References in this Quarterly Report on Form 10-Q (this "Quarterly Report") to
"we," "us" or the "Company" refer to Maxpro Capital Acquisition Corp. References
to our "management" or our "management team" refer to our officers and
directors, and references to the "Sponsor" refer to MP One Investment LLC. 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. 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 Securities and
Exchange Commission ("SEC") filings.
Overview
We were formed on June 2, 2021 for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, recapitalization, reorganization or
other similar business combination with one or more target businesses. 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 initial public offering 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 June 2, 2021
(inception) through September 30, 2022, relate to the formation and the IPO. 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 its initial business combination, at the earliest.
We will have non-operating income in the form of interest income on cash and
cash equivalents from the proceeds derived from the IPO.
On October 13, 2021, we consummated the IPO of 10,350,000 Public Units, at a
price of $10.00 per Public Unit, generating gross proceeds of $103,500,000.
Simultaneously with the closing of the IPO, the Company consummated a private
placement (the "Private Placement") in which the Sponsor, MP One Investment LLC
purchased 464,150 private units (the "Private Placement Units") at a price of
$10.00 per Private Unit, generating total proceeds of $4,641,500.
Upon the consummation of the IPO and associated private placements, $105,052,500
of cash was placed in the Trust Account, $1,811,250 was paid in underwriter's
commissions and $990,311 of cash was held outside of the Trust Account and was
available for the repayment of advances from the Sponsor, payment of expenses
related to the IPO and subsequent working capital purposes.
We cannot assure you that our plans to complete our Initial Business Combination
will be successful. If we are unable to complete its initial business
combination within 12 months from the date of the IPO (or up to 18 months from
the closing of the IPO at our election in two separate three month extensions
subject to satisfaction of certain conditions, including the deposit of up to
$1,035,000 in the Trust Account), we will (i) cease all operations except for
the purpose of winding up, (ii) as promptly as reasonably possible but not more
than five business days thereafter, redeem 100% of the outstanding public shares
and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the remaining holders of common stock and our board of
directors, liquidate and dissolve. In the event of liquidation, the holders of
the founder shares and Private Warrants will not participate in any redemption
distribution with respect to their founder shares or Private Warrants, until all
of the claims of any redeeming shareholders and creditors are fully satisfied
(and then only from funds held outside the Trust Account).
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Recent Developments
Business Combination Agreement
On September 14, 2022, we entered into a Business Combination Agreement (the
"Business Combination Agreement") by and among us, Apollomics Inc., a Cayman
Islands exempted company ("Apollomics"), and Project Max SPAC Merger Sub, Inc.,
a Delaware corporation and wholly-owned subsidiary of Apollomics ("Merger Sub").
The transactions contemplated by the Business Combination Agreement are
hereinafter referred to as the "Business Combination."
The Business Combination Agreement provides that, among other things and upon
the terms and subject to the conditions thereof, on the date of the closing of
the Business Combination (the "Closing"), Merger Sub will merge with and into
us, with us continuing as the surviving company (the "Merger"), as a result of
which we will become a wholly-owned subsidiary of Apollomics. The Closing is
expected to occur in the first quarter of 2023.
Upon the Closing, (i) each then issued and outstanding share of Class B common
stock, par value $0.0001 per share (each, a "Founder Share"), will be converted
into one share of Class A common stock, par value $0.0001 per share ("Class A
Common Stock"), and (ii) then each share of Class A Common Stock that is issued
and outstanding and has not been redeemed will be converted into the right to
receive one Apollomics ordinary share designated as Class A ordinary share in
Apollomics' organizational documents, par value $0.0001 per Class A share (each,
a "Post-Closing Apollomics Class A Ordinary Share", and together with
Post-Closing Apollomics Class B Ordinary Shares, "Post-Closing Apollomics
Ordinary Shares").
Each outstanding warrant to purchase Class A Common Stock (each, a "Warrant")
will become a warrant of Apollomics to purchase Post-Closing Apollomics Class A
Ordinary Shares, with each such warrant exercisable for the number of
Post-Closing Apollomics Class A Ordinary Shares the holder of such Warrant would
have received in the Business Combination if it exercised such Warrant
immediately prior to the Business Combination.
Ancillary Agreements
Sponsor Support Agreement
On September 14, 2022, concurrently with the execution of the Business
Combination Agreement, we also entered into a Sponsor Support Agreement (the
"Sponsor Support Agreement") with Apollomics, MP One Investment LLC, a Delaware
limited liability company (the "Sponsor"), and our directors and officers (the
"Insiders" and together with the Sponsor, the "Sponsor Parties" and
individually, a "Sponsor Party"), pursuant to which, among other things, the
Sponsor Parties will agree to vote any of the shares of Common Stock held by
them in favor of the Business Combination and to comply with their obligations
under the Letter Agreement that the Sponsor Parties entered into on October 7,
2021 in connection with the consummation of our initial public offering,
including the obligation to not redeem any such shares at the special meeting of
stockholders to be held in connection with the Business Combination.
In addition, each of the Sponsor Parties agreed not to transfer any of its
shares of Common Stock or Warrants without the prior written consent of
Apollomics, until the earliest of (i) the Closing, (ii) the termination of the
Business Combination Agreement and (iii) the liquidation of the Company.
Furthermore, each Sponsor Party agreed to forfeit such number of Founder Shares
that it owns as of immediately before the Closing, that would be necessary so
that, immediately after giving effect to the Merger and any PIPE Financing, the
Sponsor Parties collectively own a number of Post-Closing Apollomics Ordinary
Shares equal to 2.75% of the sum of (i) the Post-Closing Apollomics Ordinary
Shares that are issued pursuant to the Merger, (ii) the Post-Closing Apollomics
Ordinary Shares issued and outstanding immediately after the Share Split, (iii)
the Post-Closing Apollomics Ordinary Shares exercisable on a "gross" basis from
the vested Apollomics options issued and outstanding immediately after the Share
Split and (iv) the Apollomics Ordinary Shares and/or Apollomics Preferred
Shares, if any, issued pursuant to private placement financing arranged by the
Company.
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Lock-Up Agreement
On September 14, 2022, concurrently with the execution of the Business
Combination Agreement, Apollomics and each of the Sponsor Parties entered into a
lock-up agreement (the "Lock-Up Agreement") with respect to Apollomics Ordinary
Shares held by the Sponsor Parties immediately following the Closing (the
"Lock-Up Shares"), pursuant to which, each Sponsor Party agreed not transfer any
Lock-Up Shares for a period of six (6) months after the Closing, on the terms
and subject to the conditions set forth in the Lock-Up Agreement. The Lock-up
Agreement will become effective only at the Closing. Each holder of Apollomics
Ordinary Shares immediately prior to the Closing will receive Post-Closing
Apollomics Class B Ordinary Shares, which are subject to a six-month lock-up on
the same terms as the Lock-Up Agreement.
Qualified Summary
The sections above describing the Business Combination Agreement, the Sponsor
Support Agreement and the Lock-Up Agreement do not purport, and are not
intended, to describe all of the terms and conditions thereof. The foregoing
summary is qualified in its entirety by reference to the complete text of the
Business Combination Agreement, the Sponsor Support Agreement and the Lock-Up
Agreement, copies of each of which are attached hereto as Exhibits 2.1, 10.1 and
10.2, respectively.
For more information relating to the eBusiness Combination and the agreements
described above, please see the Form 8-K filed by the Company on September 14,
2022.
Extensions and Extension Note
On October 14, 2022, the Sponsor deposited an additional payment in the
aggregate amount of $1,035,000 (representing $0.10 per public share) (the
"Extension Payment") into the Company's trust account for its public
stockholders. This deposit enables Maxpro to extend the date by which Maxpro has
to complete its initial business combination from October 13, 2022 to January
13, 2023 (the "Extension"). The Extension is the first of two three-month
extensions permitted under the Company's governing documents and provides Maxpro
with additional time to complete its Business Combination.
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 Public Offering, described below, and, after
our Public Offering, 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 and nine months ended September 30, 2022 we had a net loss of
$58,652 and $651,606 consisting primarily of operating costs partially offset by
investment income.
For the period from June 2, 2021 (inception) through September 30, 2021 we had a
net loss of $5,828 consisting primarily of operating costs.
Liquidity and Capital Resources
As of September 30, 2022 and December 31, 2021, we had cash of $134,110 and
$598,957, respectively.
For the nine months ended September 30, 2022, the net change in cash was a
decrease of $464,847. Cash used in operating activities was $513,830. Cash
provided by investing activities was $48,983.
For the period from June 2, 2021 (inception) through September 30, 2021 the net
change in cash was an increase of $15,908. Cash used in operating activities was
$5,337. Cash provided by financing activities was $21,245. On October 13, 2021,
we consummated the Public Offering of 10,350,000 units (the "Units"), at $10.00
per Unit, generating gross proceeds of $103,500,000. Simultaneously with the
closing of the Public Offering, we consummated the sale of 464,150 Private
Placement Units, at $10.00 per Private Placement Unit, to our sponsor,
generating gross proceeds of $4,641,500. As of September 30, 2022, approximately
$134,110 of the proceeds is held in cash and available for our general use.
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Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of September 30, 2022.
Contractual obligations
As of September 30, 2022, we did not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities.
The underwriters are entitled to a deferred fee of $3,622,500 in the aggregate.
The deferred fee will be waived by the underwriters in the event that we do not
complete an Initial Business Combination, subject to the terms of the
underwriting agreement.
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited financial statements, which have been
prepared in accordance with United States generally accepted accounting
principles. The preparation of these unaudited financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities in our unaudited financial statements. On an ongoing basis, we
evaluate our estimates and judgments, including those related to fair value of
financial instruments and accrued expenses. We base our estimates on historical
experience, known trends and events and various other factors that we believe to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying unaudited financial statements.
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