The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8 Financial Statements and Supplementary Data" of this Report. Certain information contained in the discussion and analysis set forth includes forward-looking statements. Our actual results may differ materially from these anticipated in these forward-looking statements as a result of many factors, including those set forth under "Special Note Regarding Forward-Looking Statements" below, "Item 1A Risk Factors" and elsewhere in this Report.
Special Note Regarding Forward-Looking Statements
This Annual Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical facts included in this Annual Report including in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plan and objectives of management for future operations, are forward-looking statements. Words such as "expect", "believe", "anticipate", "intend", "estimate", "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
40 Table of Contents Overview
We are a blank check company formed under the laws of the
The issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:
may significantly dilute the equity interest of investors, which dilution would
? increase if the anti-dilution provisions in the Class B common stock resulted
in the issuance of Class A shares 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 in control if a substantial number of shares 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; and
? may adversely affect prevailing market prices for our Class A common stock
and/or warrants.
Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, 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 security is payable on demand;
our inability to obtain necessary additional financing if the debt security
? contains covenants restricting our ability to obtain such financing while the
debt security is outstanding;
? 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, our ability to pay expenses, make capital expenditures and
acquisitions, and fund 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;
41 Table of Contents
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.
We expect to continue to incur significant costs in the pursuit of our initial business combination plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Recent Developments
On
The consideration to be paid to the pre-closing stockholders of Comera will be
equity consideration, pursuant to which, following certain transactions
contemplated by the Business Combination Agreement, each issued and outstanding
share of Comera's common stock and Comera vested in-the-money options shall
automatically be converted into and become the right to receive, in accordance
with the Payment Spreadsheet, the number of shares of our Holdco Common Stock as
set forth in the Payment Spreadsheet. We shall assume the Company Equity Plan
(as defined in the Business Combination Agreement), and all outstanding Comera
unvested options and vested out-of-the-money option shall be converted into a
right to receive Holdco Common Stock as set forth on the Payment Spreadsheet.
Following certain transactions contemplated by the Business Combination
Agreement, each share of Class A common stock issued and outstanding immediately
prior to the OTR Merger Effective Time will automatically be converted into and
become the right to receive one (1) share of Holdco Common Stock. Concurrently
with the Closing,
The Business Combination will be consummated subject to the deliverables and provisions as further described in the Business Combination Agreement.
On
Up to
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from
For the year ended
42
Table of Contents
For the period from
Liquidity and Capital Resources
On
Transaction costs amounted to
For the year ended
For the year ended
As of
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with an initial business combination, our initial stockholders,
officers and directors or their affiliates may, but are not obligated to, loan
us funds from time to time or at any time, as may be required. If we complete an
initial business combination, we would repay such loaned amounts out of the
proceeds of the Trust Account released to us. In the event that an 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
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amounts 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 initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
43 Table of Contents Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of the Sponsor a monthly fee of
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Derivative Warrant Liabilities
We account for the warrants issued in connection with our Initial Public Offering in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Public Warrants issued in connection with the Initial Public Offering were initially measured at fair value using a Monte Carlo simulation model, and subsequently measured based on the listed market price of such warrants, whereas the fair value of the Private Placement Warrants was initially measured using a Black-Scholes option pricing model, and continue to be measured at fair value using a Black-Scholes model.
Common stock subject to possible redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Shares of Class A common stock subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value. Shares
of conditionally redeemable Class A common stock (including Class A common stock
that feature redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely
within our control) are classified as temporary equity. At all other times,
shares of Class A common stock are classified as stockholders' equity. Our
Class A common stock features certain redemption rights that are considered to
be outside of our control and subject to the occurrence of uncertain future
events. Accordingly, at
Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which, resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Net income (loss) per share of common stock
We comply with accounting and disclosure requirements of Financial Accounting Standards Board Accounting Standard Codification, or FASB ASC Topic 260, "Earnings Per Share." Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. The Company applies the two-class method in calculating earnings per share. Accretion associated with the redeemable shares of Class A common stock is excluded from EPS as the redemption value approximates fair value.
Recent accounting pronouncements
In
44
Table of Contents
Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). Adoption of the ASU did not have any material effect on the Company's financial statements.
© Edgar Online, source