service at least two business days before the effective date of the release or waiver. The Company agrees not to amend the
Insider Letter without the written consent of the Representative.
(i) Use
of Proceeds. The Company will apply the net proceeds from the sale of the Private Placement Warrants received by it in a manner materially
consistent with the applications described under the caption “Use of Proceeds” in the Pricing Disclosure Package and the Prospectus.
(j) No
Stabilization. Neither the Company nor its affiliates will take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or manipulation of the price of the Public Units.
(k) Exchange
Listing. The Company will use its reasonable best efforts to list, subject to notice of issuance, the Public Units, the Common Stock
and the Public Warrants on the Nasdaq.
(l) Reports.
For a period commencing on the initial effective date of the Registration Statement and ending five years from the date of the consummation
of the Business Combination or until such earlier time at which the Liquidation occurs, the Company shall, to the extent such information
or documents are not otherwise publicly available, upon written request from the Representative, furnish to the Representative 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 securities, and, to the extent such information or documents are not otherwise publicly available, upon written request from
the Representative, promptly furnish to the Representative: (i) a copy of such registration statements, financial statements and
periodic and special reports as the Company shall be required to file with the Commission and from time to time furnishes generally to
holders of any such class of its securities in their capacities as such; and (ii) 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, all subject to the execution of a satisfactory confidentiality agreement. Any registration statements, financial statements,
periodic and special reports or other additional documents referred to in the preceding sentence filed or furnished on the Commission’s
EDGAR website and publicly available will be considered furnished for the purposes of this Section 4(l).
(m) Filings.
The Company will file with the Commission such reports as may be required by Rule 463 under the Securities Act.
(n) Emerging
Growth Company. The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any
time prior to the later of (i) completion of the distribution of Public Units within the meaning of the Securities Act and (ii) completion
of the 180-day restricted period referred to in Section 4(h) hereof.
(o) Exchange
Act Registration. For a period commencing on the initial effective date of the Registration Statement and ending five years from the
date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs, the Company will use
commercially reasonable efforts to maintain the registration of the Common Stock (or such other security into which such Common Stock
may be exchanged in connection with a Business Combination) under the provisions of the Exchange Act, except after giving effect to a
going private transaction after the completion of an initial Business Combination. For a period commencing on the initial effective date
of the Registration Statement and ending upon the consummation of the Business Combination or until such earlier time at which the Liquidation
occurs, the Company will use commercially reasonable efforts to maintain the registration of the Public Units and Warrants under the provisions
of the Exchange Act. During such applicable period, the Company will not deregister the Public Units, Common Stock or Public Warrants
under the Exchange Act (except in connection with an exchange pursuant to a Business Combination or a going private transaction after
the completion of an initial Business Combination) without the prior written consent of the Representative.
(p) Current
Report on Form 8-K. The Company shall, on the date hereof, retain its independent registered public accounting firm to audit
the balance sheet of the Company as of the Closing Date (the “Audited Balance Sheet”) reflecting the receipt by the Company
of the proceeds of the Offering on the Closing Date. As soon as the Audited Balance Sheet becomes available, the Company shall promptly,
but not later than four business days after the Closing Date, file a Current Report on Form 8-K with the Commission, which Current
Report shall contain the Company’s Audited Balance Sheet. Additionally, upon the Company’s receipt of the proceeds from the
exercise of all or any portion of the option provided for in Section 2(b) hereof, the Company shall promptly, but not later
than four business days after the receipt of such proceeds, file a Current Report on Form 8-K with the Commission, which report shall
disclose the Company’s sale of the Option Units and its receipt of the proceeds therefrom, unless the receipt of such proceeds are
reflected in the Current Report on Form 8-K referenced in the immediately prior sentence.
(q) Quarterly
Review. For a period commencing on the initial effective date of the Registration Statement and ending five years from the date of
the consummation of the Business Combination or until such earlier time at which the Liquidation occurs or the Common Stock and Public
Warrants cease to be publicly traded, the Company, at its expense, shall cause its regularly engaged independent registered public accounting
firm to review (but not audit) the Company’s financial statements for each of the first three fiscal quarters prior to the announcement
of quarterly financial information, the filing of the Company’s Form 10-Q quarterly report and the mailing, if any, of quarterly
financial information to stockholders.
(r) Rule 462(b) Registration
Statement. If the Company elects to rely upon Rule 462(b) under the Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement
or give irrevocable instructions for the payment of such fee pursuant to Rule 111 under the Securities Act.
(s) Transfer
and Warrant Agent. For a period commencing on the initial effective date of the Registration Statement and ending five years from
the date of the consummation of the Business Combination or until such earlier time at which the Liquidation occurs or the Common Stock
and Public Warrants cease to be publicly traded, the Company shall retain a transfer and warrant agent.
(t) Initial
Business Combination. The Company will not consummate an initial Business Combination with any entity that is affiliated with the
Sponsor or any of the Company’s officers or directors unless it or a committee of independent and disinterested members of its board
of directors obtains an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting
firm, that such initial Business Combination is fair to the Company from a financial point of view. The Company shall not pay the Sponsor
or its affiliates or any of the Company’s officers, directors or any of their respective affiliates any fees or compensation of
any kind for services rendered to the Company prior to, or in connection with, the consummation of an initial Business Combination; provided,
however, that (x) such officers, directors and affiliates (i) may receive reimbursement for out-of-pocket expenses
incurred by them in connection with activities on the Company’s behalf related to identifying, investigating, negotiating and completing
an initial Business Combination and (ii) may be repaid loans as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus and (y) an affiliate of the Sponsor may receive up to $5,000 per month pursuant to the Administrative Services
Agreement for office space, administrative and support services provided to the Company, none of which payments described in (x) or
(y) will be made from the proceeds held in the Trust Account prior to completion of the initial Business Combination.
(u) FINRA
Submissions. For a period of 60 days following the effective date of the Registration Statement, 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, or has provided or will provide any investment banking, financial, advisory and/or consulting
services to the Company, the Company agrees that it shall promptly provide to the Representative and its counsel a notification prior
to entering into the agreement or transaction relating to a potential Business Combination: (i) the identity of the person or entity
providing any such services; (ii) complete details of all such services and copies of all agreements governing such services prior
to entering into the agreement or transaction; and (iii) justification as to why the value received by any person or entity for such
services is not underwriting compensation for the Offering. The Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in the tender offer materials or proxy statement, as applicable, which the Company may file in connection with
the Business Combination for purposes of offering redemption of shares held by its stockholders or for soliciting stockholder approval,
as applicable.
(v) Affiliates
or Associated Persons of Members. The Company shall advise FINRA, the Representative and its counsel if it is aware that any 10% or
greater stockholder of the Company becomes an affiliate or associated person of a Member participating in the distribution of the Public
Units.
(w) Trust
Account Investments. The Company shall cause the proceeds of the Offering and the sale of the Private Placement Warrants to be held
in the Trust Account to be invested only in United States 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 as set forth in the Trust Agreement and disclosed
in the Pricing Disclosure Package and 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 an initial Business Combination, it will not be
required to register as an investment company under the Investment Company Act.
(x) Use
of Funds in Trust Account. During the period prior to the Company’s initial Business Combination or Liquidation, the Company
may instruct the Trustee to release from the Trust Account, (i) solely from interest income earned on the funds held in the Trust
Account, the amounts necessary to pay taxes, if any, and (ii) to pay Public Stockholders who properly redeem their Public Shares
(as defined below) in connection with a stockholder vote to approve an amendment to the Company’s Amended and Restated Certificate
of Incorporation (x) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its
initial Business Combination or to redeem 100% of the outstanding Public Shares if the Company has not consummated an initial Business
Combination within 18 months from the closing of the Offering or (y) with respect to any other provision relating to stockholders’
rights or pre-initial Business Combination activity. Otherwise, all funds held in the Trust Account (including any interest income earned
on the amounts held in the Trust Account (net of taxes payable thereon in accordance with the preceding sentence)) will remain in the
Trust Account until the earlier of the consummation of the Company’s initial Business Combination and the Liquidation; provided, however,
that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds of the Offering
held by the Company outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing the Company’s
plan of dissolution.
(y) Availability
of Authorized but Unissued Securities. The Company will reserve and keep available that maximum number of its authorized but unissued
securities that are issuable upon the exercise of any of the Public Warrants and the Private Placement Warrants outstanding from time
to time and upon the conversion of the Founder Shares.
(z) No
Additional Issuances prior to the Business Combination. Prior to the earlier of the consummation of an initial Business Combination
and the Liquidation, the Company shall not issue (other than in replacement for lost, stolen or mutilated certificates) any shares of
Common Stock, Public Warrants or any options or other securities convertible into shares of Common Stock, or any preferred stock, in each
case, that (1) receive funds from the Trust Account or (2) vote as a class with the Public Shares (a) on any initial
Business Combination or (b) to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to (i) extend
the time the Company has to consummate a Business Combination beyond 18 months from the Closing Date or (ii) amend the foregoing
provisions.
(aa) Audit
Committee Review. Prior to the earlier of the consummation of an initial Business Combination and the Liquidation, the Company’s
audit committee will review on a quarterly basis all payments made by the Company to the Sponsor, to the Company’s officers or directors,
or to the Company’s or any of such other persons’ respective affiliates.
(bb) Penny
Stock. The Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule 419
under the Securities 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 3a51-1
under the Exchange Act during such period.
(cc) Internal
Controls. To the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain “disclosure controls
and procedures” (as defined under Rule 13a-15(e) under the Exchange Act) and 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
GAAP 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.
(dd) Maintenance
of Listing. The Company will use commercially reasonable efforts to effect and maintain the listing of (x) the Public Units and
Public Warrants on the Nasdaq (or another national securities exchange) until the consummation of the Business Combination or until such
earlier time at which the Liquidation occurs and (y) the Common Stock on the Nasdaq (or another national securities exchange) until
five years from the date of the consummation of the Business Combination or until such earlier time at which Liquidation occurs.
(ee) Sarbanes
Oxley. As soon as legally required to do so, the Company and its directors and officers, in their capacities as such, shall take all
actions necessary to comply with any applicable provisions of the Sarbanes-Oxley Act, including Section 402 related to loans and
Sections 302 and 906 related to certifications, and to comply with the rules of the Nasdaq.
(ff) 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.
(gg) Consummate
the Initial Business Combination. The Company, subject to any applicable provision of the Company’s Amended and Restated Certificate
of Incorporation, may consummate the initial Business Combination and conduct redemptions of Public Shares for cash upon consummation
of such Business Combination without a stockholder vote pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, including
the filing of tender offer documents with the Commission. Such tender offer documents will contain substantially the same financial and
other information about the initial Business Combination and the redemption rights as is required under the Commission’s proxy rules and
will provide each stockholder of the Company with the opportunity prior to the consummation of the initial Business Combination to redeem
the shares of Common Stock held by such stockholder for an amount of cash equal to (A) the aggregate amount then on deposit in the
Trust Account, calculated as of two business days prior to the consummation of the initial Business Combination, representing (x) the
proceeds held in the Trust Account from the Offering and the sale of the Private Placement Warrants and (y) any interest income earned
on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by (B) the total number of shares
of Common Stock sold as part of the Public Units in the Offering (the “Public Shares”) then outstanding. If, however, a stockholder
vote is required by applicable law or stock exchange listing requirement in connection with the initial Business Combination, or the Company
decides to hold a stockholder vote for business or other reasons, the Company will submit such Business Combination to the Company’s
stockholders for their approval (“Business Combination Vote”). With respect to the initial Business Combination Vote, if any,
each of the Sponsor and the Company’s directors and officers has agreed to vote all of the Founder Shares and Public Shares it then
holds, if any, in favor of the Company’s initial Business Combination. If the Company seeks stockholder approval of the initial
Business Combination, the Company will offer to each Public Stockholder the right to have its shares redeemed in conjunction with a proxy
solicitation pursuant to the proxy rules of the Commission at a per share redemption price (the “Redemption Price”) equal
to (I) the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of
the initial Business Combination, representing (1) the proceeds held in the Trust Account from the Offering and the sale of the Private
Placement Warrants and (2) interest income earned on the funds held in the Trust Account (which interest shall be net of any taxes
payable), divided by (II) the total number of Public Shares then outstanding. If the Company seeks stockholder approval of the initial
Business Combination, the Company may proceed with such Business Combination only if a majority of the outstanding shares voted by the
stockholders at a duly held stockholders meeting are voted to approve such Business Combination. If, after seeking and receiving such
stockholder approval, the Company elects to so proceed, it will redeem shares, at the Redemption Price, from those Public Stockholders
who validly and affirmatively requested such redemption. Only Public Stockholders who properly exercise their redemption rights, in accordance
with the applicable tender offer or proxy materials related to such Business Combination and the Amended and Restated Certificate of Incorporation,
shall be entitled to receive distributions from the Trust Account in connection with an initial Business Combination, and the Company
shall pay no distributions with respect to any other holders of shares of capital stock of the Company in connection therewith. In the
event that the Company does not effect a Business Combination by 18 months from the closing of the Offering (or such later date as has
been approved pursuant to a valid amendment to the Company’s Amended and Restated Certificate of Incorporation), 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 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and less up to $100,000
of such net 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 liquidation distributions, if any),
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. Only Public Stockholders holding shares
of Common Stock included in the Public Units shall be entitled to receive such redemption amounts and the Company shall pay no such redemption
amounts or any distributions in liquidation with respect to any other shares of capital stock of the Company. The Sponsor and the Company’s
officers and directors have agreed that they will not propose any amendment to the Company’s Amended and Restated Certificate of
Incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its
initial Business Combination or to redeem 100% of the outstanding Public Shares if the Company has not consummated an initial Business
Combination within 18 months from the closing of the Offering or (B) with respect to any other provision relating to stockholders’
rights or pre-initial Business Combination activity, unless the Company offers to the Public Stockholders the right to redeem their Public
Shares in connection with such amendment, as described in the Pricing Disclosure Package and Prospectus.
(hh) Business
Combination Announcement. In the event that the Company desires or is required by an applicable law or regulation to cause an announcement
(a “Business Combination Announcement”) to be placed in The Wall Street Journal, The New York Times or any other news or media
publication or outlet or to be made via a public filing or submission with the Commission announcing the consummation of an initial Business
Combination that indicates that the Underwriters were the underwriters in the Offering, 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,
subject to the agreement of the Underwriters to keep confidential such draft announcement in accordance with the Representative’s
standard policies regarding confidential information.
(ii) Deferred
Discount Payment. Upon the consummation of the initial Business Combination, the Company will direct the Trustee to pay the Representative,
on behalf of the Underwriters, the Deferred Discount out of the proceeds of the Offering held in the Trust Account. The Underwriters shall
have no claim to payment of any interest earned on the portion of the proceeds held in the Trust Account representing the Deferred Discount.
If the Company fails to consummate its initial Business Combination within the time period required by its Amended and Restated Certificate
of Incorporation, the Deferred Discount will not be paid to the Representative and will, instead, be included in the Liquidation distribution
of the proceeds held in the Trust Account made to the Public Stockholders. In connection with any such Liquidation, the Underwriters forfeit
any rights or claims to the Deferred Discount.
(jj) Forfeiture.
Upon the earlier to occur of the expiration and termination of the Underwriters’ over-allotment option, the Company shall cancel
or otherwise effect the forfeiture of Founder Shares from the Sponsor, in an aggregate amount equal to the number of Founder Shares determined
by multiplying (a) 375,000 by (b) a fraction, (i) the numerator of which is 1,500,000 minus the number of Option Units
purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,500,000. For
the avoidance of doubt, if the Underwriters exercise their over-allotment option in full, the Company shall not cancel or otherwise effect
the forfeiture of the Founder Shares pursuant to this Section 4(jj).
(kk) Written
Testing-the-Waters Communication. If at any time following the distribution of any Written Testing-the-Waters Communication, there
occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include
any untrue statement of a material fact or omitted or would omit to state any material fact necessary to make the statements therein in
the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly (i) notify the Representative
so that use of the Written Testing-the-Waters Communication may cease until it is amended or supplemented; (ii) amend or supplement,
at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission; and (iii) supply
any amendment or supplement to the Representative in such quantities as may be reasonably requested.
(ll) Emerging
Growth Company. The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any
time prior to the later of (i) completion of the distribution of the Public Units within the meaning of the Securities Act and (ii) completion
of the 180-day restricted period referred to in Section 4(h) hereof.
(mm) Delivery
of Agreements. The Company will deliver to the Representative executed copies of the Trust Agreement, the Warrant Agreement, the Founder’s
Purchase Agreement, the Warrant Purchase Agreement, the Registration Rights Agreement, the Insider Letter and the Administrative Services
Agreement.
(nn) Trust
Account Waiver. The Company will seek to have all vendors, service providers (other than its independent registered public accounting
firm), prospective target businesses and other entities with which it does business enter into an agreement waiving any right, title,
interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Stockholders. The Company may
forego obtaining such waivers only if the Company’s management shall have determined that such third party’s engagement would
be significantly more beneficial to the Company than any alternative.
(oo) Certification
of Beneficial Ownership. The Company will deliver to each Underwriter (or its agent), on the date of execution of this Agreement,
a properly completed and executed Certification Regarding Beneficial Owners and Key Controllers of Legal Entity Customers, together with
copies of identifying documentation, and the Company undertakes to provide such additional supporting documentation as each Underwriter
may reasonably request in connection with the verification of the foregoing Certification.
5. Certain
Agreements of the Underwriters. Each Underwriter hereby represents and agrees that it is not subject to any pending proceeding under
Section 8A of the Securities Act with respect to the Offering (and will promptly notify the Company if any such proceeding against
it is initiated during the Prospectus Delivery Period).
6. Conditions
of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Underwritten Units on the Closing Date or the
Option Units on the Additional Closing Date, as the case may be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration
Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding
for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the
Prospectus shall have been timely filed with the Commission under the Securities Act and in accordance with Section 4(a) hereof;
and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative.
(b) Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct on the date hereof and
on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the Company and its officers made
in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Additional Closing
Date, as the case may be.
(c) No
Material Adverse Change. No event or condition of a type described in Section 3(i) hereof shall have occurred or shall exist,
which event or condition is not described in the Pricing Disclosure Package (excluding any amendment or supplement thereto) and the Prospectus
(excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Public Units on the Closing Date or the Additional Closing Date, as
the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the Prospectus.
(d) Officers’
Certificate. The Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may
be, a certificate of the chief financial officer or chief accounting officer of the Company and one additional senior executive officer
of the Company who is satisfactory to the Representative (i) confirming that such officers have carefully reviewed the Registration
Statement, the Pricing Disclosure Package and the Prospectus and, to the knowledge of such officers, the representations set forth in
Sections 3(b) and 3(c) hereof are true and correct, (ii) confirming that the other representations and warranties of the
Company in this Agreement are true and correct and that the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be, and (iii) to
the effect set forth in paragraphs (a) and (c) above.
(e) Comfort
Letters. On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, Citrin Cooperman
LLP shall have furnished to the Representative, at the request of the Company, letters, dated the respective dates of delivery thereof
and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative, containing statements and information
of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in each of the Registration Statement, the Pricing Disclosure Package and the Prospectus;
provided that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use a “cut-off”
date no more than two business days prior to such Closing Date or such Additional Closing Date, as the case may be.
(f) Opinion
and 10b-5 Statement of Counsel for the Company. Reed Smith LLP, counsel for the Company, shall have furnished to the Representative,
at the request of the Company, their written opinion and 10b-5 statement, dated the Closing Date or the Additional Closing Date, as the
case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative.
(g) Opinion
and 10b-5 Statement of Counsel for the Underwriters. The Representative shall have received on and as of the Closing Date or the Additional
Closing Date, as the case may be, an opinion and 10b-5 statement, addressed to the Underwriters, of Skadden, Arps, Slate, Meagher &
Flom LLP, counsel for the Underwriters, with respect to such matters as the Representative may reasonably request, and such counsel shall
have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(h) No
Legal Impediment to Issuance and Sale. No action shall have been taken and no statute, rule, regulation or order shall have been enacted,
adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date or the Additional
Closing Date, as the case may be, prevent the issuance or sale of the Public Units; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Public Units.
(i) Good
Standing. The Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company in its jurisdiction of organization and its good standing in such other jurisdictions
as the Representative may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental
authorities of such jurisdictions.
(j) Exchange
Listing. The Public Units to be delivered on the Closing Date or the Additional Closing Date, as the case may be, shall have been
approved for listing on the Nasdaq, subject to official notice of issuance.
(k) Delivery
of Transaction Documents. On or prior to the Closing Date, the Company shall have delivered to the Representative executed copies
of the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the Warrant Purchase Agreement, the Registration
Rights Agreement, the Insider Letter and the Administrative Services Agreement, and each of the Transaction Documents shall be in full
force and effect on the Closing Date or the Additional Closing Date, as the case may be.
(l) Funding
of Private Placement Warrants. At least one business day prior to the Closing Date or the Additional Closing Date, as applicable,
the Company shall have caused proceeds from the sale of the Private Placement Warrants to be deposited into the Trust Account such that
the cumulative amount deposited into the Trust Account as of such Closing Date or Additional Closing Date shall equal the product of the
number of Public Units sold in the public offering as of such Closing Date or Additional Closing Date and the public offering price per
unit as set forth on the cover of the Prospectus.
(m) Additional
Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company shall have furnished to
the Representative such further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence
mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification
and Contribution.
(a) Indemnification
of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors and officers and
each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, not misleading or (ii) any untrue statement or alleged untrue statement of
a material fact contained in the Prospectus (or any amendment or supplement thereto), any Preliminary Prospectus, any Written Testing-the-Waters
Communication, any road show as defined in Rule 433(h) under the Securities Act (a “road show”) or any Pricing Disclosure
Package (including any Pricing Disclosure Package that has subsequently been amended), or caused by any omission or alleged omission to
state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made,
not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to
any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in paragraph
(b) below.
(b) Indemnification
of the Company. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its
officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above,
but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished
to the Company in writing by such Underwriter through the Representative expressly for use in the Registration Statement, the Prospectus
(or any amendment or supplement thereto), any Preliminary Prospectus, any Written Testing-the-Waters Communication, any road show or any
Pricing Disclosure Package (including any Pricing Disclosure Package that has subsequently been amended), it being understood and agreed
upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the thirteenth, fourteenth and fifteenth paragraphs under the caption “Underwriting.”
(c) Notice
and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be
brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this
Section 7, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification
may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall
not relieve it from any liability that it may have under the preceding paragraphs of this Section 7 except to the extent that it
has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further,
that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise
than under the preceding paragraphs of this Section 7. If any such proceeding shall be brought or asserted against an Indemnified
Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory
to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent
the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate
in such proceeding and shall pay the fees and expenses in such proceeding and shall pay the fees and expenses of such counsel related
to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be
legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person
and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them.
It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter,
its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representative
and any such separate firm for the Company, its directors, its officers who signed the Registration Statement and any control persons
of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, the Indemnifying Person agrees to indemnify each Indemnified Person
from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated
by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the
Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement.
No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder
by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding
and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution.
If the indemnification provided for in paragraphs (a) or (b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu
of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received
by the Company, on the one hand, and the Underwriters on the other, from the Offering or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to
in clause (i) but also the relative fault of the Company, on the one hand, and the Underwriters on the other, in connection with
the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Underwriters on the other, shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Public Units and the total underwriting
discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate offering price of the Public Units. The relative fault of the Company, on the one hand, and the
Underwriters on the other, 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 the Company or by the
Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement
or omission.
(e) Limitation
on Liability. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to paragraph
(d) above were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person
in connection with any such action or claim. Notwithstanding the provisions of paragraph (d) and this paragraph (e), in no event
shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions
received by such Underwriter with respect to the Offering exceeds the amount of any damages that such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 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. The Underwriters’ obligations to contribute pursuant to paragraph (d) and this paragraph
(e) are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive
Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Person at law or in equity.
8. Effectiveness
of Agreement. This Agreement shall become effective as of the date first written above.
9. Termination.
This Agreement may be terminated in the absolute discretion of the Representative, by notice to the Company, if after the execution and
delivery of this Agreement and on or prior to the Closing Date or, in the case of the Option Units, prior to the Additional Closing Date
(i) trading generally shall have been suspended or materially limited on or by any of the Nasdaq or the New York Stock Exchange;
(ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities;
or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or
crisis, either within or outside the United States, that, in the judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Public Units on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the
Prospectus.
10. Defaulting
Underwriter.
(a) If,
on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Public
Units that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase
of such Public Units by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after
any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Public Units, then the Company
shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters
to purchase such Public Units on such terms. If other persons become obligated or agree to purchase the Public Units of a defaulting Underwriter,
either the non-defaulting Underwriters or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be,
for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters
may be necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes. As used in this Agreement,
the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule 1 hereto that, pursuant to this Section 10, purchases Public Units that a defaulting Underwriter agreed but failed
to purchase.
(b) If,
after giving effect to any arrangements for the purchase of the Public Units of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Public Units that remain unpurchased on
the Closing Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate number of Public Units
to be purchased on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number
of Public Units that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on
the number of Public Units that such Underwriter agreed to purchase on such date) of the Public Units of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If,
after giving effect to any arrangements for the purchase of the Public Units of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Public Units that remain unpurchased on
the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of Public Units to be
purchased on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or,
with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Public Units on the Additional Closing Date,
as the case may be, shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement
pursuant to this Section 10 shall be without liability on the part of the Company, except that the Company will continue to be liable
for the payment of expenses as set forth in Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate
and shall remain in effect.
(d) Nothing
contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company or any non-defaulting Underwriter
for damages caused by its default.
11. Payment
of Expenses.
(a) Whether
or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause
to be paid all costs and expenses incident to the performance of its obligations hereunder, including, without limitation, (i) the
costs incident to the authorization, issuance, sale, preparation and delivery of the Public Units and any taxes payable in that connection;
(ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary
Prospectus, any Pricing Disclosure Package and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution
thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the
Company’s counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification
and determination of eligibility for investment of the Public Units under the laws of such jurisdictions as the Representative may designate
and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters
not to exceed $[-]); (vi) the cost of preparing stock certificates; (vii) the costs and charges of any transfer agent,
trustee, warrant agent and registrar; (viii) all expenses and application fees incurred in connection with any filing with, and clearance
of the offering by, FINRA (including the related fees and expenses of legal counsel for the Underwriters relating to such filings up to
$30,000); (ix) all expenses incurred by the Company in connection with any “road show” presentation to potential investors;
and (x) all expenses and application fees related to the listing of the Public Units on the Nasdaq.
(b) If
(i) this Agreement is terminated pursuant to Section 9 (other than clauses (iii) and (iv)), (ii) the Company for any
reason fails to tender the Public Units for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Public
Units for any reason permitted under this Agreement, the Company agrees to reimburse the Underwriters for all out-of-pocket costs and
expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement
and the Offering.
12. Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred to herein, and the affiliates of each Underwriter referred
to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Public Units from any
Underwriter shall be deemed to be a successor merely by reason of such purchase.
13. Survival.
The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and the Underwriters contained
in this Agreement or made by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Public Units and shall remain in full force and effect, regardless of any termination
of this Agreement or any investigation made by or on behalf of the Company or the Underwriters or the directors, officers, controlling
persons or affiliates referred to in Section 7 hereof.
14. Certain
Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate”
has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other
than a day on which banks are permitted or required to be closed in New York City; and (c) the term “Liquidation” means
the distributions of the Trust Account to the Public Stockholders in connection with the redemption of the Common Stock held by the Public
Stockholders pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, as amended, if the Company
fails to consummate a Business Combination within the time period provided therein.
15. Compliance
with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the
Company, which information may include the name and address of their respective clients, as well as other information that will allow
the Underwriters to properly identify their respective clients.
16. Miscellaneous.
(a) Notices.
All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted
and confirmed by any standard form of telecommunication.
Notices to the Underwriters shall be given to the
Representative:
RBC Capital Markets, LLC
200 Vesey Street
New York, New York 10281
Attention: Equity Syndicate
Email: equityprospectus@rbccm.com
with a copy to:
Skadden, Arps, Slate, Meagher &
Flom LLP
525 University Avenue, Suite 1400
Palo Alto, California 94301
Attention: Gregg A. Noel and Ann Beth
Stebbins
Notices to the Company shall be given
to it at
LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Attention: Anthony Natale
with a copy to:
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Attention: Ari Edelman
(b) Governing
Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(c) Submission
to Jurisdiction. The Company hereby submits to the exclusive jurisdiction of the U.S. federal and New York state courts in the Borough
of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company waives any objection which it may now or hereafter have to the laying of venue of any such suit or proceeding in such
courts. The Company agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding
upon the Company and may be enforced in any court to the jurisdiction of which Company is subject by a suit upon such judgment.
(d) Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
(e) Recognition
of the U.S. Special Resolution Regimes.
(i) In the event that any Underwriter
that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S. Special Resolution Regime (as defined below),
the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to
the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and
obligation, were governed by the laws of the United States or a state of the United States.
(ii) In the event that any Underwriter
that is a Covered Entity or a BHC Act Affiliate (as defined below) of such Underwriter becomes subject to a proceeding under a U.S. Special
Resolution Regime, Default Rights (as defined below) under this Agreement that may be exercised against such Underwriter are permitted
to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement
were governed by the laws of the United States or a state of the United States.
As used in this Section 16(e):
“BHC Act Affiliate” has the
meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any
of the following:
(i) a “covered entity”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI”
as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning
assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
(f) Counterparts.
This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and the same instrument.
(g) Electronic
Signatures. The words “execution,” “signed,” “signature,” and words of like import in this Agreement
or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
(h) Amendments
or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the parties hereto.
(i) Headings.
The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.
(j) Integration.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters,
or any of them, with respect to the subject matter hereof.
If the foregoing is in accordance with your understanding,
please indicate your acceptance of this Agreement by signing in the space provided below.
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Very truly yours,
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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name: Anthony Natale
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Title: Chief Executive Officer
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Accepted: As of the date first written above
RBC Capital Markets, LLC
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For itself and on behalf of the several Underwriters listed in Schedule 1 hereto.
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RBC Capital Markets, LLC
[Signature Page to Underwriting Agreement]
Schedule 1
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Underwriter
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Number of Public Units
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RBC Capital Markets, LLC
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Total
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10,000,000
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Annex A
Pricing Information Provided Orally by Underwriters
The initial public offering price per unit for
the Public Units is $10.00.
The number of units purchased by the Underwriters
is 10,000,000. The Underwriters have an option to purchase an additional 1,500,000 units to cover over-allotments, if any.
Annex B
Written Testing-the-Waters Communications
Reference is made to the materials used in the testing the waters presentation
made to potential investors by the Company, to the extent such materials are deemed to be a “written communication” within
the meaning of Rule 405 under the Securities Act.
Exhibit A
Form of Press Release
LAVA Medtech Acquisition Corp.
[Date]
LAVA Medtech
Acquisition Corp. (“Company”) announced today that RBC Capital Markets, LLC, the book-running manager in the Company’s
recent public sale of units, is [waiving] [releasing] a lock-up restriction with respect to _____ of the Company’s [shares of Common
Stock] [Warrants] [Units] held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will
take effect on ____________________, 20__, and the securities may be sold on or after such date.
This press release is not an offer for sale of the securities in
the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United
States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
[Signature Page to Underwriting
Agreement]
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
LAVA MEDTECH ACQUISITION CORP.
March 31 , 2021
The undersigned, for the purposes
of forming and organizing a corporation under the provisions of and subject to the requirements of the General Corporation Law of the
State of Delaware, as amended from time to time (the “DGCL”), hereby certifies as follows:
ARTICLE I
NAME
The name of the corporation
is LAVA Medtech Acquisition Corp. (the “Corporation”).
ARTICLE II
REGISTERED AGENT
The address of the Corporation’s
registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of New Castle, State of Delaware,
19808, and the name of the Corporation’s registered agent at such address is Corporation Service Company.
ARTICLE III
pURPOSE
The nature of the business
or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized
under the DGCL.
ARTICLE IV
CAPITALIZATION
Section 4.01 Authorized
Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation
is authorized to issue is 111,000,000 shares, consisting of (a) 110,000,000 shares of common stock (the “Common Stock”),
including (i) 100,000,000 shares of Class A common stock (the “Class A Common Stock”), and (ii) 10,000,000
shares of Class B common stock (the “Class B Common Stock”), and (b) 1,000,000 shares of preferred
stock (the “Preferred Stock”). ”).
Section 4.02 Preferred
Stock. The board of directors of the Corporation (the “Board”) is expressly authorized to provide, out of the unissued
shares of the Preferred Stock, one or more series of Preferred Stock. With respect to each such series of Preferred Stock, the Board is
expressly authorized to establish the number of shares of Preferred Stock constituting such series in each such series and to fix the
voting rights, designations, powers, preferences and relative, participating, optional, special and other rights, if any, 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 of Preferred Stock and included in a certificate of designation (a “Preferred Stock Designation”) filed
pursuant to the DGCL. The Board is expressly vested with the authority, to the full extent provided by the DGCL, to adopt any such resolution
or resolutions.
Section 4.03 Common
Stock.
(a) Voting.
(i) Except
as otherwise required by law or this certificate of incorporation (including any Preferred Stock Designation) (the “Certificate
of Incorporation”), the holders of shares of Common Stock shall exclusively possess all voting power with respect to the Corporation.
(ii) Except
as otherwise required by law or this Certificate of Incorporation (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 shares of Common Stock are entitled to vote.
(iii) Except
as otherwise required by law or this Certificate of Incorporation (including any Preferred Stock Designation), at any annual or special
meeting of the stockholders of the Corporation, holders of the Class A Common Stock and holders of the Class B Common Stock,
voting together as a single class, 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 Certificate of Incorporation
(including any Preferred Stock Designation), holders of shares of any class of Common Stock shall not be entitled to vote on any amendment
to this Certificate of Incorporation (including any amendment to any Preferred Stock Designation) that relates solely to the terms of
one or more outstanding series of Preferred Stock or other class of Common Stock if the holders of such affected series of Preferred Stock
or class of Common Stock, as applicable, are entitled, either separately or together with the holders of one or more other such series,
to vote thereon pursuant to this Certificate of Incorporation (including any Preferred Stock Designation) or the DGCL.
(b) Class B
Common Stock.
(i) Initial
Conversion Ratio. Shares of Class B Common Stock shall be convertible into shares of Class A Common Stock on a one-for-one
basis (the “Initial Conversion Ratio”) automatically upon the consummation of the Corporation’s initial merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses
(the “Business Combination”).
(ii) Adjustment
to Initial Conversion Ratio. Notwithstanding the Initial Conversion Ratio, in the case that additional shares of Class A Common
Stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Corporation’s initial public
offering of securities and related to the closing of the initial Business Combination, all issued and outstanding shares of Class B
Common Stock shall automatically convert into shares of Class A Common Stock at the time of the closing of the initial Business Combination
at a ratio for which:
(1) the
numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion
or exercise of any equity-linked securities or otherwise) by the Corporation, related to or in connection with the consummation of the
initial Business Combination (excluding any securities issued or issuable to any seller in the initial Business Combination) plus (B) the
number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination; and
(2) the
denominator shall be the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business
Combination.
Notwithstanding anything
to the contrary contained herein, (A) the adjustment to the Initial Conversion Ratio provided in this Section 4.03(b)(ii) may
be waived as to any particular issuance or deemed issuance of additional shares of Class A Common Stock or equity-linked securities
by the written consent or agreement of holders of a majority of the shares of Class B Common Stock then outstanding consenting or
agreeing separately as a single class in the manner provided in Section 4.03(b)(iii) and (B) in no event shall the
Class B Common Stock convert into Class A Common Stock at a ratio that is less than one-for-one.
The adjustment to
the Initial Conversion Ratio provided in this Section 4.03(b)(ii) shall also be adjusted to account for any subdivision
(by stock split, subdivision, exchange, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock
split, exchange, reclassification, recapitalization or otherwise) or similar reclassification or recapitalization of the outstanding shares
of Class A Common Stock into a greater or lesser number of shares occurring after the original filing of this Certificate of Incorporation
without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalization of the outstanding
shares of Class B Common Stock.
Each share of Class B
Common Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this Section 4.03(b).
The pro rata share for each holder of Class B Common Stock will be determined as follows: each share of Class B Common Stock
shall convert into such number of shares of Class A Common Stock as is equal to the product of one multiplied by a fraction, the
numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued and outstanding shares
of Class B Common Stock shall be converted pursuant to this Section 4.03(b) and the denominator of which shall be
the total number of issued and outstanding shares of Class B Common Stock at the time of conversion.
(iii) Voting.
Except as otherwise required by law or this Certificate of Incorporation (including any Preferred Stock Designation), for so long as any
shares of Class B Common Stock shall remain outstanding, the Corporation shall not, without the prior vote or written consent of
the holders of a majority of the shares of Class B Common Stock then outstanding, voting separately as a single class, amend, alter
or repeal any provision of this Certificate, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would
alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B Common Stock.
Any action required or permitted to be taken at any meeting of the holders of Class B Common Stock may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the
holders of the outstanding Class B Common 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 of Class B Common Stock 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 minutes of proceedings 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. Prompt written notice of the taking of
corporate action without a meeting by less than unanimous written consent of the holders of Class B Common Stock shall, to the extent
required by law, be given to those holders of Class B Common Stock who have not consented in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date
that written consents signed by a sufficient number of holders of Class B Common Stock to take the action were delivered to the Corporation.
(c) Dividends.
Subject to applicable law and the rights, if any, of the holders of any outstanding series of the Preferred Stock, 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.
(d) Liquidation,
Dissolution or Winding Up of the Corporation. Subject to applicable law and the rights, if any, of the holders of any outstanding
series of the Preferred Stock, 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 Class A Common Stock (on an as converted basis with respect to the Class B Common Stock) held by
them.
Section 4.04 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 series, 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
INCORPORATOR
The name and mailing address of the sole incorporator
of the Corporation are as follows:
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Name
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Address
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Matthew L. Hancock
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Reed Smith LLP
10 S. Wacker Drive, Suite 4000,
Chicago, IL 60606
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ARTICLE VI
DIRECTORS
Section 6.01 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 Certificate of Incorporation or the by-laws of the Corporation
(the “By-laws”), 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 Certificate of Incorporation and any
By-laws adopted by the stockholders; provided, however, that no By-laws hereafter adopted by the stockholders shall invalidate
any prior act of the Board that would have been valid if such By-laws had not been adopted.
Section 6.02 Election.
Unless and except to the extent that the By-laws shall so require, the election of directors need not be by written ballot.
ARTICLE VII
BY-LAWS
In furtherance and not in
limitation of the powers conferred upon it by law, the Board is expressly authorized to adopt, amend, alter, change, add or repeal the
By-laws or adopt new By-laws without any action on the part of the stockholders; provided, however, that any By-laws adopted or
amended by the Board, and any powers thereby conferred, may be amended, altered, changed, added or repealed by the stockholders.
ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION
Section 8.01 Limitation
of Director Liability. To the fullest extent permitted by law, a director of the Corporation
shall not be personally liable to the Corporation or to its stockholders for monetary damages for any breach of fiduciary duty as a director.
No amendment to, modification of, or repeal of this Section 8.01 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 prior to such amendment.
Section 8.02 Indemnification.
The Corporation shall indemnify, advance expenses, and hold harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person (a “Covered Person”) who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”),
by reason of the fact that he or she, or a person for whom he or she is the legal representative, 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, enterprise, or nonprofit entity, including service
with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably
incurred by such Covered Person. Notwithstanding the preceding sentence, except for claims for indemnification (following the final disposition
of such Proceeding) or advancement of expenses not paid in full, the Corporation shall be required to indemnify a Covered Person in connection
with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by
the Covered Person was authorized in the specific case by the Board. Any amendment, repeal, or modification of this Section 8.02
shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time
of such repeal or modification.
ARTICLE IX
INSOLVENCY; SALE, LEASE OR EXCHANGE OF ASSETS
Whenever a compromise or arrangement
is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any
class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation
or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under Section 291
of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation
under Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders
or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority
in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders
of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence
of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class
of stockholders, of this Corporation, as the case may be, and also on this Corporation.
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 Certificate of Incorporation 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 (a) such opportunity is one the Corporation is legally and contractually
permitted to undertake and would otherwise be reasonable for the Corporation to pursue and (b) the director or officer is permitted
to refer that opportunity to the Corporation without violating any legal obligation.
ARTICLE XI
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
As permitted by Section 203(b)(1) of
Title 8 of the DGCL, the Corporation elects not to be governed by Section 203 of Title 7 of the DGCL.
ARTICLE XII
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the
right at any time, and from time to time, to amend, alter, change, add or repeal any provision contained in this Certificate of Incorporation
(including any Preferred Stock Designation), in the manner now or hereafter prescribed by this Certificate of Incorporation and the DGCL.
All rights, preferences, privileges, and powers of any kind conferred upon a director of stockholder of the Corporation by this Certificate
of Incorporation or any amendment thereof are conferred subject to such right.
ARTICLE XIII
FORUM SELECTION
Section 13.01 Exclusive
Forum for Internal Corporate Claims. Subject to Section 13.02, unless the Corporation consents in writing to the selection
of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation,
(b) any action asserting a claim for breach of a fiduciary duty owed by any current or former director, officer, employee, agent
or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising
pursuant to any provision of the DGCL, the Certificate of Incorporation, or the By-laws, or (d) any action asserting a claim governed
by the internal affairs doctrine, shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of
Delaware lacks jurisdiction over any such action or proceeding, then another court of the State of Delaware or, if no court of the State
of Delaware has jurisdiction, then the United States District Court for the District of Delaware).
Section 13.02 Exclusive
Forum for Federal Securities Laws Claims. The exclusive forum provision provided in Section 13.01 will not apply to suits
brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as amended (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 13.03 Consent
to Jurisdiction. If any action the subject matter of which is within the scope of Section 13.01 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 (a) 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 13.01 (an “FSC Enforcement Action”)
and (b) 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 13.04 Severability.
If any provision or provisions of this ARTICLE XIII 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 XIII (including, without limitation,
each portion of any sentence of this ARTICLE XIII 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 XIII.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned
incorporator has executed this Certificate of Incorporation as of the date first set forth above.
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By:
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/s/ Matthew L. Hancock
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Name: Matthew L. Hancock
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Title: Sole Incorporator
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Exhibit 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
LAVA MEDTECH ACQUISITION CORP.
[__], 2021
LAVA Medtech Acquisition Corp., 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 “LAVA
Medtech Acquisition Corp.”. The original certificate of incorporation of the Corporation was filed with the Secretary of
State of the State of Delaware on March 31, 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 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended from
time to time (the “DGCL”).
3. 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 LAVA Medtech Acquisition
Corp. (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, capital stock exchange, asset acquisition, stock purchase, reorganization or 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, in the City of Wilmington, County of New Castle, State of Delaware
19808, and the name of the Corporation’s 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, each with a par value of $0.0001 per share, which the Corporation
is authorized to issue is 111,000,000 shares, consisting of (a) 110,000,000 shares of common stock (the “Common Stock”),
including (i) 100,000,000 shares of Class A common stock (the “Class A Common Stock”), and (ii) 10,000,000
shares of Class B common stock (the “Class B Common Stock”), and (b) 1,000,000 shares of preferred
stock (the “Preferred Stock”).
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 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 as set forth in Section 9.9 hereof and any Preferred
Stock Designation), at any annual or special meeting of the stockholders of the Corporation, holders of the Class A Common Stock
and holders of the Class B Common Stock, voting together as a single class, 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 any series
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 or other series of
Common Stock if the holders of such affected series of Preferred Stock or Common Stock, as applicable, 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) Class B
Common Stock.
(i) Shares of Class B
Common Stock shall be convertible into shares of Class A Common Stock on a one-for-one basis (the “Initial
Conversion Ratio”) (A) at any time and from time to time at the option of the holder thereof and (B) automatically
upon the consummation of the Business Combination.
(ii) Notwithstanding the
Initial Conversion Ratio, in the case that additional shares of Class A Common Stock, or Equity-linked Securities (as defined below),
are issued or deemed issued in excess of the amounts issued in the Corporation’s initial public offering of securities (the “Offering”)
and related to the closing of the initial Business Combination, all issued and outstanding shares of Class B Common Stock shall automatically
convert into shares of Class A Common Stock at the time of the closing of the initial Business Combination at a ratio for which:
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the numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any Equity-linked Securities or otherwise) in each case by the Corporation related to or in connection with the consummation of the initial Business Combination (excluding any shares of Class A Common Stock or Equity-linked Securities issued or issuable to any seller in the initial Business Combination) plus (B) the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination; and
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the denominator shall be the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination.
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As used herein, the term
“Equity-linked Securities” means any securities of the Corporation which are convertible into, exchangeable
for or exercisable for Common Stock.
Notwithstanding anything
to the contrary contained herein, (i) the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular
issuance or deemed issuance of additional shares of Class A Common Stock or Equity-linked Securities by the written consent or agreement
of holders of a majority of the shares of Class B Common Stock then outstanding consenting or agreeing separately as a single class
in the manner provided in Section 4.3(b)(iii), and (ii) in no event shall the Class B Common Stock convert
into Class A Common Stock at a ratio that is less than one-for-one.
The foregoing conversion
ratio shall also be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification,
recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise) or similar
reclassification or recapitalization of the outstanding shares of Class A Common Stock into a greater or lesser number of shares
occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding subdivision, combination
or similar reclassification or recapitalization of the outstanding shares of Class B Common Stock.
Each share of Class B
Common Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this Section 4.3(b).
The pro rata share for each holder of Class B Common Stock will be determined as follows: Each share of Class B
Common Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one (1) multiplied
by a fraction, the numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued and
outstanding shares of Class B Common Stock shall be converted pursuant to this Section 4.3(b) and the denominator
of which shall be the total number of issued and outstanding shares of Class B Common Stock at the time of conversion.
(iii) Voting. Except
as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), for so long as any
shares of Class B Common Stock shall remain outstanding, the Corporation shall not, without the prior vote or written consent of
the holders of a majority of the shares of Class B Common Stock then outstanding, voting separately as a single class, amend, alter
or repeal any provision of this Amended and Restated Certificate, whether by merger, consolidation or otherwise, if such amendment, alteration
or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B
Common Stock. Any action required or permitted to be taken at any meeting of the holders of Class B Common Stock may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed
by the holders of the outstanding Class B Common 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 of Class B Common Stock 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 minutes of proceedings 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. Prompt written notice of the taking of
corporate action without a meeting by less than unanimous written consent of the holders of Class B Common Stock shall, to the extent
required by law, be given to those holders of Class B Common Stock who have not consented in writing and who, if the action had been
taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date
that written consents signed by a sufficient number of holders of Class B Common Stock to take the action were delivered to the Corporation.
(c) 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.
(d) 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 Class A Common Stock (on an as converted basis with respect
to the Class B 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
(“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; provided, 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.
Section 5.2 Number,
Election and Term.
(a) The number of directors
of the Corporation, shall be fixed from time to time in the manner provided in the Bylaws.
(b) Subject to Section 5.5 hereof,
commencing at the second annual meeting of the stockholders, and at each annual meeting of the stockholders thereafter, directors elected
to succeed those directors whose terms expire shall be elected for a term of office to expire at the second annual meeting of the stockholders
after their election.
(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.
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 director 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 and except as otherwise required by this Amended and Restated Certificate
(including as set forth on Section 9.9 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.
Section 5.6 Approval
of Business Combination. Notwithstanding any other provision in this Amended and Restated Certificate and in the Bylaws, the affirmative
vote of a majority of the Board, which must include a majority of the Corporation’s independent directors, shall be required to
approve the Corporation’s initial Business Combination (or such other vote as the applicable law or stock exchange rules then in
effect may require).
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. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. 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 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, 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 to call a special
meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders 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 and Section 4.3(b)(iii) hereof), subsequent to the consummation of 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 other than with respect to our Class B Common Stock with respect to which
action may be taken by written consent.
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 they violated their 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 their actions as
directors. 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 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, 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.
(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, except as set forth in Section 9.9, 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 underwriter’s 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 [__], 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 to fund the Corporation’s working capital requirements, and/or
to pay taxes (less up to $100,000 interest to pay dissolution expenses), 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 is
unable to complete the initial Business Combination within 24 months from the closing of the Offering (or, if the Office of the Delaware
Division of Corporations shall not be open for business (including filing of corporate documents) on such date the next date upon which
the Office of the Delaware Division of Corporations shall be open (the “Deadline Date”) and (iii) the redemption
of shares in connection with a vote seeking to amend any provisions of this Amended and Restated Certificate (A) to modify the substance
or timing of the Corporation’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100%
of the Offering Shares if the Corporation does not complete its initial Business Combination by the Deadline Date or (B) relating
to stockholders’ rights or pre-initial Business Combination activity (as described in Section 9.7) and,
for purposes of this clause (iii), only with respect to the redemption of those Offering Shares that a stockholder properly elects to
redeem. Holders of shares of 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 affiliates of LAVA Medtech LP (the “Sponsor”) or officers or directors of the Corporation)
are referred to herein as “Public Stockholders.”
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
will only redeem or repurchase Offering Shares so long as (after such redemption), such redemption would result in the Corporation’s
net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (or any successor rule)), or any entity that succeeds the Corporation as a public company, will be 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 the 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 of 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 of 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 of 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
applicable law or stock exchange listing requirements 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 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 on deposit in the Trust Account, calculated as of two business days
prior to the consummation of the initial Business Combination, including interest not previously released to the Corporation to pay
taxes, by (ii) the total number of 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 on deposit in the Trust Account, calculated as of two business days
prior to the consummation of the initial Business Combination, including interest not previously released to the Corporation to pay
taxes, by (b) the total number of 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 15% of the Offering Shares without the prior written consent of the Corporation.
(d) In the event that the
Corporation has not consummated an initial Business Combination by the Deadline Date, the Corporation shall (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 Offering Shares in consideration of a per-share price, payable in cash,
equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest not previously
released to the Corporation to pay taxes (less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total
number of then outstanding Offering Shares, which redemption will completely extinguish rights of the Public Stockholders (including the
right to receive further liquidating distributions, if any), 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 each case to the Corporation’s obligations under the DGCL to provide for claims of creditors and other requirements of 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 Public Stockholders relating to the proposed initial
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 the consummation of the Corporation’s initial Business Combination, the Corporation shall not issue any
additional shares of capital stock of the Corporation that would entitle the holders thereof to receive funds from the Trust Account or
vote as a class with the Class A Common Stock on any initial Business Combination.
Section 9.5 Transactions
with Affiliates. In the event the Corporation enters into an initial Business Combination with a target business that is affiliated
with the Sponsor, or the directors or officers of the Corporation, the Corporation, or a committee of the independent directors of the
Corporation, shall obtain an opinion from an independent accounting firm or an independent investment banking firm that is a member of
the Financial Industry Regulatory Authority that such 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 solely with another
blank check company or a similar company with nominal operations.
Section 9.7 Additional
Redemption Rights. If, in accordance with Section 9.1(a), any amendment is made to this Amended and Restated
Certificate of Incorporation (i) to modify the substance or timing of the Corporation’s obligation to allow redemption in connection
with its initial Business Combination or to redeem 100% of the Offering Shares if the Corporation has not consummated an initial Business
Combination by the Deadline Date or (ii) 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 the 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 not previously released to the Corporation to pay taxes, divided by the number of then outstanding Offering Shares.
The Corporation’s ability to provide such opportunity is subject to the Redemption Limitation.
Section 9.8 Minimum Value
of Target. In the event that the Corporation’s securities are listed on the Nasdaq Capital Market, the Corporation’s initial
Business Combination must occur with one or more operating businesses or assets with a fair market value equal to at least 80% of the
net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of
any deferred underwriting discount held in the Trust Account) at the time of the Corporation’s signing a definitive agreement in
connection with its initial Business Combination.
Section 9.9 Appointment
and Removal of Directors. Notwithstanding any other provision in this Amended and Restated Certificate, prior to the closing of
the initial Business Combination, the holders of Class B Common Stock shall have the exclusive right to elect and remove any
director, and the holders of Class A Common Stock shall have no right to vote on the election or removal of any director. This Section 9.9 may
only be amended by a resolution passed by holders of at least ninety percent (90%) of the outstanding Common Stock entitled to vote
thereon.
ARTICLE X
CORPORATE OPPORTUNITY
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. In addition to the
foregoing, the doctrine of corporate opportunity shall not apply to any other corporate opportunity with respect to any of the directors
or officers of the Corporation unless such corporate opportunity is offered to such person solely in his or her capacity as a director
or officer of the Corporation and such opportunity is one the Corporation is legally and contractually permitted to undertake and would
otherwise be reasonable for the Corporation to pursue, and to the extent the director or officer is permitted to refer that opportunity
to the Corporation without violating another 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; CONSENT
TO JURISDICTION
Section 12.1 Forum. Subject
to the last sentence in this Section 12.1, and unless the Corporation consents in writing to the selection of an alternative forum, to
the fullest extent permitted by the applicable law, 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 of the Corporation to
the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers
or employees arising pursuant to any provision of the DGCL or this Second Amended and Restated Certificate or the By-Laws, or (iv) any
action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine and,
if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s
counsel except any action (A) as to which the Court of Chancery in the State of Delaware 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) for which the Court of Chancery does not have subject matter jurisdiction. Notwithstanding the
foregoing, (i) the provisions of this Section 12.1 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 courts have exclusive jurisdiction and (ii) unless the Corporation consents in writing to
the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted
by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933,
as amended, or the rules and regulations promulgated thereunder.
Section
12.2 Consent to Jurisdiction. If any action the subject matter of which is within the scope of Section 12.1 immediately
above 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
immediately above (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.
Section 12.4 Deemed
Notice. Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall be
deemed to have notice of and consented to this Article XII.
IN WITNESS WHEREOF, LAVA
Medtech Acquisition Corp. 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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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name:
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Anthony Natale
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Title:
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Chief Executive Officer
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Exhibit 3.3
BY-LAWS
OF
LAVA MEDTECH ACQUISITION CORP.
Adopted
as of March 31 , 2021
ARTICLE I
OFFICES
Section 1.01 Registered
Office. The registered office of LAVA Medtech Acquisition Corp. (the “Corporation”) will be fixed in the certificate
of incorporation of the Corporation, as may be amended or restated from time to time (the “Certificate of Incorporation”).
Section 1.02 Other
Offices. The Corporation may, have other offices, both within and without the State of Delaware, as the board of directors
of the Corporation (the “Board”), from time to time, shall determine or as the business and affairs of the Corporation
may require.
ARTICLE II
STOCKHOLDERS MEETINGS
Section 2.01 Place
of Meetings. All meetings of the stockholders shall be held at such place, if any, either within or without the State of Delaware,
or by means of remote communication, as shall be designated from time to time by resolution of Board and stated in the notice of meeting.
Section 2.02 Annual
Meetings. The annual meeting of stockholders for the election of directors and for the transaction of such other business as may property
come before the meeting in accordance with these by-laws of the Corporation (the “By-laws”) shall be held at such date,
time, and place, if any as shall be determined by the Board and stated in the notice of the meeting; provided, however, 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 9.05(a).
Section 2.03 Special
Meetings. Subject to the rights of the holders of any outstanding series of the preferred stock, par value $0.0001 per share,
of the Corporation (“Preferred Stock”), and to the requirements of the General Corporation Law of the State of Delaware,
as amended (the “DGCL”), special meetings of stockholders, for any purpose or purposes, may be called only by the 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 at such 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 9.05(a).
Section 2.04 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 9.03 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 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 2.08(c)) given before the date
previously scheduled for such meeting.
Section 2.05 Quorum.
Except as otherwise provided by applicable law, 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 2.07 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 2.06 Voting
of Shares.
(a) Voting
Lists. The Secretary of the Corporation (the “Secretary”) shall prepare, or shall cause the officer or agent who
has charge of the stock ledger of the Corporation to 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, that 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 and class of shares registered in the
name of each stockholder. Nothing contained in this Section 2.06(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 inspected 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 9.05(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 2.06(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 9.03(c)), 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 expressly provides for a longer period. Proxies need not be filed with the Secretary
until the meeting is called to order but shall be filed with the Secretary before being voted. No stockholder shall have cumulative voting
rights. 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, 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 appoint 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 2.07 Adjournments.
Any meeting of stockholders, annual or special, may be adjourned by the chairman of the meeting, 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 9.02, 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 2.08 Advance
Notice for Business.
(a) Annual
Meetings of Stockholders. No business 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) given by or at the direction of the Board, (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 entitled to vote at such annual meeting on the date
of the giving of the notice provided for in this Section 2.08(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 2.08(a).
Notwithstanding anything in this Section 2.08(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 3.02 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 and such business must otherwise
be a proper matter for stockholder action. Subject to Section 2.08(a)(iii), a stockholder’s notice to the Secretary
with respect to such business, to be timely, must be received by the Secretary at the principal executive offices of the Corporation not
later than the opening of business on the 90th day nor earlier than the opening 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 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not
earlier than the opening of business on the 120th day before the meeting and not later than the later of (x) the opening 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 2.08(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 2.08(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 2.08(a),
provided, however, that once business has been properly brought before the annual meeting in accordance with such procedures, nothing
in this Section 2.08(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 2.08(a) or
that the information provided in a stockholder’s notice does not satisfy the information requirements of this Section 2.08(a),
such proposal shall not be presented for action at the annual meeting. Notwithstanding the foregoing provisions of this Section 2.08(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 2.08(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 2.08(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 3.02.
(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 2.09 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 date and time of the opening and the closing of the polls for each matter upon
which the stockholders will vote at a meeting shall be announced at the meeting by the chairman of the meeting. 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 2.10 Consents
in Lieu of Meeting. Unless otherwise provided by the Certificate of Incorporation, until the Corporation consummates an
initial public 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 entitled to vote thereon
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 entitled to vote 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 3.01 Powers;
Number. 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. Subject to the Certificate of Incorporation, the number of directors shall be fixed exclusively by resolution of the Board.
Section 3.02 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 entitled to vote in the election of directors on the date of the giving of the notice provided for in this Section 3.02 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 3.02.
(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. To be timely, a stockholder’s notice to the Secretary must be received by 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 opening 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 60
days after such anniversary date, notice by the stockholder to be timely must be so received not earlier than the opening 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 3.02.
(c) Notwithstanding
anything in Section 3.02(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 90th day prior to the anniversary date of the immediately preceding annual meeting of stockholders,
a stockholder’s notice required by this Section 3.02 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 received by 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
that are owned beneficially or of record by the person and (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; 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 3.02, or that the information provided in a stockholder’s notice does not satisfy the information
requirements of this Section 3.02, then such nomination shall not be considered at the meeting in question. Notwithstanding
the foregoing provisions of this Section 3.02, 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 3.02, 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 3.02
shall be deemed to affect any rights of the holders of Preferred Stock to elect directors pursuant to the Certificate of Incorporation.
Section 3.03 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, and may be paid either a fixed sum for attendance at each meeting of
the Board or other compensation as director. 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 compensation and reimbursement of expenses for service on the committee.
Section 3.04 Newly
Created Directorships and Vacancies. Any newly created directorships resulting from an increase in the authorized number of directors
and any vacancies occurring in the Board of Directors, shall be filled solely by the affirmative votes of a majority of the remaining
members of the Board of Directors, although less than a quorum, or by a sole remaining director. A director so elected shall be elected
to hold office until the earlier of the expiration of the term of office of the director whom he or she has replaced, a successor is duly
elected and qualified, or the earlier of such director’s death, resignation, or removal.
Section 3.05 Removal.
Except as prohibited by applicable law or the Certificate of Incorporation, the stockholders holding a majority of the shares then entitled
to vote at an election of directors may remove any director from office with or without cause.
ARTICLE IV
BOARD MEETINGS
Section 4.01 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 4.01.
Section 4.02 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 4.03 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 9.03, 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. A special meeting may be held at any time without notice if all the directors are present
or if those not present waive notice of the meeting in accordance with Section 9.04.
Section 4.04 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 4.05 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 4.06 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 5.01 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 5.02 Available
Powers. Any committee established pursuant to Section 5.01 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 5.03 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 5.04 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 III and ARTICLE IV of these By-laws.
ARTICLE VI
OFFICERS
Section 6.01 Officers.
The officers of the Corporation elected by the Board shall be a Chief Executive Officer, a Chief Financial Officer, a Secretary and such
other officers (including without limitation, a Chairman of the Board, Presidents, Vice Presidents, Assistant Secretaries and a Treasurer)
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 Corporation (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 6.01(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) 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.
(f) 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.
(g) 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).
(h) Treasurer.
The Treasurer shall, in the absence (or inability or refusal to act) of the Chief Financial Officer, perform the duties and exercise the
powers of the Chief Financial Officer.
Section 6.02 Term
of Office; Removal; Vacancies. The elected officers of the Corporation shall be appointed by the Board and shall hold office until
their successors are duly elected and qualified by the Board 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 6.03 Other
Officers. The Board may delegate the power to appoint such other officers and agents, and may also remove such officers and
agents or delegate the power to remove same, as it shall from time to time deem necessary or desirable.
Section 6.04 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 7.01 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 7.02 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 7.03 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, Chief Executive Officer, the President or a Vice President and (b) the 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 7.04 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 any tangible or intangible property or any benefit to the Corporation including cash, promissory notes, services performed,
contracts for services to be performed or other securities, 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 7.05 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 7.06 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 7.08(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 7.07 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 7.08 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, offering circular or prospectus sent by the Corporation to
the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares, 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, offering circular or prospectus sent by the
Corporation to the registered owner of such shares within a reasonable time prior to or after the issuance or transfer of such shares.
Section 7.09 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 8.01 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 8.03 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 8.02 Right
to Advancement of Expenses. In addition to the right to indemnification conferred in Section 8.01, 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 8.03 Right
of Indemnitee to Bring Suit. If a claim under Section 8.01 or Section 8.02 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 8.04 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 8.05 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 8.06 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 8.07 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 66.7% of the voting power of all outstanding shares of capital stock
of the Corporation.
Section 8.08 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 8.09 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 9.01 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 9.05 hereof, then such meeting shall not be held at
any place.
Section 9.02 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 9.02(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 9.03 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) Notice
to Stockholders. Whenever under applicable law, the Certificate of Incorporation or these By-laws notice is required to be given to
any stockholder, such notice may be given (i) in writing and sent either by hand delivery, through the United States mail, or by
a nationally recognized overnight delivery service for next day delivery, or (ii) by means of a form of electronic transmission consented
to by the stockholder, to the extent permitted by, and subject to the conditions set forth in Section 232 of the DGCL. A notice to
a stockholder shall be deemed given as follows: (i) if given by hand delivery, when actually received by the stockholder, (ii) if
sent through the United States mail, when deposited in the United States mail, with postage and fees thereon prepaid, addressed to the
stockholder at the stockholder’s address appearing on the stock ledger 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 stockholder
at the stockholder’s address appearing on the stock ledger of the Corporation, and (iv) if given by a form of electronic transmission
consented to by the stockholder to whom the notice is given and otherwise meeting the requirements set forth above, (A) if by facsimile
transmission, when directed to a number at which the stockholder has consented to receive notice, (B) if by electronic mail, when
directed to an electronic mail address at which the stockholder has consented to receive notice, (C) if by a posting on an electronic
network together with separate notice to the stockholder of such specified posting, upon the later of (1) such posting and (2) the
giving of such separate notice, and (D) if by any other form of electronic transmission, when directed to the stockholder. A stockholder
may revoke such stockholder’s consent to receiving notice by means of electronic communication by giving written notice of such
revocation to the Corporation. Any such consent shall be deemed revoked if (1) the Corporation is unable to deliver by electronic
transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known
to the Secretary or an Assistant Secretary or to the Corporation’s transfer agent, or other person responsible for the giving of
notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
(c) 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, including but not limited to transmission by telex, facsimile telecommunication,
electronic mail, telegram and cablegram.
(d) 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.
(e) Exceptions
to Notice Requirements.
(i) 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.
(ii) 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 9.04 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. All
such waivers shall be kept with the books of the Corporation. 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 9.05 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 entitled to vote at such meeting 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, if entitled to vote, to vote on matters submitted to the applicable 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, except where a person participates in the meeting 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 9.06 .
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 9.07 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 9.08 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 9.09 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, any Vice 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 power (except
as otherwise provided in Section 8.07) 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
NUMBER UNITS
U-
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 519345 201
LAVA MEDTECH ACQUISITION CORP.
UNITS CONSISTING OF ONE SHARE OF CLASS A
COMMON STOCK AND ONE-HALF OF ONE REDEEMABLE WARRANT TO PURCHASE ONE SHARE OF CLASS A COMMON STOCK
THIS CERTIFIES THAT [__] is the owner of Units.
Each Unit (“Unit”)
consists of one (1) share of Class A common stock, par value $0.0001 per share (“Common Stock”), of
LAVA Medtech Acquisition Corp., a Delaware corporation (the “Company”), and one-half (1/2) of one redeemable
warrant (each whole warrant, a “Warrant”). Each whole Warrant entitles the holder to purchase one (1) share
(subject to adjustment) of Common Stock for $11.50 per share (subject to adjustment). Each Warrant will become exercisable thirty (30)
days after the Company’s completion of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other
similar business combination with one or more businesses (each a “Business Combination”) and will expire unless
exercised before 5:00 p.m., New York City Time, on the date that is five (5) years after the date on which the Company completes
its initial Business Combination, or earlier upon redemption or liquidation (the “Expiration Date”). The Common
Stock and Warrants comprising the Units represented by this certificate are not transferable separately prior to [__], 2021, unless RBC
Capital Markets, LLC elects to allow separate trading earlier, subject to the Company’s filing of a Current Report on Form 8-K
with the Securities and Exchange Commission containing an audited balance sheet reflecting the Company’s receipt of the gross proceeds
of its initial public offering and issuing a press release announcing when separate trading will begin. No fractional warrants will be
issued upon separation of the Units. The terms of the Warrants are governed by a Warrant Agreement, dated as of [__], 2021, between the
Company and Continental Stock Transfer & Trust Company, as 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. Copies of the Warrant Agreement
are 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.
Upon the consummation of
the Business Combination, the Units represented by this certificate will automatically separate into shares of Common Stock and Warrants
comprising such Units.
This certificate is not valid
unless countersigned by the Transfer Agent and Registrar of the Company.
This certificate shall be
governed by and construed in accordance with the internal laws of the State of New York.
Witness the facsimile signature of its duly authorized
officers.
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__________________________
Secretary
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__________________________
Chief Financial Officer
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LAVA MEDTECH ACQUISITION CORP.
The Company will furnish
without charge to each unitholder who so requests, a statement of the powers, designations, preferences and relative, participating, optional
or other special rights of each class of stock 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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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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JT TEN
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as joint tenants with
right of survivorship
and not as tenants in
common
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under Uniform Gifts to Minors Act
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(State)
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Additional abbreviations may also be used though
not in the above list.
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For value received, [__] hereby sell, assign and transfer unto [__]
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PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
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(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: 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 (OR ANY SUCCESSOR RULE).
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In each case, as more fully
described in the Company’s final prospectus dated [__], 2021, the holder(s) of this certificate shall be entitled to receive
a pro-rata portion of certain funds held in the trust account established in connection with its initial public offering only in the event
that (i) the Company redeems the shares of Common Stock sold in its initial public offering and liquidates because it does not consummate
an initial business combination by the date set forth in the Company’s amended and restated certificate of incorporation, (ii) the
Company redeems the shares of Common Stock sold in its initial public offering in connection with a stockholder vote to amend the Company’s
amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to allow
redemption in connection with the Company’s initial business combination or to redeem 100% of the Common Stock if it does not consummate
an initial business combination by the date set forth in the Company’s amended and restated certificate of incorporation or (B) with
respect to any other provision relating to the rights of holders of the Common stock or pre-initial Business Combination activity or (iii) if
the holder(s) seek(s) to redeem for cash his, her or its respective shares of Common Stock in connection with a tender offer
(or proxy solicitation, solely in the event the Company seeks stockholder approval of the proposed initial business combination) setting
forth the details of a proposed initial business combination. In no other circumstances shall the holder(s) have any right or interest
of any kind in or to the trust account.
Exhibit 4.2
NUMBER
C-
SHARES
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 519345 102
LAVA MEDTECH ACQUISITION CORP.
INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE
CLASS A COMMON STOCK
This Certifies that [__] is the owner of FULLY PAID AND NON-ASSESSABLE
SHARES OF THE PAR VALUE OF $0.0001 EACH OF THE CLASS A COMMON STOCK OF
LAVA MEDTECH ACQUISITION CORP.
(THE “CORPORATION”)
transferable on the books of the Corporation in
person or by duly authorized attorney upon surrender of this certificate properly endorsed.
The Corporation will be forced to redeem all of
its shares of Class A common stock if it is unable to complete a business combination by the date set forth in the Corporation’s
amended and restated certificate of incorporation, all as more fully described in the Corporation’s final prospectus dated [__],
2021.
This certificate is not valid unless countersigned
by the Transfer Agent and registered by the Registrar.
Witness the seal of the Corporation and the facsimile
signatures of its duly authorized officers.
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Secretary
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[Corporate Seal]
Delaware
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President
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LAVA MEDTECH ACQUISITION CORP.
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 of the Corporation 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 Corporation’s
amended and restated certificate of incorporation and all amendments thereto and resolutions of the Corporation’s Board of Directors
providing for the issue of securities (copies of which may be obtained from the secretary of the Corporation), to all of which the holder
of this certificate by acceptance hereof assents. 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
and not as tenants in
common
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under Uniform Gifts to Minors 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(S) OF ASSIGNEE(S))
(PLEASE PRINT OR TYPEWRITE NAME(S) AND ADDRESS(ES),
INCLUDING ZIP CODE, OF ASSIGNEE(S))
Shares of the capital stock represented by the
within Certificate, and do hereby irrevocably constitutes and appoints [__] Attorney to transfer the said stock on the books of the within
named Corporation 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:
By
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 (OR ANY SUCCESSOR RULE).
In each case, as more fully described in the Corporation’s
final prospectus dated [__], 2021, the holder(s) of this certificate shall be entitled to receive a pro-rata portion of certain funds
held in the trust account established in connection with its initial public offering only in the event that (i) the Corporation redeems
the shares of Class A common stock sold in its initial public offering and liquidates because it does not consummate an initial business
combination by the date set forth in the Corporation’s amended and restated certificate of incorporation, (ii) the Corporation redeems
the shares of Class A common stock sold in its initial public offering in connection with a stockholder vote to amend the Corporation’s
amended and restated certificate of incorporation (A) to modify the substance or timing of the Corporation’s obligation to allow
redemption in connection with its initial business combination or to redeem 100% of the Class A common stock if it does not consummate
an initial business combination by the date set forth in the Corporation’s amended and restated certificate of incorporation or
(B) with respect to any other provision relating to the rights of holders of the Class A common stock or pre-initial business combination
activity, or (iii) if the holder(s) seek(s) to redeem for cash his, her or its respective shares of Class A common stock in connection
with a tender offer (or proxy solicitation, solely in the event the Corporation seeks stockholder approval of the proposed initial business
combination) setting forth the details of a proposed initial business combination. In no other circumstances shall the holder(s) have
any right or interest of any kind in or to the trust account.
Exhibit 4.4
WARRANT AGREEMENT
between
LAVA MEDTECH ACQUISITION CORP.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
THIS WARRANT AGREEMENT (this
“Agreement”), dated as of [__], 2021, is by and between LAVA Medtech Acquisition Corp., a Delaware corporation
(the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, as warrant
agent (the “Warrant Agent”, also referred to herein as the “Transfer Agent”).
WHEREAS, on [__], 2021, the
Company entered into that certain Private Placement Warrants Purchase Agreement with LAVA Medtech Sponsor LP, a Delaware limited partnership
(the “Sponsor”), pursuant to which the Sponsor will purchase an aggregate of 7,500,000 redeemable warrants (or
up to 8,175,000 warrants if the Over-allotment Option (as defined below) in connection with the Company’s Offering (as defined below)
is exercised in full) simultaneously with the closing of the Offering bearing the legend set forth in Exhibit B hereto (the
“Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant; and
WHEREAS, in order to finance
the Company’s transaction costs in connection with an intended initial Business Combination (as defined below), 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 the Company may require, of which up to $2,000,000 may be convertible into up to an additional 2,000,000 Private Placement Warrants
of the post Business Combination entity at a price of $1.00 per warrant; and
WHEREAS, the Company is engaged
in an initial public offering (the “Offering”) of units of the Company’s equity securities, each such
unit comprised of one share of Common Stock (as defined below) and one-half of one Public Warrant (as defined below) (the “Units”)
and, in connection therewith, has determined to issue and deliver up to 5,000,000 redeemable warrants (including up to 750,000 redeemable
warrants subject to the Over-allotment Option) to public investors in the Offering (the “Public Warrants” and,
together with the Private Placement Warrants, the “Warrants”). Each whole Warrant entitles the holder thereof
to purchase one share of Class A common stock of the Company, par value $0.0001 per share (“Common Stock”),
for $11.50 per share, subject to adjustment as described herein; and
WHEREAS, the Company has
filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1,
No. 333-[__] (the “Registration Statement”) and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the Units, the
Public Warrants and the shares of Common Stock included in the Units; and
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; and
WHEREAS, the Company desires
to provide for the form and provisions of the Warrants, 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 (if a physical certificate is issued), as provided herein, the valid, binding and legal obligations of the Company, and to authorize
the execution and delivery of this 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 Agreement.
2. Warrants.
2.1 Form of Warrant.
Each Warrant shall initially be issued in registered form only.
2.2 Effect of Countersignature.
If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this 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 original issuance and
the registration of transfer 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. Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such
ownership shall be effected through, records maintained by institutions that have accounts with (i) The Depository Trust Company
(the “Depositary”) (such institution, with respect to a Warrant in its account, a “Participant”)
or (ii) the Depositary or its nominee for each book-entry Warrant Certificate.
If the Depositary subsequently
ceases to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding
making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer necessary
to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver
to the Warrant Agent for cancellation each book-entry Public Warrant, and the Company shall instruct the Warrant Agent to deliver to the
Depositary definitive certificates in physical form evidencing such Warrants which shall be in the form annexed hereto as Exhibit A.
Physical certificates, if
issued, shall be signed by, or bear the facsimile signature of, the Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
Secretary or other principal officer 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.
2.3.2 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 is registered in the Warrant Register (the “Registered Holder”) as the absolute owner
of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on any physical 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.
The Common Stock and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the date of the Prospectus
or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York City are generally
open for normal business (a “Business Day”), then on the immediately succeeding Business Day following such
date, or earlier (the “Detachment Date”) with the consent of RBC Capital Markets, LLC as representative of the
several underwriters, but in no event shall the Common Stock and the Public Warrants comprising the Units be separately traded until (A) the
Company has filed a Current Report on Form 8-K with the Commission containing an audited balance sheet reflecting the receipt by
the Company of the gross proceeds of the Offering, including the proceeds received by the Company from the exercise by the underwriters
of their right to purchase additional Units in the Offering (the “Over-allotment Option”), if the Over-allotment
Option is exercised prior to the filing of the Form 8-K, and (B) the Company issues a press release and files with the Commission
a current report on Form 8-K announcing when such separate trading shall begin.
2.5 No Fractional Warrants
Other Than as Part of Units. The Company shall not issue fractional Warrants other than as part of Units, each of which is comprised
of one share of Common Stock and one-half of one Public Warrant. If, upon the detachment of Public Warrants from Units or otherwise, a
holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to the nearest whole number the number
of Warrants to be issued to such holder.
2.6 Private Placement
Warrants. The Private Placement Warrants shall be identical to the Public Warrants, except that so long as they are held by the Sponsor
or any of its Permitted Transferees (as defined below) the Private Placement Warrants: (i) may be exercised for cash or on a cashless
basis, pursuant to subsection 3.3.1(c) hereof, and (ii) may not be (including the shares of Common Stock issuable upon
exercise of the Private Placement Warrants) transferred, assigned or sold until thirty (30) days after the completion by the Company of
an initial Business Combination (as defined below); provided, however, that in the case of (ii), the Private Placement Warrants
and any shares of Common Stock held by the Sponsor or any of its Permitted Transferees issued upon exercise of the Private Placement Warrants
may be transferred by the holders thereof:
(a) to the Company’s
officers or directors, any affiliates or family members of any of the Company’s officers or directors, any members of the Sponsor,
or any affiliates of the Sponsor;
(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 the 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 the Company’s initial Business Combination at prices no greater than the price at which the Warrants were
originally purchased;
(f) in the event of the Company’s liquidation
prior to the completion of its initial Business Combination; or
(g) by virtue of the laws of the State of Delaware
or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor; or
(h) in the event of the
Company’s completion of a liquidation, merger, capital stock exchange, reorganization or other similar transaction which results
in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property
subsequent to the completion of the Company’s initial Business Combination;
provided,
however, that in the case of clauses (a) through (e), these permitted transferees (the “Permitted Transferees”)
must enter into a written agreement with the Company agreeing to be bound by these transfer restrictions.
3. Terms and Exercise of Warrants.
3.1 Warrant Price.
Each Warrant shall, when countersigned by the Warrant Agent (if a physical certificate is issued), entitle the Registered Holder thereof,
subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock stated
therein, at the price of $11.50 per share, subject to the adjustments provided in Section 4 hereof and in the last sentence
of this Section 3.1. The term “Warrant Price” as used in this Agreement shall mean the price per share at which
shares of Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price
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 twenty (20) 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 (the “Exercise Period”) commencing on the date that is thirty
(30) days after the first date on which the Company completes a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination, involving the Company and one or more businesses (a “Business Combination”)
and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x) the date that is five (5) years after the date
on which the Company completes its initial Business Combination, (y) the liquidation of the Company in accordance with the Company’s
amended and restated certificate of incorporation, as amended from time to time, if the Company fails to consummate a Business Combination,
and (z) other than with respect to the Private Placement Warrants then held by the Sponsor or any Permitted Transferees; provided,
however, that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection
3.3.2 below with respect to an effective registration statement. Each Warrant (other than a Private Placement Warrant then held by
the Sponsor or any Permitted Transferees) not exercised on or before the Expiration Date shall become void, and all rights thereunder
and all rights in respect thereof under this Agreement shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company
in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, that the Company shall
provide at least twenty (20) days prior written notice of any such extension to Registered Holders of the Warrants and, provided further
that any such extension shall be identical in duration among all the Warrants.
3.3 Exercise of Warrants.
3.3.1 Payment. Subject
to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the Warrant Agent (if in the form of a physical
certificate), may be exercised by the Registered Holder thereof by delivering to the Warrant Agent at its corporate trust department (i) the
definitive warrant certificate evidencing the Warrants to be exercised, or, in the case of a Warrant represented by a book-entry, the
Warrants to be exercised (the “Book-Entry Warrants”) on the records of the Depositary to an account of
the Warrant Agent at the Depositary designated for such purposes in writing by the Warrant Agent to the Depositary from time to time,
(ii) an election to purchase any shares of Common Stock pursuant to the exercise of a Warrant, properly completed and executed by
the Registered Holder on the reverse of the definitive warrant certificate or, in the case of a Book-Entry Warrant, properly delivered
by the Participant in accordance with the Depositary’s procedures, and (iii) the payment in full of the Warrant Price for each
full share of Common Stock 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 shares of Common Stock and the issuance of such shares of Common Stock, as follows:
(a) in lawful money of
the United States, in good certified check or good bank draft payable to the Warrant Agent;
(b) with respect to any
Private Placement Warrant, so long as such Private Placement Warrant is held by the Sponsor or a Permitted Transferee, 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 excess of the “Fair Market Value”, as defined in this subsection
3.3.1(c), over the Warrant Price by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Fair
Market Value” shall mean the average last reported sale price of the shares of Common Stock for the ten (10) trading days ending
on the third trading day prior to the date on which notice of exercise of the Warrant is sent to the Warrant Agent; or
(c) as provided in Section 7.4 hereof.
3.3.2 Issuance of Shares
of Common Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of
the Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of such Warrant
a book-entry position or certificate, as applicable, for 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 in full, a new
book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock as to which such Warrant shall not
have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any shares of Common Stock pursuant
to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities
Act covering the issuance of the shares of Common Stock issuable upon the exercise of the Public Warrants is then effective and a current
prospectus relating thereto is available, subject to the Company’s satisfying its obligations under Section 7.4, or
a valid exemption from registration is available. No Warrant shall be exercisable and the Company shall not be obligated to issue shares
of Common Stock upon exercise of a Warrant unless the shares of Common Stock issuable upon such Warrant exercise has been registered,
qualified or deemed to be exempt under the securities laws of the state of residence of the Registered Holder of the Warrants. The Company
may require holders of Public Warrants to settle the Warrant on a “cashless basis” pursuant to Section 7.4. If,
by reason of any exercise of Warrants on a “cashless basis,” the holder of any Warrant would be entitled, upon the exercise
of such Warrant, to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number,
the number of shares of Common Stock to be issued to such holder.
3.3.3 Valid Issuance.
All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully
paid and non-assessable.
3.3.4 Date of Issuance.
Each person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued shall for all purposes
be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant, or book-entry position
representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate
in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when the share transfer books
of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have become the holder of such shares
of Common Stock at the close of business on the next succeeding date on which the share transfer books or book-entry system are open.
3.3.5 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
3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 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 9.8% (or such other amount
as such holder may specify) (the “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 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 stock 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 Commission as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the
Company or the Transfer 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.
4.1.1 Split-Ups. If after
the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased
by a stock dividend payable in shares of Common Stock to all or substantially all holders of Common Stock, or by a split-up of shares
of Common Stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares
of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common
Stock. A rights offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the
“Fair Market Value” (as defined below) 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 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 4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common
Stock, in determining the price payable for 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 and (ii) “Fair Market Value” means the volume weighted
average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the first
date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right
to receive such rights.
4.1.2 Extraordinary Dividends.
If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities
or other assets to all or substantially all holders of the 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 4.1.1
above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Common Stock
in connection with a proposed initial Business Combination, (d) to satisfy the redemption rights of the holders of Common Stock in
connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance
or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or
to redeem 100% of the shares of Common Stock included in the Units sold in the Offering (the “Public Shares”)
if the Company does not complete the initial Business Combination within the time period set forth in the Company’s amended and
restated certificate of incorporation or with respect to any other provision relating to stockholders’ rights or pre-initial Business
Combination activity or (e) in connection with the redemption of the Public Shares upon the failure of the Company to complete its
initial Business Combination and any subsequent distribution of its assets upon its liquidation (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/or the fair market value (as determined by the Board,
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 4.1.2, “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 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) to the extent it
does not exceed $0.50 (being 5% of the offering price of the Units in the Offering).
4.2 Aggregation of Shares.
If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar
event, then, on the effective date of such consolidation, combination, reverse stock split, 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 Adjustments in Exercise Price.
4.3.1 Whenever the number of shares of Common Stock
purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section 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
(x) 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 (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately
thereafter.
4.3.2 If the Company issues
additional shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock 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 Board (and
in the case of any such issuance to the initial stockholders (as defined in the Prospectus) or their affiliates, without taking into account
any founder shares held by such stockholders or their affiliates, as applicable, prior to such issuance) (the “New Issuance
Price”), the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115% of the New Issuance Price.
4.4 Replacement of Securities
upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other
than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or 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 holders
of the Warrants 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
holder of the Warrants would have received if such holder had exercised his, her or its Warrant(s) immediately prior to such event
(the “Alternative Issuance” ); provided, however, that (i) if the holders of the Common Stock
were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation
or merger, then the kind and amount of securities, cash or other assets constituting the Alternative Issuance for which each Warrant shall
become exercisable shall be deemed to be the weighted average of the kind and amount received per share by the holders of the Common Stock
in such consolidation or merger that affirmatively make such election, and (ii) if a tender, exchange or redemption offer shall have
been made to and accepted by the holders of the Common Stock (other than a tender, exchange or redemption offer made by the Company in
connection with redemption rights held by stockholders of the Company as provided for in the Company’s amended and restated certificate
of incorporation or bylaws or as a result of the redemption of shares of Common Stock by the Company if a proposed initial Business Combination
is presented to the stockholders of the Company for approval) under circumstances in which, upon completion of such tender or exchange
offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act
(or any successor rule)) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning
of Rule 12b-2 under the Exchange Act (or any successor rule)) and any members of any such group of which any such affiliate or associate
is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act (or any successor rule)) more than 50% of the
outstanding shares of Common Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, the highest amount
of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such Warrant holder had
exercised the Warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the shares of Common Stock
held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation
of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in this Section 4; provided,
further, that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event is payable
in the form of capital stock or shares in the successor entity that is listed for trading on a national securities exchange or is quoted
in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the Registered
Holder properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable event
by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by an amount
(in dollars) equal to the difference of (i) the Warrant Price in effect prior to such reduction minus (ii) (A) the Per
Share Consideration (as defined below) (but in no event less than zero) minus (B) the Black-Scholes Warrant Value (as defined below).
The “Black-Scholes Warrant Value” means the value of a Warrant immediately prior to the consummation of the
applicable event based on the Black-Scholes Warrant Model for a Capped American Call on Bloomberg Financial Markets (“Bloomberg”).
For purposes of calculating such amount, (1) the price of each share of Common Stock shall be the volume weighted average price of
the shares of Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date
of the applicable event, (2) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg determined
as of the trading day immediately prior to the day of the announcement of the applicable event, and (3) the assumed risk-free interest
rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration”
means (i) if the consideration paid to holders of the shares of Common Stock consists exclusively of cash, the amount of such cash
per share of Common Stock, and (ii) in all other cases, the volume weighted average price of the shares of Common Stock as reported
during the ten (10) trading day period ending on the trading day prior to the effective date of the applicable event. If any reclassification
or reorganization also results in a change in shares of Common Stock covered by subsection 4.1.1, then such adjustment shall be
made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4
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.
4.5 Notices of Changes
in Warrant. Upon every adjustment of the Warrant Price or the number of shares of Common Stock 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 of Common Stock 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, 4.2, 4.3 or 4.4, the Company shall give written notice of the occurrence
of such event to each holder of a Warrant, at the last address set forth for such 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.
4.6 No Fractional Shares.
Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares of Common Stock
upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant
would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise,
round down to the nearest whole number the number of shares of Common Stock to be issued to such holder.
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 of Common Stock as is stated in the Warrants initially issued
pursuant to this Agreement; provided, however, that 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 Other Events.
In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4
are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an adverse impact
on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall
appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing, which shall
give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and
purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment. The Company
shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
5. Transfer and Exchange of Warrants.
5.1 Registration of Transfer.
The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender
of such Warrant for transfer, and, if in the form of a physical certificate, 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 request.
5.2 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 that a Warrant surrendered for
transfer bears a restrictive legend (as in the case of the Private Placement Warrants), the Warrant Agent shall not cancel such Warrant
and issue new Warrants in exchange thereof 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.
5.3 Fractional Warrants.
The Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a warrant
certificate or book-entry position for a fraction of a warrant, except as part of the Units.
5.4 Service Charges.
No service charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Warrant Execution
and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement,
the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the
Warrant Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6 Transfer of Warrants.
Prior to the Detachment Date, the Public 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. Notwithstanding the
foregoing, the provisions of this Section 5.6 shall have no effect on any transfer of Warrants on and after the Detachment
Date.
6. Exclusion of Private Placement Warrants.
6.1 Exclusion of Private
Placement Warrants. None of the Private Placement Warrants will be redeemable by the Company so long as they are held by the Sponsor
or its permitted transferees. Private Placement Warrants that are transferred to persons other than Permitted Transferees shall upon such
transfer cease to be Private Placement Warrants and shall become Public Warrants under this Agreement.
7. Other Provisions Relating to Rights of 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 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 Common
Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that
shall be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration of Common Stock; Cashless
Exercise at Company’s Option.
7.4.1 Registration of the
Common Stock. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business Days after the closing
of its initial Business Combination, it shall use its best efforts to file with the Commission, and within sixty (60) Business Days following
the closing of its initial Business Combination have declared effective, a post-effective amendment to the registration statement of which
the prospectus relating to the offering forms a part, or a new registration statement for the registration, under the Securities Act,
of the shares of Common Stock issuable upon exercise of the Warrants. The Company shall use its best efforts to cause the same to become
effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the redemption
or expiration of the Warrants in accordance with the provisions of this Agreement. If any such registration statement has not been declared
effective by the 60th Business Day following the closing of the Business Combination, holders of the Warrants shall have the right, during
the period beginning on the 61st Business Day after the closing of the Business Combination and ending upon such registration statement
being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration
statement covering the shares of Common Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,”
by exchanging the Warrants (in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption)
for that number of shares of Common Stock equal to the (A) quotient obtained by dividing (x) the product of the number of shares
of Common Stock underlying the Warrants, multiplied by the excess of the “Fair Market Value” (as defined below) over the Warrant
Price by (y) the Fair Market Value and (B) 0.361 per Warrant. Solely for purposes of this subsection 7.4.1, “Fair
Market Value” shall mean the average last reported sale price of the Common Stock as reported during the ten (10) trading day
period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants
or its securities broker or intermediary. The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively
determined by the Warrant Agent. In connection with the “cashless exercise” of a Public Warrant, the Company shall, upon request,
provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience)
stating that (i) the exercise of the Warrants on a cashless basis in accordance with this subsection 7.4.1 is not required
to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely tradable
under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under the Securities
Act (or any successor rule)) of the Company and, accordingly, shall not be required to bear a restrictive legend. Except as provided in
subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants have been exercised, the Company shall continue
to be obligated to comply with its registration obligations under the first three sentences of this subsection 7.4.1.
7.4.2 Cashless Exercise at
Company’s Option. If the Common Stock is at the time of any exercise of a Warrant not listed on a national securities exchange
such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act (or any
successor rule), the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise
such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor
rule) as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall (x) not be required
to file or maintain in effect a registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable
upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary, and (y) use its best efforts to register
or qualify the shares of Common Stock issuable upon exercise of the Public Warrant under the blue sky laws of the state of residence of
the exercising Public Warrant holder to the extent an exemption is not available.
8. Concerning the Warrant Agent and Other Matters.
8.1 Payment of Taxes.
The Company shall 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 the Warrants, but the Company shall not be obligated to pay
any transfer taxes in respect of the Warrants or such shares of Common Stock.
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 thirty (30) days after it has been notified
in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his
Warrant for inspection by the Company), then the 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 at the Company’s cost. 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 authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal or state authority. 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 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 Agreement without
any further act.
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 such Warrant Agent hereunder and shall, pursuant to
its obligations under this Agreement, 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 Agreement.
8.4 Liability of Warrant Agent.
8.4.1 Reliance on Company
Statement. Whenever in the performance of its duties under this 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, Secretary 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 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 save 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 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 Agreement or with respect to the validity or execution
of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not 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 Agreement
or any Warrant or as to whether any shares of Common Stock shall, 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 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 monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise
of the Warrants.
8.6 Waiver. The Warrant
Agent has no 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. The Warrant Agent hereby waives any and all Claims against
the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous Provisions.
9.1 Successors. All
the covenants and provisions of this 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 Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently
given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days
after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent),
as follows:
LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Attention: Anthony Natale
With a copy to (which shall not constitute notice):
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Attn: Ari Edelman
Edward P. Bromley, III
Any notice, statement or demand authorized by
this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given
when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, 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, NY 10004
Attention: Compliance Department
With a copy in each case to:
Skadden, Arps, Slate, Meagher & Flom
LLP
525 University Avenue, Suite 4000
Palo Alto, California 94301
Attn: Gregg A. Noel
Ann Beth Stebbins
and
RBC Capital Markets, LLC
200 Vesey Street
New York, New York 10281
Attn: Equity Syndicate
9.3 Applicable Law; Exclusive
Forum. The validity, interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by 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. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in
any way to this Agreement shall 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 forum for any such action, proceeding or claim. The Company
hereby waives any objection to such jurisdiction and that such courts represent an inconvenient forum. Notwithstanding the foregoing,
(i) 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, and (ii) unless
the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall, to the full extent permitted by law, be the exclusive form for the resolution of any complaint asserting a cause of action arising
under the Securities Act or the rules and regulations promulgated thereunder. 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.
9.4 Persons Having Rights
under this Agreement. Nothing in this Agreement 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 any right, remedy, or claim under or by reason of this Agreement or of any
covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained
in this 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 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 holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6 Counterparts.
This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7 Effect of Headings.
The section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
9.8 Amendments. This
Agreement may be amended by the parties hereto without the consent of any Registered Holder for the purpose of curing any ambiguity, or
curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to
matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely
affect the interest of the Registered Holders. All other modifications or amendments to the Public Warrants, including any amendment to
increase the Warrant Price or shorten the Exercise Period shall require the vote or written consent of the Registered Holders of at least
50% of the then outstanding Public Warrants. All other modifications or amendments to the Private Placement Warrants may be made by the
Company and Sponsor without the consent of any Registered Holders of the Private Placement Warrants. Notwithstanding the foregoing, the
Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively,
without the consent of the Registered Holders.
9.9 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 and be valid and enforceable.
Exhibit A Form of Warrant Certificate
Exhibit B Legend — Private Placement Warrants
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.
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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name:
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Anthony
Natale
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Title:
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Chief
Executive Officer
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CONTINENTAL STOCK
TRANSFER &
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TRUST COMPANY,
as Warrant Agent
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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 Certificate
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD PROVIDED
FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
LAVA MEDTECH ACQUISITION CORP.
Incorporated Under the Laws of the State of
Delaware
CUSIP 519345 110
Warrant Certificate
This
Warrant Certificate certifies that [__], or registered assigns, is the registered holder of warrant(s) evidenced hereby
(the “Warrants” and each, a “Warrant”) to purchase shares of Class A common stock,
$0.0001 par value per share (“Common Stock”), of LAVA Medtech Acquisition Corp., a Delaware corporation (the
“Company”). Each Warrant entitles the holder, upon exercise during the period set forth in the Warrant Agreement
referred to below, to receive from the Company that number of fully paid and non-assessable shares of Common Stock as set forth below,
at the exercise price (the “Exercise Price”) as determined pursuant to the Warrant Agreement, payable in lawful
money (or through “cashless exercise” as provided for in the Warrant Agreement) of the United States of America
upon surrender of this Warrant Certificate and payment of the Exercise Price at the office or agency of the Warrant Agent referred to
below, subject to the conditions set forth herein and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not
defined herein shall have the meanings given to them in the Warrant Agreement.
Each whole Warrant is initially
exercisable for one fully paid and non-assessable share of Common Stock. The number of shares of Common Stock issuable upon exercise of
the Warrants is subject to adjustment upon the occurrence of certain events set forth in the Warrant Agreement.
The initial Exercise Price
per share of Common Stock for any Warrant is equal to $11.50 per share. If, upon the exercise of Warrants, a holder would be entitled
to receive a fractional interest in a share of Common Stock, the Company will round down to the nearest whole number the number of shares
of Common Stock to be issued to the Warrant holder. The Exercise Price is subject to adjustment upon the occurrence of certain events
set forth in the Warrant Agreement.
Subject to the conditions
set forth in the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the
end of such Exercise Period, such Warrants shall become void. The Warrants may be redeemed, subject to certain conditions, as set forth
in the Warrant Agreement.
Reference is hereby made
to the further provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by
and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles thereof.
Form of Warrant Certificate
[Reverse]
The Warrants evidenced by
this Warrant Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common
Stock and are issued or to be issued pursuant to a Warrant Agreement dated as of [__], 2021 (the “Warrant Agreement”),
duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant
agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the holders (the words “holders” or “holder”
meaning the Registered Holders or Registered Holder) of the Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof
upon written request to the Company. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given
to them in the Warrant Agreement.
Warrants may be exercised
at any time during the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate
may exercise them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed
and executed, together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise”
as provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any exercise
of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced hereby, there
shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number of Warrants not exercised.
Notwithstanding anything
else in this Warrant Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration
statement covering the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus
thereunder relating to the shares of Common Stock is current, except through “cashless exercise” as provided for in the Warrant
Agreement.
The Warrant Agreement provides
that upon the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the
face hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to receive
a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to the nearest whole number of shares of
Common Stock to be issued to the holder of the Warrant.
Warrant Certificates, when
surrendered at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or 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 evidencing in the aggregate
a like number of Warrants.
Upon due presentation for registration of transfer
of this Warrant Certificate at the office 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 tax or other governmental charge imposed in connection
therewith.
The Company and the Warrant
Agent may deem and treat the Registered Holder(s) hereof 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
holder(s) hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably
elects to exercise the right, represented by this Warrant Certificate, to receive shares of Common Stock and herewith tenders payment
for such shares of Common Stock to the order of LAVA Medtech Acquisition Corp. (the “Company”) in the amount of $[__]
in accordance with the terms hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the
name of [__], whose address is [__] and that such shares of Common Stock be delivered to [__] whose address is [__]. If said number of
shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant
Certificate representing the remaining balance of such shares of Common Stock be registered in the name of [__], whose address is [__]
and that such Warrant Certificate be delivered to [__], whose address is [__].
In the event that the Warrant
is a Private Placement Warrant that is to be exercised on a “cashless” basis pursuant to subsection 3.3.1(c) of
the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be determined in accordance with
subsection 3.3.1(c) of the Warrant Agreement.
In the event that the Warrant
is to be exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares
of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the Warrant Agreement.
In the event that the Warrant
may be exercised, to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Common Stock
that this Warrant is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows
for such cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to
exercise the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive
shares of Common Stock. If said number of shares is less than all of the shares of Common Stock purchasable hereunder (after giving effect
to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining balance of such shares of
Common Stock be registered in the name of [__], whose address is [__] and that such Warrant Certificate be delivered to [__], whose address
is [__].
[Signature Page Follows]
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Date: [__], 2021
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(Signature)
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(Address)
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(Tax Identification Number)
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Signature Guaranteed:
THE SIGNATURE(S) SHOULD 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 (OR ANY SUCCESSOR RULE)).
EXHIBIT B
LEGEND
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER DESCRIBED IN THE LETTER
AGREEMENT BY AND AMONG LAVA MEDTECH ACQUISITION CORP. (THE “COMPANY”), LAVA MEDTECH SPONSOR LP AND THE OTHER PARTIES THERETO,
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE THAT IS THIRTY (30) DAYS AFTER THE
DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION 3 OF THE WARRANT AGREEMENT REFERRED
TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN WRITING WITH THE COMPANY
TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE AND SHARES
OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS UNDER A REGISTRATION
RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”
Exhibit 5.1
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Reed Smith LLP
599 Lexington Avenue
22nd Floor
New York, NY 10022
+1 212 521 5400
Fax +1 212 521 5450
reedsmith.com
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LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
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October 1, 2021
LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
RE: Form S-1 Registration Statement for LAVA Medtech Acquisition
Corp.
Ladies and Gentlemen,
We
have acted as counsel to LAVA Medtech Acquisition Corp., a Delaware corporation (the “Company”), in connection with
the Registration Statement on Form S-1 (File No. 333-[•]) (such registration statement, as amended through the
date hereof, the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”)
under the Securities Act of 1933, as amended (the “Securities Act”), relating to the offer and sale by the Company
(the “Offering”) of (a) up to 11,500,000 units of the Company (the “Units”) (including up
to 1,500,000 Units subject to the underwriters’ option to purchase additional Units), each such Unit consisting of one share of
Class A common stock of the Company, par value $0.0001 per share (the “Common Stock”), and one-half of one redeemable
warrant of the Company (each whole warrant, a “Warrant”), each Warrant exercisable for the purchase of one share of
Common Stock, as set forth in the prospectus included in the Registration Statement (the “Prospectus”), and (b) all
shares of Common Stock and all Warrants, in each case, issued as part of the Units, and (c) all shares of Common Stock underlying
the Warrants (the “Warrant Shares”).
This opinion letter is being furnished in accordance
with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
We have reviewed originals or copies of the Registration
Statement, the Prospectus, the certificate of incorporation and bylaws of the Company, as amended through the date hereof (the “Organizational
Documents”), the form of warrant agreement (the “Warrant Agreement”) proposed to be entered into by the
Company and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agent”) that is filed
as Exhibit 4.4 to the Registration Statement, and the form of Unit certificate filed as Exhibit 4.1 to the Registration Statement
(together with the Warrant Agreement the “Transaction Documents”), and such other corporate records, agreements and
documents of the Company, certificates or comparable documents of public officials and officers of the Company and have made such other
investigations as we have deemed necessary as a basis for the opinion set forth below.
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ABU
DHABI ¨ ATHENS
¨ AUSTIN
¨ BEIJING
¨ BRUSSELS
¨ CENTURY
CITY ¨ CHICAGO
¨ DALLAS
¨ DUBAI
¨ FRANKFURT
¨ HONG
KONG
HOUSTON ¨ KAZAKHSTAN
¨ LONDON
¨ LOS
ANGELES ¨ MIAMI
¨ MUNICH
¨ NEW
YORK ¨ PARIS
¨ PHILADELPHIA
¨ PITTSBURGH
¨ PRINCETON
RICHMOND ¨ SAN
FRANCISCO ¨ SHANGHAI
¨ SILICON
VALLEY ¨ SINGAPORE
¨ TYSONS
¨ WASHINGTON,
D.C. ¨ WILMINGTON
Cindy
Minniti ¨ Office
Administrative Partner ¨ A
Limited Liability Partnership formed in the State of Delaware
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October 1, 2021
Page 2
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In rendering the opinion set forth below, we
have assumed:
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a.
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the genuineness of all signatures;
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b.
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the legal capacity of natural persons;
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c.
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the authenticity of all documents submitted
to us as originals;
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d.
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the conformity to original documents
of all documents submitted to us as duplicates or conformed copies;
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e.
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as to matters of fact, the truthfulness
of the representations made in certificates or comparable documents of public officials
and officers of the Company;
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f.
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the board of directors of the Company
or a duly constituted and acting committee of such board of directors will have taken all
action necessary to set the public offering price of the Units;
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g.
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with respect to the issuance of the Common
Stock, the amount of valid consideration paid in respect of such Common Stock will equal
or exceed the par value of such Common Stock; and
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h.
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neither the execution and delivery by
the Company of the Transaction Documents nor the performance by the Company of its obligations
thereunder, including the issuance and sale of the Units, Warrants, and Warrant Shares (i) conflicts
or will conflict with the Organizational Documents, (ii) constitutes or will constitute
a violation of, or a default under, any lease, indenture, instrument or other agreement to
which the Company or its property is subject, (iii) contravenes or will contravene any
order or decree of any governmental authority to which the Company or its property is subject,
or (iv) violates or will violate any law, rule or regulation to which the Company
or its property is subject (except that we do not make the assumption set forth in this clause
(iv) with respect to the Opined-on Law (as defined below)).
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We have not independently established the validity
of the foregoing assumptions.
Based upon the foregoing, and subject to the
qualifications, assumptions and limitations stated herein, we are of the opinion that:
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1.
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The Units, when issued and sold by the
Company in the manner contemplated in the Registration Statement and Prospectus against payment
therefor, and assuming the due authorization, execution and delivery of the Units by Continental
Stock Transfer & Trust Company, as transfer agent, will constitute the legal, valid,
and binding obligations of the Company, enforceable against the Company in accordance with
their terms under the laws of the State of New York, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith, and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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2.
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The Common Stock included in the Units,
when the Units are issued and sold by the Company in the manner contemplated in the Registration
Statement and Prospectus, against payment therefor, will be validly issued, fully paid, and
non-assessable.
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October 1, 2021
Page 3
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3.
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The Warrants included in the Units, when
the Units are issued and sold by the Company in the manner contemplated in the Registration
Statement and Prospectus against payment therefor, and assuming the due authorization, execution
and delivery of such Warrants by the Warrant Agent, will constitute the legal, valid, and
binding obligations of the Company, enforceable against the Company in accordance with their
terms, under the laws of the State of New York, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
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4.
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The Common Stock issuable upon exercise
of the Warrants, assuming the due authorization, execution and delivery of such Warrants
by each of the Company and the Warrant Agent, in accordance with the Warrant Agreement, will
be validly issued, fully paid, and non-assessable.
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Our opinion is limited to the laws of the State
of New York and the General Corporation Law of the State of Delaware (collectively, the “Opined-on Law”) and we do
not express any opinion herein concerning any other law. This opinion letter speaks only as of its date.
We hereby consent to the filing of this opinion
letter as Exhibit 5.1 to the Registration Statement and to the use of our name under the caption “Legal Matters” in
the Prospectus. In giving such consent, we do not hereby admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act, and the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/REED SMITH LLP
Exhibit 10.1
THE
OFFER AND SALE OF THIS AMENDED AND RESTATED 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 COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
AMENDED AND RESTATED
PROMISSORY NOTE
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Principal Amount: Up to $300,000
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Dated as of September 30, 2021
New York, New York
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LAVA
Medtech Acquisition Corp., a Delaware corporation and blank check company (the “Maker”), promises to pay to the
order of LAVA Medtech Sponsor LP, a Delaware limited partnership or its registered assigns or successors in interest (together, the “Payee”),
the principal sum of up to Three Hundred Thousand Dollars ($300,000) (the “Maximum Amount”) 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 Maker, to such account as Payee may from time to time designate
by Notice (as defined in Section 9) to Maker in accordance with the provisions of this Note.
1. Principal.
The principal balance of this Note shall be payable by Maker on the earlier of: (i) December 31, 2021 (the “Maturity Date”)
or (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 Maker, be obligated personally for any obligations or liabilities of Maker hereunder.
2. Interest. No
interest shall accrue on the unpaid principal balance of this Note.
3. Drawdown Requests. Maker and Payee agree that Maker may request from the Payee or its affiliates up to the Maximum Amount
for costs reasonably related to Maker’s initial public offering of its securities. The principal of this Note may be drawn down
from time to time prior to the earlier of: (i) December 31, 2021 or (ii) the date on which Maker consummates an initial public offering
of its securities, upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request must
state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000), unless agreed upon by Maker and
Payee. Payee shall fund each Drawdown Request no later than five business days after receipt of a Drawdown Request; provided, however,
that the maximum amount of drawdowns collectively under this Note shall not exceed the Maximum Amount. Once an amount is drawn down under
this Note, such amount shall not be available for future Drawdown Requests, even if such amount is 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. Notwithstanding the foregoing, 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 attorneys’ fees, and second, to the reduction of the unpaid principal balance of this Note.
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, second, to the payment in full of any late charges,
and third, to the reduction of the unpaid principal balance of this Note.
5. Events
of Default. The following events shall constitute an event of default (“Event of Default”):
5.1 Failure
to Make Required Payments. The failure by Maker to pay the principal amount due pursuant to this Note within five business days of
the Maturity Date.
5.2 Voluntary
Bankruptcy, Etc. The: (a) commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization,
rehabilitation or other similar law; (b) consent by Maker to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Maker for any substantial part of its property, (c) making by Maker
of any assignment for the benefit of creditors; (d) the failure of Maker generally to pay its debts as such debts become due; or
(e) taking of any corporate action by Maker in furtherance of any of the foregoing events described in Section 5.2(a) –
Section 5.2(d).
5.3 Involuntary
Bankruptcy, Etc. The: (a)(i) 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, (ii) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or
(iii) the ordering of the winding-up or liquidation of Maker’s affairs; and (b) continuance of any such decree, appointment,
or order unstayed and in effect for a period of 60 consecutive days.
6. Remedies.
6.1 Upon
the occurrence of an Event of Default specified in Section 5.1, Payee may, by Notice to Maker, declare this Note to be due
immediately and payable by Maker, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become
immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived,
notwithstanding anything contained herein or in the documents evidencing the same to the contrary.
6.2 Upon
the occurrence of an Event of Default specified in Section 5.2 and Section 5.3, 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 by Maker, 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: (a) presentment for payment, demand, notice of
dishonor, protest, and notice of protest with regard to the Note; (b) all errors, defects and imperfections in any proceedings instituted
by Payee under the terms of this Note; and (c) all benefits that might accrue to Maker by virtue of any present or future laws (i) exempting
any property, real or personal, or any part of the proceeds arising from any sale of any such real or personal property, from attachment,
levy or sale under execution, or (ii) providing for any stay of execution, exemption from civil process, or extension of time for
payment. Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof or 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 Maker’s 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. Maker 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. Maker agrees that additional makers, endorsers, guarantors, or sureties may become parties
hereto without either any Notice to Maker or any bearing on Maker’s liability hereunder.
9. Notices.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a “Notice”) shall
be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address
that may be designated by the receiving party from time to time in accordance with this Section 9). A Notice shall be deemed
to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if
sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email (with confirmation
of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours
of the recipient; or (d) on the third day after the date mailed, by certified or registered mail (in each case, return receipt requested,
postage pre-paid). .
10. Construction. THIS
NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, 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, Payee hereby waives any and all right, title, interest or claim of any kind
(each, a “Claim”) in or to any distribution of or from the trust account to be established (the “Trust Account”),
in which the proceeds of both the (a) IPO (including the deferred underwriters discounts and commissions) and (b) sale of the
warrants to be issued in a private placement to occur at the closing of the IPO are to be deposited, as described in greater detail in
the Registration Statement on Form S-1 and prospectus to be filed with the Securities and Exchange Commission in connection with
the IPO. Payee 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 both Maker
and 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. Any attempted assignment without the required consent shall be
void.
15. Cancellation of Prior Promissory Note; Entire Agreement. The prior Promissory Note, dated March 31, 2021, from the Maker
to the Payee is hereby cancelled in its entirety, and replaced with this Note. This Note embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
[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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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name:
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Anthony Natale
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Title:
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Chief Executive Officer
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Accepted and agreed as of the date first written above.
LAVA MEDTECH SPONSOR LP
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By:
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LAVA Medtech Manager LL
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By:
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Name:
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Anthony Natale
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Title:
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Member
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[Signature Page to Amended and Restated Promissory
Note]
Exhibit 10.2
_____, 2021
LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
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Re:
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Initial Public Offering
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Ladies and Gentlemen:
This letter (this “Letter Agreement”)
is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”)
entered into by and among LAVA Medtech Acquisition Corp., a Delaware corporation (the “Company”), RBC Capital
Markets, LLC, as representative (the “Representative”) of the several underwriters (each, an “Underwriter”
and collectively, the “Underwriters”), relating to an underwritten initial public offering (the “Public Offering”),
of up to 11,500,000 of the Company’s units (including up to 1,500,000 units that may be purchased to cover over-allotments, if any)
(the “Units”), each comprised of one share of the Company’s Class A common stock, par value $0.0001
per share (the “Common Stock”), and one-half of one redeemable warrant. Each whole warrant
(each, a “Warrant”) entitles the holder thereof to purchase one share of Common Stock at a price of $11.50 per
share, subject to adjustment. The Units will be sold in the Public Offering pursuant to a registration statement on Form S-1 and
prospectus (the “Prospectus”) filed by the Company with the U.S. Securities and Exchange Commission (the “Commission”)
and the Company has applied to have the Units listed on The Nasdaq Capital Market. Certain capitalized terms used herein are defined in
paragraph 11 hereof.
In order to induce the Company and the Underwriters
to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each of LAVA Medtech Sponsor LP (the “Sponsor”) and the undersigned
individuals, each of whom is a member of the Company’s board of directors and/or management team (each, an “Insider”
and collectively, the “Insiders”), hereby agree with the Company as follows:
1. The Sponsor and each
Insider agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection with such proposed
Business Combination, it, he or she shall (i) vote any shares of Capital Stock (as defined below) owned by it, him or her in favor
of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in connection with such
stockholder approval. If the Company engages in a tender offer in connection with any proposed Business Combination, the Sponsor
and each Insider agrees that it, he or she will not seek to sell its, his or her shares of Capital Stock to the Company in connection
with such tender offer.
2. The Sponsor and each
Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within 18 months from the closing
of the Public Offering, or such later period approved by the Company’s stockholders in accordance with the Company’s amended
and restated certificate of incorporation (the “Charter”), the Sponsor and each Insider shall take all reasonable
steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem 100% of the Common Stock
sold as part of the Units in the Public Offering (the “Offering Shares”), at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account (as defined below), including interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest to
pay dissolution expenses), divided by the number of then outstanding Offering Shares, which redemption will completely extinguish all
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 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 other requirements of applicable law. The Sponsor and each Insider
agrees not to propose any amendment to the Charter to modify (i) the substance or timing of the ability of holders of Offering Shares
to seek redemption in connection with a Business Combination, (ii) certain amendments to the Charter prior to the completion of a
Business Combination or (iii) (A) the Company obligation to redeem 100% of the Offering Shares if the Company does not complete
a Business Combination within such time set forth in the Charter or (B) any other provisions relating to stockholders’ rights
or pre-initial Business Combination activity, unless the Company provides its 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 the Company
to pay its taxes, divided by the number of then outstanding Offering Shares.
The Sponsor and each Insider acknowledges that
it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the
Company as a result of any liquidation of the Company with respect to the Founder Shares held by it, him or her. The Sponsor and each
Insider hereby further waives, with respect to any shares of Common Stock held by it, him or her, if any, any redemption rights it, he
or she may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available
in the context of a stockholder vote to approve such Business Combination or a stockholder vote to approve an amendment to the Charter
to modify (i) the substance or timing of the ability of holders of Offering Shares to seek redemption in connection with a Business
Combination or (ii) (A) the Company’s obligation to redeem 100% of the Offering Shares if the Company does not complete
a Business Combination within such time set forth in the Charter or (B) any other provisions relating to stockholders’ rights
or pre-initial Business Combination activity, unless the Company provides its 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 the Company
to pay its taxes, divided by the number of then outstanding Offering Shares, or (iii) in the context of a tender offer made by the
Company to purchase shares of Common Stock (although the Sponsor, the Insiders and their respective affiliates shall be entitled to redemption
and liquidation rights with respect to any Offering Shares it or they hold if the Company fails to consummate a Business Combination within
the time period set forth in the Charter).
3. During the period
commencing on the date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider shall not, without
the prior written consent of the Representative, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and the rules and regulations of the Commission promulgated thereunder, with respect
to any Units, shares of Capital Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Capital
Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any
of the economic consequences of ownership of any Units, shares of Capital Stock, Warrants or any securities convertible into, or exercisable,
or exchangeable for, shares of Capital Stock owned by it, him or her, whether any such transaction is to be settled by delivery of such
securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or
(ii). Each of the Insiders and the Sponsor acknowledges and agrees that, prior to the effective date of any release or waiver, of the
restrictions set forth in this paragraph 3 or paragraph 7 below, the Company shall announce the impending release or waiver by press release
through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted
shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not
apply if the release or waiver is effected solely to permit a transfer not for consideration and the transferee has agreed in writing
to be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms remain in effect at
the time of the transfer.
4. In the event of the
liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination within the time period
set forth in the Charter, the Sponsor (the “Indemnitor”) agrees to indemnify and hold harmless the Company 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, whether pending or threatened) to which the Company
may become subject as a result of any claim by (i) any third party for services rendered or products sold to the Company or (ii) any
prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement
or Business Combination agreement (a “Target”); provided, however, that such indemnification of the
Company by the Indemnitor shall (x) apply only to the extent necessary to ensure that such claims by a third party or a Target do
not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.25 per Offering Share and (ii) the actual
amount per Offering Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.25 per Offering
Share is then held in the Trust Account due to reductions in the value of the trust assets, less interest earned on the Trust Account
which may be withdrawn to pay taxes, (y) not apply to any claims by a third party or a Target which executed a waiver of any and
all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) and (z) not apply to any claims under
the Company’s indemnity of the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933,
as amended. The Indemnitor shall have the right to defend against any such claim with counsel of its choice reasonably satisfactory to
the Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the Indemnitor notifies the Company
in writing that it shall undertake such defense.
5. To the extent that
the Underwriters do not exercise their over-allotment option to purchase up to an additional 1,500,000 Units in full within 45 days from
the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number of Founder
Shares in the aggregate equal to 375,000 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. The
Sponsor will be required to forfeit only that number of Founder Shares as is necessary so that the Initial Stockholders will own an aggregate
of 20.0% of the Company’s issued and outstanding shares of Capital Stock after the Public Offering.
6. (a) The Underwriters
acknowledge that each Insider may become an officer or director of another special purpose acquisition company with a class of securities
intended to be registered under the Exchange Act, even before the Company has entered into a definitive agreement regarding an initial
Business Combination.
(b) The Sponsor and each
Insider hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured in the event of a
breach by such Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), 7(b), and 9, as applicable,
of this Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party
shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of
such breach.
7. (a) The Sponsor
and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or shares of Common Stock issuable upon conversion thereof)
until the earlier of (A) one year after the completion of the Company’s initial Business Combination or (B) subsequent
to the Business Combination, (x) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock
splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 120 days after the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation,
merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having
the right to exchange their shares of Common Stock for cash, securities or other property (the “Founder Shares Lock-up Period”).
(b) The Sponsor and each
Insider agrees that it, he or she shall not Transfer any Private Placement Warrants (or shares of Common Stock issued or issuable upon
the exercise of the Private Placement Warrants), until 30 days after the completion of a Business Combination (the “Private Placement Warrants Lock-up Period”,
together with the Founder Shares Lock-up Period, the “Lock-up Periods”).
(c) Notwithstanding the
provisions set forth in paragraphs 7(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and shares of Common
Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants or the Founder Shares and that are held by
the Sponsor, any Insider or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (a) to
the Company’s officers or directors, any affiliate or family member of any of the Company’s officers or directors or any affiliate
of the Sponsor or to any member(s) of the Sponsor or any of their affiliates; (b) in the case of an individual, by gift to a
member of such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate
family, an affiliate of such individual or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent
and distribution upon death of such 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 the Company’s liquidation prior
to the completion of an initial Business Combination; (g) by virtue of the laws of the State of Delaware or the Sponsor’s limited
liability company agreement upon dissolution of the Sponsor or (h) in the event of our liquidation, merger , capital stock exchange,
reorganization 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 subsequent to our completion of our initial business combination; provided, however,
that in the case of clauses (a) through (e) or (g), these permitted transferees must enter into a written agreement with the
Company agreeing to be bound by the transfer restrictions herein.
8. The Sponsor and each
Insider represents and warrants that it, he or she has never been suspended or expelled from membership in any securities or commodities
exchange or association or had a securities or commodities license or registration denied, suspended or revoked. Each Insider’s
biographical information furnished to the Company (including any such information included in the Prospectus) is true and accurate in
all respects and does not omit any material information with respect to the Insider’s background. Each Insider’s questionnaire
furnished to the Company is true and accurate in all respects. Each Insider represents and warrants that: it, he or she is not subject
to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any
act or practice relating to the offering of securities in any jurisdiction; it, he or she has never been convicted of, or pleaded guilty
to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining
to any dealings in any securities and it, he or she is not currently a defendant in any such criminal proceeding.
9. Except as disclosed
in the Prospectus, neither the Sponsor nor any officer, nor any affiliate of the Sponsor or any officer, nor any director of the Company,
shall receive from the Company any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or
other compensation prior to, or in connection with any services rendered in order to effectuate, the consummation of the Company’s
initial Business Combination (regardless of the type of transaction that it is) .
10. The Sponsor and
each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation, any non-competition
or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and, as applicable, to serve
as an officer and/or director on the board of directors of the Company and hereby consents to being named in the Prospectus as an officer
and/or director of the Company.
11. As used
herein, (i) “Business Combination” shall mean a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses;
(ii) “Capital Stock” shall mean, collectively, the Common Stock and the Founder
Shares; (iii) “Founder Shares” shall mean (a) the 2,875,000 shares of the
Company’s Class B common stock, par value $0.0001 per share, initially issued to the Sponsor (up to 375,000 Shares of
which are subject to complete or partial forfeiture by the Sponsor if the over-allotment option is not exercised by the
Underwriters) for an aggregate purchase price of $25,000, or $0.009 per share, prior to the consummation of the Public Offering;
(iv) “Initial Stockholders” shall mean the Sponsor and any Insider that holds
Founder Shares; (v) “Private Placement Warrants” shall mean the
Warrants to purchase up to 7,500,000 shares of Common Stock of the Company (up to 8,175,000 if the over-allotment option is
exercised in full) that the Sponsor has agreed to purchase for an aggregate purchase price of $7,500,000 in the aggregate (up to
$8,175,000 if the over-allotment option is exercised in full), or $1.00 per Warrant, in a private placement that shall occur
simultaneously with the consummation of the Public Offering;
(vi) “Public Stockholders” shall mean the holders of securities issued in the
Public Offering; (vii) “Trust Account” shall mean the trust fund into which a
portion of the net proceeds of the Public Offering shall be deposited; and (viii) “Transfer” shall
mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or
otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position
or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act,
and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any
security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public
announcement of any intention to effect any transaction specified in clause (a) or (b).
12. The Company will
maintain an insurance policy or policies providing directors’ and officers’ liability insurance, and each officer and director
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 of the Company’s directors or officers.
13. This Letter Agreement
constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof 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 changed, amended, modified or waived
(other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.
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 parties. 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 Sponsor and each Insider and
their respective successors, heirs and assigns and permitted transferees.
15. Nothing in this
Letter Agreement shall be construed to confer upon, or give to, any person or corporation 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.
16. This Letter Agreement
may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and the same instrument.
17. This Letter 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 Letter 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 Letter Agreement a provision as similar in terms to such invalid
or unenforceable provision as may be possible and be valid and enforceable.
18. This Letter 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. The parties hereto (i) all
agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought
and enforced in the courts of New York City, in the State of New York, and irrevocably submit to such jurisdiction and venue, which jurisdiction
and venue shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and venue or that such courts represent
an inconvenient forum.
19. 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 facsimile transmission.
20. This Letter Agreement
shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the Company; provided,
however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated and closed by December 31,
2021; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.
21. The Company, the
Sponsor and each Insider hereby acknowledges and agrees that the Representative on behalf of the Underwriters is a third party beneficiary
of this Letter Agreement.
[Signature Page Follows]
Sincerely,
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LAVE MEDTECH SPONSOR LP
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By:
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LAVA Medtech Manager LLC
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Its:
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General Partner
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By:
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Name:
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Anthony Natale
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Title:
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Member
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Acknowledged and Agreed:
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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name:
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Anthony Natale
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Title:
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Chief Executive Officer
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[Signature Page to Letter Agreement]
Exhibit 10.3
FORM OF INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management
Trust Agreement (this “Agreement”) is made effective as of [ ], 2021, by and between LAVA Medtech Acquisition
Corp., a Delaware corporation (the “Company”), and Continental Stock Transfer & Trust Company, a New
York corporation (the “Trustee”).
WHEREAS,
the Company’s registration statement on Form S-1, File No. [____________] (the “Registration Statement”)
and prospectus (the “Prospectus”) for the initial public offering of the Company’s units (the “Units”),
each of which consists of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Common
Stock”), and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of
Common Stock (such initial public offering hereinafter referred to as the “Offering”), has been declared effective as of the
date hereof by the U.S. Securities and Exchange Commission; and
WHEREAS,
the Company has entered into an Underwriting Agreement (the “Underwriting Agreement”) with RBC Capital Markets,
LLC as representative (the “Representative”) of the several underwriters (the “Underwriters”)
named therein; and
WHEREAS,
as described in the Prospectus, $7,500,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined
in the Underwriting Agreement) (or $8,175,000, if the Underwriters’ over-allotment option is exercised in full) will be delivered
to the Trustee to be deposited and held in a segregated trust account located at all times in the United States (the “Trust
Account”) for the benefit of the Company and the holders of the Common Stock included in the Units issued in the Offering
as hereinafter provided (the amount to be delivered to the Trustee (and any interest subsequently earned thereon) is 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”);
WHEREAS,
pursuant to the Underwriting Agreement, a portion of the Property equal to $[__________], or $[_____________] if the Underwriters’
over-allotment option is exercised in full, is attributable to deferred underwriting discounts and commissions that will be payable by
the Company to the Representative upon and concurrently with the consummation of the Business Combination (as defined below) (the “Deferred
Discount”); 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.
NOW 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 the Trust Account established by the Trustee in the United
States Morgan Stanley 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 written instruction of the Company, invest and reinvest the Property solely in United States government securities within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less, or in money
market funds meeting the conditions of Rule 2a-7(d) promulgated under the Investment Company Act of 1940, as amended (or any
successor rule), which invest only in direct U.S. government treasury obligations, as determined by the Company; it being understood that
the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder and the
Trustee may earn bank credits or other consideration;
(d) Collect and receive,
when due, all interest or other income arising from the Property, which shall become part of the “Property,”
as such term is used herein;
(e) Promptly notify
the Company and the Representative of all communications received by the Trustee 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;
(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;
(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 Chief Executive Officer, Chief Financial Officer, President,
Executive Vice President, Vice President, Secretary or Chairman of the board of directors of the Company (the “Board”)
or other authorized officer of the Company, and, in the case of a Termination Letter in a form substantially similar to the attached hereto
as Exhibit A, jointly signed by the Representative, 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 (less up to $100,000 of interest that
may be released to the Company to pay dissolution expenses), only as directed in the Termination Letter and the other documents referred
to therein, or (y) the date which is the later of (1) 18 months after the closing of the Offering 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 (less up to $100,000 of interest that may be released to the
Company to pay dissolution expenses) shall be distributed to the Public Stockholders of record as of such date; and provided, however,
that in the event the Trustee receives a Termination Letter in a form substantially similar to Exhibit B hereto, or if the
Trustee begins to liquidate the Property because it has received no such Termination Letter by the date specified in clause (y) of
this Section 1(i), the Trustee shall keep the Trust Account open until twelve (12) months following the date the Property
has been distributed to the Public Stockholders. Other than what is provided for in Section 1(k), it is acknowledged and agreed
that there should be no reduction in the principal amount initially deposited in the Trust Account;
(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 C,
withdraw from the Trust Account and distribute to the Company the amount of interest earned on the Property requested by the Company to
cover any tax obligation owed by the Company as a result of assets of the Company or interest or other income earned on the Property,
which amount shall be delivered directly to the Company by electronic funds transfer or other method of prompt payment, and the Company
shall forward such payment to the relevant taxing authority; provided, however, that to the extent there is not sufficient
cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust Account as shall be designated
by the Company in writing to make such distribution, so long as there is no reduction in the principal amount initially deposited in the
Trust Account; provided, further, that if the tax to be paid is a franchise tax, the written request by the Company to make
such distribution shall be accompanied by a copy of the franchise tax bill from the State of Delaware for the Company (it being acknowledged
and agreed that any such amount in excess of interest income earned on the Property shall not be payable from the Trust Account). The
written request of the Company referenced above shall constitute presumptive evidence that the Company is entitled to said funds, and
the Trustee shall have no responsibility to look beyond said request;
(k) 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,
the Trustee shall distribute on behalf of the Company the amount requested by the Company to be used to redeem shares of Common Stock
from Public Stockholders properly submitted in connection with a stockholder vote to approve an amendment to the Company’s amended
and restated certificate of incorporation to modify the substance or timing of the ability of Public Stockholders to seek redemption in
connection with an initial Business Combination or the Company’s obligation to redeem 100% of its public shares of Common Stock
if the Company has not consummated an initial Business Combination within such time as is described in clause (y) of Section 1(i) of
the Agreement. 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; and
(l) Not make any withdrawals
or distributions from the Trust Account other than pursuant to Section 1(i), (j) or (k) above.
2. 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 Chairman of the Board, Chief Executive Officer, Chief Financial Officer,
President, Executive Vice President, Vice President or Secretary. In addition, except with respect to its duties under Sections 1(i),
1(j) and 1(k) hereof, 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 and with reasonable care, 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 Section 4
hereof, hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and
disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and in connection with any 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 interest earned on the Property,
except for expenses and losses resulting from the Trustee’s gross negligence, fraud 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 Section 2(b), 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 such consent shall not be unreasonably withheld. The Company may participate in such action with its own
counsel;
(c) Pay the Trustee
the fees set forth on Schedule A hereto, including an initial acceptance fee, annual administration fee, and transaction processing
fee 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 unless and until the closing of the Business Combination (defined below). The Company shall pay the Trustee the
initial acceptance fee and the first annual administration fee at the consummation of the Offering. The Trustee shall refund to the Company
the annual administration fee (on a pro rata basis) with respect to any period after the liquidation of the Trust Account. The Company
shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section 2(c), Schedule
A and as may be provided in Section 2(b) hereof;
(d) In connection with
any vote of the Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote of such
stockholders regarding such Business Combination;
(e) Provide the Representative
with a copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with respect to any proposed
withdrawal from the Trust Account promptly after it issues the same;
(f) Unless otherwise
agreed between the Company and the Representative, ensure that any Instruction Letter (as defined in Exhibit A) delivered
in connection with a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount is paid directly
to the account or accounts directed by the Representative prior to any transfer of the funds held in the Trust Account to the Company
or any other person;
(g) Instruct the Trustee
to make only those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make any distributions
that are not permitted under this Agreement; and
(h) Within four (4) business
days after the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such over-allotment expires, provide
the Trustee with a notice in writing of the total amount of the Deferred Discount, which shall in no event be less than $[___________].
3. Limitations of Liability.
The Trustee shall have no responsibility or liability to:
(a) 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;
(b) Take any action
with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability to any third
party except for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) 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;
(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 Trustee’s best judgment, except for the Trustee’s gross negligence, fraud 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, which counsel may be the Company’s counsel), 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 the Trustee believes, in good faith and with reasonable care, 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 accuracy
of the information contained in the Registration Statement;
(h) Provide any assurance
that any Business Combination entered into by the Company or any other action taken by the Company is as contemplated by the Registration
Statement;
(i) File information
returns with respect to the Trust Account with any local, state or federal taxing authority or provide periodic written statements to
the Company documenting the taxes payable by the Company, if any, relating to any interest income earned on the Property;
(j) Prepare, execute
and file tax reports, income or other tax returns and pay any taxes with respect to any income generated by, and activities relating to,
the Trust Account, regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited to, franchise
and income tax obligations, except pursuant to Section 1(j) hereof; or
(k) Verify calculations,
qualify or otherwise approve the Company’s written requests for distributions pursuant to Sections 1(i), 1(j) or
1(k) hereof.
4. 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 2(b) or Section 2(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.
5. 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, pending which the Trustee shall continue to act in accordance with this Agreement. At such time that the Company notifies
the Trustee that a successor trustee has been appointed 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 (90) 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 and its obligations in accordance with the provisions of Section 1(i) hereof
and distributed the Property in accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect
to Section 2(b).
6. 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 confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee shall
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. Except for any liability arising out of the Trustee’s
gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense resulting from any error
in the information or transmission of the funds.
(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. This Agreement 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. This Agreement or any provision
hereof may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties
hereto; provided, however, that no such change, amendment or modification to Section 1(i), 2(f) or Exhibit A
may be made without the prior written consent of the Representative.
(d) This Agreement or
any provision hereof may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent of the
Stockholders. For purposes of this Section 6(d), the “Consent of the Stockholders” means receipt
by the Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that the Company’s stockholders
of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law, as amended
(“DGCL”) (or any successor rule), who hold sixty-five percent (65%) or more of all then outstanding shares of
the Common Stock and Class B common stock, par value $0.0001 per share, of the Company voting together as a single class, have voted
in favor of such change, amendment or modification. No such amendment will affect any Public Stockholder who has otherwise indicated his
election to redeem his shares of Common Stock in connection with a stockholder vote sought to amend this Agreement to modify the substance
or timing of the Company’s obligation to redeem 100% of the Common Stock if the Company does not complete its initial Business Combination
within the time frame specified in the Company’s amended and restated certificate of incorporation. Except for any liability arising
out of the Trustee’s gross negligence, fraud or willful misconduct, the Trustee may rely conclusively on the certification from
the inspector or elections referenced above and shall be relieved of all liability to any party for executing the proposed amendment in
reliance thereon.
(e) The parties hereto
consent to the jurisdiction and venue of any state or federal court located in the City of New York, State of New York, for purposes of
resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY WAIVES
THE RIGHT TO TRIAL BY JURY.
(f) 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 or by electronic mail:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attn: Francis Wolf and Celeste Gonzalez
Email: fwolf@continentalstock.com
cgonzalez@continentalstock.com
if to the Company, to:
LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Attn: Anthony Natale
Email: Tony@aperturevp.com
in each case, with copies to:
Reed Smith LLP
599 Lexington Avenue
New York, NY 10022
Attn: Ari Edelman, Esq. and Edward P. Bromley, III, Esq.
Email: aedelman@reedsmith.com; ebromley@reedsmith.com@reedsmith.com
Skadden, Arps, Slate, Meagher & Flom
LLP
525 University Avenue, Suite 1400
Palo Alto, CA 94301
Attn: Gregg A. Noel, Esq. and Ann Beth Stebbins, Esq.
Email: AnnBeth.Stebbins@skadden.com; Gregg.Noel@skadden.com
and
RBC Capital Markets, LLC [______________]
(g) Each of the Company
and the Trustee 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. The Trustee acknowledges and agrees that it shall not make any claims or
proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust Account under any
circumstance.
(h) This Agreement is
the joint product of the Trustee and the Company and each provision hereof has been subject to the mutual consultation, negotiation and
agreement of such parties and shall not be construed for or against any party hereto.
(i) This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute
valid and sufficient delivery thereof.
(j) Each of the Company
and the Trustee hereby acknowledges and agrees that RBC Capital Markets, LLC on behalf of the Underwriters is a third party beneficiary
of this Agreement.
(k) Except as specified
herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.
[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:
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Title:
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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name: Anthony Natale
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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 set-up fee.
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Initial closing of Offering by wire transfer.
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$
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3,500
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Trustee administration fee
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Payable annually. First year fee payable, at initial closing of Offering by wire transfer, thereafter by wire transfer or check.
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$
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10,000
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Transaction processing fee for disbursements to Company under Sections 1(i), (j) and (k)
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Billed to Company following disbursement made to Company under Section 1
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$
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250
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Paying Agent services as required pursuant to Sections 1(i) and 1(k)
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Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k)
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Prevailing rates
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[Signature Page to Investment Management
Trust Agreement]
EXHIBIT A
[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
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Re:
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Trust Account No. Termination Letter
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Ladies and Gentlemen:
Pursuant to Section 1(i) of the
Investment Management Trust Agreement between LAVA Medtech Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [ ], 2021 (the “Trust Agreement”),
this is to advise you that the Company has entered into an agreement with (the “Target Business”) to consummate
a business combination with Target Business (the “Business Combination”) on or about [insert date]. The Company
shall notify you at least seventy-two (72) hours in advance of the actual date of the consummation of the Business Combination (the “Consummation
Date”). Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust Agreement,
we hereby authorize you to commence to liquidate all of the assets of the Trust Account, and to transfer the proceeds to a segregated
account held by you on behalf of the Beneficiaries to the effect that, on the Consummation Date, all of the 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 (including
as directed to it by the Representative on behalf of the Underwriters (with respect to the Deferred Discount)). It is acknowledged and
agreed that while the funds are on deposit in the trust operating account at Morgan Stanley. 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, or will be consummated concurrently
with your transfer of funds to the accounts as directed by the Company (the “Notification”) and (ii) the
Company shall deliver to you (a) a certificate of the Chief Executive Officer, which verifies that the Business Combination has been
approved by a vote of the Company’s stockholders, if a vote is held and (b) a joint written instruction signed by the Company
and the Representative with respect to the transfer of the funds held in the Trust Account, including payment of amounts owed to public
stockholders who have properly exercised their redemption rights and payment of the Deferred Discount to the Representative from the Trust
Account (the “Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the
Trust Account immediately upon your receipt of the Notification and the Instruction Letter, (x) to the Representative in an amount
equal to the Deferred Discount as directed by the Representative and (y) the remainder 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 in writing of the same and the Company shall direct you as to whether such funds should remain in the Trust Account
and be distributed after the Consummation Date to the Company. Upon the distribution of all the funds, net of any payments necessary for
reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under 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 Section 1(c) of the Trust Agreement on the business day immediately following
the Consummation Date as set forth in such notice as soon thereafter as possible.
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Very truly yours,
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LAVA Medtech Acquisition Corp.
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By:
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Name:
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Acknowledged and Agreed by:
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Title:
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RBC Capital Markets, LLC
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By:
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Name:
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Title:
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[Signature Page to Investment Management
Trust Agreement]
EXHIBIT B
[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
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Re:
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Trust Account No. Termination Letter
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Ladies and Gentlemen:
Pursuant to Section 1(i) of the
Investment Management Trust Agreement between LAVA Medtech Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of [ ], 2021 (the “Trust Agreement”),
this is to advise you that the Company has been unable to effect a business combination with a Target Business (the “Business
Combination”) within the time frame specified in Section 1(i) of the Trust Agreement. Capitalized terms
used but not defined herein 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 of the assets in the Trust Account and to transfer the total proceeds into a segregated account
held by you on behalf of the Beneficiaries to await distribution to the Public Stockholders. The Company has selected (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. You agree to be the Paying Agent of record and, in your separate capacity as Paying Agent, agree to distribute said funds directly
to the Company’s 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, net of any payments necessary for reasonable unreimbursed expenses
related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise
provided in Section 1(j) of the Trust Agreement.
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(1)
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18 months from the closing of the Offering, or at a later date, if extended.
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Very truly yours,
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LAVA Medtech Acquisition Corp.
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By:
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Name:
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Title:
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cc:
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RBC Capital Markets, LLC
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[Signature Page to Investment Management
Trust Agreement]
EXHIBIT C
[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
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Re:
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Trust Account No. Withdrawal Instruction
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Ladies and Gentlemen:
Pursuant to Section 1(j) of the
Investment Management Trust Agreement between LAVA Medtech Acquisition Corp. (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 Company $ [__] of the interest income earned on the Property as of the date hereof.
Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay for the tax
obligations as set forth on the attached tax return or tax statement. 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 a segregated account held
by you on behalf of the Beneficiaries:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours,
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LAVA Medtech Acquisition Corp.
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By:
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Name:
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Title:
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cc:
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RBC Capital Markets, LLC
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[Signature Page to Investment Management
Trust Agreement]
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
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Re:
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Trust Account No. Stockholder Redemption Withdrawal Instruction
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Gentlemen:
Pursuant to Section 1(k) of the
Investment Management Trust Agreement between LAVA Medtech Acquisition Corp. (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 Stockholders who have requested redemption of their 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 modify the substance or timing of
the Company’s obligation to redeem 100% of public shares of Common Stock if the Company has not consummated an initial Business
Combination within such time as is described in Section 1(i) of the Trust Agreement. As such, you are hereby directed
and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to a segregated account held by you
on behalf of the Beneficiaries.
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Very truly yours,
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LAVA Medtech Acquisition Corp.
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By:
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Name:
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Title:
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Cc:
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RBC Capital Markets, LLC
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[Signature Page to Investment Management
Trust Agreement]
Exhibit 10.5
LAVA MEDTECH ACQUISITION CORP.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
March 31, 2021
LAVA Medtech Sponsor LP
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
RE: Securities Subscription Agreement
Ladies and Gentlemen:
This agreement (the “Agreement”)
is entered into on March 31, 2021 by and between LAVA Medtech Sponsor LP, a Delaware limited partnership (the “Subscriber”
or “you”), and LAVA Medtech Acquisition Corp., a Delaware corporation (the “Company”, “we”
or “us”). Pursuant to the terms hereof, the Company hereby accepts the offer the Subscriber has made to purchase 2,875,000
shares (the “Shares”) of Class B common stock, $0.0001 par value per share (the “Class B Common
Stock”) up to 375,000 of which are subject to forfeiture by you if the underwriters of the initial public offering (“IPO”)
of units of the Company (the “Units”), do not fully exercise their over-allotment option (the “Over-allotment
Option”). The Company and the Subscriber’s agreements regarding such Shares are as follows:
1. Purchase
of Shares. For the sum of $25,000, which the Company acknowledges receiving in cash, the Company hereby issues the Shares to the Subscriber,
and the Subscriber hereby purchases the Shares from the Company, subject to forfeiture, on the terms and subject to the conditions set
forth in this Agreement. Concurrently with the Subscriber’s execution of this Agreement, the
Company shall, at its option, deliver to the Subscriber a certificate registered in the Subscriber’s name representing the Shares
(the “Original Certificate”), or effect such delivery in book-entry form.
2. Representations,
Warranties, and Agreements.
2.1 Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby represents
and warrants to the Company and agrees with the Company as follows:
2.1.1 No
Government Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any recommendation
or endorsement of the offering of the Shares.
2.1.2 No
Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions contemplated
hereby do not violate, conflict with or constitute a default under (a) the formation and governing documents of the Subscriber, (b) any
agreement, indenture or instrument to which the Subscriber is a party, or (c) any law, statute, rule or regulation to which
the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.
2.1.3 Organization
and Authority. The Subscriber is a Delaware limited liability company, validly existing and in good standing under the laws of Delaware
and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution
and delivery by you, this Agreement is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).
2.1.4 Experience,
Financial Capability and Suitability.
(a) Subscriber
is: (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Shares and (ii) able
to bear the economic risk of its investment in the Shares for an indefinite period of time because the Shares have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”) and therefore cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is available. Subscriber is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its own interests.
(b) Subscriber
must bear the economic risk of this investment until the Shares are sold pursuant to: (i) an effective registration statement under
the Securities Act or (ii) an exemption from registration available with respect to such sale. Subscriber is able to bear the economic
risks of an investment in the Shares and to afford a complete loss of Subscriber’s investment in the Shares.
2.1.5 Access
to Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity to ask
questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances,
operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all
information so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s own knowledge
and understanding of the Company and its business based upon Subscriber’s own due diligence investigation and the information furnished
pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information or to make any representations
which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations or information
in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.
2.1.6 Regulation
D Offering. Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act and acknowledges the sale contemplated hereby is being made in reliance on a private
placement exemption to “accredited investors” within the meaning of Section 501(a) of Regulation D promulgated under
the Securities Act or similar exemptions under state law.
2.1.7 Investment
Purposes. The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s own account and not for
the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The Subscriber did
not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D promulgated under the Securities Act.
2.1.8 Restrictions
on Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not involving a public offering within
the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within the meaning of
section (a)(3) of Rule 144 promulgated under the Securities Act (“Rule 144”), and Subscriber understands
that the Certificates (as defined in Section 3.3) or book-entries representing the Shares will contain a legend in respect
of such restrictions. If in the future the Subscriber decides to offer, resell, pledge or otherwise transfer the Shares, such Shares may
be offered, resold, pledged or otherwise transferred only pursuant to (a) registration under the Securities Act covering such offer,
resale, pledge or other transaction or (b) an available exemption from registration. Subscriber agrees that if any transfer of its
Shares or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver
to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not to resell
the Shares. Subscriber further acknowledges that because the Company is a shell company, Subscriber may not be able to rely on Rule 144
promulgated under the Securities Act with respect to the resale of the Shares until one year following consummation of the initial business
combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual
transfer restrictions.
2.1.9 No
Governmental Consents. No governmental, administrative or other third-party consents or approvals are required, necessary or appropriate
on the part of Subscriber in connection with the transactions contemplated by this Agreement.
2.2 Company’s
Representations, Warranties and Agreements. To induce the Subscriber to purchase the Shares, the Company hereby represents and warrants
to the Subscriber and agrees with the Subscriber as follows:
2.2.1 Organization
and Corporate Power. The Company is a Delaware corporation and is qualified to do business in every jurisdiction in which the failure
to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating results or assets of
the Company. The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by
this Agreement.
2.2.2 No
Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated
hereby do not violate, conflict with or constitute a default under (a) the certificate of incorporation or by-laws of the Company,
(b) any agreement, indenture or instrument to which the Company is a party, or (c) any law, statute, rule or regulation
to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject.
2.2.3 Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Shares will be duly and validly issued,
fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Subscriber will have or
receive good title to the Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a) transfer restrictions
hereunder and other agreements to which the Shares may be subject which have been notified to the Subscriber in writing, (b) transfer
restrictions under federal and state securities laws, and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.
2.2.4 No
Adverse Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company that:
(a) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement or
(b) question the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection with
any transactions.
3. Forfeiture
of Shares.
3.1 Partial
or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the underwriters of the IPO is not
exercised in full, the Subscriber acknowledges and agrees that it (or, if applicable, it and any transferees of the Shares (such transferees,
the “Initial Stockholders”)) shall forfeit any and all rights to such number of Shares (up to an aggregate of 375,000
Shares, pro rata based upon the percentage of the Over-allotment Option exercised) such that immediately following such forfeiture,
the Subscriber (and all other Initial Stockholders prior to the IPO, if any) will own an aggregate number of Shares (not including any
Shares issuable upon exercise of any warrants or any shares of Class A common stock, par value $0.0001 per share (the “Class A
Common Stock”, together with the Class B Common Stock, the “Common Stock”) purchased by Subscriber or
any other Initial Stockholder in the IPO or in the aftermarket) equal to 20% of the issued and outstanding Shares immediately following
the IPO.
3.2 Termination
of Rights as Stockholder. If any of the Shares are forfeited in accordance with this Section 3, then after such time the
Subscriber (or Initial Stockholder or other successor in interest), shall no longer have any rights as a holder of such forfeited Shares,
and the Company shall take such action as is appropriate to cancel such forfeited Shares.
3.3 Share
Certificates. In the event an adjustment to the original certificates representing the Shares
(the “Original Certificates”), if any, is required pursuant to this Section 3,
then the Subscriber shall return such Original Certificates to the Company or its designated agent as soon as practicable upon its receipt
of Notice (as defined in Section 6.2) from the Company advising Subscriber of such adjustment, following which a new certificate
representing the Shares (the “New Certificate” and together with the Original Certificates, the “Certificates”),
if any, shall be issued in such amount representing the adjusted number of Shares held by the Subscriber. The New Certificate, if any,
shall be returned to the Subscriber as soon as practicable. Any such adjustment for any uncertificated securities held by the Subscriber
shall be made in book-entry form.
4. Waiver
of Liquidation Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber
hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust account,
which will be established for the benefit of the Company’s public stockholders and into which substantially all of the proceeds
of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the Company upon the Company’s
failure to timely complete an initial business combination. For purposes of clarity, in the event the Subscriber purchases Units in the
IPO or shares of Class A Common Stock in the aftermarket, any additional shares of Class A Common Stock included in the Units
or shares of Class A Common Stock so purchased shall be eligible to receive any liquidating distributions by the Company. However,
in no event will the Subscriber have the right to redeem any Shares into funds held in the Trust Account upon the successful completion
of an initial business combination.
5. Restrictions
on Transfer.
5.1 Securities
Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly known as an “Insider
Letter”) by and between Subscriber and the Company to be dated as of the closing of the IPO, Subscriber agrees not to sell,
transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless, prior thereto (a) a registration statement
on the appropriate form under the Securities Act and applicable state securities laws with respect to the offer and sale of the Shares
proposed to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory
to the Company, that such registration is not required because such transaction is exempt from registration (i) under the Securities
Act and the rules promulgated thereunder by the Securities and Exchange Commission and (ii) with respect to all applicable state
securities laws.
5.2 Lock-up.
Subscriber acknowledges that the Shares will be subject to lock-up provisions (the “Lock-up”) contained in the Insider
Letter.
5.3 Restrictive
Legends. Any Certificates shall have endorsed thereon legends substantially as follows:
“THE OFFER AND SALE OF THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH OFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSAL UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE.”
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.”
5.4 Additional
Shares or Substituted Securities. In the event of the declaration of a share dividend, the declaration of an extraordinary dividend
payable in a form other than Common Stock, a spin-off, a share split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding shares of Common Stock without receipt of consideration, any new, substituted or
additional securities or other property, which are by reason of such transaction distributed with respect to any Shares subject to this
Section 5 or into which such Shares thereby become convertible shall immediately be subject to this Section 5
and Section 3. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number
or class of Shares subject to this Section 5 and Section 3.
5.5 Registration
Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements of
the Securities Act and will become freely-tradable only after certain conditions are met or the offer and sale of the Shares is registered
under the Securities Act pursuant to that certain registration rights agreement to be dated as of the closing of the IPO by and between
Subscriber, the Company, and the other parties thereto (the “Registration Rights Agreement”) prior to the closing of
the IPO.
6. Other
Agreements.
6.1 Further
Assurances. Subscriber agrees to execute such further instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Agreement.
6.2 Notices.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a “Notice”) shall
be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address
that may be designated by the receiving party from time to time in accordance with this Section 6.2). A Notice shall be deemed
to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if
sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email (with confirmation
of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours
of the recipient; or (d) on the third day after the date mailed, by certified or registered mail (in each case, return receipt requested,
postage pre-paid).
6.3 Entire
Agreement. This Agreement, together with the Insider Letter and the Registration Rights Agreement, each substantially in the form
to be filed as an exhibit to the Registration Statement on Form S-1 associated with the Company’s IPO, embodies the entire
agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes all prior
oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant
or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.
6.4 Modifications
and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties
hereto.
6.5 Assignment.
The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of the other
party.
6.6 Successors
and Assigns; No Third-Party Beneficiaries. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective permitted successors and permitted assigns. This Agreement is for the sole benefit of the parties hereto and their
respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person
or entity any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
6.7 Governing
Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by
the laws of New York applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict
of law principles thereof.
6.8 Severability.
In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement
shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems
it reasonable and enforceable, and as so limited shall remain in full force and effect. In the event that such court shall deem any such
provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
6.9 Waivers
and Consents. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and
signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach, or
default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or
after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. No Notice on
a party not expressly required under this Agreement shall entitle the party receiving such Notice to any other or further Notice in similar
or other circumstances or constitute a waiver of the rights of the party giving such Notice to any other or further action in any circumstances
without such Notice.
6.10 Survival
of Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any other
agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof and any investigations
made by or on behalf of the parties.
6.11 No
Broker or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial consultant
has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to create any liability
on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any claim or demand for commission or other
compensation by any broker, finder, financial consultant or similar agent claiming to have been employed by or on behalf of such party
and to bear the cost of legal expenses incurred in defending against any such claim.
6.12 Headings
and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall
in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
6.13 Counterparts.
This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or any other form
of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.
6.14 Construction.
The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent
or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of
proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. The words “include,”
“includes,” and “including” will be deemed to be followed by “without limitation.”
Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will
be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend
that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached
any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty
or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached
will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.
6.15 Mutual
Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.
7. Voting
and Tender of Shares. The Subscriber agrees to vote the Shares in favor of an initial business combination that the Company negotiates
and submits for approval to the Company’s stockholders and the Subscriber shall not seek redemption with respect to such Shares.
Additionally, the Subscriber agrees not to tender any Shares in connection with a tender offer presented to the Company’s stockholders
in connection with an initial business combination negotiated by the Company.
8. Indemnification.
Each party shall indemnify the other against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred
as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement.
[Signature Page Follows]
If the foregoing accurately sets forth our understanding
and agreement, please sign the enclosed copy of this Agreement and return it to us.
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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name: Anthony Natale
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Title: Chief Executive Officer
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Accepted and agreed as of the date first written above.
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LAVA MEDTECH SPONSOR LP
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By: LAVA Medtech Manager LLC
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Its: General Partner
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By:
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Name: Anthony Natale
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Title: Member
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[Signature Page to Subscription
Agreement]
Exhibit 10.6
PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT WARRANTS
PURCHASE AGREEMENT, effective as of [__], 2021 (as it may from time to time be amended, this “Agreement”), is entered
into by and between LAVA Medtech Acquisition Corp., a Delaware corporation (the “Company”), and LAVA Medtech Sponsor
LP, a Delaware limited partnership (the “Purchaser”).
WHEREAS, the Company intends
to consummate an initial public offering of the Company’s units (the “Public Offering”), each unit consisting
of one share of the Company’s Class A common stock, par value $0.0001 per share (each, a “Share”), and one-half
of one redeemable warrant as set forth in the Company’s registration statement on Form S-1, filed with the Securities and Exchange
Commission (the “SEC”), File Number 333-[__] (the “Registration Statement”), under the Securities
Act of 1933, as amended (the “Securities Act”);
WHEREAS, each whole warrant
entitles the holder to purchase one Share at an exercise price of $11.50 per Share; and
WHEREAS, the Purchaser has
agreed to purchase an aggregate of 7,500,000 redeemable warrants (or up to 8,175,000 redeemable warrants if the over-allotment option
in connection with the Public Offering is exercised in full) (the “Private Placement Warrants”), each whole Private
Placement Warrant entitling the holder to purchase one Share at an exercise price of $11.50 per Share.
NOW THEREFORE, in consideration
of the mutual promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization, Purchase and Sale; Terms of the Private
Placement Warrants.
A. Authorization of the
Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement Warrants to the Purchaser.
B. Purchase and Sale of the Private Placement
Warrants.
(i) On the date of the
consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the Purchaser and the Company (the “Initial
Closing Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, 7,500,000
Private Placement Warrants at a price of $1.00 per warrant for an aggregate purchase price of $7,500,000 (the “Purchase Price”),
which shall be paid by wire transfer of immediately available funds to the Company at least one day prior to the Initial Closing Date
in accordance with the Company’s wiring instructions; provided, however, that the Purchase Price shall be reimbursed to the Purchaser
if the Initial Closing Date does not occur on the day following such wire payment. On the Initial Closing Date, following the payment
by the Purchaser of the Purchase Price by wire transfer of immediately available funds to the Company, the Company, at its option, shall
deliver a certificate evidencing the Private Placement Warrants purchased on such date duly registered in the Purchaser’s name to
the Purchaser, or effect such delivery in book-entry form.
(ii) On the date of
the consummation of each closing (if any) of the over-allotment option in connection with the Public Offering or on such earlier time
and date as may be mutually agreed by the Purchaser and the Company (each such date, an “Over-allotment Closing Date”,
and, each Over-allotment Closing Date (if any) together with the Initial Closing Date, being sometimes referred to herein as a “Closing
Date”), the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company, an aggregate of
up to 675,000 Private Placement Warrants, in the same proportion as the amount of the over-allotment option that is then so exercised,
at a price of $1.00 per warrant for an aggregate purchase price of up to $675,000 (if the over-allotment option in connection with the
Public Offering is exercised in full) (the “Over-allotment Purchase Price”), which shall be paid by wire transfer of
immediately available funds to the Company at least one day prior to such Over-allotment Closing Date in accordance with the Company’s
wiring instructions; provided, however, that the Over-allotment Purchase Price shall be reimbursed to the Purchaser if such Over-allotment
Closing Date does not occur on the day following such wire payment. On the Over-allotment Closing Date, following the payment by the Purchaser
of the Over-allotment Purchase Price by wire transfer of immediately available funds to the Company, the Company shall, at its option,
deliver a certificate evidencing the Private Placement Warrants purchased on such date duly registered in the Purchaser’s name to
the Purchaser, or effect such delivery in book-entry form.
C. Terms of the Private Placement Warrants.
(i) Each Private Placement
Warrant shall have the terms set forth in a Warrant Agreement to be entered into by the Company and a warrant agent, in connection with
the Public Offering (the “Warrant Agreement”).
(ii) At the time of
the closing of the Public Offering, the Company and the Purchaser shall enter into a registration rights agreement (the “Registration
Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser relating to the Private
Placement Warrants and the Shares underlying the Private Placement Warrants.
Section 2.
Representations and Warranties of the Company. As a material inducement to the Purchaser to enter into this Agreement and purchase
the Private Placement Warrants, the Company hereby represents and warrants to the Purchaser (which representations and warranties shall
survive each Closing Date) that:
A. Organization and Corporate
Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material
adverse effect on the financial condition, operating results or assets of the Company. The Company possesses all requisite corporate power
and authority necessary to carry out the transactions contemplated by this Agreement and the Warrant Agreement.
B. Authorization; No Breach.
(i) The execution, delivery
and performance of this Agreement and the Private Placement Warrants have been duly authorized by the Company as of the Closing Date.
This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms. Upon issuance in
accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Private Placement Warrants will constitute
valid and binding obligations of the Company, enforceable in accordance with their terms as of each Closing Date.
(ii) The execution and
delivery by the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private Placement Warrants,
the issuance of the Shares upon exercise of the Private Placement Warrants and the fulfillment of, and compliance with, the respective
terms hereof and thereof by the Company, do not and will not as of each Closing Date (a) conflict with or result in a breach of the
terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of any lien, security interest,
charge or encumbrance upon the Company’s capital stock or assets under, (d) result in a violation of, or (e) require any
authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative
or governmental body or agency pursuant to the certificate of incorporation of the Company or the Bylaws of the Company (in effect on
the date hereof or as may be amended prior to completion of the contemplated Public Offering), or any material law, statute, rule or
regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except for any
filings required after the date hereof under federal or state securities laws.
C. Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Shares issuable upon exercise
of the Private Placement Warrants will be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and
payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will have good title to the Private Placement Warrants
and the Shares issuable upon exercise of such Private Placement Warrants, free and clear of all liens, claims and encumbrances of any
kind, other than (i) transfer restrictions hereunder and under the other agreements contemplated hereby, (ii) transfer restrictions
under federal and state securities laws, and (iii) liens, claims or encumbrances imposed due to the actions of the Purchaser.
D. Governmental Consents.
No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required in connection
with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of any other transactions
contemplated hereby.
Section 3.
Representations and Warranties of the Purchaser. As a material inducement to the Company to enter into this Agreement and issue
and sell the Private Placement Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations
and warranties shall survive each Closing Date) that:
A. Organization and Requisite Authority.
The Purchaser possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.
B. Authorization; No Breach.
(i) This Agreement constitutes
a valid and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights and to
general equitable principles (whether considered in a proceeding in equity or law).
(ii) The execution and
delivery by the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser does not and
shall not as of each Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or provisions of any agreement,
instrument, order, judgment or decree to which the Purchaser is subject.
C. Investment Representations.
(i) The Purchaser is
acquiring the Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Shares issuable upon such exercise
(collectively, the “Securities”), for the Purchaser’s own account, for investment purposes only and not with
a view towards, or for resale in connection with, any public sale or distribution thereof.
(ii) The Purchaser is
an “accredited investor” as such term is defined in Rule 501(a)(3) of Regulation D under the Securities Act.
(iii) The Purchaser
understands that the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration requirements
of the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations and warranties of the Purchaser set forth herein in order to determine the availability of such exemptions
and the eligibility of the Purchaser to acquire such Securities.
(iv) The Purchaser did
not decide to enter into this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act.
(v) The Purchaser has
been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer
and sale of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions
of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities involves a high
degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision
with respect to the acquisition of the Securities.
(vi) The Purchaser understands
that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser nor have such authorities
passed upon or endorsed the merits of the offering of the Securities.
(vii) The Purchaser
understands that: (a) the Securities have not been and are not being registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold
in reliance on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither the
Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder. In this regard, the Purchaser understands that the SEC has taken
the position that promoters or affiliates of a blank check company and their transferees, both before and after a Business Combination,
are deemed to be “underwriters” under the Securities Act when reselling the securities of a blank check company. Based on
that position, Rule 144 adopted pursuant to the Securities Act would not be available for resale transactions of the Securities despite
technical compliance with the requirements of such Rule, and the Securities can be resold only through a registered offering or in reliance
upon another exemption from the registration requirements of the Securities Act.
(viii) The Purchaser
has such knowledge and experience in financial and business matters, knowledge of the high degree of risk associated with investments
in the securities of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment
in the Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies and will have
no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities. The Purchaser can
afford a complete loss of its investment in the Securities.
(ix) The Purchaser understands
that the Private Placement Warrants shall bear the legend substantially in the form set forth in the Warrant Agreement.
Section 4.
Conditions of the Purchaser’s Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement
Warrants are subject to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations and
Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct at and as of such
Closing Date as though then made.
B. Performance. The
Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by it on or before such Closing Date.
C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement or the
Warrant Agreement.
D. Warrant Agreement.
The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Purchaser.
Section 5.
Conditions of the Company’s Obligations. The obligations of the Company to the Purchaser under this Agreement are subject
to the fulfillment, on or before each Closing Date, of each of the following conditions:
A. Representations and
Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct at and as of
such Closing Date as though then made.
B. Performance. The
Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required
to be performed or complied with by the Purchaser on or before such Closing Date.
C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement or the
Warrant Agreement.
D. Warrant Agreement.
The Company shall have entered into a Warrant Agreement with a warrant agent on terms satisfactory to the Company.
Section 6.
Termination. This Agreement may be terminated at any time after December 31, [__] upon the election by either the Company
or the Purchaser upon written notice to the other party if the closing of the Public Offering does not occur prior to such date.
Section 7.
Survival of Representations and Warranties. All of the representations and warranties contained herein shall survive each Closing
Date.
Section 8.
Definitions. Terms used but not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration
Statement.
Section 9. Miscellaneous.
A. Successors and Assigns.
Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the
parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether so expressed or not. Notwithstanding
the foregoing or anything to the contrary herein, the parties may not assign this Agreement, other than assignments by the Purchaser to
affiliates thereof.
B. Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but
if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than one party,
but all such counterparts taken together shall constitute one and the same agreement.
D. Descriptive Headings;
Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part
of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation.
E. Governing Law.
This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in
accordance with the internal laws of the State of New York.
F. Amendments. This Agreement may not be
amended, modified or waived as to any particular provision, except by a written instrument executed by all parties hereto.
[Signature page follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first set forth above.
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COMPANY:
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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name:
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Title:
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PURCHASER:
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LAVA MEDTECH SPONSOR LP, a Delaware limited partnership
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By:
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Name:
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Title:
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Exhibit 10.7
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT
(this “Agreement”) is made as of [__]. 2021, by and between LAVA Medtech Acquisition Corp., 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 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
publicly traded 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 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;
WHEREAS, Indemnitee
may not be willing to serve as an officer or 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; and
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein and subject to the provisions of the letter agreement dated as of [__],
2021 among the Company, Indemnitee and the other parties thereto pursuant to the Underwriting Agreement among the Company and the representatives
of the underwriters named therein in connection with the Company’s initial public offering, 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, appointed or retained or until Indemnitee tenders his or her resignation or until Indemnitee is removed.
2.
DEFINITIONS. As used in this Agreement:
2.1
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.
2.2
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.
2.3
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:
2.3.1
Acquisition of Stock by Third Party. Other than an affiliate of LAVA Medtech Sponsor LP, a Delaware limited partnership
(the “Sponsor”), 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 2.3.3 of this definition;
2.3.2
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;
2.3.3
Corporate Transactions. The effective date of a merger, capital stock exchange, asset acquisition, stock purchase, 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 51% 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 an affiliate of the Sponsor, no
Person (excluding any corporation resulting from such Business Combination) is the Beneficial Owner, directly or indirectly, of fifteen
percent (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 of Directors, providing for such Business Combination;
2.3.4 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
2.3.5
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 thereof) (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.
2.4
“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.
2.5
“Delaware Court” shall mean the Court of Chancery of the State of Delaware.
2.6
“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.
2.7
“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, manager, managing member, fiduciary, employee
or agent.
2.8
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
2.9
“Expenses” shall include all direct and indirect costs, fees and expenses of any type or nature whatsoever,
including, without limitation, all 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, telephone
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, supersede as 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.
2.10
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.
2.11
“Independent Counsel” shall mean a law firm or a member of a law firm with significant experience in
matters of corporate 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.
2.12
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.
2.13
The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, mediation,
alternate dispute resolution mechanism, investigation (whether formal or informal), 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, manager, 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.
2.14
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.
3.
INDEMNITY IN THIRD-PARTY PROCEEDINGS. 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 3 if Indemnitee was, is, or is threatened to
be made, a party to or a participant (as a witness or otherwise (including as a recipient of a request from a governmental or regulatory
authority) in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. 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.
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 or otherwise (including as a recipient of a request from a
governmental or regulatory authority)) in any Proceeding by or in the right of the Company to procure a judgment in its favor. 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 (all appeals having been exhausted) by a court 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 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 5 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 in any Proceeding to which Indemnitee is not 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.
8.1
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.
8.2
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.
8.3
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, 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 and which payment has not subsequently been returned, 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 thereof) or similar provisions of state statutory law or common
law; or
(c)
except as otherwise provided in Sections 14.5 and 14.6 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.
10.
ADVANCES OF EXPENSES; DEFENSE OF CLAIM.
10.1
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 be unsecured and interest
free. Advances shall 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 advance 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.
This Section 10.1 shall not apply to any claim made by Indemnitee for which an indemnification, hold harmless or exoneration payment
is excluded pursuant to Section 9.
10.2
The Company will be entitled to participate in the Proceeding at its own expense.
10.3
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 REQUEST FOR INDEMNIFICATION.
11.1
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 or matter 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.
11.2
Indemnitee may deliver to the Company a written request to indemnify, hold harmless or exonerate Indemnitee in accordance with
this Agreement. Such request(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 request for indemnification by Indemnitee, Indemnitee’s entitlement to indemnification shall
be determined according to Section 12.1 of this Agreement.
12.
PROCEDURE UPON REQUEST FOR INDEMNIFICATION.
12.1 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 if less than a quorum of the Board (ii) by Independent Counsel in a written opinion to the Board, a
copy of which shall be delivered to Indemnitee; or (iii) 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 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.
12.2
In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12.1
hereof, the Independent Counsel shall be selected as provided in this Section 12.2. 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 11.2 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
12.1 hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14.1 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).
12.3
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.
13.1 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 11.2 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 its 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 its 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.
13.2
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 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.
13.3
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.
13.4
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 13.4 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.
13.5
The knowledge and/or actions, or failure to act, of any other director, officer, trustee, general 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.
14.1
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 12.1 of this Agreement within thirty (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 12.1 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.
14.2
In the event that a determination shall have been made pursuant to Section 12.1 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.
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 advances 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 advances of Expenses, as the case may be,
and the Company may not refer to or introduce into evidence any determination pursuant to Section 12.1 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).
14.3
If a determination shall have been made pursuant to Section 12.1 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.
14.4
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.
14.5
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 Company’s 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).
14.6
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.
16.1 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) 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 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.
16.2
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.
16.3
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, managers, 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 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 take all necessary or desirable action 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.
16.4
In the event of any payment under this Agreement, the Company 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.
16.5
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.
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.
19.1
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.
19.2
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.
19.3
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 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.
19.4
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.
19.5
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 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 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.
20.
MODIFICATION AND WAIVER. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing
by the parties hereto. 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:
LAVA Medtech Acquisition Corp.
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Attn: Anthony Natale
With a copy, which shall not constitute
notice, to:
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Attn: Ari Edelman, Esq.
Jared Kelly, Esq.
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 14.1 of this Agreement, 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.
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, 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. 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.
[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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LAVA MEDTECH ACQUISITION CORP.
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By:
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Name:
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Anthony Natale
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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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Exhibit 10.8
LAVA Medtech Acquisition Corp.
c/o Reed Smith LLP
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
[ ], 2021
LAVA Medtech Sponsor LP
c/o Reed Smith LLP
303 Wyman Street, Suite 300
Waltham, Massachusetts 02451
Re: Administrative Services Agreement
Ladies and Gentlemen:
This letter agreement by and
between LAVA Medtech Acquisition Corp. (the “Company”) and LAVA Medtech Sponsor LP, our sponsor, dated as of the date hereof,
will confirm our agreement that, commencing on the date the securities of the Company are first listed on the Nasdaq Capital Market (the
“Listing Date”), pursuant to a Registration Statement on Form S-1 and prospectus filed with the Securities and Exchange
Commission (the “Registration Statement”) 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”):
(i) Our sponsor shall
make available to the Company, at 303 Wyman Street, Suite 300, Waltham, Massachusetts 02451 (or any successor location), certain
office space, utilities and secretarial and administrative support as may be reasonably required by the Company. In exchange therefor,
the Company shall pay our sponsor the sum of $5,000 per month on the Listing Date and continuing monthly thereafter until the Termination
Date; and
(ii) Our sponsor 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.
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 the 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.
[Signature Page Follows]
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Very truly yours,
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LAVA MEDTECH ACQUISITION CORP.
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By:
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/s/ Anthony Natale
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Name:
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Anthony Natale
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Title:
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Chief Executive Officer
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AGREED TO AND ACCEPTED BY:
LAVA MEDTECH SPONSOR LP
By: LAVA Medtech Manager LLC
Its: General Partner
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By:
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/s/ Anthony Natale
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Name:
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Anthony Natale
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Title:
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Member
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[Signature Page to Admin. Services Agreement]
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
We consent to the use in this Registration Statement
on Form S-1 of our report dated October 1, 2021, relating to the financial statements of LAVA Medtech Acquisition Corp. as of April 20,
2021, and for the period from March 31, 2021 (inception) through April 20, 2021. Our report includes an explanatory paragraph about the
existence of substantial doubt concerning the Company’s ability to continue as a going concern. We also consent to the reference
to our Firm under the caption “Experts” in the above noted Registration Statement.
/s/ Citrin Cooperman & Company, LLP
New York, New York
October 1, 2021
Exhibit 99.1
LAVA MEDTECH ACQUISITION CORP.
AUDIT COMMITTEE CHARTER
1. STATUS
The Audit Committee (the
“Committee”) is a committee of the Board of Directors (the “Board”) of LAVA Medtech Acquisition
Corp. (the “Company”).
2. PURPOSE
The Committee is appointed
by the Board for the primary purposes of:
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Performing the Board’s oversight responsibilities as they relate to the Company’s accounting policies and internal controls, financial reporting practices and legal and regulatory compliance, including, among other things:
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the quality and integrity of the Company’s financial statements;
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the Company’s compliance with legal and regulatory requirements;
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review of the independent registered public accounting firm’s qualifications and independence; and
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the performance of the Company’s internal audit function and the Company’s independent registered public accounting firm;
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Maintaining, through regularly scheduled meetings, a line of communication between the Board and the Company’s financial management, internal auditors and independent registered public accounting firm, including providing such parties with appropriate opportunities to meet separately and privately with the Committee on a periodic basis, and
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Preparing the report to be included in the Company’s annual proxy statement, as required by the Securities and Exchange Commission’s (“SEC”) rules.
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3. COMPOSITION AND QUALIFICATIONS
The Committee shall be appointed
by the Board and shall be comprised of three or more Directors (as determined from time to time by the Board), each of whom shall meet
the independence requirements of the Sarbanes-Oxley Act of 2002 (the “Act”), the listing standards of any exchange
or national listing market system upon which the Company’s securities are listed or quoted for trading (including, without limitation,
The Nasdaq Capital Market) (the “Principal Market”) and all other applicable laws.
The chairperson of the Committee
shall be designated by the Board, provided that if the Board does not so designate a chairperson, the members of the
Committee, by a majority vote, may designate a chairperson.
Any vacancy on the Committee
shall be filled by majority vote of the Board. No member of the Committee shall be removed except by majority vote of the Board.
Each member of the Committee
shall be financially literate and at least one member of the Committee shall have past employment experience in finance or accounting,
requisite professional certification in accounting or any other comparable experience or background which results in the individual’s
financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with
financial oversight responsibilities, as each such qualification is interpreted by the Board in its business judgment. In addition, at
least one member of the Committee shall be an “audit committee financial expert” as such term is defined by the SEC pursuant
to the Sarbanes-Oxley Act of 2002 (“SOX”).
4. MEETINGS OF THE COMMITTEE
The Committee shall meet
as often as it determines necessary to carry out its duties and responsibilities, but no less frequently than once every fiscal quarter.
The Committee, in its discretion, may ask members of management or others to attend its meetings (or portions thereof) and to provide
pertinent information as necessary. A majority of the members of the Committee present in person or by means of a conference telephone
or other communications equipment by means of which all persons participating in the meeting can hear each other shall constitute a quorum.
The Committee shall maintain
minutes of its meetings and records relating to those meetings.
5. RESPONSIBILITIES
In carrying out its duties
and responsibilities, the Committee’s policies and procedures should remain flexible, so that it may be in a position to best address,
react or respond to changing circumstances or conditions. The following duties and responsibilities are within the authority of the Committee
and the Committee shall, consistent with and subject to applicable law and rules and regulations promulgated by the SEC, the Nasdaq
Capital Market, or any other applicable regulatory authority.
The Committee will:
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A.
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Review and discuss with the independent registered public accounting firm their annual audit plan, including the timing and scope of audit activities, and monitor such plan’s progress and results during the year.
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B.
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Review and discuss the annual audited financial statements and the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with management and the independent registered public accounting firm. In connection with such review, the Committee will:
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Discuss with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61 (as may be modified or supplemented) and the matters in the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence;
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Review significant changes in accounting or auditing policies;
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Review with the independent registered public accounting firm any problems or difficulties encountered in the course of their audit, including any change in the scope of the planned audit work and any restrictions placed on the scope of such work and management’s response to such problems or difficulties;
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Review with the independent registered public accounting firm, management and the senior internal auditing executive the adequacy of the Company’s internal controls, and any significant findings and recommendations with respect to such controls;
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Review reports required to be submitted by the independent registered public accounting firm concerning: (a) all critical accounting policies and practices used; (b) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with management, the ramifications of such alternatives, and the accounting treatment preferred by the independent registered public accounting firm; (c) any other material written communications with management and (d) any material financial arrangements of the Company which do not appear on the financial statements of the Company;
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Review (a) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company’s selection or application of accounting principles, and major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies; and (b) analyses prepared by management and/or the independent registered public accounting firm setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analysis of the effects of alternative GAAP methods on the financial statements and the effects of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company; and
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Discuss policies and procedures concerning earnings press releases and review the type and presentation of information to be included in earnings press releases (paying particular attention to any use of “pro forma” or “adjusted” non-GAAP information), as well as financial information and earnings guidance provided to analysts and rating agencies.
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C.
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Review and discuss the quarterly financial statements and the Company’s disclosures provided in periodic quarterly reports including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” with management, the senior internal auditing executive and the independent registered public accounting firm.
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D.
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Oversee the external audit coverage. The Company’s independent registered public accounting firm are ultimately accountable to the Committee, which has the direct authority and responsibility to appoint, retain, compensate, terminate, select, evaluate and, where appropriate, replace the independent registered public accounting firm. In connection with its oversight of the external audit coverage, the Committee will have authority to:
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Appoint and replace (subject to stockholder approval, if deemed advisable by the Board) the independent registered public accounting firm;
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Approve the engagement letter and the fees to be paid to the independent registered public accounting firm;
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Pre-approve all audit and non-audit services to be performed by the independent registered public accounting firm and the related fees for such services other than prohibited nonauditing services as promulgated under rules and regulations of the SEC (subject to the inadvertent de minimis exceptions set forth in the Act and the SEC rules);
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Monitor and obtain confirmation and assurance as to the independent registered public accounting firm’s independence, including ensuring that they submit on a periodic basis (not less than annually) to the Committee a formal written statement delineating all relationships between the independent registered public accounting firm and the Company. The Committee is responsible for actively engaging in a dialogue with the independent registered public accounting firm with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm and for taking appropriate action in response to the independent registered public accounting firm’s report to satisfy itself of their independence;
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At least annually, obtain and review a report by the independent registered public accounting firm describing: the firm’s internal quality-control procedures; 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, and any steps taken to deal with any such issues; and to assess the independent registered public accounting firm’s independence, all relationships between the independent registered public accounting firm and the Company;
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Meet with the independent registered public accounting firm prior to the annual audit to discuss planning and staffing of the audit;
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Review and evaluate the performance of the independent registered public accounting firm, as the basis for a decision to reappoint or replace the independent registered public accounting firm;
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Set clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by all applicable laws and listing rules;
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Setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
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Assure regular 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 the Act, and consider whether rotation of the independent registered public accounting firm is required to ensure independence;
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Engage in a dialogue with the independent registered public accounting firm to confirm that audit partner compensation is consistent with applicable SEC rules;
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Review and discuss with the independent registered public accounting firm the results of the year-end audit of the Company, including any comments or recommendations of the Company’s independent registered public accounting firm and, based on such review and discussions and on such other considerations as it determines appropriate, recommend to the Board whether the Company’s financial statements should be included in the Annual Report on Form 10-K;
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Take, or recommend that the Board take, appropriate action to oversee the independence of the Company’s independent registered public accounting firm; and
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Monitor compliance by the Company of the employee conflict of interest requirements contained in the Act and the rules and regulations promulgated by the SEC thereunder.
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E.
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Oversee internal audit coverage. In connection with its oversight responsibilities, the Committee will:
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Review the appointment or replacement of the senior internal auditing executive;
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Review, in consultation with management, the independent registered public accounting firm and the senior internal auditing executive, the plan and scope of internal audit activities, and, when deemed necessary or appropriate by the Committee, assign additional internal audit projects to appropriate personnel;
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Review the Committee’s level of involvement and interaction with the Company’s internal audit function, including the Committee’s line of authority and role in appointing and compensating employees in the internal audit function;
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Review internal audit activities, budget, compensation and staffing; and
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Review significant reports to management prepared by the internal auditing department and management’s responses to such reports.
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F.
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Receive periodic reports from the Company’s independent registered public accounting firm, management and director of the Company’s internal auditing department to assess the impact on the Company of significant accounting or financial reporting developments that may have a bearing on the Company.
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G.
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Review with the independent registered public accounting firm and the senior internal auditing executive the adequacy and effectiveness of the Company’s accounting and internal controls policies and procedures and any significant findings and recommendations with respect to such controls.
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H.
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Review with the chief executive officer, chief financial officer and independent registered public accounting firm, periodically, the following:
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
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any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.
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I.
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Resolve any differences in financial reporting between management and the independent registered public accounting firm.
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J.
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Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
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K.
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Establish procedures for the receipt, retention and treatment of reports of evidence of a material violation made by attorneys appearing and practicing before the SEC in the representation of the Company or any of its subsidiaries, or reports made by the Company’s chief executive officer in relation thereto.
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L.
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Discuss policies and guidelines to govern the process by which risk assessment and risk management is undertaken.
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M.
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Meet periodically and at least four times per year with management to review and assess the Company’s major financial risk exposures and the manner in which such risks are being monitored and controlled.
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N.
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Meet periodically (not less than annually) in separate executive session with each of the chief financial officer, the senior internal auditing executive, and the independent registered public accounting firm.
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O.
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Review and approve all “related party transactions” requiring disclosure under SEC Regulation S-K, Item 404, in accordance with the policy set forth in Section 7 below.
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P.
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Review the Company’s policies relating to the ethical handling of conflicts of interest and review past or proposed transactions between the Company and members of management as well as policies and procedures with respect to officers’ expense accounts and perquisites, including the use of corporate assets. The Committee shall consider the results of any review of these policies and procedures by the Company’s independent registered public accounting firm.
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Q.
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Review and approve in advance any services provided by the Company’s independent registered public accounting firm to the Company’s executive officers or members of their immediate family.
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R.
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Review the Company’s program to monitor compliance with the Company’s Code of Conduct, and meet periodically with the Company’s Compliance Committee to discuss compliance with the Code of Conduct.
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S.
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Establish procedures for the receipt, retention and treatment of reports of evidence of a material violation made by attorneys appearing and practicing before the SEC in the representation of the Company or any of its subsidiaries, or reports made by the Company’s chief executive officer in relation thereto.
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T.
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Approve reimbursement of expenses incurred by management in connection with certain activities on our behalf, such as identifying potential target businesses.
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U.
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Review periodically with the Company’s outside legal counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct.
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V.
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As it determines necessary to carry out its duties, engage and obtain advice and assistance from outside legal, accounting or other advisers, the cost of such independent expert advisors to be borne by the Company.
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W.
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Report regularly to the Board with respect to Committee activities.
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X.
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Prepare the report of the Committee required by the rules of the SEC to be included in the proxy statement for each annual meeting.
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Y.
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Review and reassess annually the adequacy of this Charter and recommend any proposed changes to the Board.
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Z.
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Monitor compliance, on a regularly scheduled basis, with the terms of the Company’s initial public offering (the “Offering”) and, if any noncompliance is identified, promptly take all action necessary to rectify such noncompliance or otherwise cause the Company to come into compliance with the terms of the Offering.
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AA.
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review with management, the independent registered 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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BB.
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Determine the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.
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CC.
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On a quarterly basis, review and approve all payments made to the Company’s existing holders, executive officers or directors and their respective affiliates.
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6. PROCEDURES
A majority of the members
of the entire Committee shall constitute a quorum. The Committee shall act on the affirmative vote a majority of members present at a
meeting at which a quorum is present. Without a meeting, the Committee may act by unanimous written consent of all members. However, the
Committee may delegate to one or more of its members the authority to grant pre-approvals of audit and non-audit services, provided the
decision is reported to the full Committee at its next scheduled meeting.
The Company shall provide
for appropriate funding, as determined by the Committee, for payment of compensation: (a) to outside legal, accounting or other advisors
employed by the Committee; and (b) for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying
out its duties.
While the Committee has the
responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that
the Company’s financial statements are complete and accurate and are in accordance with GAAP. This is the responsibility of management
and the independent registered public accounting firm.
7. RELATED PARTY TRANSACTIONS POLICY.
A “Related Party Transaction”
is any transaction directly or indirectly involving any Related Party that would need to be disclosed under Item 404(a) of Regulation
S-K. Under Item 404(a), the Company is required to disclose any transaction occurring since the beginning of the Company’s last
fiscal year, or any currently proposed transaction, involving the Company where the amount involved exceeds $120,000, and in which any
related person had or will have a direct or indirect material interest. “Related Party Transaction” also includes any material
amendment or modification to an existing Related Party Transaction.
“Related Party”
means any of the following:
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a director (which term when used herein includes any director nominee);
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a person known by the Company to be the beneficial owner of more than 5% of the Company’s common stock (a “5% stockholder”); or
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a person known by the Company to be an immediate family member of any of the foregoing.
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“Immediate family member”
means a child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law of such director, executive officer, nominee for director or beneficial owner, and any person (other than a tenant or
employee) sharing the household of such director, executive officer, nominee for director or beneficial owner.
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B.
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Identification of Potential Related Party Transactions.
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Related Party Transactions
will be brought to management’s and the Board’s attention in a number of ways. Each of the Company’s directors and executive
officers shall inform the Chairman of the Committee of any potential Related Party Transactions. In addition, each such director and executive
officer shall complete a questionnaire on an annual basis designed to elicit information about any potential Related Party Transactions.
Any potential Related Party
Transactions that are brought to the Committee’s attention shall be analyzed by the Committee, in consultation with outside counsel
or members of management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a Related Party
Transaction requiring compliance with this Policy.
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C.
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Review and Approval of Related Party Transactions.
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At each of its meetings,
the Committee shall be provided with the details of each new, existing or proposed Related Party Transaction, including the terms of the
transaction, any contractual restrictions that the Company has already committed to, the business purpose of the transaction, and the
benefits to the Company and to the relevant Related Party. In determining whether to approve a Related Party Transaction, the Committee
shall consider, among other factors, the following factors to the extent relevant to the Related Party Transaction:
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whether the terms of the Related Party Transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a Related Party;
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whether there are business reasons for the Company to enter into the Related Party Transaction;
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whether the Related Party Transaction would impair the independence of an outside director;
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whether the Related Party Transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or Related Party, the direct or indirect nature of the director’s, executive officer’s or Related Party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Committee deems relevant; and
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any pre-existing contractual obligations.
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Any member of the Committee
who has an interest in the transaction under discussion shall abstain from voting on the approval of the Related Party Transaction, but
may, if so requested by the Chairman of the Committee, participate in some or all of the Committee’s discussions of the Related
Party Transaction. Upon completion of its review of the transaction, the Committee may determine to permit or to prohibit the Related
Party Transaction.
A Related Party Transaction
entered into without pre-approval of the Committee shall not be deemed to violate this Policy, or be invalid or unenforceable, so long
as the transaction is brought to the Committee as promptly as reasonably practical after it is entered into or after it becomes reasonably
apparent that the transaction is covered by this Policy.
A Related Party Transaction
entered into prior to the effective date of this Charter shall not be required to be reapproved by the Committee.
8. INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS.
The Committee may conduct
or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and may retain, at the
Company’s expense, such independent counsel or other consultants or advisers as it deems necessary.
While the Committee has the
duties and responsibilities set forth in this charter, the Committee is not responsible for preparing or certifying the financial statements,
for planning or conducting the audit, or for determining whether the Company’s financial statements are complete and accurate and
are in accordance with generally accepted accounting principles.
In fulfilling their responsibilities
hereunder, it is recognized that members of the Committee are not full-time employees of the Company, it is not the duty or responsibility
of the Committee or its members to conduct “field work” or other types of auditing or accounting reviews or procedures or
to set auditor independence standards, and each member of the Committee shall be entitled to rely on (i) the integrity of those persons
and organizations within and outside the Company from which it receives information and (ii) the accuracy of the financial and other
information provided to the Committee absent actual knowledge to the contrary.
Nothing contained in this
Charter is intended to create, or should be construed as creating, any responsibility or liability of the members of the Committee, except
to the extent otherwise provided under applicable federal or state law.
Exhibit 99.2
CHARTER OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF
LAVA MEDTECH ACQUISITION CORP.
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I.
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PURPOSE OF THE COMMITTEE
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The purposes of the Compensation
Committee (the “Committee”) of the Board of Directors (the “Board”) of LAVA Medtech Acquisition Corp. (the “Company”)
shall be to oversee the Company’s compensation and employee benefit plans and practices, including its executive compensation plans,
and its incentive-compensation and equity-based plans; to review and discuss with management the Company’s compensation discussion
and analysis (“CD&A”) to be included in the Company’s annual proxy statement or annual report on Form 10-K
filed with the Securities and Exchange Commission (the “SEC”); to prepare the Compensation Committee Report as required by
the rules of the SEC; and to perform such further functions as may be consistent with this Charter or assigned by applicable law,
the Company’s charter or bylaws or the Board.
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II.
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COMPOSITION OF THE COMMITTEE
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The Committee shall consist
of two or more directors as determined from time to time by the Board. Each member of the Committee shall be qualified to serve on the
Committee pursuant to the requirements of The Nasdaq Capital Market (“Nasdaq”), and any additional requirements that the Board
deems appropriate. Members of the Committee shall also qualify as “non-employee directors” within the meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “outside directors”
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. The chairperson of the Committee shall
be designated by the Board, provided that if the Board does not so designate a chairperson, the members of the Committee,
by majority vote, may designate a chairperson. Each Committee member shall have one vote. Any vacancy on the Committee shall be filled
by majority vote of the Board. No member of the Committee shall be removed except by majority vote of the Board.
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III.
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MEETINGS AND PROCEDURES OF THE COMMITTEE
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The Committee shall meet as
often as it determines necessary to carry out its duties and responsibilities, but no less than twice annually. The Committee, in its
discretion, may ask members of management or others to attend its meetings (or portions thereof) and to provide pertinent information
as necessary, provided, that the Chief Executive Officer of the Company may not be present during any portion of a Committee meeting in
which deliberation or any vote regarding his or her compensation occurs.
A majority of the members
of the Committee present in person or by means of a conference telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other shall constitute a quorum.
The Committee shall maintain
minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities, as appropriate.
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IV.
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DUTIES AND RESPONSIBILITIES OF THE COMMITTEE
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A.
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Executive Compensation
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The Committee shall have the
following duties and responsibilities with respect to the Company’s executive compensation plans:
a) To review at least annually
the goals and objectives of the Company’s executive compensation plans, and amend, or recommend that the Board amend, these goals
and objectives if the Committee deems it appropriate.
b) To review at least annually
the Company’s executive compensation plans in light of the Company’s goals and objectives with respect to such plans, and,
if the Committee deems it appropriate, adopt, or recommend to the Board the adoption of, new, or the amendment of existing, executive
compensation plans.
c) To evaluate annually the
performance of the Chief Executive Officer in light of the goals and objectives of the Company’s executive compensation plans, and,
either as a Committee or together with the other independent directors (as directed by the Board), determine and approve the Chief Executive
Officer’s compensation level based on this evaluation. In determining the long-term incentive component of the Chief Executive Officer’s
compensation, the Committee shall consider factors as it determines relevant, which may include, for example, the Company’s performance
and relative stockholder return, the value of similar awards to chief executive officers of comparable companies, and the awards given
to the Chief Executive Officer of the Company in past years. The Committee may discuss the Chief Executive Officer’s compensation
with the Board if it chooses to do so.
d) To evaluate annually the
performance of the other executive officers of the Company in light of the goals and objectives of the Company’s executive compensation
plans, and either as a Committee or together with the other independent directors (as directed by the Board), determine and approve the
compensation of such other executive officers. To the extent that long-term incentive compensation is a component of such executive officer’s
compensation, the Committee shall consider all relevant factors in determining the appropriate level of such compensation, including the
factors applicable with respect to the Chief Executive Officer.
e) To evaluate annually the
appropriate level of compensation for Board and Committee service by non-employee directors.
f) Review and recommend to
the Board the adoption of or changes to the compensation of the Company’s independent directors.
g) To review and approve
any severance or termination arrangements to be made with any executive officer of the Company.
h) To perform such duties
and responsibilities as may be assigned to the Board or the Committee under the terms of any executive compensation plan.
i) To review perquisites
or other personal benefits to the Company’s executive officers and directors and recommend any changes to the Board.
j) To consider the results
of the most recent stockholder advisory vote on executive compensation as required by Section 14A of the Exchange Act, and, to the
extent the Committee determines it appropriate to do so, take such results into consideration in connection with the review and approval
of executive officer compensation.
k) To review and discuss
with management the Company’s CD&A, and based on that review and discussion, to recommend to the Board that the CD&A be
included in the Company’s annual proxy statement or annual report on Form 10-K.
l) To review compensation
arrangements for the Company’s employees to evaluate whether incentive and other forms of pay encourage unnecessary or excessive
risk taking, and review and discuss, at least annually, the relationship between risk management policies and practices, corporate strategy
and the Company’s compensation arrangements.
m) To the extent it deems
necessary, review and approve the terms of any compensation “clawback” or similar policy or agreement between the Company
and the Company’s executive officers or other employees subject to Section 16 of the Exchange Act.
n) Review, recommend to the
Board, and administer all plans that require “disinterested administration” under Rule 16b-3 under the Exchange Act.
o) To prepare the Compensation
Committee Report in accordance with the rules and regulations of the SEC for inclusion in the Company’s annual proxy statement
or annual report on Form 10-K.
p) Retain (at the Company’s
expense) outside consultants and obtain assistance from members of management as the Committee deems appropriate in the exercise of its
authority.
q) To perform such other
functions as assigned by law, the Company’s charter or bylaws or the Board.
r) Make reports and recommendations
to the Board within the scope of its functions and advise the officers of the Company regarding various personnel matters as may be raised
with the Committee.
s) Approve all special perquisites,
special cash payments and other special compensation and benefit arrangements for the Company’s executive officers.
Notwithstanding anything to
the contrary in the foregoing, the Committee shall have sole discretion and authority with respect to any action regarding compensation
payable to the Chief Executive Officer or other executive officers of the Company that the Committee intends to constitute “qualified
performance-based compensation” for purposes of section 162(m) of the Internal Revenue Code of 1986, as amended and the Treasury
Regulations promulgated thereunder.
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B.
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General Compensation and Employee Benefit Plans
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The Committee shall have the
following duties and responsibilities with respect to the Company’s general compensation and employee benefit plans, including incentive-compensation
and equity-based plans:
(a) To review at least
annually the goals and objectives of the Company’s general compensation plans and other employee benefit plans, including incentive-compensation
and equity-based plans, and amend, or recommend that the Board amend, these goals and objectives if the Committee deems it appropriate.
(b) To review at least
annually the Company’s general compensation plans and other employee benefit plans, including incentive-compensation and equity-based
plans, in light of the goals and objectives of these plans, and recommend that the Board amend these plans if the Committee deems it appropriate.
(c) To review all equity-compensation
plans to be submitted for stockholder approval under the Nasdaq listing standards, and to review and, in the Committee’s sole discretion,
approve all equity-compensation plans that are exempt from such stockholder approval requirement.
(d) Approve all special
perquisites, special cash payments and other special compensation and benefit arrangements for the Company’s employees.
(e) To perform such duties
and responsibilities as may be assigned to the Board or the Committee under the terms of any compensation or other employee benefit plan,
including any incentive-compensation or equity-based plan.
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V.
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ROLE OF CHIEF EXECUTIVE OFFICER
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The Chief Executive Officer
may make, and the Committee may consider, recommendations to the Committee regarding the Company’s compensation and employee benefit
plans and practices, including its executive compensation plans, its incentive-compensation and equity-based plans with respect to executive
officers (other than the Chief Executive Officer) and the Company’s director compensation arrangements.
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VI.
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DELEGATION OF AUTHORITY
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The Committee may form subcommittees
for any purpose that the Committee deems appropriate and may delegate to such subcommittees such power and authority as the Committee
deems appropriate; provided, however, that no subcommittee shall consist of fewer than two members; and provided
further that the Committee shall not delegate to a subcommittee any power or authority required by any law, regulation or listing
standard to be exercised by the Committee as a whole.
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VII.
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EVALUATION OF THE COMMITTEE
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The Committee shall, no less
frequently than annually, evaluate its performance. In conducting this review, the Committee shall evaluate whether this Charter appropriately
addresses the matters that are or should be within its scope and shall recommend such changes as it deems necessary or appropriate. The
Committee shall address all matters that the Committee considers relevant to its performance, including at least the following: the adequacy,
appropriateness and quality of the information and recommendations presented by the Committee to the Board, the manner in which they were
discussed or debated, and 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.
The Committee shall deliver
to the Board a report, which may be oral, setting forth the results of its evaluation, including any recommended amendments to this Charter
and any recommended changes to the Company’s or the Board’s policies or procedures.
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VIII.
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INVESTIGATIONS AND STUDIES; OUTSIDE ADVISERS
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The Committee may conduct
or authorize investigations into or studies of matters within the Committee’s scope of responsibilities, and may, in its sole discretion,
retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser. The Committee shall be directly
responsible for the appointment, compensation and oversight of the work of any compensation consultant, independent legal counsel or other
adviser retained by the Committee, the expense of which shall be borne by the Company. The Committee may select a compensation consultant,
independent legal counsel or other adviser to the Committee only after taking into consideration the following:
(a) The provision of
other services to the Company by the person that employs the compensation consultant, independent legal counsel or other adviser;
(b) The amount of fees
received from the Company by the person that employs the compensation consultant, independent legal counsel or other adviser, as a percentage
of the total revenue of the person that employs the compensation consultant, independent legal counsel or other adviser;
(c) The policies and
procedures of the person that employs the compensation consultant, independent legal counsel or other adviser that are designed to prevent
conflicts of interest:
(d) Any business or personal
relationship of the compensation consultant, independent legal counsel or other adviser with a member of the Committee;
(e) Any stock of the
Company owned by the compensation consultant, independent legal counsel or other adviser; and
(f) Any business or personal
relationship of the compensation consultant, independent legal counsel, other adviser or the person employing the adviser with an executive
officer of the Company.
The Committee shall conduct
the independence assessment with respect to any compensation consultant, independent legal counsel or other adviser that provides advice
to the Committee, other than: (i) in-house legal counsel; and (ii) any compensation consultant, independent legal counsel or
other adviser whose role is limited to the following activities for which no disclosure would be required under Item 407(e)(3)(iii) of
Regulation S-K: consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers
or directors of the Company, and that is available generally to all salaried employees; or providing information that either is not customized
for the Company or that is customized based on parameters that are not developed by the compensation consultant, and about which the compensation
consultant does not provide advice.
Nothing herein requires a
compensation consultant, independent legal counsel or other compensation adviser to be independent, only that the Committee consider the
enumerated independence factors before selecting or receiving advice from a compensation consultant, independent legal counsel or other
compensation adviser. The Committee may select or receive advice from any compensation consultant, independent legal counsel or other
compensation adviser it prefers, including ones that are not independent, after considering the six independence factors outlined above.
Nothing herein shall be construed:
(1) to require the Committee to implement or act consistently with the advice or recommendations of the compensation consultant,
independent legal counsel or other adviser to the Committee; or (2) to affect the ability or obligation of the Committee to exercise
its own judgment in fulfillment of its duties.
Any amendment or other modification
of this Charter shall be made and approved by the full Board.
If required by the rules of
the SEC or Nasdaq, this Charter, as amended from time to time, shall be made available to the public on the Company’s website.
* * *
While the members of the Committee
have the duties and responsibilities set forth in this Charter, nothing contained in this Charter is intended to create, or should be
construed as creating, any responsibility or liability of members of the Committee, except to the extent otherwise provided under applicable
federal or state law.
Exhibit 99.3
Consent of Peter van
der Velden to be Named as a Director Nominee
In
connection with the filing by LAVA Medtech Acquisition Corp. of the Registration Statement on Form S-1 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule
438 of the Securities Act, to being named as a nominee to the board of directors of LAVA Medtech Acquisition Corp. in the Registration
Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration
Statement and any amendments thereto.
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Dated:
October 1, 2021
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/s/ Peter van der Velden
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Peter van der Velden
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Exhibit 99.4
Consent of Fritz LaPorte
to be Named as a Director Nominee
In
connection with the filing by LAVA Medtech Acquisition Corp. of the Registration Statement on Form S-1 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule
438 of the Securities Act, to being named as a nominee to the board of directors of LAVA Medtech Acquisition Corp. in the Registration
Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration
Statement and any amendments thereto.
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Dated: October 1, 2021
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/s/ Fritz LaPorte
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Fritz LaPorte
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Exhibit 99.5
Consent of Richard
Emmitt to be Named as a Director Nominee
In
connection with the filing by LAVA Medtech Acquisition Corp. of the Registration Statement on Form S-1 with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the “Securities Act”), I hereby consent, pursuant to Rule
438 of the Securities Act, to being named as a nominee to the board of directors of LAVA Medtech Acquisition Corp. in the Registration
Statement and any and all amendments and supplements thereto. I also consent to the filing of this consent as an exhibit to such Registration
Statement and any amendments thereto.
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Dated: October 1, 2021
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/s/ Richard Emmitt
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Richard Emmitt
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