References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Arbor Rapha Capital Bioholdings Corp. I. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

We were formed on March 4, 2021, for the purpose of entering into a Business Combination. Our efforts to identify a prospective target business will not be limited to any particular industry or geographic region. We intend to utilize cash derived from the proceeds of our IPO in effecting our initial Business Combination.

We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.

We presently have no revenue. All activities for the period from March 4, 2021 (inception) through September 30, 2022, relate to the formation and the IPO, and subsequent to the IPO, identifying a target company for a Business Combination. We will have no operations other than the active solicitation of a target business with which to complete a Business Combination, and we will not generate any operating revenue until after our initial Business Combination, at the earliest. We will have non-operating income in the form of interest income from the proceeds derived from the IPO.

On November 2, 2021, we completed our IPO of 17,250,000 Units, including the issuance of 2,250,000 Units as a result of the underwriter's exercise of its option to purchase additional Units in full. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share ("Class A common stock"), and one-third of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $172,500,000.

Substantially concurrently with the closing of the IPO, we completed the private sale of 4,133,33 Private Placement Warrants to our Sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds of $6,200,000.

We also executed a promissory note with the Sponsor, the Sponsor Loan, generating gross proceeds to the Company of $4,312,500. The Sponsor Loan shall be repaid or converted into Sponsor Loan Warrants at a purchase price of $1.50 per warrant, at the Sponsor's direction. The Sponsor Loan Warrants will be identical to the Private Placement Warrants.

A total of $176,812,500, comprised of net proceeds from the IPO, a portion of the proceeds from the sale of the Private Placement Warrants and proceeds from the execution of the Sponsor Loan, was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee.



We cannot assure you that our plans to complete our initial Business Combination
will be successful.

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Extension Meeting

We intend to mail to our stockholders of record as of October 28, 2022, a definitive proxy statement for a special meeting of stockholders ("Extension Meeting") to approve an extension of time for us to complete an initial Business Combination (the "Extension Proposal") from February 2, 2023 which is 15 months from the date of the IPO, to August 2, 2023 (the "Extension Date"). The Company's public stockholders will be able to elect to redeem their shares in connection with the Extension Meeting for a pro rata portion of the amount then on deposit in the Trust Account (approximately $10.25 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company (net of taxes payable)), which could result in a smaller number of Public Shares. There is no assurance that the Company's stockholders will vote to approve the Extension Proposal. If the Company does not obtain stockholder approval, the Company would wind up its affairs and liquidate.

If we are unable to complete our initial Business Combination (i) within 15 months from the date of the IPO or (ii) by the Extension Date (if the if the Extension Proposal is approved and implemented), we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem our Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest will be net of taxes payable), divided by the number of then issued and 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, liquidate and dissolve, subject, in each case, to the Company's obligations under the Delaware General Corporation Law (the "DGCL") to provide for claims of creditors and the requirements of other applicable law. In the event of liquidation, the holders of the Founder Shares and Private Placement Warrants will not participate in any redemption distribution with respect to their Founder Shares or Private Placement Warrants, until all of the claims of any redeeming stockholders and creditors are fully satisfied (and then only from funds held outside the Trust Account).

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities through September 30, 2022, were organizational activities, those necessary to prepare for the IPO, described below, and, after our IPO, day-to-day operations and identifying a target company for an initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2022, we had net income of $350,124, consisting primarily of interest income on investments held in the Trust Account of $798,072, net of general and administrative expense of $292,237 and incomes taxes of $155,711.

There was no activity for the three months ended September 30, 2021.

For the nine months ended September 30, 2022, we had a net loss of $184,577, consisting primarily of interest income on investments held in the Trust Account of $1,054,638, net of general and administrative expense of $1,083,504 and incomes taxes of $155,711.

For the period from March 4, 2021 (inception) through September 30, 2021, we had a net loss of $234, consisting of general and administrative expense.


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Going Concern and Capital Resources

As of September 30, 2022, we had cash of $883,612 and working capital of $504,048.

Until the consummation of a Business Combination, the Company has used and will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

In connection with our assessment of going concern considerations in accordance with FASB's Accounting Standards Update ("ASU") 205-40, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern," management believes that the funds which we have available following the completion of the IPO will enable us to sustain operations. However, the Company has until February 2, 2023, to consummate a Business Combination. It is uncertain that the Company will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. This condition raises substantial doubt about the Company's ability to continue as a going concern. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

For the nine months ended September 30, 2022, cash used in operating activities was $460,504.

For the period from March 4, 2021 (inception) through September 30, 2021, no cash was used in operating activities.

Commitments and Contingencies

Our Sponsor lent us $4,312,500 as of the closing date of the IPO. The Sponsor Loan will bear no interest. The proceeds of the Sponsor Loan were deposited into the Trust Account and will be used to fund the redemption of our Public Shares (subject to the requirements of applicable law). The Sponsor Loan shall be repaid or converted into Sponsor Loan Warrants at a conversion price of $1.50 per warrant, at our Sponsor's discretion. The Sponsor Loan Warrants would be identical to the Private Placement Warrants sold. The Sponsor Loan was extended in order to ensure that the amount in the Trust Account is $10.25 per Public Share. If we do not complete a Business Combination, we will not repay the Sponsor Loan and its proceeds will be distributed to our public stockholders. Our Sponsor has waived any claims against the Trust Account in connection with the Sponsor Loan. As of September 30, 2022, there was $4,312,500 outstanding under the Sponsor Loan.

As of September 30, 2022, except for the Sponsor Loan, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

Critical Accounting Estimates

This management's discussion and analysis of financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our unaudited condensed financial statements. Actual results could differ from these estimates.

A summary of our significant accounting policies is presented in Note 2. Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our financial statements. Each quarter, we assess these estimates and assumptions based on several factors, including historical experience, which we believe to be reasonable under the circumstances. These estimates are subject to change in the future if any of the underlying assumptions or factors change.

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