Filed 2025-03-31 · Period ending 2024-12-31 · 70,675 words · SEC EDGAR
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# Profusa, Inc. (PFSA) — 10-K
**Filed:** 2025-03-31
**Period ending:** 2024-12-31
**Accession:** 0001013762-25-004396
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1859807/000101376225004396/)
**Origin leaf:** e8c2a3ae2284f5df851663d7dd584cd8871007588c6ec801c6be67e6f453043e
**Words:** 70,675
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**
UNITED STATES**
**SECURITIES AND EXCHANGE COMMISSION**
**WASHINGTON, D.C. 20549**
**FORM 10-K**
**ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
For the fiscal year ended **December 31, 2024**
**or**
**TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF**
**For the transition period
from to**
Commission File Number: **001-41177**
**NORTHVIEW ACQUISITION CORP.**
(Exact name of registrant as specified in its charter)
| Delaware | | 86-3437271 | |
| (State or Other Jurisdiction of | | (I.R.S. Employer | |
| Incorporation or Organization) | | Identification Number) | |
****
**207 West 25th St, 9th
Floor
New York, NY 10001
(212) 494-9022**
(Address of Principal Executive Offices, Zip Code
and Registrants Telephone Number)
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class | | Trading Symbol (s) | | Name of each exchange on which registered | |
| Common Stock, par value $0.0001 per share | | NVAC | | None | |
| Rights, each right convertible into one-tenth of one share of common stock | | NVACR | | None | |
| Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per whole share | | NVACW | | None | |
Securities registered pursuant to Section 12(g)
of the Act: **None**
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter periods as the registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days. Yes No
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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. (check one)
| Large accelerated filer | | | | |
| Non-accelerated filer | | Smaller reporting company | | |
| Accelerated filer | | Emerging growth company | | |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants
executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The aggregate market value of the Companys
common stock held by non-affiliates computed by reference to the closing price for the common stock on June 30, 2024, as reported on the
Nasdaq Stock Market was $68,215,988.
As of March 28, 2025, 5,348,311 shares of Company
common stock, par value $0.0001 were issued and outstanding.
**Table of Contents**
|
PART I | |
|
Item 1. |
Business |
1 | |
|
Item 1A. |
Risk Factors |
12 | |
|
Item 1B. |
Unresolved Staff Comments |
40 | |
|
Item 1C |
Cybersecurity |
40 | |
|
Item 2. |
Properties |
40 | |
|
Item 3. |
Legal Proceedings |
40 | |
|
Item 4. |
Mine Safety Disclosure |
40 | |
|
Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
41 | |
|
Item 6. |
[RESERVED] |
41 | |
|
Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
42 | |
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
49 | |
|
Item 8. |
Consolidated Financial Statements and Supplementary Data |
49 | |
|
Item 9. |
Change in and Disagreements with Accountants on Accounting and Financial Disclosures |
49 | |
|
Item 9A. |
Controls and Procedures |
50 | |
|
Item 9B. |
Other Information |
50 | |
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
50 | |
|
|
|
| |
|
PART III | |
|
| |
|
Item 10. |
Directors, Executive Officers and Corporate Governance |
51 | |
|
Item 11. |
Executive Compensation |
57 | |
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
58 | |
|
Item 13. |
Certain Relationships and Related Transactions and Director Independence |
59 | |
|
Item 14. |
Principal Accountant Fees and Services |
61 | |
|
|
|
| |
|
PART IV | |
|
| |
|
Item 15. |
Exhibits and Financial Statement Schedules |
62 | |
|
Item 16. |
Form 10-K Summary |
63 | |
|
Signatures |
64 | |
i
****
**CERTAIN TERMS**
Unless otherwise stated in
this Annual Report on Form 10-K (this Report), or the context otherwise requires, references to:
|
| combination
period means the period following the completion of our initial public offering at the end of which, if we have not completed
our initial business combination, 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, divided by the number of then outstanding public shares, subject to
applicable law and certain conditions and as further described herein. The combination period ends on June 22, 2025, unless we amend
our charter to further extend the period of time to consummate a business combination; |
|
|
| Dawson
James are to Dawson James Securities, Inc.; |
|
|
| founder
shares are to shares of our common stock purchased by our sponsor in a private placement prior to our initial public offering; |
|
|
| I-Bankers
are to I-Bankers Securities, Inc.; |
|
|
| initial
stockholders are to holders of our founder shares prior to our initial public offering; |
|
|
| management
or our management team are to our executive officers and directors; |
|
|
| private
placement warrants are to the warrants issued in a private placement to our sponsor, I-Bankers, and Dawson James simultaneously
with the closing of our initial public offering; |
|
|
| public
shares are to shares of our common stock sold as part of the units in our initial public offering (whether they were purchased
in our initial public offering or thereafter in the open market); |
|
|
| public
stockholders are to the holders of our public shares, including our initial stockholders and management team to the extent our
initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholders and
member of our management teams status as a public stockholder shall only exist with respect to such public shares; |
|
|
| public
warrants are to the redeemable warrants sold as part of the units in our initial public offering (whether they were purchased
in our initial public offering or thereafter in the open market) and to any private placement warrants issued upon conversion of working
capital loans that are sold to third parties that are not our initial stockholders or executive officers or directors (or permitted transferees)
following the consummation of our initial business combination; |
|
|
| rights
are to the rights sold as part of the units in our initial public offering (whether they were purchased in our initial public offering
or thereafter in the open market); |
|
|
| sponsor
are to NorthView Sponsor I, LLC, a limited liability company; |
|
|
| warrants
are to our 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 |
|
|
| we,
us, NorthView, company or our company are to NorthView Acquisition Corp., a Delaware
corporation. |
|
ii
**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**
Some statements contained
in this Report may constitute forward-looking statements for purposes of the federal securities laws. Our forward-looking
statements include, but are not limited to, statements regarding our or our management teams 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. Forward-looking statements in this prospectus may include, for example, statements about:
|
| our
ability to select an appropriate target business or businesses; |
|
|
| our
ability to complete our initial business combination; |
|
|
| our
expectations around the performance of the 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, as a result of which they would then receive expense reimbursements; |
|
|
| our
potential ability to obtain additional financing to complete our initial business combination; |
|
|
| our
pool of prospective target businesses; |
|
|
| the
ability of our officers and directors to generate a number of potential acquisition 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 our initial public offering. |
|
The forward-looking statements
contained in this Report 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, those factors described under the heading Risk Factors. 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.
iii
****
**PART I**
**ITEM 1. BUSINESS**
**Our Company**
We are a blank check company
formed under the laws of the State of Delaware April 19, 2021. We were formed for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout
this prospectus as our initial business combination. Although there is no restriction or limitation on what industry our target operates
in, it is our intention to pursue prospective targets that are focused on healthcare innovation. We anticipate targeting what are traditionally
known as small cap companies domiciled in North America, Europe and/or the APAC regions that are developing assets in the biopharmaceutical,
medical technology/medical device and diagnostics space which aligns with our management teams experience in operating health care
companies and in drug and device technology development as well as diagnostic and other services.****
**Recent Developments**
*Proposed Business Combination*
On November 7, 2022, NorthView
entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among NorthView, NV Profusa Merger
Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of NorthView (Merger Sub), and Profusa, Inc., a California
corporation (Profusa).
The Merger Agreement provides
that, among other things, at the closing (the Closing) of the transactions contemplated by the Merger Agreement, Merger
Sub will merge with and into Profusa (the Merger), with Profusa surviving as a wholly-owned subsidiary of NorthView. In
connection with the Merger, NorthView will change its name to Profusa, Inc. The Merger and the other transactions contemplated
by the Merger Agreement are hereinafter referred to as the Business Combination.
The Business Combination is
subject to customary closing conditions, including the satisfaction of the minimum available cash condition, the receipt of certain governmental
approvals and the required approval by the stockholders of NorthView and Profusa. There is no assurance that the Business Combination
will be completed.
The aggregate consideration
to be received by the Profusa stockholders is based on a pre-transaction equity value of $155,000,000. The exchange ratio will be equal
to (a) $155,000,000, divided by an assumed value of NorthView Common Stock of $10.00 per share.
Subject to certain future
revenue and stock-price based milestones, Profusa stockholders will have the right to receive an aggregate of up to an additional 3,875,000
shares of NorthView common stock (the Earnout Shares). One-quarter of the Earnout Shares will be issued if, between the
18-month anniversary and the two year anniversary of the Closing, the combined companys common stock achieves a daily volume weighted
average market price of at least $12.50 per share for any 20 trading days within a 30 consecutive trading day period (Milestone
Event I). One-quarter of the Earnout Shares will be issued if, between the first and second anniversary of the Closing, the combined
companys common stock achieves a daily volume weighted average market price of at least $14.50 per share for a similar number of
days (Milestone Event II). One-quarter of the Earnout Shares will be issued upon the consummation of the Tasly JV (as defined
in the amended Merger Agreement) during fiscal year 2024, and one-quarter of the Earnout Shares will be issued if the combined company
achieves at least $99,702,000 in revenue in fiscal year 2025 (or up to one-half of the Earnout Shares if both revenue milestones are achieved).
Additionally, if Milestone
Event I or Milestone Event II are achieved by the second anniversary of the Closing, NorthViews sponsor, NorthView Sponsor I, LLC
and Profusa stockholders, will be issued additional shares up to the amount of any shares forgone as an inducement to obtaining Additional
Financings (as defined in the Merger Agreement).
On
September 12, 2023, the parties to the Merger Agreement entered into Amendment No. 1 to the Merger Agreement (the Amendment)
pursuant to which the parties agreed to revise the revenue earnout milestones to reflect updated projections provided by Profusa. Specifically,
Amendment No. 1 revised the definition of Milestone Event III and Milestone Event IV such that one-quarter
of the Earnout Shares would be issued to Profusa stockholders if the combined company achieves Earnout Revenue of $11,864,000 for the
fiscal year ended December 31, 2024, and one-quarter of the Earnout Shares would be issued to Profusa stockholders if the combined company
achieves Earnout Revenue of $99,702,000 for the fiscal year ended December 31, 2025. Amendment No. 1 also clarified the exercise price
of certain of the Companys Warrants.
On January 12, 2024, the
parties to the Merger Agreement entered into Amendment No. 2 to the Merger Agreement (the Amendment) pursuant to which
the parties agreed to revise the definition of Milestone Event III and such that the Earnout Revenue milestone of $11,864,000
for the fiscal year ended December 31, 2024, was replaced with a milestone requiring consummation of the Tasly JV (a joint venture contemplated
among Profusa and Tasly (International) Healthcare Capital Company Limited, as described in the Amendment) and receipt of the related
funding during the fiscal year ended December 31, 2024. . Amendment No. 2 also extended the Outside Date (the date by which the Business
Combination must be consummated, otherwise the Merger Agreement becomes terminable by Profusa or the Company) from September 21, 2023,
to June 22, 2024.
On March4, 2024, the parties to the Merger
Agreement entered into an Amendment No.3 to the Merger Agreement (Amendment No.3 to the Merger Agreement) pursuant
to which the parties agreed to revise the Company Reference Value to adjust for financing proceeds and debt conversions that could be
received by Profusa prior to the Business Combination. On March14, 2024, NorthView filed a Current Report on Form8-K regarding
Amendment No.3 to the Merger Agreement with the SEC.
1
On February 11, 2025, the
parties to the Merger Agreement entered into an Amendment No. 4 to the Merger Agreement (Amendment No. 4 to the Merger Agreement)
pursuant to which the parties agreed to revise the Company Reference Value to adjust for financing proceeds that could be received by
Profusa prior to the Business Combination, along with debt conversions and incentive shares being issued that. On February 19, 2025, NorthView
filed a Current Report on Form 8-K regarding Amendment No. 4 to the Merger Agreement with the SEC.
*Extension Meeting*
The Company initially had
15 months from the closing of its initial public offering to complete a Business Combination. On March 10, 2023, the Company held a vote
to amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business Combination
from March 22, 2023 to December 22, 2023 (the First Extension Meeting). On December 21, 2023, the Company held a vote to
amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business Combination
from December 22, 2023 to March 22, 2024 (the Second Extension Meeting). On March21, 2024, the Company held a vote
to amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business Combination
from March 22, 2023 to September 22, 2024 (the Third Extension Meeting). On September19, 2024, the Company held a
vote to amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business
Combination from September 22, 2024 to March 22, 2025 (the Fourth Extension Meeting). On March 21, 2025, the Company had
the Special Meeting. At the Special Meeting, shareholders approved an extension for the Company to consummate an initial business combination
from March 22, 2025 to June 22, 2025 (the Fifth Extension Meeting). If the Company is unable to complete a Business Combination
within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously
released to the Company to pay taxes, 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 Companys
remaining stockholders and the Companys board of directors, dissolve and liquidate, subject in each case to the Companys
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
*Nasdaq Delisting*
On December 20, 2024, NorthView
received a delisting determination letter from Nasdaq as the 36-month anniversary from its IPO has passed on December 27, 2024, and NorthViews
securities were suspended from trading and delisted from Nasdaq. As of the same date, NorthViews securities started being quoted
on OTC Pink.
**Our Sponsors and Competitive Advantages**
We believe that the combination
of a high-quality management team with extensive operational, financial, merger and acquisition, and public company experience, combined
with the resources of a high quality investment bank focused on evaluating and assisting quality private companies to access the public
markets, is an attractive format. It is particularly important that our management team and our sponsor have successfully worked together
in the past. It is also important that our sponsor, management team and directors have deep experience, contacts and relationships in
the healthcare sector.
**Opportunity & Acquisition Target Criteria**
We will seek to acquire small
cap businesses in the biopharmaceutical, medical technology/device industries or diagnostic and other services sector. We believe these
industries are attractive for a number of reasons, including: they represent attractive markets, which are characterized by a high level
of innovation and they include a large number of emerging high growth companies that have the right size as potential targets.
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. We believe target businesses might
find this method a more certain and cost-effective method to becoming a public company than the typical initial public offering. Furthermore,
once the business combination is consummated, 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 that could prevent
the offering from occurring. Once public, we believe the target business should then have greater access to capital and an additional
means of providing management incentives consistent with stockholders interests than it would have as a privately held company.
It can offer further benefits by augmenting a companys profile among potential new customers and vendors and aid in attracting
talented employees.
While we believe that our
status as a public company will make us an attractive business partner, some potential target businesses may view the inherent limitations
in our status as a blank check company as a deterrent and may prefer to affect a business combination with a more established entity or
with a private company. These inherent limitations include limitations on our available financial resources, which may be inferior to
those of other entities pursuing the acquisition of similar target businesses; the requirement that we seek stockholder approval of a
business combination or conduct a tender offer in relation thereto, which may delay the consummation of a transaction; and the existence
of our outstanding rights and warrants, which may represent a source of future dilution.
2
**Our Acquisition Process**
In evaluating a prospective
target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent
management and employees, document reviews, inspection of facilities, as well as a review of financial and other information that will
be made available to us. In conducting our due diligence review, we intend to leverage the experience of members of our management team,
directors, sponsors and advisors on an efficient and cost-effective basis as we deploy them to review matters related to their specific
areas of functional expertise.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our advisors or our sponsor, officers or directors. In
the event we seek to complete our initial business combination with a company that is affiliated with our officers or directors, we, or
a committee of independent directors, will obtain an opinion from an independent investment banking firm which is a member of the Financial
Industry Regulatory Authority, or FINRA, or 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 and our independent directors directly or indirectly own founder shares and/or private placement warrants following our initial public
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 target 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.
**Initial Business Combination**
So long as we maintain a listing
for our securities on Nasdaq, our initial business combination must be with one or more target businesses that together have an aggregate
fair market value equal to at least 80% of the value of the assets held in the trust account (excluding 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 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 an independent accounting firm with respect to the satisfaction
of such criteria. 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 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 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-transaction
company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a
transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In
this case, we 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 valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net
assets test will be based on the aggregate value of all of the target businesses 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.
**Financial Position**
We had funds available in
the Trust Account for a business combination of approximately $8.3 million, as of December 31, 2024. On March 21, 2025, the Companys
stockholders elected to redeem 532,958 publicshares of Common Stock in connection with the extension of our business combination
period for up to threemonths, from March22, 2025, ultimately until as late as June22, 2025. In connection with this
extension, the Company is required to make a one-time contribution of $30,000 to the Trust Account for the entire extension period, which
occurred on March 21, 2025. Following the extension, we have available funds in the Trust Account of approximately $1.9 million as of
March 21, 2025. This amount includes $2.0 million of the business combination marketing fee payable to I-Bankers and Dawson James, payable
in cash upon the Closing of our business combination with Profusa. As the business combination marketing fee exceeds the funds available
in the Trust Account, the Company is expected to use proceeds from a private financing to pay a portion of the business combination marketing
fee at the closing of the business combination.
3
**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:
|
| 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 |
|
|
| 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 targets
management team**
Although we intend to closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with
that business, our assessment of the target business 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 business combination, it is unlikely that any of them will
devote their full efforts to our affairs subsequent to our 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 a 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. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
|
Type of Transaction |
|
Whether Stockholder
Approval is Required | |
|
Purchase of assets |
|
No | |
|
Purchase of stock of target not involving a merger with the company |
|
No | |
|
Merger of target into a subsidiary of the company |
|
No | |
|
Merger of the company with a target |
|
Yes | |
Under Nasdaqs listing
rules, stockholder approval would be required for our initial business combination if, for example:
|
| we
issue shares of common stock that will be equal to or in excess of 20% of the number of shares of our common stock then outstanding (other
than in a public offering); |
|
|
| 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 5% or more; or |
|
|
| the
issuance or potential issuance of common stock will result in our undergoing a change of control. |
|
4
**Permitted purchases of our securities**
In the event we seek stockholder
approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our initial stockholders, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination. 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. None of
the funds in the trust account will be used to purchase shares in such transactions. They will not make 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. We have an insider trading
policy that requires 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 our legal counsel 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 initial
stockholders, 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. 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 the business combination or (ii) 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 business combination, where it appears that such requirement would otherwise not
be met. This may result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases
are made, the public float of our common stock 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 initial stockholders,
officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our initial stockholders, officers,
directors or 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 initial stockholders, 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. Our initial stockholders, officers, directors, advisors or their affiliates
will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our initial
stockholders, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will
only be made 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. 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 initial stockholders, officers, directors and/or their affiliates
will not make 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**
In connection with a special meeting of NorthView stockholders, held
on March 10, 2023, the NorthView stockholders elected to redeem 18,000,868 public shares of NorthView Common Stock and to extend NorthViews
business combination period monthly, for up to nine months, from March 22, 2023, ultimately until as late as December 22, 2023. Separately,
on December 21, 2023, the NorthView stockholders elected to redeem 140,663 public shares of NorthView Common Stock in connection with
a shareholder meeting, related to the extension of NorthViews business combination period monthly, for up to three months, from
December 22, 2023, ultimately until as late as March 22, 2024. Additionally, the NorthView stockholders elected to redeem 95,394 public
shares of NorthView Common Stock in connection with a shareholder meeting on March21, 2024, related to the extension of NorthViews
business combination period monthly, for up to sixmonths, from March22, 2024, ultimately until as late as September22,
2024. On September19, 2024, the NorthView stockholders elected to redeem 50,556 publicshares of NorthView Common Stock in
connection with the extension of NorthViews business combination period monthly, for up to sixmonths, from September22,
2024, ultimately until as late as March22, 2025. The aggregate of 18,287,481 public shares redeemed in connection with the Extension
represented approximately 75.7% of the total NorthView shares of common stock outstanding following NorthViews IPO and approximately
96.4% of the public shares previously outstanding. As of December 31, 2024, NorthView had 687,519 public shares of NorthView Common Stock
outstanding, and held approximately $8.3 million in the Trust Account. In connection with this Extension, each monthly extension shall
require NorthView or its designee to contribute $0.05, per public share outstanding, to the Trust account. We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of 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 as of two business
days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable)
divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account
was initially approximately $10.10 per public share. This amount has increased as a result of contributions to the trust account in connection
with the Extension, as well as interest earned on the amounts held in the trust account. The per share amount we will distribute to stockholders
who properly exercise their redemption rights will not be reduced by the fee payable to I-Bankers and Dawson James pursuant to the business
combination marketing agreement. 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 their founder shares and any public shares they may hold in connection with
the completion of our business combination, 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.
5
**Ability to Extend Time to Complete Business
Combination**
We will have until the end
of the combination period to consummate our initial business combination. However, if we anticipate that we may not be able to consummate
our initial business combination within 15 months from our initial public offering, we may, by resolution of our board if requested by
our sponsor, extend the period of time to consummate a business combination up to two times, each by an additional three months (for a
total of up to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust account
as set out below. In connection with a special meeting of NorthView stockholders, held on March 10, 2023, the NorthView stockholders elected
to redeem 18,000,868 public shares of NorthView Common Stock and to extend NorthViews business combination period monthly, for
up to nine months, from March 22, 2023, ultimately until as late as December 22, 2023. Separately, on December 21, 2023, the NorthView
stockholders elected to redeem 140,663 public shares of NorthView Common Stock in connection with a shareholder meeting, related to the
extension of NorthViews business combination period monthly, for up to three months, from December 22, 2023, ultimately until as
late as March 22, 2024. Additionally, the NorthView stockholders elected to redeem 95,394 public shares of NorthView Common Stock in connection
with a shareholder meeting on March21, 2024, related to the extension of NorthViews business combination period monthly,
for up to sixmonths, from March22, 2024, ultimately until as late as September22, 2024. On September19, 2024,
the NorthView stockholders elected to redeem 50,556 publicshares of NorthView Common Stock in connection with the extension of NorthViews
business combination period monthly, for up to sixmonths, from September22, 2024, ultimately until as late as March22,
2025. On March 21, 2025, the NorthView stockholders elected to redeem 532,958 public shares of NorthView Common Stock in connection with
the extension of NorthViews business combination period from March 22, 2025, until as late as June 22, 2025. At the time of the
stockholder vote on March 21, 2025, NorthViews stockholders redeemed 9.1% of the total outstanding shares. The aggregate of 18,820,439
public shares redeemed in connection with the Extension represented approximately 77.9% of the total NorthView shares of common stock
outstanding following NorthViews IPO and approximately 99.2% of the public shares previously outstanding. In connection with this
extensions, NorthView or its designee to contributed funds to the Trust Account. Any such payments have been and will be made in the form
of a loan. Any such loans will be non-interest bearing and payable upon the consummation of our initial business combination. If we complete
our initial business combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us. If we do
not complete a business combination, we will not repay such loans. Furthermore, the letter agreement with our initial stockholders contains
a provision pursuant to which our sponsor has agreed to waive its right to be repaid for such loans out of the funds held in the Trust
Account in the event that we do not complete a business combination. In the event that we receive notice from our sponsor five days prior
to the applicable deadline of its wish for us to effect an extension, we intend to issue a press release announcing such intention at
least three days prior to the applicable deadline. In addition, we intend to issue a press release the day after the applicable deadline
announcing whether or not the funds had been timely deposited. Our sponsor and its affiliates or designees are not obligated to fund the
Trust Account to extend the time for us to complete our initial business combination. If we choose to extend the period of time to consummate
a business combination as set forth herein, you will not have the ability to vote or redeem your shares of common stock in connection
with either of the three-month extensions. However, if we seek to complete a business combination during an extension period, investors
will still be able to vote and redeem their shares of common stock in connection with that business combination.
See Recent Developments
- Extension Meeting above for information about our extension of the combination period from our shareholders.
**Manner of Conducting Redemptions**
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of common stock 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 the law or stock exchange listing requirement. Under Nasdaq
rules, 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 require stockholder approval. We may conduct redemptions without a stockholder vote pursuant to the
tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirement or we choose to seek
stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we
would 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 legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
|
| conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and |
|
|
| file
tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies. |
|
Upon the public announcement
of our initial business combination, we or our initial stockholders will terminate any plan established in accordance with Rule 10b5-1
to purchase shares of our 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 are not purchased by our initial stockholders. If public stockholders tender more shares than we have offered to
purchase, we will withdraw the tender offer and not complete the initial business combination.
6
If, however, stockholder approval
of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business
or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
|
| conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and |
|
|
| file
proxy materials with the SEC. |
|
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,
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 sponsor, executive officers and directors will count toward this quorum and have agreed to vote their founder
shares and any public shares purchased during or after our initial public offering in favor of our initial business combination. These
quorum and voting thresholds, and the voting agreements of our sponsor, executive officers and directors may make it more likely that
we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether
they vote for or against the proposed transaction. 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 their founder shares and public shares in
connection with the completion of a business combination.
Redemptions of our public
shares may also be subject to a 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 common stock that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will
not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned
to the holders thereof.
**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 business
combination pursuant to the tender offer rules, our amended and restated 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 Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. 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, our initial stockholders
or our management 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 an aggregate of 15% or more of the shares sold in our initial public offering could threaten
to exercise its redemption rights if such holders shares are not purchased by us, our initial stockholders or our management at
a premium to the then-current market price or on other undesirable terms. By limiting our stockholders ability to redeem to less
than 15% of the shares sold in our initial public offering, we believe we will limit the ability of a small group of stockholders to unreasonably
attempt to block our ability to complete our 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 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 mailed to such holders,
or up to two business days prior to the 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 Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian)
System, at the holders 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 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. Given the relatively short exercise period,
it is advisable for stockholders to use electronic delivery of their public shares.
7
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 and it would be up to the broker whether or not to pass the cost on to the redeeming
holder. However, the fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery
must be effectuated.
The foregoing is different
from the procedures used by some blank check companies. In order to perfect redemption rights in connection with their business combinations,
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 companys stock in the market.
If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his
or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit
before the stockholder meeting, would become option rights surviving past the completion of the business combination until
the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that
a redeeming holders 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 the date of the stockholder
meeting set forth in our proxy materials, as applicable. 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 business combination
is not completed, we may continue to try to complete a business combination with a different target until the end of the combination period.
**Redemption of public shares and liquidation
if no initial business combination**
We will have only until the
end of the combination period to complete our initial business combination. If we are unable to complete our initial business combination
within the combination 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, 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 (less up to $100,000 of interest to pay dissolution expenses,
which interest shall be net of taxes payable) 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),
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. There will be no redemption rights or liquidating distributions
with respect to our rights and warrants, which will expire worthless if we fail to complete our initial business combination within the
combination period.
Our initial stockholders have
agreed to waive 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 the combination period. However, if our initial stockholders acquire public shares in or after
our initial public offering, 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 combination period.
Our sponsor, officers and
directors have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment to our amended and restated
certificate of incorporation that would affect (i) the substance or timing of our obligation to redeem 100% of our public shares if we
do not complete our initial business combination within the combination period or (ii) with respect to any other provision relating to
stockholders rights or pre-business combination activity, unless we provide our public stockholders with the opportunity to redeem
their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then
outstanding public shares.
8
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 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 our initial public offering and the private placement, 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 $10.10. 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 $10.10. 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 vendors, service providers, 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 for the benefit of our public
stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would 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 an 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 partys
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. In order to protect the amounts held in the trust account, our sponsor
has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or
a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust
account to below (i) $10.10 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 which
may be withdrawn to pay 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 our initial public 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, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not asked
our sponsor to reserve for such indemnification obligations, and our sponsors only assets are securities of our company. Therefore,
we cannot assure you that our sponsor would be able to satisfy those obligations. We believe the likelihood of our sponsor having to
indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other
entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
In the event that the proceeds
in the trust account are reduced below (i) $10.10 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 which may be withdrawn to pay 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 $10.10 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 vendors, service
providers, 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 monies held in the trust account. Our sponsor will also not be liable as to any claims under our
indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
We will not have significant funds remaining from the proceeds of our initial public offering 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.
9
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 the combination period may be considered a liquidation distribution under Delaware
law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable
provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholders 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 the combination period, is not considered a liquidation distribution under Delaware law and such
redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due
to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of
creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation
distribution. If we are unable to complete our initial business combination within the combination 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, 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
(net of the amount of interest which may be withdrawn to pay taxes, and 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 liquidation distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve
and liquidate, subject in 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 the combination
period 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, 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) $10.10 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 our initial public
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 $10.10 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.
10
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,
(ii) the redemption of any public shares properly tendered 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 redeem 100% of our public shares if we do not complete our
initial business combination within the combination period or (B) with respect to any other provision relating to stockholders
rights or pre-business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our initial
business combination within the combination period, subject to applicable law. 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 stockholders voting in connection with the business combination alone will not result in a stockholders 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.
**Employees**
We currently have two executive
officers. 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 any member of our management team 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 have registered our common
stock, rights, 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 consolidated
financial statements audited and reported on by our independent registered public auditors.
We will provide stockholders
with audited consolidated 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. In all likelihood, these consolidated financial statements
will need to be prepared in accordance with GAAP. We cannot assure you that any particular target business identified by us as a potential
acquisition candidate will have consolidated financial statements prepared in accordance with GAAP or that the potential target business
will be able to prepare its consolidated financial statements in accordance with GAAP. To the extent that this requirement cannot be met,
we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not
believe that this limitation will be material.
We are now required to evaluate
our internal control procedures each fiscal year , which began with 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 will we be required to have our internal
control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such acquisition.
We are an emerging
growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial
public offering, (b) in which we have total annual gross revenue of at least $1.235 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 $1.00 billion in non-convertible debt securities during the prior
three-year period. References herein to emerging growth company shall have the meaning associated with it in the JOBS Act.
11
**ITEM 1A. RISK FACTORS**
**Summary of Risk Factors**
An investment in our securities
involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled Risk
Factors, alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition
and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Such risks include, but are not limited to:
|
| We
may not be able to complete the Business Combination pursuant to the Merger Agreement. If we are unable to do so, we will incur substantial
costs associated with withdrawing from the transaction and may not be able to find additional sources of financing to cover those costs |
|
|
| Our
public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, and even if we hold a vote,
holders of our founder shares will participate in such vote, which means we may complete our initial business combination even though
a majority of our public stockholders do not support such a combination. |
|
|
| 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. |
|
|
| Your
only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your
right to redeem your shares from us for cash, unless we seek stockholder approval of the 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. |
|
|
| The
ability of our public stockholders 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. |
|
|
| 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. |
|
|
| 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 decrease our ability to conduct due diligence on potential business combination
targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination on terms that
would optimize value for our stockholders. |
|
|
| 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. |
|
|
| If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or fails
to comply with the procedures for tendering its shares, such shares may not be redeemed. |
|
|
| 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 15% or more of our common stock, you will lose the ability to
redeem all such shares equal to or in excess of 15% of our common stock. |
|
|
| 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. |
|
|
| 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, executive officers and directors which may raise potential conflicts of interest. |
|
|
| We
will likely only be able to complete one business combination with the proceeds of our initial public 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. |
|
12
|
| As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there may
be more competition for attractive target businesses. This could increase the cost of our initial business combination and could even
result in our inability to find a suitable target business or to consummate an initial business combination. |
|
|
| 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. |
|
|
| 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. |
|
|
| Our
executive 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. |
|
|
| Certain
of our executive 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 following our initial business combination and, accordingly, may have conflicts
of interest in determining to which entity a particular business opportunity should be presented. |
|
|
| Since
our initial stockholders, including our sponsor, executive 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. |
|
|
| Because
each unit contains one right and one-half of one redeemable warrant, and only a whole warrant may be exercised, the units may be worth
less than units of other blank check companies. |
|
|
| We
are not registering the shares of common stock issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time, and such registration may not 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. |
|
|
| Our
initial stockholders paid an aggregate of $25,000, or approximately $0.005 per founder share, and, accordingly, you will experience immediate
and substantial dilution from the purchase of our common stock. |
|
|
| Provisions
in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors
and officers. |
|
**Risks Relating to Our Search For, Consummation
of, or Inability to Consummate, a Business Combination**
**We may not be able to complete the Business
Combination pursuant to the Merger Agreement. If we are unable to do so, we will incur substantial costs associated with withdrawing from
the transaction and may not be able to find additional sources of financing to cover those costs.**
In connection with the Merger
Agreement, we have incurred substantial costs researching, planning and negotiating the transaction. These costs include, but are not
limited to, costs associated with securing sources of financing, costs associated with employing and retaining third-party advisors who
performed the financial, auditing and legal services required to complete the transaction, and the expenses generated by our officers,
executives, and employees in connection with the transaction. If, for whatever reason, the transactions contemplated by the Merger Agreement
fail to close, we will be responsible for these costs, but will have no source of revenue with which to pay them. We may need to obtain
additional sources of financing in order to meet our obligations, which we may not be able to secure on the same terms as our existing
financing or at all. If we are unable to secure new sources of financing and do not have sufficient funds to meet our obligations, we
will be forced to cease operations and liquidate the trust account.
13
**As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive target
businesses. This could increase the cost of our initial business combination and could even result in our inability to find a suitable
target business 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 target businesses for blank
check companies have already entered into an initial business combination, and there are still many blank check companies preparing and
seeking target businesses for an initial public offering, 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 blank check companies seeking to enter into an initial business combination with available targets businesses, the competition
for available target businesses with attractive fundamentals or business models may increase, which could cause targets businesses 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 target businesses
post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate
an initial business combination, and may result in our inability to consummate an initial business combination on terms favorable to our
investors altogether.
**Changes in the market for directors and officers
liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.**
In recent months, the market
for directors and officers liability insurance for blank check companies has changed in ways adverse to us and our officers and directors.
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. These trends may continue into the future.
The increased cost and decreased
availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and consummate
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 combinations
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 stockholders.
**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 $10.00
per share or which approximates the per-share amounts in our trust account at such time, which is generally approximately $10.10. The
purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price of the
shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such time.
14
**Our public stockholders may not be afforded
an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate
in such vote, 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 not hold a stockholder
vote to approve our initial business combination unless the business combination would require stockholder approval under applicable state
law or the rules of Nasdaq or if we decide to hold a stockholder vote for business or other reasons. For instance, the Nasdaq rules currently
allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we
were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore,
if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder
approval of such business combination. However, except for as required by law, 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 consummate our initial business combination even if holders of a majority
of the outstanding shares of our common stock do not approve of the business combination we consummate. 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 to vote their
founder shares, as well as any public shares purchased during or after our initial public offering, in favor of our initial business combination.
Our sponsor, officers and directors own 88.7% of our outstanding shares of common stock. As a result, if we seek stockholder approval
of our initial business combination, it is more likely that we will received the necessary stockholder approval than would be the case
if our initial stockholders and their permitted transferees agreed to vote their founder shares in accordance with the majority of the
votes cast by the public stockholders. In addition, in the event that our board of directors amends our bylaws to reduce the number of
shares required to be present at a meeting of our stockholders, we would need even fewer public shares to be voted in favor of our initial
business combination to have such transaction approved.
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 our initial stockholders agreed to vote their 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 may be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of the business combination.**
At the time of your investment
in us, you may not be provided with an opportunity to evaluate the specific merits or risks of one or more 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 vote. 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. Prospective targets will be aware of these
risks and, thus, may be reluctant to enter into a business combination transaction with us.
15
**The ability of our public stockholders 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
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our 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 amount of the fee payable to I-Bankers and Dawson James pursuant to the terms of the business combination marketing agreement
will not be adjusted for any shares that are redeemed in connection with an initial business combination. The above considerations may
limit our ability to complete the most desirable business combination available to us or optimize our capital structure, or may incentivize
us to structure a transaction whereby we issue shares to new investors and not to sellers of target businesses.
**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 decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our business combination on terms that would optimize 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 the combination period. 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.**
We must complete our initial
business combination within the combination period. Our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the conflict
between Ukraine and Russia continues to grow and, while the extent of the impact of the conflict on us will depend on future developments,
it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased
market liquidity and third-party financing being unavailable on terms acceptable to us or at all. We may not be able to find a suitable
target business and complete our initial business combination within such time period. If we have not completed our initial business combination
within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, 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 (which interest shall be net of taxes payable, and 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 liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law.
16
**If we seek stockholder approval of our initial
business combination, our initial stockholders, directors, executive officers, advisors and their affiliates may elect to purchase shares
from public stockholders, which may influence a vote on a proposed business combination and reduce the public float of our
common stock.**
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender
offer rules, our initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares 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 initial stockholders, directors, executive 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 purpose of such purchases could be to vote such shares in favor of the business
combination and thereby increase the likelihood of obtaining stockholder approval of the 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
business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of a business
combination that may not otherwise have been possible.
In addition, if such purchases
are made, the public float of our common stock 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 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 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.
****
**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 15% or more of our common stock, you will lose the ability to redeem all such shares equal to or in excess of 15% of
our 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 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 Exchange Act), will be restricted from seeking redemption rights with respect to an aggregate of 15% or more of the
shares sold in our initial public offering, which we refer to as the Excess Shares. However, we would not be restricting
our stockholders ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability
to redeem the Excess Shares will reduce your influence over our ability to complete our 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 business combination. And as a result, you will continue to hold that number of shares
equal to or exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially
at a loss.
17
**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
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10 per share, on our
redemption, and our rights and 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 our initial public 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 common stock redeemed and, in the event we seek stockholder approval of our business combination, we make
purchases of our common stock, the resources available to us for our initial business combination will potentially be reduced. Any of
these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete
our initial business combination, our public stockholders may receive only approximately $10.10 per share on the liquidation of our trust
account and our rights and warrants will expire worthless.
**If the net proceeds of our initial public 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 term of the combination period, 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 term of the combination period, assuming that
our initial business combination is not completed during that time. We believe that the funds available to us outside of the trust account
will be sufficient to allow us to operate for at least the term of the combination period; 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 are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.10 per share on the liquidation of our trust account
and our rights and warrants will expire worthless.
**If the net proceeds of our initial public 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 will depend on loans from
our initial stockholders or management team to fund our search, to pay our taxes and to complete our business combination.**
Of the net proceeds of our
initial public offering, the sale of the private placement warrants, and subsequent private financings, only approximately $16,204 as
of December 31, 2024 is available to us outside the trust account to fund our working capital requirements. If we are required to seek
additional capital, we would need to borrow funds from our initial stockholders, management team or other third parties to operate or
may be forced to liquidate. None of our initial stockholders, members of our management team or any of their affiliates is under any obligation
to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from
funds released to us upon completion of our initial business combination. Up to $1,500,000 of such working capital loans may be convertible
into private placement-equivalent warrants at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical
to the private placement warrants, including as to exercise price, exercisability and exercise period of the underlying warrants. We do
not expect to seek loans from parties other than our initial stockholders or an affiliate of our initial stockholders 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 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. Consequently, our public stockholders may only receive approximately $10.10
per share on our redemption of our public shares, and our rights and warrants will expire worthless.
18
**We may seek acquisition opportunities in companies
that may be outside of our managements areas of expertise.**
We will consider a business
combination outside of our managements 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 managements expertise, our managements expertise may not be directly applicable to its evaluation or
operation, and the information contained in this Report regarding the areas of our managements 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. Accordingly, any stockholders who choose to remain stockholders following our business combination
could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless
they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary
duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or
proxy statement relating to the business combination contained an actionable material misstatement or material omission.
**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 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 law, or we decide to obtain stockholder approval
for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination
if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.10 per share on the liquidation of our trust account and our rights and warrants
will expire worthless.
**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 business
combination with an affiliated entity, or our board cannot independently determine the fair market value of the target business or businesses,
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 for a target 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.
**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 are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10 per share
on the liquidation of our trust account and our rights and 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 are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.10 per share on the liquidation
of our trust account and our rights and warrants will expire worthless.
19
**We may have a limited ability to assess the
management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.**
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target business management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the targets management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the targets
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 stockholders who choose to remain stockholders following
the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of
a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that
the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material
omission.
The officers and directors
of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination targets
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 candidates 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 engage in a business combination with
one or more target businesses that have relationships with entities that may be affiliated with our sponsor, executive officers and directors
which may raise potential conflicts of interest.**
In light of the involvement
of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with
our sponsor, executive officers and directors. Our 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. 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 - Effecting our initial business combination - 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 executive
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.
**We will likely only be able to complete one
business combination with the proceeds of our initial public 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.**
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:
|
| solely
dependent upon the performance of a single business, property or asset, or |
|
|
| dependent
upon the development or market acceptance of a single or limited number of products, 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.
20
**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 company
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. By definition, 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 company that is not as profitable
as we suspected, if at all.
**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 less than 100% of the
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
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 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 common stock in exchange for all of the outstanding capital stock of a target.
In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares
of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common
stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a
single person or group obtaining a larger share of the companys 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 may seek business combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.**
We may seek business combination
opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement
such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the initial business
combination may not be as successful as we anticipate.
To the extent we complete
our initial business combination with a large complex business or entity with a complex operating structure, we may also be affected by
numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our
strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations,
we may not be able to properly ascertain or assess all of the significant risk factors until we complete our initial business combination.
If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we
may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave
us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination
may not be as successful as a combination with a smaller, less complex organization.
21
**Any failure to meet the initial listing requirements of Nasdaq
could result in an inability to list our common stock and warrants on Nasdaq and the obligation to comply with the penny stock
rules and could affect the combined companys cash position following the closing of an initial business combination.**
Prior to March 21, 2025, our charter prevented us from redeeming public
shares to the extent that it would cause our net tangible assets to be less than $5,000,001 (the NTA Requirement). The NTA
Requirement has been waived by our stockholders, and our charter was amended on March 21, 2025. The initial purpose of the NTA Requirement
in the charter was to ensure that we would not be subject to the penny stock rules of the SEC, and to therefore not be deemed
a blank check company as defined under Rule 419 of the Securities Act, because it complied with the NTA Requirement.
However, if our net tangible assets less than $5,000,001 upon closing
of the business combination with Profusa, the combined companys failure to meet the initial listing requirements of Nasdaq could
result in (i) the inability of the combined company to list the common stock and warrants on Nasdaq and (ii) the obligation to comply
with the penny stock trading rules.
If an initial business combination is consummated but the combined
company is not able to list its common stock and warrants on Nasdaq, such securities would likely then trade only in the over-the-counter
market and the market liquidity of such securities could be adversely affected and their market price could decrease. If the common stock
and warrants were to trade on the over-the-counter market, selling such securities could be more difficult because smaller quantities
of such securities would likely be bought and sold, transactions could be delayed, and the combined company could face significant material
adverse consequences, including: (i) a limited availability of market quotations for its securities, (ii) reduced liquidity for its securities,
(iii) a determination that the common stock are a penny stock which will require brokers trading in such shares to adhere
to more stringent rules, including being subject to the depository requirements of Rule 419 of the Securities Act, and possibly result
in a reduced level of trading activity in the secondary trading market for the securities, (iv) limited or no news or analyst coverage,
and (v) a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in
lower prices and larger spreads in the bid and ask prices for the common stock and/or warrants, could substantially impair the combined
companys ability to raise additional funds, and could result in a loss of institutional investor interest and fewer development
opportunities for the combined company. However, we note that the ability to meet Nasdaq listing requirements is currently a condition
to closing the business combination with Profusa.
**We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our stockholders do not agree.**
Our amended and restated certificate
of incorporation does not provide a specified maximum redemption threshold. 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
initial stockholders, including our officers or directors, or their advisors or their affiliates. In the event the aggregate cash consideration
we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will
not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the
holders thereof, and we instead may search for an alternate business combination.
**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 our initial public 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 identified any prospective target business we cannot ascertain the capital requirements
for any particular transaction. If the net proceeds of our initial public 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 repurchase for cash a significant number of shares from stockholders who elect redemption in connection
with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. 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 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 business combination. If we are unable
to complete our initial business combination, our public stockholders may only receive approximately $10.10 per share on the liquidation
of our trust account, and our rights and warrants will expire worthless.
22
**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 historical
and/or pro forma financial statement disclosure. 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 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.
**Our securities were suspended from trading
and delisted from Nasdaq on December27, 2024, following receipt of a delisting determination letter from Nasdaq on December20,
2024. This could have significant material adverse consequences on us and our securities, including that it will negatively impact our
ability to complete a Business Combination, will limit investors ability to make transactions in our securities and could subject
us to additional trading restrictions.**
****
We currently have up until
as late as June 22, 2025 to complete an initial business combination. Nasdaq Listing Rule 5815, which was amended effective October 7,
2024, provides for the immediate suspension and delisting upon issuance of a listing determination letter for failure to meet the requirement
in Nasdaq Listing Rule IM 5101-2(b), curtailing the ability of the Nasdaq hearings panel to give special purpose acquisition companies
(SPACs) more time to complete an initial business combination beyond 36 months. Nasdaq Listing Rule IM 5101-2(b) requires a SPAC such
as us to complete its initial business combination within 36 months of the effectiveness of its IPO registration statement, which, in
our case, was December 20, 2024.
As such, following December 20, 2024 (our 36-month anniversary), we
are no longer in compliance with Nasdaq listing rules. On December 20, 2024, we received a delisting determination letter from Nasdaq.
As a result, our securities were immediately suspended from trading and delisted from Nasdaq on December 27, 2024. Our securities are
currently traded on OTC Pink.
In addition, in connection with any initial business combination, we
would be required to demonstrate compliance with the applicable exchanges initial listing requirements, which are more rigorous
than the continued listing requirements, in order to continue to maintain the listing of our securities. We cannot assure you that we
will be able to meet those initial listing requirements at that time, particularly if we are no longer listed on a stock exchange.
Following the suspension and delisting of our securities from Nasdaq,
we and our securities are currently facing significant material adverse consequences, including:
|
| being less attractive to potential business combination targets
and therefore making it more difficult for us to complete an initial business combination; |
|
|
| a decreased ability to issue additional securities or obtain
additional financing in the future; |
|
|
| a limited availability of market quotations for our securities,
even if our securities were to be quoted on an over-the-counter market; |
|
|
| reduced liquidity and demand for our securities; |
|
|
| determination that our shares of common stock are a penny
stock which will require brokers trading in our shares of common stock to adhere to more stringent rules and could result in a
further reduced level of trading activity in the secondary trading market for our securities; |
|
|
| greater difficulty and cost at being able to satisfy any applicable
stock exchanges initial listing requirements for the post-business combination company; |
|
|
| our securities no longer qualifying as covered securities
under the National Securities Markets Improvement Actof1996 (NSMIA), meaning that sales of our securities would
be subject to regulation in each state in which that sale occurs, including in connection with our initial business combination, which
may negatively impact our ability to consummate our initial business combination or to otherwise issue additional securities or obtain
additional financing in the future and could negatively impact the ability of our security holders to trade, and result in further reduced
liquidity and demand for, our securities; and |
|
|
| a limited amount of news and analyst coverage. |
|
23
Additionally, under the Merger
Agreement, one of the conditions to Closing is the listing by Nasdaq of the New Profusa common stock and securities and satisfaction of
initial and continued listing requirement. Following the delisting of our securities from the Nasdaq, New Profusa may face increased difficulties
and uncertainties in meeting the initial and continued listing requirement of Nasdaq, such as the requirements as to the market value
of unrestricted publicly held shares and market value of listed securities, and therefore face increased uncertainties as to its ability
to successfully consummate the Business Combination.
**Risks Relating to the Post-Business Combination
Company**
**Subsequent to the completion of our initial
business combination, we may be required to 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 our stock price, 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 surface all material issues that
may be present inside 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 stockholders who choose to remain stockholders following the business combination could suffer a reduction
in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or
if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating
to the business combination contained an actionable material misstatement or material omission.
**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 operations.**
Although we expect to focus
our search for a target business on entities in the healthcare industry, we may seek to complete a business combination with an operating
company in any industry or sector. However, we are not, under our amended and restated certificate of incorporation, permitted to effectuate
our business combination with another blank check company or similar company with nominal operations. To the extent we complete our 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 ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders
following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement
or material omission.
24
**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 Report to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial
public 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:
|
| 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, 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;
and |
|
|
| limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of
our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
|
**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.**
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:
|
| higher
costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements
of overseas markets; |
|
|
| rules
and regulations regarding currency redemption; |
|
25
|
| laws
governing the manner in which future business combinations may be effected; |
|
|
| tariffs
and trade barriers; |
|
|
| regulations
related to customs and import/export matters; |
|
|
| local
or regional economic policies and market conditions; |
|
|
| unexpected
changes in regulatory requirements; |
|
|
| longer
payment cycles; |
|
|
| tax
issues, such as tax law changes and variations in tax laws as compared to the United States; |
|
|
| currency
fluctuations and exchange controls; |
|
|
| rates
of inflation; |
|
|
| challenges
in collecting accounts receivable; |
|
|
| cultural
and language differences; |
|
|
| employment
regulations; |
|
|
| underdeveloped
or unpredictable legal or regulatory systems; |
|
|
| corruption; |
|
|
| protection
of intellectual property; |
|
|
| social
unrest, crime, strikes, riots, civil disturbances, regime changes, political upheaval, terrorist attacks, natural disasters and wars; |
|
|
| deterioration
of political relations with the United States; and |
|
|
| government
appropriation of assets. |
|
We may not be able to adequately
address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations
and financial condition.
**Risks Relating to our Management and Directors**
**We may identify material weaknesses in our
internal control over financial reporting in the future or fail to maintain an effective system of internal control over financial reporting,
which may result in material misstatements of our consolidated financial statements or cause us to fail to meet periodic reporting obligations.**
As a public company, we are required to comply
with SEC rules that implement Section 404 of the Sarbanes-Oxley Act and make an ongoing, formal assessment of the effectiveness of our
internal controls over financial reporting.
We cannot assure you that the measures we have
taken to date, and actions we may take in the future, will prevent or avoid control deficiencies that could lead to material weaknesses
in our internal control over financial reporting in the future. Our current controls, and any new controls that we develop, may become
inadequate because of changes in conditions in our business. Further, deficiencies in our disclosure controls and internal control over
financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered
in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may
result in a restatement of our financial statements for prior periods.
26
We have performed a formal evaluation of our internal
control over financial reporting under the supervision and with the participation of management, including our principal executive officer
and principal financial officer, as required by Section 404 of the Sarbanes-Oxley Act. Based upon their evaluation, our principal executive
officer and principal financial and accounting officer, concluded that our internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) were not effective as of December 31, 2024 due to the existence of material weaknesses.
We have not engaged an independent registered public accounting firm to perform an audit of our internal control over financial reporting
as of any balance sheet date or for any period reported in our financial statements. We are required to evaluate and disclose changes
made in our internal controls and procedures on a quarterly basis. Failure to comply with the Sarbanes-Oxley Act could potentially subject
us to sanctions or investigations by the SEC, the applicable stock exchange or other regulatory authorities, which would require additional
financial and management resources.
**If we fail to maintain an effective system
of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements
or comply with applicable regulations could be impaired, which may adversely affect investor confidence in our Company and, as a result,
the market price of our common stock.**
As a public company, we are required to comply
with the requirements of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, including, among other things, that we maintain effective
disclosure controls and procedures and internal control over financial reporting. We continue to develop and refine our disclosure controls
and other procedures that are designed to ensure that information we are required to disclose in the reports that we will file with the
SEC are recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required
to be disclosed in reports under the Exchange Act, is accumulated and communicated to our management, including our principal executive
and financial officers.
In order to maintain and improve the effectiveness
of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will
continue to expend, significant resources, including dedicated to internal resources. We may also need to engage outside consultants and
adopt a detailed work plan to assess and document the adequacy of our internal control over financial reporting. If any of these new or
improved controls and systems do not perform as expected, we may experience material weaknesses in our controls. Moreover, our testing,
or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal control
over financial reporting that are deemed to be material weaknesses.
Any failure to implement and maintain effective
disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material
weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which would
likely adversely affect the market price of our common stock. In addition, we could be subject to sanctions or investigations by the stock
exchange on which our common stock is listed, the SEC and other regulatory authorities.
****
**Past performance by our management team may
not be indicative of future performance of an investment in us.**
Information regarding performance
by, or businesses associated with, our management team is presented for informational purposes only. Any past experience and performance
of our management team is not a guarantee either: (a) that we will be able to successfully identify a suitable candidate for our initial
business combination; or (b) of any results with respect to any initial business combination we may consummate. You should not rely on
the historical record of our management teams performance as indicative of the future performance of an investment in us or the
returns we will, or are likely to, generate going forward.
**We are dependent upon our executive officers
and directors and their departure could adversely affect our ability to operate.**
Our operations are dependent
upon a relatively small group of individuals. We believe that our success depends on the continued service of our executive officers and
directors, at least until we have completed our business combination. In addition, our executive officers and directors are not required
to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time
among various business activities, including identifying potential business combinations and monitoring the related due diligence. We
do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected
loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
27
**Our ability to successfully effect our initial
business combination and to be successful thereafter will be totally 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 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. 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 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.
**The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination targets 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 candidates 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.
**Our executive 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 executive 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 executive officers
is engaged in several other business endeavors for which he may be entitled to substantial compensation and our executive officers are
not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and
board members for other entities. If our executive 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.
28
**Certain of our executive 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 following our initial business combination and, accordingly, may have conflicts of interest in determining to which
entity a particular business opportunity should be presented.**
Following the completion of
our initial public 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 executive officers and directors are, or may in the future become, affiliated with entities
that are engaged in business activities similar to those intended to be conducted by us following our initial business combination.
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 another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our
interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely
in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue.
For a complete discussion
of our executive 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 executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.**
We have not adopted a policy
that expressly prohibits our executive officers, directors, security holders and their respective 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 directors or executive
officers, although we do not currently 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. Accordingly, such persons or entities may have a conflict between
their interests and ours.
**Since our initial stockholders, including our
sponsor, executive 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.**
Our sponsor holds 4,743,750
founder shares. Certain members of our management team also have a financial interest in our sponsor. The founder shares held by our sponsor
will be worthless if we do not complete an initial business combination. In addition, our sponsor purchased 5,162,500 private placement
warrants, for an aggregate purchase price of $5,162,500. All of the foregoing private placement warrants will also be worthless if we
do not consummate our initial business combination. The personal and financial interests of our sponsor, executive 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. This risk may become more acute as the end of
the combination period nears, which is the deadline for our completion of an initial business combination.
29
**Since our sponsor, executive officers and directors
will not be eligible to be reimbursed for their out-of-pocket expenses if our 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.**
At the closing of our initial
business combination, our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any
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. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in
connection with activities on our behalf. These financial interests of our sponsor, executive officers and directors, may influence their
motivation in identifying and selecting a target business combination and completing an initial business combination.
**Since our sponsor paid only approximately $0.005
per share for the founder shares, our officers and directors could potentially make a substantial profit even if we acquire a target business
that subsequently declines in value.**
In April 2021, our sponsor
acquired 5,175,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.005 per share. In October 2021, our
sponsor forfeited 862,500 founder shares. On December 20, 2021, we effected a 1.1-for-1 stock dividend of our common stock, resulting
in an aggregate of 4,743,750 founder shares outstanding. 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 acquire a target business that subsequently declines in value and is unprofitable for public investors.
**Risks Relating to Our Securities**
**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, rights, 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,
(ii) the redemption of any public shares properly tendered 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 redeem 100% of our public shares if we do not complete our
initial business combination within the combination period or (B) with respect to any other provision relating to stockholders
rights or pre-business combination activity and (iii) the redemption of all of our public shares if we are unable to complete our business
combination within the combination period, subject to applicable law and as further described herein. Stockholders who do not exercise
their rights to the funds in connection with an amendment to our certificate of incorporation would still have rights to the funds in
connection with a subsequent business combination. In no other circumstances will a public stockholder have any right or interest of any
kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares, rights, or warrants,
potentially at a loss.
30
**If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10
per share.**
Our placing of funds in the
trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers,
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 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 partys engagement would be significantly more beneficial to us
than any alternative. We are not aware of any product or service providers who have not or will not provide such waiver other than the
underwriters of our initial public offering.
Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we
are unable to complete our business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection
with our 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 $10.10 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 vendor for services rendered or products sold to us, or a prospective target
business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below
(i) $10.10 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 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 indemnity of the underwriters of our initial public 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 asked our sponsor to reserve for such indemnification
obligations, and our sponsors only assets are securities of our company. Therefore, we cannot assure you that our sponsor would
be able to satisfy those obligations.
31
**A provision of our warrant agreement may make
it more difficult for us to consummate an initial business combination.**
If (x) we issue additional
shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business
combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective
issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates,
without taking into account any founder shares held by our sponsor or its affiliates, as applicable, prior to such issuance) (the newly
issued price), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest
thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination
(net of redemptions), and (z) the volume weighted average trading price of our common stock during the 20 trading day period starting
on the trading day prior to the day on which we complete our initial business combination (such price, the Market Value)
is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher
of the Market Value and the newly issued price, and the $18.00 per share redemption trigger price 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.
**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 the lesser of (i) $10.10 per share or (ii) other than due to the failure to obtain a waiver from
a vendor 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 lesser amount per 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 taxes, and our sponsor
asserts that it is unable to satisfy its 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 $10.10 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 all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
stockholders from the trust account prior to addressing the claims of creditors.
**If, before distributing the proceeds in the
trust account to our public stockholders, we file a bankruptcy 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 may be reduced.
32
**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 the combination period may be considered a liquidation 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 stockholders 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 end of the combination period in the event we do not complete our business combination and, therefore, we do not
intend to comply with those 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 stockholders 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 the end
of the combination period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to
be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently
unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the
unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.
**We may not hold an annual meeting of stockholders
until after our consummation of a business combination and you will not be entitled to any of the corporate protections provided by such
a meeting.**
In accordance with the 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 a companys bylaws unless such election is made by written consent in lieu of such a meeting.
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 our consummation of a 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.
33
**We did not register the shares of common stock
issuable upon exercise of the warrants under the Securities Act or any state securities laws at the time of our IPO, and such registration
may not 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.**
We did not register the shares
of common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at the time of our IPO. However,
under the terms of the warrant agreement, we have agreed, 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 reasonable best efforts to file, and within 60 business days after the closing
of our initial business combination, to have declared effective, a registration statement relating to the common stock issuable upon exercise
of the warrants, and to maintain a current prospectus relating to such shares of common stock until the expiration 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 shares issuable
upon exercise of the warrants are 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 from registration is available. Notwithstanding the above,
if our 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 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. 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. 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 shares of common
stock included in the units. We may not redeem the warrants when a holder may not exercise such warrants. However, there may be instances
in which holders of our public warrants may be unable to exercise such public warrants but holders of our private placement warrants may
be able to exercise such private placement warrants.
**The warrants may become exercisable and redeemable
for a security other than the shares of our common stock, and you will not have any information regarding such other security at this
time.**
In certain situations, including
if we are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than
the shares of our common stock. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement,
you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving
company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within
fifteen (15) business days of the closing of an initial business combination.
**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 common stock.**
Pursuant to an agreement entered
into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted
transferees can demand that we register their shares of our common stock at the time of our initial business combination. In addition,
holders of our private placement warrants and their permitted transferees can demand that we register the private placement warrants and
the shares of common stock issuable upon exercise of the private placement warrants, and holders of securities that may be issued upon
conversion of working capital loans may demand that we register such warrants or the 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 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 common stock that is expected when the common stock 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.
34
**We may issue additional shares of common stock
or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination, and any such issuances would dilute the interest of our stockholders and likely present other risks.**
Our amended and restated certificate
of incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares
of undesignated preferred stock, par value $0.0001 per share.
We may issue a substantial
number of additional shares of common stock, and may issue shares of preferred stock, in order to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-business
combination activity). However, our amended and restated certificate of incorporation provides, 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 on any initial business combination. These provisions of our amended and restated certificate
of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
However, our sponsor, executive 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 redeem
100% of our public shares if we do not complete our initial business combination within the combination period or (B) with respect to
any other provision relating to stockholders rights or pre-business combination activity, unless we provide our public stockholders
with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable),
divided by the number of then outstanding public shares. The issuance of additional shares of common or preferred stock:
|
| may
significantly dilute the equity interest of investors in our initial public 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 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;
and |
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| may
adversely affect prevailing market prices for our units, common stock, rights, and/or warrants. |
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**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.
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 that 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.
For example, blank check companies have amended the definition of business combination, increased redemption thresholds and extended the
time period in which the company must consummate its initial business combination. We cannot assure you that we will not seek to amend
our charter or governing instruments in order to effectuate our initial business combination.
**Certain agreements related to our initial public
offering may be amended without stockholder approval.**
Certain agreements, including
the underwriting agreement relating to our initial public offering, the investment management trust agreement between us and Continental
Stock Transfer & Trust Company, the letter agreements and the registration rights agreement among us and our sponsor, executive officers
and directors, the administrative services agreement between us and our sponsor, and the business combination marketing agreement may
be amended without stockholder approval. These agreements contain various provisions that our public stockholders might deem to be material.
While we do not expect our board of directors to approve any amendment to any of these agreements prior to our initial business combination,
it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve
one or more amendments to any such agreement in connection with the consummation of our initial business combination. Any such amendment
may have an adverse effect on the value of an investment in our securities.
35
**Our initial stockholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do
not support.**
Our initial stockholders own
97.1% of our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions requiring a
stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation
and approval of major corporate transactions. If our initial stockholders purchase any units in our initial public offering or additional
shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence.
**We may amend the terms of the rights in a manner
that may be adverse to holders of rights with the approval by the holders of at least 65% of the then outstanding rights.**
Our rights will be issued
in registered form under a rights agreement between Continental Stock Transfer & Trust Company, as rights agent, and us. The rights
agreement provides that the terms of the rights 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 65% of the then outstanding rights to make any change that adversely
affects the interests of the registered holders of rights. Accordingly, we may amend the terms of the rights in a manner adverse to a
holder if holders of at least 65% of the then outstanding rights approve of such amendment. Although our ability to amend the terms of
the rights with the consent of at least 65% of the then outstanding rights is unlimited, examples of such amendments could be amendments
to, among other things, adjust the conversion ratio of the rights.
**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 65% 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 65% 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 65% 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 65% 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 common stock purchasable upon exercise of a warrant.
**Our warrant agreement designates 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 provides
that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement,
including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the
exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum.
Notwithstanding the foregoing,
these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act
or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person
or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented
to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the
Southern District of New York (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 holders counsel in the foreign
action as agent for such warrant holder.
This choice-of-forum provision
may limit a warrant holders 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.
36
**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 common stock equals or exceeds $18.00 per share 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 redemption to the warrant holders. We may not redeem the
warrants when a holder may not exercise such warrants. Redemption of the outstanding warrants could force you (i) to exercise your warrants
and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current
market price when you might otherwise wish to hold your warrants or (iii) to 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 their initial purchasers or their permitted transferees.
**Our rights and warrants may have an adverse
effect on the market price of our common stock and make it more difficult to effectuate our initial business combination.**
We issued rights that convert
into 1,897,500 shares of our common stock and warrants to purchase 9,487,500 shares of our common stock as part of the units offered in
our initial public offering and, simultaneously with the closing of our initial public offering, we issued an aggregate of 7,347,500 warrants
at a price of $1.00 per warrant in a private placement to our sponsor, I-Bankers and Dawson James. In addition, if our initial stockholders
make any working capital loans, up to $1,500,000 of such loans may be convertible, at the option of the lender, into private placement
warrants at a price of $1.00 per warrant of the post business combination entity. To the extent we issue shares of common stock to effectuate
a business combination, the potential for the issuance of a substantial number of additional shares of common stock upon conversion of
the rights or exercise of the warrants could make us a less attractive acquisition vehicle to a target business. Such rights and warrants,
if and when converted or exercised, would increase the number of issued and outstanding shares of our common stock and reduce the value
of the shares of common stock issued to complete the business combination. Therefore, our rights and warrants may make it more difficult
to effectuate a business combination or increase the cost of acquiring the target 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 common stock and could entrench management.**
Our amended and restated certificate
of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred
stock, 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 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.
**Provisions in our amended and restated certificate
of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.**
Our amended and restated certificate
of incorporation requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding
brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee
to us or our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any
provision of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against
us, our directors, officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the
State of Delaware, except any claim (A) as to which the Court of Chancery of 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, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action
arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall
have concurrent 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 stockholders counsel. Although we believe this provision benefits us by providing increased consistency
in the application of Delaware law in the types of lawsuits to which it applies, 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, although
our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Notwithstanding the foregoing,
our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce
a duty or liability created by the Exchange 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. Although we believe this provision benefits us by providing increased consistency in the
application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against
our directors and officers.
37
**Our warrants are accounted for as warrant liabilities
and recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may make it more difficult
for us to consummate an initial business combination.**
Following the consummation
of our IPO and the concurrent private placement of warrants, we issued an aggregate of 17,404,250 warrants. We accounted for these as
a warrant liabilities and recorded at fair value upon issuance any changes in fair value each period reported in earnings as determined
by us. Potential targets may seek a business combination partner that does not have warrants that are accounted for as warrant liabilities,
which may make it more difficult for us to consummate an initial business combination.
**General Risks**
**We are a newly formed 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 formed company
with no operating results, and did not commence operations until obtaining funding through our initial public 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.
**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 business combination.**
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including, without limitation, restrictions on
the nature of our investments, and restrictions on the issuance of our securities, each of which may make it difficult for us to complete
our business combination. In addition, we may have imposed upon us burdensome requirements, including, without limitation, registration
as an investment company; adoption of a specific form of corporate structure; and reporting, record keeping, voting, proxy and disclosure
requirements and other rules and regulations.
In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting,
owning, holding or trading investment securities constituting more than 40% of our total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and thereafter
to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale
or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account were previously
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. However, to mitigate
the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the
Investment Company Act) under the proposed rules issued by the SEC and thus potentially subject to regulation under the Investment Company
Act, in January 2024, we instructed Continental, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury
obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in an interest bearing
demand deposit account at a bank until the earlier of the consummation of a Business Combination or the liquidation of the Company. Following
such liquidation, we may receive less interest on the funds held in the Trust Account than we would have if we had not liquidated such
assets. As a result, our public stockholders would receive a lower amount upon any redemption or liquidation of the Company as compared
to what they would have received had the investments not been so liquidated. 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
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10 per share on the
liquidation of our trust account and our rights and warrants will expire worthless.
38
**Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, investments and results of operations.**
We are subject to laws and
regulations enacted by national, regional and local governments. 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, 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.
**A market for our securities may not develop,
which would adversely affect the liquidity and price of our securities.**
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 an emerging growth company within the
meaning of the Securities Act, and we are taking advantage of certain exemptions from disclosure requirements available to emerging growth
companies, which 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 are taking 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.
**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 will 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 will not 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 company with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal 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.
39
**Cyber incidents or attacks directed at us could
result in information theft, data corruption, operational disruption and/or financial loss.**
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
**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 (a PHC) for U.S. federal
income tax purposes.**
A U.S. corporation generally
will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such
taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose
certain entities such as certain tax exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to
certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporations
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
as discussed above. 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 such persons during the last half of a taxable year. Thus,
no assurance can be given that we will not become a PHC 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.
**Non-U.S. Holders may be subject to U.S. federal
income tax if we are considered a United States real property holding corporation.**
A Non-U.S. Holder of our common
stock may be subject to U.S. federal income and/or withholding tax in the event we are considered a United States real property
holding corporation (USRPHC) for U.S. federal income tax purposes. In that event, Non-U.S. Holders of our common
stock could be subject to U.S. federal income or withholding tax, or both, in respect of certain distributions on, and payments in connection
with a sale, exchange, redemption, repurchase or other disposition of, our common stock. Certain Non-U.S. Holders may be eligible for
an exemption if they do not exceed certain ownership levels. Non-U.S. Holders are urged to consult their tax advisors with respect to
the U.S. federal income tax consequences of acquiring, owning and disposing of our common stock.
**ITEM 1B. UNRESOLVED STAFF COMMENTS**
None.
**ITEM 1C. CYBERSECURITY**
We have no business operations.
Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. Therefore,
we have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk, which may make us
susceptible to heightened cybersecurity risk. Our board of directors is generally responsible for the oversight of risks from cybersecurity
threats, if there is any. We have not encountered any cybersecurity incidents since our IPO.
**ITEM 2. PROPERTIES**
We currently maintain our
executive offices at 207 West 25th St, 9th Floor, New York, NY 10001. Previously, the cost for this space was included
in the $5,000 per month fee that was paid to an affiliate of one of our officers for office space, utilities, secretarial support and
other administrative and consulting services. In June 2023, the Company terminated the $5,000 fee arrangement but still maintains our
executive office at 207 West 25th St, 9th Floor, New York, NY 10001. We consider our current office space adequate
for our current operations.
**ITEM 3. LEGAL PROCEEDINGS**
To the knowledge of our management, there is no
litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of
our property.
**ITEM 4. MINE SAFETY DISCLOSURE**
Not applicable.
40
**PART II**
**ITEM 5. MARKET FOR REGISTRANTS COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**
**Market Information**
Our units commenced public
trading on December 20, 2021, under the symbol NVACU. Our shares of common stock, rights, and warrants began separate trading
on January 21, 2022, under the symbols NVAC, NVACR, and NVACW respectively, and our units ceased
trading on such separation date.On December 27, 2024, the common stock, rights, and warrants began to be quoted on the OTC Pink
Sheets under the same symbols.
**Holders**
As of March 28, 2025, there
were four holders of record for our shares common stock, one holder of record of our rights, and five holders of record of our warrants.
**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 a business combination. The payment
of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition
subsequent to completion of a business combination. The payment of any cash dividends subsequent to a 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. Further, if we incur any indebtedness, our ability to declare dividends
may be limited by restrictive covenants we may agree to in connection therewith.
**Recent Sales of Unregistered Securities; Use of Proceeds from Registered
Offering**
On December 22, 2021, we consummated
our initial public offering (IPO) of 18,975,000 units, including the issuance of 2,475,000 units as a result of the underwriters
exercise of their over-allotment option in full. The units were sold at a price of $10.00 per unit, generating gross proceeds of $189,750,000.
Simultaneously with the closing
of the IPO, pursuant to certain subscription agreements, we completed a private sale of an aggregate of 7,347,500 private placement warrants
to our sponsor, I-Bankers, and Dawson James at a purchase price of $1.00 per private placement warrant, generating gross proceeds to the
Company of $7,347,500. The private placement warrants are identical to the public warrants sold in the IPO except that the private placement
warrants: (i) will not be redeemable by us and (ii) may be exercised for cash or on a cashless basis, in each case so long as they are
held by the initial purchasers or any of their permitted transferees. If the private placement warrants are held by holders other than
the initial purchasers or any of their permitted transferees, the private placement warrants will be redeemable by us and exercisable
by the holders on the same basis as the public warrants included in the units sold in the IPO. No underwriting discounts or commissions
were paid with respect to such sale. The issuance of the private placement warrant was made pursuant to the exemption from registration
contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
I-Bankers and Dawson James
were representatives of the several underwriters. The securities sold in the IPO were registered under the Securities Act on registration
statements on Form S-1 (Nos. 333-257156 and 333-261763). The SEC declared the registration statement effective on December 20, 2021.
We paid a total of $3,450,000
in underwriting discounts and commissions and $609,623 for other costs and expenses related to the IPO. I-Bankers and Dawson James, representatives
of the several underwriters in the IPO, received a portion of the underwriting discounts and commissions related to the IPO. We also repaid
the promissory note to the Sponsor from the proceeds of the IPO. After deducting the underwriting discounts and commissions and incurred
offering costs, the total net proceeds from our IPO and the sale of the private placement warrants was $193,647,500, of which $191,647,500
(or $10.10 per unit sold in the IPO) was placed in the trust account. Other than as described above, no payments were made by us to directors,
officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates.
**Purchases of Equity Securities by the Issuer and Affiliated Purchasers**
There were no suchrepurchases
of our equity securitiesby us or an affiliate during the fourth quarter of the fiscal year covered by the Report.
**ITEM 6. [RESERVED]**
41
**ITEM7.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
*The
following discussion and analysis of the Companys financial condition and results of operations should be read in conjunction
with our audited consolidated financial statements and the notes related thereto which are included in Item 8. Consolidated Financial
Statements and Supplementary Data of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis
set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking
statements as a result of many factors, including those set forth under Cautionary Note Regarding Forward-Looking Statements,
Item 1A. Risk Factors and elsewhere in this Annual Report on Form 10-K.*
**Overview**
We
are a blank check company incorporated on April 19, 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
(a Business Combination). We consummated our initial public offering on December 22, 2021 and have identified a target
company for our business combination. We intend to use the cash proceeds from our Public Offering and the Private Placement described
below as well as additional issuances, if any, of our capital stock, debt or a combination of cash, stock and debt to complete the Business
Combination.
We
expect to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to raise capital
or to complete our initial Business Combination will be successful.
**Recent
Developments**
*Proposed
Business Combination*
On
November 7, 2022, NorthView entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among
NorthView, NV Profusa Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of NorthView (Merger Sub),
and Profusa, Inc., a California corporation (Profusa).
The
Merger Agreement provides that, among other things, at the closing (the Closing) of the transactions contemplated by the
Merger Agreement, Merger Sub will merge with and into Profusa (the Merger), with Profusa surviving as a wholly-owned subsidiary
of NorthView. In connection with the Merger, NorthView will change its name to Profusa, Inc. The Merger and the other transactions
contemplated by the Merger Agreement are hereinafter referred to as the Business Combination.
The
Business Combination is subject to customary closing conditions, including the satisfaction of the minimum available cash condition of
$15,000,000, the receipt of certain governmental approvals and the required approval by the stockholders of NorthView and Profusa. There
is no assurance that the Business Combination will be completed.
The
aggregate consideration to be received by the Profusa stockholders is based on a pre-transaction equity value of $155,000,000. The exchange
ratio will be equal to (a) $155,000,000, divided by an assumed value of NorthView Common Stock of $10.00 per share.
42
Pursuant
to the Merger Agreement, subject to certain future revenue and stock-price based milestones, Profusa stockholders will have the right
to receive an aggregate of up to an additional 3,875,000 shares of NorthView Common Stock (the Earnout Shares). One-quarter
of the Earnout Shares will be issued if, between the 18-month anniversary and the two year anniversary of the Closing, the combined companys
common stock achieves a daily volume weighted average market price of at least $12.50 per share for any 20 trading days within a 30 consecutive
trading day period (Milestone Event I). One-quarter of the Earnout Shares will be issued if, between the first and second
anniversary of the Closing, the combined companys common stock achieves a daily volume weighted average market price of at least
$14.50 per share for a similar number of days (Milestone Event II). Pursuant to the Merger Agreement, the remaining one-quarter
of the Earnout Shares were to be issued if the combined company achieves at least $5,100,000 in revenue in fiscal year 2023, and one-quarter
of the Earnout Shares will be issued if the combined company achieves at least $73,100,000 in revenue in fiscal year 2024, (or up to
one-half of the Earnout Shares if both milestones are achieved).
On
September 12, 2023, the parties to the Merger Agreement entered into Amendment No. 1 to the Merger Agreement ( Amendment No. 1)
pursuant to which the parties agreed to revise the revenue earnout milestones to reflect updated projections provided by Profusa. Specifically,
Amendment No. 1 revised the definition of Milestone Event III and Milestone Event IV such that one-quarter
of the Earnout Shares would be issued to Profusa stockholders if the combined company achieves Earnout Revenue of $11,864,000 for the
fiscal year ended December 31, 2024, and one-quarter of the Earnout Shares would be issued to Profusa stockholders if the combined company
achieves Earnout Revenue of $99,702,000 for the fiscal year ended December 31, 2025. Amendment No. 1 also clarified the exercise price
of certain the Company Warrants.
On January12, 2024, the parties to the Merger Agreement entered
into an Amendment No. 2 to the Merger Agreement (Amendment No. 2) pursuant to which the parties agreed to revise the definition
of Milestone EventIII and such that the Earnout Revenue milestone of $11,864,000 for the fiscal year ended December31,
2024, was replaced with a milestone of consummating the APAC Joint Venture and receipt of the related funding (as described elsewhere
in this proxy statement/prospectus) during the fiscal year ended December31, 2024.
On March4, 2024, the parties to the Merger Agreement entered
into an Amendment No.3 to the Merger Agreement (Amendment No.3) pursuant to which the parties agreed to revise
the Company Reference Value to adjust for financing proceeds and debt conversions that could be received by Profusa prior to the Business
Combination
On February 11, 2025, the parties to the Merger
Agreement entered into an Amendment No. 4 to the Merger Agreement (Amendment No. 4) pursuant to which the parties agreed
to revise the Company Reference Value to adjust for financing proceeds received by Profusa prior to the Business Combination, along with
debt conversions and incentive shares being issued. Additionally, Amendment No. 4 to the Merger Agreement revised the definition of Milestone
Event III and Milestone Event IV such that the parties extended the period for Profusa to consummate the APAC Joint
Venture and receive the related funding until December 31, 2025, and extended the period for Profusa to achieve Earnout Revenue of $11,864,000
for the fiscal year ended December 31, 2026.
Additionally,
if Milestone Event I or Milestone Event II are achieved by the second anniversary of the Closing, NorthViews sponsor, NorthView
Sponsor I, LLC and Profusa stockholders, will be issued additional shares up to the amount of any shares forgone as an inducement to
obtaining Additional Financings (as defined in the Merger Agreement).
43
*Merger Agreement Amendment and Termination
of Financing*
On
January 12, 2024, the parties to the Merger Agreement entered into an Amendment No. 2 to the Merger Agreement pursuant to which the parties
agreed to revise the definition of Milestone Event III and such that the Earnout Revenue milestone of $11,864,000 for the
fiscal year ended December 31, 2024, was replaced with a milestone of consummating the Tasly JV (as defined in the amended Merger Agreement)
and receipt of the related funding during the fiscal year ended December 31, 2024. All other aspects of the Merger Agreement were unmodified.
On
February 16, 2024, the Companys Board of Directors approved and authorized the Company to execute a binding term sheet (Original
term sheet) between the Company and Profusa, Inc. (the Target) for PIPE funding with Vellar Opportunities Fund Master,
Ltd. (Vellar). Vellar agreed to subscribe for 2,500,000 shares of common and/or preferred stock of the Target upon the
closing of the Business Combination at a price of $2.00 per share, for a total amount of $5,000,000 to be funded by Vellar immediately
prior to the Business Combination. On May 9, 2024, the original term sheet between the Company and Profusa was amended and restated to
clarify certain provisions of the Original term sheet.
On
March 4, 2024, the parties to the Merger Agreement entered into Amendment No. 3 to the Merger Agreement pursuant to which the parties
agreed to revise the definition of Company Reference Value (as defined in the Merger Agreement) to adjust for financing proceeds and
debt conversions that could be received by Profusa prior to the Business Combination. All other aspects of the Merger Agreement were
unmodified.
On
September 25, 2024,Vellar terminated the Amended and Restated Binding Principal Terms and Conditions with the Company and Profusa,
dated May 9, 2024.
On February 11, 2025, the parties entered into
Amendment No. 4 to the Merger Agreement pursuant to which the parties agreed to revise the Company Reference Value (as defined in the
Merger Agreement) to adjust for financing proceeds received by Profusa prior to the Business Combination, along with debt conversions
and incentive shares to be issued. Additionally, the Amendment (i) revised the definition of Milestone Event III such that
the parties extended the period for Profusa to consummate the APAC Joint Venture (as defined in the Merger Agreement) and receive the
related funding from December 31, 2024 until December 31, 2025, and (ii) revised the definition of Milestone Event IV to
change the earnout revenue target from $99,702,000 for the fiscal year ended December 31, 2025 to an earnout revenue target of $11,864,000
for the fiscal year ended December 31, 2026.
*Extension
of Our Combination Period*
On March 10, 2023, the Company held a vote to
amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business Combination
from March 22, 2023 to December 22, 2023 (the First Extension Meeting).
On
December 21, 2023, the Company held a special meeting of stockholders to vote on extending the Combination Period. As a result, the Company
has extended the Combination Period from December 22, 2023 to March 22, 2024. In connection with the extension, 140,663 shares of the
Companys common stock were redeemed, with 6,027,219 shares of Common Stock remaining outstanding after the Redemption; 833,469
shares of Common Stock remaining outstanding after the Redemption are shares issued in connection with our initial public offering. In
January 2024, $1,565,078 was paid from the trust account to redeeming stockholders in connection with the extension.
On
January 2, 2024, the Company and Continental Stock Transfer & Trust Company (CST) entered into Amendment No. 1 to Investment
Management Trust Agreement, dated December 20, 2021, by and between the Company and CST, to allow CST, upon written instruction of the
Company, to (i) hold the funds in the Companys trust account uninvested or (ii) hold the funds in an interest-bearing bank demand
deposit account.
On
March 21, 2024, the Company held its 2024 Annual Meeting of Stockholders (the Meeting). At the meeting, the Companys
stockholders approved the amendment of the Companys amended and restated certificate of incorporation to extend the date by which
the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the
shares of the Companys common stock issued in the Companys initial public offering, from March 22, 2024, monthly for up
to six additional months at the election of the Company and only upon contribution of $0.05 per month per outstanding public share, ultimately
until September 22, 2024.
44
In
connection with the meeting, the holders of 95,394Public Shares properly exercised their right to redeem, with 5,931,825 shares
of Common Stock remaining outstanding after the Redemption; 738,075 shares of Common Stock remaining outstanding after the Redemption
are shares issued in connection with the initial public offering. Consequently, the contribution is $36,904per month needed for
the Company to continue to extend the Combination Period monthly. On May 8, 2024 and May 31, 2024, the Company made two deposits of $36,904
each for April and May extension contributions. On September 10, 2024, the Company made a deposit of $112,114, of which $110,174 was
for June, July and August extension contributions and $1,400 for lost interest due to late trust payments.
On
September 19, 2024, the Company held a special meeting of stockholders. At the meeting, the Companys stockholders approved an
amendment to the Companys amended and restated certificate of incorporation to extend the date by which the Company must consummate
its initial Business Combination to March 22, 2025. In connection with the approval of the extension amendment, holders of50,556shares
of the Companys common stock exercised their right to redeem, with 5,881,269 shares of common stock remaining outstanding after
the redemption; 687,519 shares of common stock remaining outstanding after the redemption are shares issued in connection with our initial
public offering. Consequently, the contribution is $34,376per month needed for the Company to continue to extend the Combination
Period monthly. On October 4, 2024, the Company made a deposit of $34,376 for the September extension contribution. In October 2024,
$595,439 was paid from the trust account to redeeming stockholders in connection with the extension that took place at the September
19, 2024 stockholders meeting. On December 13, 2024, the Company made a deposit of $68,752 for the October and November extension contributions.
On December 23, 2024, the Company made a deposit of $34,376 for the December extension contribution. On February 27, 2025, the Company
made a deposit of $49,376 for the January extension contribution and a portion ($15,000) of the February extension contribution. On March
7, 2025, the Company deposited the remainder of the February extension contribution of $19,376, plus interest.
On March 18, 2025, the company commenced a special
meeting of stockholders, which was adjourned until March 21, 2025 without conducting any business. On March 21, 2025, the Company reconvened
the special meeting to approve an extension of time for the Company to consummate an initial business combination from March 22, 2025
to June 22, 2025. The meeting was adjourned until March 21, 2025, at which the stockholders approve the extension of the business combination
period until June 22, 2025. As a condition of the extension, the Company contributed $30,000 to the Trust Account, for the entire extension
period, on March 21, 2025.
*Promissory
Note*
On
January 10, 2024, the Companys Board of Directors approved, and the Company amended, its Convertible Working Capital Promissory
Note (the Note) with the sponsor to increase the principal amount of the Note that could be drawn on to $1.5million.
The amended and restated Note also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares
of Company common stock at a price of $2.22 per share at the election of the sponsor.
On
May 31, 2024, the Companys Board of Directors approved, and the Company second amended its Convertible Working Capital Promissory
Note with the sponsor to increase the principal amount of the Note that could be drawn on to $2.5million. The second amended and
restated Note also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares of Company common
stock at a price of $2.22 per share at the election of the sponsor.
*Nasdaq
Delisting*
On December 20, 2024, the Company received a written
notice from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market that the Companys securities would be delisted
from The Nasdaq Stock Market by reason of the failure of the Company to complete its initial business combination by December 20, 2024
(36 months from the effectiveness of its IPO registration statement) as required by Listing Rule IM-5101-2. Accordingly, trading in the
Companys Common Stock, Rights and Warrants was suspended at the opening of business on December 27, 2024 and a Form 25-NSE was
filed by Nasdaq with the Securities and Exchange Commission, which removed the Companys securities from on the Nasdaq Stock Market.
The Companys Common Stock, Rights and Warrants began to be quoted its on the Pink Markets operated on The OTC Market systems (OTC
Market) under the symbols NVAC, NVACR and NVACW.
45
**Results
of Operations**
As
of December 31, 2024, we had not commenced any operations. All activity for the period from April 19, 2021 (inception) through December
31, 2024 relates to our formation and the Initial Public Offering, and, subsequent to the IPO, identifying a target company for a Business
Combination. We have neither engaged in any operations nor generated any operating revenues to date. We will not generate any operating
revenues until after the completion of our initial Business Combination, at the earliest. We will generate non-operating income in the
form of interest income and unrealized gains from the cash and marketable securities held in the Trust Account. We expect to 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 year ended December 31, 2024, we had
net loss of $8,711,619 which consisted of operating costs of $1,351,038, income tax provision of $80,513, change in fair value of our
warrant liabilities of $539,531 and change in fair value of convertible note of $7,165,953, offset by interest income on securities held
in the Trust Account of $425,416.
For the year ended December 31, 2023, we had
net income of $1,161,910, which consisted of interest income on securities held in the Trust Account of $2,248,538 and a gain of $701,148
for the change in fair value of our warrant liabilities and change in fair value of convertible note of $177,697, offset by operating
costs of $1,508,683, and income tax provision of $456,790.
**Liquidity
and Going Concern**
As of December 31, 2024, we had $16,204 in cash and a working capital
deficit of $12,254,024.
For the year ended December 31, 2024, cash used
in operating activities was $1,296,812. Net loss of $8,711,619 was impacted primarily by trust interest income of $425,416, change in
fair value of convertible note of $7,165,953 and change in fair value of our warrant liabilities of $539,531. Changes in operating assets
and liabilities reflected cash provided by operating activities of $134,739 during such period.
For
the year ended December 31, 2024, cash provided by investing activities included $485,350 of extension payments made to the trust, $204,459
of reimbursement from the trust of franchise and income tax payments and cash withdrawn from the trust of $3,248,878 in relation to stock
redemptions.
For the year ended December 31, 2024, cash used in financing activities
included $797,981 of proceeds from a convertible promissory note, $791,407 of an advance from Profusa and $3,248,878 paid out in relation
to stock redemptions.
For
the year ended December 31, 2023, cash used in operating activities was $2,064,860. Net income of $1,161,910 was impacted primarily by
trust interest income of $2,248,538, change in fair value of convertible note of $177,697, change in fair value of our warrant liabilities
of $701,148. Changes in operating assets and liabilities reflected a use of cash of $99,387 from operating activities during such period.
46
For
the year ended December 31, 2023, cash provided by investing activities included $438,360 of extension payments made to the trust, $1,192,438
of reimbursement from the trust of franchise and income tax payments and cash withdrawn from the trust of $184,845,836 in relation to
a partial stock redemption.
For
the year ended December 31, 2023, cash used in financing activities included $1,121,815 of proceeds from a convertible promissory note
and $184,845,836 of a partial stock redemption.
Prior
to the completion of the initial public offering, our liquidity needs had been satisfied through a capital contribution from the sponsor
of $25,000 for the founder shares to cover certain of the offering costs and the loan under an unsecured promissory note from the sponsor
of $204,841, which was fully paid upon the initial public offering. Subsequent to the consummation of the initial public offering and
private placement, our liquidity needs have been satisfied through the proceeds from the consummation of the private placement not held
in the trust account, and the drawdowns on the convertible promissory note.
In
order to finance transaction costs in connection with an intended Business Combination, the initial stockholders or an affiliate of the
initial stockholders or certain of the Companys officers and directors may, but are not obligated to, provide the Company Working
Capital Loans (see Note 5).
On April 27, 2023, the Company signed a Convertible Working Capital
Promissory Note (the Note) with the Sponsor for $1,200,000. The Note is non-interest bearing and is due the earlier of the
consummation of a business combination or the date of liquidation. The Sponsor may elect to convert all or any portion of the unpaid principal
balance of this Note into warrants, at a price of $1.00 per warrant. On January 10, 2024, the Companys Board of Directors approved,
and the Company amended the Note to increase the principal amount of the Note that could be drawn on to $1.5million. The amended
and restated Note also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares of Company common
stock at a price of $2.22 per share at the election of the sponsor. On May 31, 2024, the Companys Board of Directors approved and
the Company entered into a second amendment of its Convertible Working Capital Promissory Note with the sponsor to increase the principal
amount of the Note that could be drawn on to $2.5million. The second amended and restated Note also allows for the conversion of
the outstanding principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22per share at the
election of the sponsor. The Company had principal outstanding of $1,919,796 and is presenting the Note at fair value on its balance sheet
at December 31, 2024 in the amount of $8,908,052.
The Company has until June 22, 2025 to consummate
a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by June 22, 2025. If a Business
Combination is not consummated by the required date, there will be an option to either extend the time available for us to consummate
our initial business combination or execute a mandatory liquidation and subsequent dissolution. In connection with the Companys
assessment of going concern considerations in accordance with the authoritative guidance in Financial Accounting Standards Board (FASB)
Accounting Standards Update (ASU) 2014-15, Disclosure of Uncertainties About an Entitys Ability to Continue
as a Going Concern, management has determined that mandatory liquidation, and subsequent dissolution, should the Company be unable
to complete a business combination, raises substantial doubt about the Companys ability to continue as a going concern for the
next twelve months from the issuance of these consolidated financial statements. No adjustments have been made to the carrying amounts
of assets and liabilities should the Company be required to liquidate after June 22, 2025.
**
**Off-Balance
Sheet Financing Arrangements**
**
We
did not have any off-balance sheet arrangements as of December 31, 2024 and 2023.
**Contractual
Obligations**
****
As
of December 31, 2024 and 2023, we did not have any long-term debt or capital or operating lease obligations.
We
entered into an administrative services agreement with our sponsor pursuant to which we pay for office space and secretarial and administrative
services provided to members of our management team, in an amount of $5,000 per month. As of June 30, 2023, the Company and the sponsor
terminated this agreement. For the year ended December 31, 2024, $0 had been incurred and billed relating to the administrative service
fee. For the year ended December 31, 2023, $30,000 had been incurred and billed relating to the administrative service fee. As of December
31, 2024 and 2023, $50,000 relating to the administrative service fee was not paid and recorded as due to related party.
47
NorthView previously engaged I-Bankers as an advisor
to assist in holding meetings to discuss the potential business combination and the target business attributes, introduce NorthView
to potential investors that are interested providing funding in connection with a Business Combination, assist NorthView in obtaining
stockholder approval for such business combination and assist NorthView with its press releases and public filings in connection with
such business combination (the Business Combination Marketing Agreement). In connection with such engagement, NorthView
agreed to pay I-Bankers and Dawson James a cash fee (the Business Combination Fee) for such services upon the consummation
of a business combination in an amount equal to 3.68% of the gross proceeds of its initial public offering (exclusive of any applicable
finders fees which might become payable). In connection with the Business Combination, NorthView, I-Bankers and Dawson James amended
the Business Combination Marketing Agreement to revise a portion of the Business Combination Fee to be partially payable in NorthView
securities and partially payable in cash upon the closing of the Merger with Profusa, with such securities to be subject to lock-up provisions.
Subsequently, on January 19, 2025, the agreement was modified by the parties such that the Company will be required to pay $2,000,000,
payable in cash, if a business combination is consummated.
**Critical Accounting Estimates**
Certain of our accounting policies require that
management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management
reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented
fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and
information available from outside sources, as appropriate. Some of the more significant estimates are in connection with determining
the fair value of the warrant liabilities and convertible promissory note. However, by their nature, judgments are subject to an inherent
degree of uncertainty, and, therefore, actual results could differ from our estimates.
*Convertible
Promissory Note*
The
fair value of the Companys convertible promissory note is valued using a compound option formula on the convertible feature and
a present value of the host contract. The valuation technique requires inputs that are both unobservable and significant to the overall
fair value measurement. These inputs reflect managements own assumption about the assumptions a market participant would use in
pricing the working capital loan.
*Warrant
Liabilities*
****
We
account for the warrants issued in connection with the IPO in accordance with the guidance contained in ASC 815-40. Such guidance provides
that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly,
we classified each warrant as a liability at its fair value. This liability is subject to re-measurementat each balance sheet date.
With each such re-measurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in our
consolidated statements of operations.
In
determining the fair value of the Private Placement Warrants and the Representatives Warrants assumptions related to expected
share-price volatility, expected life and risk-free interest rate are utilized. The Company estimates the volatility of its common stock
based on historical volatility that matches the expected remaining life of the warrants.
48
**Recent
Accounting Standards**
****
*Standards Adopted*
In November 2023, the FASB
issuedASU2023-07,Segment Reporting(Topic280): Improvements to Reportable Segment Disclosures. The
amendments in thisASUrequire disclosures, on an annual and interim basis, of significant segment expenses that are
regularly provided to the chief operating officer decision maker (CODM), as well as the aggregate amount of other
segment items included in the reported measure of segment profit or loss. TheASUrequires that a public entity disclose
the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in
assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual
disclosures currently required by Topic280in interim periods, and entities with a single reportable segment are required
to provide all the disclosures required by the amendments in thisASUand existing segment disclosures in Topic280.
ThisASUis effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years
beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07, which was applied retrospectively
to all prior periods presented. See Note 10 for further details regarding this adoption.
*Standards not yet Adopted*
In
December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09),
which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional
information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income
taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.
ASU 2023-09 will become effective for annual periods beginning after December 15, 2024. The Company is still reviewing the impact of
ASU 2023-09.
Our
management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have
a material effect on the accompanying consolidated financial statements.
**JOBS
Act**
TheJOBS
Actcontains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify
as an emerging growth company under theJOBS Actand are 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-emerginggrowth companies. As a result, our consolidated 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 theJOBS Act.
Subject to certain conditions set forth in theJOBS 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 independent registered public accounting firms attestation
report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure
that may be required of non-emerginggrowth public companies under the Dodd-FrankWall 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
independent registered public accounting firms report providing additional information about the audit and the consolidated 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 CEOs 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.
**Item7A.
Quantitative and Qualitative Disclosures about Market Risk**
We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise
required under this item.
**Item8.
Consolidated Financial Statements and Supplementary Data**
This
information appears following Item 15 of this Report and is included herein by reference.
**Item9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure**
None.
49
**ITEM9A.
CONTROLS AND PROCEDURES**
**Evaluation
of Disclosure Controls and Procedures**
Disclosure
controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed
under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the
SECs rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated
and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal
financial and accounting officer (our Certifying Officers), the effectiveness of our disclosure controls and procedures
as of December 31, 2024, pursuant to Rule13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers
concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective.
We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all
our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
**Managements
Report on Internal Controls Over Financial Reporting**
Management
is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f)
under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with
accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures
may deteriorate.
Under the supervision and with the participation
of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation
of the effectiveness of our internal control over financial reporting as of December 31, 2024, as such term is defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. Based upon their evaluation, our principal executive officer and principal financial and accounting
officer, concluded that our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) were not effective as of December 31, 2024 due to the existence of material weaknesses. Our internal controls did not detect an error
in (i) the review of the convertible promissory notes valuation and warrant valuation (ii) proper recording of accounts payable and accrued
expenses, expensing or prepaid expenses and the calculation of our income tax provision.
We
do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and
procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there
are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all
our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions
This
Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm due to a transition period
established by rules of the SEC for 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.
**Changes
in Internal Control over Financial Reporting**
There were no changes in our internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than as described above.
**ITEM 9B. OTHER INFORMATION.**
During the period covered
by this Annual Report, none of the Companys directors or executive officers has adopted or terminated a Rule 10b5-1 trading arrangement
or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as
amended).
**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS.**
Not applicable.
50
**PART III**
**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**
**Directors and Executive Officers**
Our directors and officers are as follows:
|
Name |
|
Age |
|
Title | |
|
Jack Stover |
|
69 |
|
Co-Founder, Director, Chief Executive Officer | |
|
Fred Knechtel |
|
63 |
|
Co-Founder, Director, Chief Financial Officer | |
|
Peter ORourke |
|
50 |
|
Chairman of the Board, Independent Director | |
|
Ed Johnson |
|
62 |
|
Independent Director | |
|
Lauren Chung |
|
49 |
|
Independent Director | |
****
**Jack Stover - Co-Founder, Director and Chief
Executive Officer**
Jack Stover has served as
our Chief Executive Officer and director since inception. From June 2016 to November 2020, Mr. Stover served as president and chief executive
officer of Interpace Biosciences, Inc., a publicly-traded small cap life sciences company providing complex molecular analysis for the
early diagnosis and treatment of cancer and supporting the development of targeted therapeutics. From December 2015 until June 2016, Mr.
Stover served as interim president and chief executive officer of Interpace Biosciences, Inc. Mr. Stover on the board of directors of
Interpace Biosciences, Inc. from August 2005 until November 2020, and was chairman of the audit committee from August 2005 until December
2015. From June 2016 to December 2016, Mr. Stover was chairman of the audit committee and a member of the board of directors of Viatar
CTC Solutions, Inc. From 2004 to 2008, he served as chief executive officer, president and director of Antares Pharma, Inc., a publicly
held specialty pharmaceutical company (current market cap of ~$700M) then listed on the American Stock Exchange. In addition to other
relevant experience, Mr. Stover was also formerly a partner with PricewaterhouseCoopers (then Coopers and Lybrand), working in the bioscience
industry division in New Jersey. Mr. Stover received his B.A. in Accounting from Lehigh University and is a Certified Public Accountant.
We believe that Mr. Stover is well-qualified to serve as a director of our company based on Mr. Stovers experience holding senior
leadership positions in the life sciences industry, and his specific experience and skills in the areas of general operations, financial
operations and administration.
**Fred Knechtel - Co-Founder, Director and Chief
Financial Officer**
Fred Knechtel has served as
our Chief Financial Officer and director since inception. From August 2022 to August 2023, Mr. Knechtel served as chief financial officer
of DiamiR Biosciences. From January 2020 to January 2021, Mr. Knechtel served as chief financial officer of Interpace Biosciences, Inc.
From June 2018 to December 2018, Mr. Knechtel served as chief financial officer of GENEWIZ, Inc. From November 2014 to November 2017,
Mr. Knechtel served as group chief financial officer of Sims Metal Management. From November 2009 to October 2014, Mr. Knechtel served
as chief financial officer of Remy International, Inc. Mr. Knechtel received a Bachelor of Engineering from Stony Brook University and
a M.B.A in Finance from Hofstra University. We believe that Mr. Knechtel is well-qualified to serve as a director of our company based
on Mr. Knechtels experience holding high level executive positions in the life sciences industry, and his financial and accounting
experience.
**Peter ORourke - Chairman of the Board**
Peter ORourke has served
as our chairman of the board since the effective date of our initial public offering. Since December 2018, Mr. ORourke has served
as Managing Partner at TCI Partners, a consulting firm focused on healthcare, aerospace and the public sector. From November 2020-August
2022, Mr. ORourke was President and Director for Western Magnesium, where he created the U.S. operations strategy and team during
the successful technology pilot phase of the company, and led enterprise and defense business development, government affairs, and communications.
From January 2017 to December 2018, Mr. ORourke served as the Acting Secretary and Chief of Staff of the Department of Veteran
Affairs. From May 2015 to July 2016, Mr. ORourke served as a principal of Calibre Systems, Inc., a consulting firm. Mr. ORourke
also served in both the U.S. Navy and Air Force. Mr. ORourke served as Director for AXIM Biotechnologies from July 2020 to present.
AXIM is a vertically integrated research and development company focused on improving the landscape for the diagnosis of ophthalmological
conditions such as Dry Eye Disease (DED) through rapid diagnostic tests. Mr. ORourke received a Bachelor of Arts in Political Science
from the University of Tennessee in Knoxville as well as a Master of Science in Logistics and Supply Chain Management from the United
States Air Forces Institute of Technology. We believe that Mr. ORourke is well-qualified to serve as a director of our company
based on Mr. ORourkes leadership and consulting experience in the healthcare industry.
51
**Ed Johnson - Director**
Ed Johnson has served as a
director since the effective date of our initial public offering. Since March 2020, Mr. Johnson has served as the chief executive officer
of iONEBIOUSA Molecular COVID-19 Technologies, which he founded. Since March 2018, Mr. Johnson has served as chief executive officer of
Johnson Global Ventures, LLC. Since March 2018, Mr. Johnson has served on the Advisory Board to Advantage Capital Partners. Mr. Johnson
received a Bachelor of Science in Marketing from Florida State University and a M.B.A. from Nova Southeastern University. We believe that
Mr. Johnson is well-qualified to serve as a director of our company based on Mr. Johnsons healthcare focused experience.
**Lauren Chung - Director**
Lauren Chung has served as
a director since the effective date of our initial public offering. Since November 2019, Dr. Chung has served as chief executive officer
of MINLEIGH LLC, identifying, evaluating and partnering with companies for investments and strategic, operational, and commercial opportunities,
and venture partner at Yozma Group. From May 2017 to November 2019, Dr. Chung was an Equity Research Managing Director at WestPark Capital.
From August 2016 to April 2017, Dr. Chung as in equity research at Maxim Group. Previously, Dr. Chung founded and served as chief operating
officer and chief compliance officer of Tokum Capital Management, a global healthcare investment fund. Prior to that, she managed healthcare
investment portfolios at institutional investment firms. Dr. Chung serves as director of Todos Medical Ltd. Dr. Chung previously served
as director of Cure Pharmaceutical Holding Corp from August 2019 until November 2021, UltraSight, Inc from December 2020 to December 2021,
and AdiTxt, Inc. from June 2021 until December 2021. Dr. Chung holds a Ph.D. in Neuropathology from Columbia University-College of Physicians
& Surgeons, an M.B.A from Columbia Business School, and a BA with honors in Biochemistry and Economics from Wellesley College. We
believe that Dr. Chung is well-qualified to serve as a director of our company based on Dr. Chungs extensive corporate board and
investment analysis experience.
**Number of Officers and Directors**
Our board of directors consists
of five directors. We may not hold an annual meeting of stockholders until after we consummate our initial business combination. 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.
**Director Independence**
The 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 companys board of directors, would interfere with the directors exercise of independent judgment in carrying out
the responsibilities of a director. Our board of directors have determined that Dr. Chung, Mr. Johnson and Mr. ORourke are independent
directors as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors have regularly scheduled
meetings at which only independent directors are present.
**Committees of the Board of Directors**
Our board of directors has
three standing committees: an audit committee, a compensation committee and a nominating and corporate governance committee. Each committee
operates under a charter that has been approved by our board and has the composition and responsibilities described below. Our audit committee,
compensation committee and nominating and corporate governance committee is composed solely of independent directors.
52
*Audit Committee*
The members of our audit committee
are Dr. Chung, Mr. Johnson and Mr. ORourke. Dr. Chung serves as chair of the audit committee. Under the Nasdaq listing standards
and applicable SEC rules, we are required to have at least three members on the audit committee. 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. Dr. Chung, Mr. Johnson
and Mr. ORourke qualify as independent directors under applicable rules. Each member of the audit committee is financially literate
and our board of directors has determined that Dr. Chung qualifies as an audit committee financial expert as defined in
applicable SEC rules.
We have adopted an audit committee
charter, which details the principal functions of the audit committee, including:
|
| the
appointment, compensation, retention, replacement, and oversight of the work of the independent registered accounting firm 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 registered accounting firm or any other registered public accounting
firm engaged by us, and establishing pre-approval policies and procedures; |
|
|
| reviewing
and discussing with the independent registered accounting firm 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 registered accounting firm; |
|
|
| 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 registered accounting firm describing (i) the independent registered
accounting firms internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control
review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within, the
preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
|
|
| 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 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. |
|
*Compensation Committee*
The members of our Compensation
Committee are Mr. Johnson, Dr. Chung, and Mr. ORourke. Mr. Johnson serves as chair of the compensation committee. Under the Nasdaq
listing standards and applicable SEC rules, we are required to have at least two members on the compensation committee, all of whom must
be independent.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
|
| reviewing
and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officers compensation, evaluating
our Chief Executive Officers performance in light of such goals and objectives and determining and approving the remuneration
(if any) of our Chief Executive Officers based on such evaluation; |
|
|
| reviewing
and approving the compensation of all of our other executive 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 executive 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. |
|
53
The charter also provides
that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or
other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However,
before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee
will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
*Nominating and Corporate Governance Committee*
The members of our nominating
and corporate governance are Dr. Chung, Mr. ORourke and Mr. Johnson. Dr. Chung serves as chair of the nominating and corporate
governance committee.
The primary purposes of our
nominating and corporate governance committee will be to assist the board in:
|
| identifying,
screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination
for election at the annual meeting of stockholders or to fill vacancies on the board of directors; |
|
|
| developing,
recommending to the board of directors and overseeing implementation of our corporate governance guidelines; |
|
|
| coordinating
and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance
of the company; and |
|
|
| reviewing
on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
|
The nominating and corporate
governance committee is governed by a charter that complies with the rules of Nasdaq.
**Director Nominations**
Our nominating and corporate
governance committee will recommend to the board of directors candidates for nomination for election at the annual meeting of the stockholders.
The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they
are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of
stockholders).
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**
We have adopted a Code of
Ethics applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and our audit committee
charter as exhibits to the registration statement we filed in connection with our initial public offering. You are able to review these
documents by accessing our public filings at the SECs 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.
54
**Conflicts of Interest**
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity 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 which is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she will honor these fiduciary obligations under applicable law. 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 business
combination. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue.
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. |
|
|
| Our
sponsor, executive officers and directors have agreed to waive their redemption rights with respect to their founder shares and any public
shares they hold in connection with the consummation of our initial business combination. Additionally, our sponsor, executive officers
and directors have agreed to waive their redemption rights with respect to their founder shares if we fail to consummate our initial
business combination within the combination period, although they will be entitled to liquidating distributions from the trust account
with respect to any public shares they hold. If we do not complete our initial business combination within such applicable time period,
the proceeds of the sale of the private placement warrants 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 earlier of (1) one year after the completion of our initial business combination and (2)
the date on which we consummate a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after our
initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash,
securities or other property. Notwithstanding the foregoing, if the last sale price of our 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 our initial business combination, the founder shares will be released from
the lock-up. With certain limited exceptions, the private placement warrants and the securities underlying such warrants will not be
transferable, assignable or salable by our initial stockholders until 30 days after the completion of our initial business combination.
Since our initial stockholders and officers and directors may directly or indirectly own common stock and warrants following our initial
public 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 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. |
|
|
| Our
initial stockholders, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing
arrangements as we may obtain loans from our initial stockholders or an affiliate of our initial stockholders or any of our officers
or directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans
may be, at the option of the lender, convertible into placement warrants at a price of $1.00 per warrant. Such units would be identical
to the private placement warrants, including as to exercise price, exercisability and exercise period. |
|
|
| Our
initial stockholders, officers and directors may be owed reimbursement for expenses incurred in connection with certain activities on
our behalf which would only be repaid if we complete an initial business combination. |
|
|
| Our
officers and directors may be paid consulting, finder or success fees for assisting us in consummating our initial business combination. |
|
55
The conflicts described above
may not be resolved in our favor.
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 corporations line of business; and |
|
|
| it
would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. |
|
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our initial stockholders, officers or directors. In the
event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain
an opinion from an independent investment banking firm which 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 the event that we submit
our initial business combination to our public stockholders for a vote, our sponsor, executive officers, and directors have agreed to
vote their founder shares and any public shares purchased in or after our initial public offering in favor of our initial business combination.
The following table summarizes
the relevant pre-existing fiduciary or contractual obligations of our officers and directors:
|
Individual | |
Entity | |
Position at affiliated entity | |
|
Jack Stover | |
Onconova Therapeutics, Inc. | |
Director | |
|
| |
| |
| |
|
Fred Knechtel | |
- | |
- | |
|
| |
| |
| |
|
Peter ORourke | |
TCI Partners | |
Managing Partner | |
|
| |
AXIM Biotechnologies | |
Director | |
|
| |
| |
| |
|
Ed Johnson | |
iONEBIOSUSA | |
CEO | |
|
| |
Johnson Global Ventures LLC | |
CEO | |
|
| |
Advantage Capital Partners | |
Advisor | |
|
| |
| |
| |
|
Lauren Chung | |
MINLEIGH, LLC | |
CEO | |
|
| |
Todos Medical Ltd. | |
Director | |
**Limitation on Liability and Indemnification
of Officers and Directors**
Our amended and restated certificate
of incorporation provides 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 provides that our
directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent
such exemption from liability or limitation thereof is not permitted by the DGCL.
56
We entered 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 permit us to maintain insurance on behalf of any officer, director or employee
for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We have obtained
a policy of directors and officers liability insurance that insures our officers and directors against the cost of defense,
settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
These provisions may discourage
stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect
of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise
benefit us and our stockholders. Furthermore, a stockholders investment may be adversely affected to the extent we pay the costs
of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions,
the directors and officers liability insurance and the indemnity agreements are necessary to attract and retain talented
and experienced officers and directors.
**ITEM 11. EXECUTIVE COMPENSATION**
**Executive Officer and Director Compensation**
None of our executive officers
or directors have received any cash compensation for services rendered to us. Until the earlier of consummation of our initial business
combination and our liquidation, beginning on the closing date of our initial public offering, we had agreed to pay an affiliate of one
of our officers a total of $5,000 per month for office space, utilities, secretarial support and other administrative and consulting services.
As of June 30, 2023, the Company and the sponsor terminated this agreement. Our executive officers and directors, or any of their respective
affiliates, will be reimbursed for any 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 to our sponsor, officers, directors or their affiliates.
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, 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 executive officers will be determined
by a compensation committee constituted solely by independent directors.
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination,
although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to
remain with us after the initial business combination. The existence or terms of any such employment or consulting arrangements to retain
their positions with us may influence our managements 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 executive officers
and directors that provide for benefits upon termination of employment.
**Compensation Committee Interlocks and Insider Participation**
****
None of our executive officers
currently serves, and in the past year has not served, as a member of the board of directors or compensation committee of any entity that
has one or more executive officers serving on our board of directors.
57
**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
****
The following table shows the beneficial ownership of NorthView Common
Stock as of March 28, 2025 by:
|
| each person known by NorthView to beneficially own more than
5% of the outstanding NorthView Common Stock; |
|
|
| each of NorthViews named executive officers and directors;
and |
|
|
| all of NorthViews executive officers and directors
as a group. |
|
Unless otherwise indicated, NorthView believes that all persons named
in the table have sole voting and investment power with respect to all shares beneficially owned by them. Except as otherwise noted herein,
the number and percentage of NorthView Common Stock beneficially owned is determined in accordance with Rule13d-3 of the ExchangeAct,
and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership
includes any Profusa Common Stock as to which the holder has sole or shared voting power or investment power and also any NorthView Common
Stock which the holder has the right to acquire within 60days of March 21, 2025 through the exercise of any option, conversion or
any other right.
As of March 28, 2025, there were 5,348,311 shares of NorthView Common
Stock outstanding.
|
| |
NorthView
Common Stock | | |
|
| |
Number of Shares Beneficially Owned | | |
Approximate Percentageof Outstanding Common Stock | | |
|
Name of Beneficial Owner(1) | |
| | |
| | |
|
Executive Officers and Directors: | |
| | |
| | |
|
Jack Stover(3)(2) | |
| 4,743,750 | | |
| 80.7 | % | |
|
Fred Knechtel(3)(2) | |
| 4,743,750 | | |
| 80.7 | % | |
|
Peter ORourke(4) | |
| | | |
| | | |
|
Ed Johnson(4) | |
| | | |
| | | |
|
Lauren Chung(4) | |
| | | |
| | | |
|
All directors and executive officers as a group (five individuals) | |
| 4,743,750 | | |
| 80.7 | % | |
|
Five Percent or More Holders: | |
| | | |
| | | |
|
NorthView Sponsor I, LLC(3)(2) | |
| 4,743,750 | | |
| 80.7 | % | |
|
* | Represents less than 1% |
|
|
(1) | Unless otherwise noted, the business address of each of the
following entities or individuals 207 West 25th St, 9th Floor, NewYork, NY10001. |
|
|
(2) | Interests shown consist solely of founder shares. |
|
|
(3) | Shares are held by NorthView SponsorI, LLC, a limited
liability company, of which Messrs. Stover and Knechtel are the managers. Members of this limited liability company include certain officers
and directors of the company. Messrs. Stover and Knechtel disclaim beneficial ownership of the reported shares other than to the extent
of their ultimate pecuniary interest therein. |
|
|
(4) | Does
not include any securities held by NorthView SponsorI, LLC, a limited liability company, of which each person is a direct or indirect
member. Each such person disclaims beneficial ownership of the reported securities, except to the extent of his pecuniary interest therein. |
|
58
**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE**
In April 2021, our sponsor
purchased 5,175,000 founder shares for an aggregate purchase price of $25,000. In October 2021, our sponsor forfeited 862,500 founder
shares. On December 20, 2021, we effected a 1.1- for-1 stock dividend of our common stock, resulting in an aggregate of 4,743,750 founder
shares (up to 618,750 of which are subject to forfeiture).
Our sponsor purchased an aggregate
of 5,162,500 private placement warrants, each exercisable to purchase one share of common stock at $11.50 per share, at a price of $1.00
per warrant ($5,162,500 in the aggregate), in a private placement that closed simultaneously with the closing of our initial public offering.
The private placement warrants (including the shares of common stock issuable upon exercise of the private placement warrants) may not,
subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination.
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. Our executive officers and directors currently have certain relevant
fiduciary duties or contractual obligations that may take priority over their duties to us.
We entered into an Administrative
Services Agreement pursuant to which we pay NorthView Sponsor I, LLC, an affiliate of one of our officers, a total of $5,000 per month
for office space, utilities, secretarial support and other administrative and consulting services. 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 21 months, NorthView Sponsor I, LLC will be paid a total of $105,000 ($5,000 per month) for office space,
utilities, secretarial support and other administrative and consulting services and will be entitled to be reimbursed for any out-of-pocket
expenses. As of June 30, 2023, the Company and the sponsor terminated this agreement.
Our sponsor, executive officers
and directors, or any of their respective affiliates, will be reimbursed for any 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 to our sponsor, officers, directors or our or 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 out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Prior to the closing of our
initial public offering, our sponsor loaned us $204,841 to be used for a portion of the expenses of our initial public offering. These
loans were non-interest bearing, unsecured and were repaid on the closing of our initial public offering.
59
In addition, in order to finance
transaction costs in connection with an intended initial business combination, our initial stockholders or an affiliate of our initial
stockholders or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete
an initial business combination, we would repay such loaned amounts. In the event that the 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 for such repayment. Up to $1,500,000 of such loans may be, at the option of the lender, convertible into warrants
at a price of $1.00 per warrant of the post business combination entity. The warrants would be identical to the private placement warrants,
including as to exercise price, exercisability and exercise period. 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 initial stockholders or an affiliate
of our initial stockholders or certain officers and directors 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 may pay consulting, finder
or success fees to our initial stockholders, officers, directors or their affiliates for assisting us in consummating our initial business
combination. Other than these consulting, finder or success fees, no compensation of any kind will be paid by us to our initial stockholders,
executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the completion
of an initial business combination. However, these individuals will be reimbursed for any 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 to our initial stockholders, officers, directors or our
or their affiliates.
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 officer and director compensation.
We entered into a registration
rights agreement with respect to the founder shares and private placement warrants (and underlying securities).
**Policy for Approval of Related Party Transactions**
The audit committee of our
board of directors has adopted a policy setting forth the policies and procedures for its review and approval or ratification of related
party transactions. Pursuant to the policy, the audit committee will consider (i) the relevant facts and circumstances of each
related party transaction, including if the transaction is on terms comparable to those that could be obtained in arms-length dealings
with an unrelated third party, (ii) the extent of the related partys interest in the transaction, (iii) whether the transaction
contravenes our code of ethics or other policies, (iv) whether the audit committee believes the relationship underlying the transaction
to be in the best interests of the company and its stockholders and (v) the effect that the transaction may have on a directors
status as an independent member of the board and on his or her eligibility to serve on the boards committees. Management will present
to the audit committee each proposed related party transaction, including all relevant facts and circumstances relating thereto. Under
the policy, we may consummate related party transactions only if our audit committee approves or ratifies the transaction in accordance
with the guidelines set forth in the policy. The policy will not permit any director or executive officer to participate in the discussion
of, or decision concerning, a related person transaction in which he or she is the related party.
60
**ITEM14.
PRINCIPAL ACCOUNTING FEES AND SERVICES.**
The
following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered.
*Audit Fees*. During the years ended December
31, 2024 and 2023, fees for our independent registered public accounting firm were approximately $191,946 and $108,148 for the services
Marcum performed in connection with the audit of our December 31, 2024 and 2023 consolidated financial statements included in this Annual
Report on Form 10K.
*Audit-Related Fees.* During the years ended
December 31, 2024 and 2023, fees for our independent registered public accounting firm were approximately $62,335 and $102,604 for the
services Marcum performed in connection with any audit-related services.
*Tax
Fees*. During the years ended December 31, 2024 and 2023, our independent registered public accounting firm did not render services
to us for tax compliance, tax advice and tax planning.
*All
Other Fees*. During the years ended December 31, 2024 and 2023, there were no fees billed for products and services provided by our
independent registered public accounting firm other than those set forth above.
**Pre-Approval
Policy**
Our
audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve
all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board
of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve
all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject
to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to
the completion of the audit).
We
hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference
can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C.
20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C.
20549, at prescribed rates or on the SEC website at www.sec.gov.
61
**PART IV**
****
**ITEM 15. EXHIBITS AND CONSOLIDATED FINANCIAL STATEMENTS**
****
|
a. | Documents
filed as part of this Report |
|
|
1. | Consolidated
Financial Statements |
|
The financial statements and notes thereto
which are attached hereto have been included by reference into Item 8 of this part of the annual report on Form 10-K. See the Index to
Consolidated Financial Statements.
|
2. | Consolidated
Financial Statement Schedules |
|
All schedules are omitted because they
are inapplicable or not required or the required information is shown in the financial statements or notes thereto.
|
3. | Exhibits |
|
|
Exhibit No. |
|
Description | |
|
2.1 |
|
Merger Agreement and Plan of Reorganization, dated as of November 7, 2022, by and among NorthView, NV Profusa Merger Sub, Inc. and Profusa, Inc. (incorporated by reference to exhibit 2.1 of the Current Report on Form 8-K, filed November 10, 2022) | |
|
2.2 |
|
Amendment No. 1 to Merger Agreement, dated September 12, 2023, by and among NorthView, Profusa and Merger Sub (incorporated by reference to Exhibit 2.2 of the Current Report on Form 8-K, filed September 13, 2023) | |
|
2.3 |
|
Amendment No. 2 to Merger Agreement, dated January 12, 2024, by and among NorthView, Profusa and Merger Sub (incorporated by reference to Exhibit 2.2 of the Current Report on Form 8-K, filed January 22, 2024) | |
|
2.4 |
|
Amendment No. 3 to Merger Agreement, dated March 4, 2024, by and among NorthView, Profusa and Merger Sub (incorporated by reference to Exhibit 2.2 of the Current Report on Form 8-K, filed March 14, 2024) | |
|
2.5 |
|
Amendment No. 4 to Merger Agreement, dated February 11, 2025, by and among NorthView, Profusa and Merger Sub (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K, filed February 19, 2025) | |
|
3.1 |
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed December 23, 2021) | |
|
3.2 |
|
Amendment to the Amended and Restated Certificate of Incorporation of NorthView Acquisition Corp., dated March 10, 2023 (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on March 13, 2023) | |
|
3.3 |
|
Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on December 28, 2023) | |
|
3.4 |
|
Bylaws (incorporated by reference to exhibit 3.3 of the Form S-1 file no 333-257156) | |
|
3.5 |
|
Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on March 26, 2024) | |
|
3.6 |
|
Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on September 23, 2024) | |
|
3.7 |
|
Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on March 26, 2025) | |
|
4.1 |
|
Warrant Agreement, dated December 20, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to exhibit 4.2 of the Current Report on Form 8-K, filed with the SEC on December 23, 2021) | |
|
4.2 |
|
Rights Agreement, dated December 20, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as rights agent (incorporated by reference to exhibit 4.1 of the Current Report on Form 8-K, filed with the SEC on December 23, 2021) | |
|
4.3 |
|
Description of Registrants Securities (incorporated by reference to exhibit 4.3 of the Annual Report on Form 10-K, filed with the SEC on March 6, 2023) | |
62
|
10.1 |
|
Letter Agreement, dated December 20, 2021, by and among the Company, NorthView Sponsor I, LLC and each of the officers and directors of the Company (incorporated by reference to exhibit 10.1 of the Current Report on Form 8-K, filed with the SEC on December 23, 2021) | |
|
10.2 |
|
Investment Management Trust Agreement, dated December 20, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to exhibit 10.2 of the Current Report on Form 8-K, filed with the SEC on December 23, 2021) | |
|
10.3 |
|
Form of Amendment to the Investment Management Trust Agreement, by and between the Company and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed with the SEC on March 13, 2023) | |
|
10.4 |
|
Amendment No. 1 to Investment Management Trust Agreement, dated December 20, 2023, by and between the Company and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed with the SEC on January 9, 2024) | |
|
10.5 |
|
Registration Rights Agreement among the Registrant and certain security holders (incorporated by reference to exhibit 10.3 of the Current Report on Form 8-K, filed with the SEC on December 23, 2021) | |
|
10.6 |
|
Form of Indemnity Agreement (incorporated by reference to exhibit 10.7 of the Form S-1 file no. 333-257156) | |
|
10.7 |
|
Form of Administrative Services Agreement, by and between the Company and NorthView Sponsor I, LLC (incorporated by reference to exhibit 10.8 of the Form S-1 file no. 333-257156) | |
|
10.8 |
|
Business Combination Marketing Agreement dated December 20, 2021 between the Registrant and I-Bankers Securities, Inc. (incorporated by reference to exhibit 1.2 of the Current Report on Form 8-K, filed with the SEC on December 23, 2021) | |
|
10.9 |
|
Form of Stockholder Support Agreement (incorporated by reference to exhibit 10.1 of the Current Report on Form 8-K, filed November 10, 2022). | |
|
10.10 |
|
Sponsor Support Agreement (incorporated by reference to exhibit 10.2 of the Current Report on Form 8-K, filed November 10, 2022). | |
|
10.11 |
|
Form of Lock-Up Agreement (incorporated by reference to exhibit 10.3 of the Current Report on Form 8-K, filed November 10, 2022). | |
|
10.12 |
|
Form of Amended and Restated Registration Rights Agreement (incorporated by reference to exhibit 10.4 of the Current Report on Form 8-K, filed November 10, 2022) | |
|
10.13 |
|
Omnibus Amendment to I-Bankers Fee Agreements (incorporated by reference to exhibit 10.5 of the Current Report on Form 8-K, filed November 10, 2022) | |
|
14 |
|
Code of Ethics (incorporated by reference to exhibit 14 of the Form S-1 file no. 333-257156) | |
|
19 |
|
Insider Trading Policy of the Company | |
|
31.1* |
|
Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes- Oxley Act of 2002 | |
|
31.2* |
|
Certification of Principal Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002 | |
|
32.1* |
|
Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
32.2* |
|
Certification of Principal Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
97.1 |
|
Executive Incentive Clawback Policy (incorporated by reference to exhibit 97.1 of Form 10-K, filed February 26, 2024) | |
|
101.INS |
|
Inline XBRL Instance Document | |
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document | |
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase
Document | |
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase
Document | |
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document | |
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase
Document | |
|
104 |
|
Cover Page Interactive Data File (formatted as Inline
XBRL and contained in Exhibit 101). | |
|
* | Filed
herewith. |
|
|
| Certain
of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). The Registrant agrees
to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request. |
|
****
**ITEM 16. FORM 10-K SUMMARY**
None.
63
**NORTHVIEW
ACQUISITION CORP.**
**INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS**
| Report of Independent Registered Public Accounting Firm (PCAOB ID # 688) | F-2 | |
| Consolidated Financial Statements: | | |
| Consolidated Balance Sheets | F-3 | |
| Consolidated Statements of Operations | F-4 | |
| Consolidated Statements of Changes in Stockholders Deficit | F-5 | |
| Consolidated Statements of Cash Flows | F-6 | |
| Notes to Consolidated Financial Statements | F-7 to F-23 | |
F-1
**REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To the Stockholders and Board of Directors of
Northview Acquisition Corporation
**Opinion on the Financial Statements**
****
We have audited the accompanying consolidated
balance sheets of Northview Acquisition Corporation (the Company) as of December 31, 2024 and 2023, the related consolidated
statements of operations, changes in stockholders deficit and cash flows for each of the two years in the period ended December
31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its
operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles
generally accepted in the United States of America.
**Explanatory Paragraph Going Concern**
****
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As described in Note 1 to the financial statements, the Company is
a Special Purpose Acquisition Corporation that 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 on or before June 22, 2025. The Company entered
into a definitive business combination agreement with a business combination target on November 7, 2022; however, the completion of this
transaction is subject to the approval of the Companys stockholders among other conditions. There is no assurance that the Company
will obtain the necessary approvals, satisfy the required closing conditions, raise the additional capital it needs to fund its operations,
and complete the transaction prior to June 22, 2025, if at all. The Company also has no approved plan in place to extend the business
combination deadline and fund operations for any period of time after June 22, 2025, in the event that it is unable to complete a business
combination by that date. These matters raise substantial doubt about the Companys ability to continue as a going concern. Managements
plans with regard to these matters are also described in Note 1. The financial statements do not include any adjustments that may be necessary
should the Company be unable to continue as a going concern.
**Basis for Opinion**
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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 audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits 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 audits 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 audits 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 audits 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 audits provide a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Companys auditor since 2021.
Boston, MA
March 28, 2025
F-2
**NORTHVIEW
ACQUISITION CORPORATION**
**CONSOLIDATED
BALANCE SHEETS**
****
|
| |
December31, 2024 | | |
December31, 2023 | | |
|
Assets | |
| | |
| | |
|
Current Assets: | |
| | |
| | |
|
Cash | |
$ | 16,204 | | |
$ | 4,519 | | |
|
Prepaid expenses and other current assets | |
| 14,166 | | |
| 6,750 | | |
|
Prepaid income taxes | |
| 30,492 | | |
| | | |
|
Cash and marketable securities held in Trust Account | |
| | | |
| 1,565,078 | | |
|
Total Current Assets | |
| 60,862 | | |
| 1,576,347 | | |
|
| |
| | | |
| | | |
|
Cash and marketable securities held in Trust Account | |
| 8,330,835 | | |
| 9,308,328 | | |
|
Total Assets | |
$ | 8,391,697 | | |
$ | 10,884,675 | | |
|
| |
| | | |
| | | |
|
Liabilities, Redeemable Common Stock and Stockholders Deficit | |
| | | |
| | | |
|
Current Liabilities: | |
| | | |
| | | |
|
Accounts payable and accrued expenses | |
$ | 684,483 | | |
$ | 449,114 | | |
|
Advance from Profusa | |
| 791,407 | | |
| | | |
|
Excise tax payable | |
| 1,880,944 | | |
| 1,864,106 | | |
|
Common stock to be redeemed (1) | |
| | | |
| 1,565,078 | | |
|
Income tax payable | |
| | | |
| 49,061 | | |
|
Convertible promissory note related party | |
| 8,908,052 | | |
| 944,118 | | |
|
Due to related party | |
| 50,000 | | |
| 50,000 | | |
|
Total Current Liabilities | |
| 12,314,886 | | |
| 4,921,477 | | |
|
| |
| | | |
| | | |
|
Deferred tax liability | |
| | | |
| 13,661 | | |
|
Warrant liabilities | |
| 696,170 | | |
| 156,639 | | |
|
Total Liabilities | |
| 13,011,056 | | |
| 5,091,777 | | |
|
| |
| | | |
| | | |
|
Commitments and Contingencies (Note 6) | |
| | | |
| | | |
|
Common stock subject to possible redemption,687,519 and 833,469 shares at redemption value of approximately $12.13 and $11.10 at December 31, 2024 and 2023, respectively | |
| 8,337,388 | | |
| 9,252,208 | | |
|
| |
| | | |
| | | |
|
Stockholders Deficit: | |
| | | |
| | | |
|
Preferred stock, $0.0001par value;1,000,000shares authorized;noneissued and outstanding | |
| | | |
| | | |
|
Common stock, $0.0001par value;100,000,000shares authorized;5,193,750shares issued and outstanding at December 31, 2024 and 2023 (excluding 687,519 and 833,469 shares subject to possible redemption at December 31, 2024 and 2023, respectively) | |
| 519 | | |
| 519 | | |
|
Accumulated deficit | |
| (12,957,266 | ) | |
| (3,459,829 | ) | |
|
Total Stockholders Deficit | |
| (12,956,747 | ) | |
| (3,459,310 | ) | |
|
Total Liabilities, Redeemable Common Stock and Stockholders Deficit | |
$ | 8,391,697 | | |
$ | 10,884,675 | | |
|
(1) | In
connection with the special meeting of stockholders to vote on extending the Combination Period, on December 21, 2023, 140,663 shares
of the Companys common stock were redeemed at a per share price of $11.13. In January 2024, $1,565,078 was paid from the Trust
Account to redeeming stockholders in connection with the extension. As a result, the Company has recorded a liability of $1,565,078 as
common stock to be redeemed and reduced common stock subject to possible redemption as of December 31, 2023 on the consolidated balance
sheet. |
|
*The
accompanying notes are an integral part of the consolidated financial statements*
F-3
**NORTHVIEW
ACQUISITION CORPORATION**
**CONSOLIDATED
STATEMENTS OF OPERATIONS**
****
|
| |
For the Year Ended December31, | | |
|
| |
2024 | | |
2023 | | |
|
Formation and operating costs | |
$ | 1,351,038 | | |
$ | 1,508,683 | | |
|
Loss from operations | |
| (1,351,038 | ) | |
| (1,508,683 | ) | |
|
| |
| | | |
| | | |
|
Other income (expense): | |
| | | |
| | | |
|
Interest income earned on investments held in trust account | |
| 425,416 | | |
| 2,248,538 | | |
|
Change in fair value of convertible note | |
| (7,165,953 | ) | |
| 177,697 | | |
|
Change in fair value of warrant liabilities | |
| (539,531 | ) | |
| 701,148 | | |
|
Total other (expense) income, net | |
| (7,280,068 | ) | |
| 3,127,383 | | |
|
| |
| | | |
| | | |
|
(Loss) income before provision for income tax | |
| (8,631,106 | ) | |
| 1,618,700 | | |
|
Income tax provision | |
| (80,513 | ) | |
| (456,790 | ) | |
|
Net (loss) income | |
$ | (8,711,619 | ) | |
$ | 1,161,910 | | |
|
| |
| | | |
| | | |
|
Basic and diluted weighted average shares outstanding, common stock subject to possible redemption | |
| 747,644 | | |
| 4,866,356 | | |
|
Basic and diluted net (loss) income per share, common stock subject to possible redemption | |
$ | (1.47 | ) | |
$ | 0.12 | | |
|
Basic and diluted weighted average shares outstanding, common stock | |
| 5,193,750 | | |
| 5,193,750 | | |
|
Basic and diluted net (loss) income per share, common stock | |
$ | (1.47 | ) | |
$ | 0.12 | | |
*The
accompanying notes are an integral part of the consolidated financial statements.*
F-4
**NORTHVIEW
ACQUISITION CORPORATION**
**CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT**
**FOR
THE YEARS ENDED DECEMBER 31, 2024 AND 2023**
|
| |
Common stock | | |
Additional Paid-In | | |
Accumulated | | |
Total Stockholders | | |
|
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
|
| |
| | |
| | |
| | |
| | |
| | |
|
Balance as of December 31, 2022 | |
| 5,193,750 | | |
$ | 519 | | |
$ | | | |
$ | (619,995 | ) | |
$ | (619,476 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Accretion of common stock to redemption value | |
| | | |
| | | |
| | | |
| (2,137,638 | ) | |
| (2,137,638 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Excise tax payable attributable to redemption of common stock | |
| | | |
| | | |
| | | |
| (1,864,106 | ) | |
| (1,864,106 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Net income | |
| | | |
| | | |
| | | |
| 1,161,910 | | |
| 1,161,910 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Balance as of December 31, 2023 | |
| 5,193,750 | | |
$ | 519 | | |
$ | | | |
$ | (3,459,829 | ) | |
$ | (3,459,310 | ) | |
|
| |
Common stock | | |
Additional Paid-In | | |
Accumulated | | |
Total Stockholders | | |
|
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
|
Balance as of December 31, 2023 | |
| 5,193,750 | | |
$ | 519 | | |
$ | | | |
$ | (3,459,829 | ) | |
$ | (3,459,310 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Accretion of common stock to redemption value | |
| | | |
| | | |
| | | |
| (768,980 | ) | |
| (768,980 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Excise tax payable attributable to redemption of common stock | |
| | | |
| | | |
| | | |
| (16,838 | ) | |
| (16,838 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Net loss | |
| | | |
| | | |
| | | |
| (8,711,619 | ) | |
| (8,711,619 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Balance as of December 31, 2024 | |
| 5,193,750 | | |
$ | 519 | | |
$ | | | |
$ | (12,957,266 | ) | |
$ | (12,956,747 | ) | |
*The
accompanying notes are an integral part of the consolidated financial statements.*
F-5
**NORTHVIEW
ACQUISITION CORPORATION**
**CONSOLIDATED
STATEMENTS OF CASH FLOWS**
****
|
| |
For the Year Ended
December31, | | |
|
| |
2024 | | |
2023 | | |
|
Cash flows from operating activities: | |
| | |
| | |
|
Net (loss) income | |
$ | (8,711,619 | ) | |
$ | 1,161,910 | | |
|
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |
| | | |
| | | |
|
Interest income on cash andmarketable securitiesheld in Trust Account | |
| (425,416 | ) | |
| (2,248,538 | ) | |
|
Change in fair value of warrant liabilities | |
| 539,531 | | |
| (701,148 | ) | |
|
Changes in fair value of convertible promissory note | |
| 7,165,953 | | |
| (177,697 | ) | |
|
Changes in operating assets and liabilities: | |
| | | |
| | | |
|
Prepaid expenses and other current assets | |
| (7,416 | ) | |
| 311,468 | | |
|
Accounts payable and accrued expenses | |
| 235,369 | | |
| 634 | | |
|
Prepaid income taxes | |
| (30,492 | ) | |
| | | |
|
Income tax payable | |
| (49,061 | ) | |
| (413,210 | ) | |
|
Deferred tax liability | |
| (13,661 | ) | |
| (23,279 | ) | |
|
Due to related party | |
| | | |
| 25,000 | | |
|
Net cash used in operating activities | |
| (1,296,812 | ) | |
| (2,064,860 | ) | |
|
| |
| | | |
| | | |
|
Cash flows from investing activities: | |
| | | |
| | | |
|
Payment of extension fee into Trust Account | |
| (485,350 | ) | |
| (438,360 | ) | |
|
Cash withdrawn from Trust Account in connection with redemption | |
| 3,248,878 | | |
| 184,845,836 | | |
|
Reimbursement of franchise and income taxes from Trust Account | |
| 204,459 | | |
| 1,192,438 | | |
|
Net cash provided by investing activities | |
| 2,967,987 | | |
| 185,599,914 | | |
|
| |
| | | |
| | | |
|
Cash flows from financing activities: | |
| | | |
| | | |
|
Proceeds from convertible promissory note | |
| 797,981 | | |
| 1,121,815 | | |
|
Advance from Profusa | |
| 791,407 | | |
| | | |
|
Redemption of common stock | |
| (3,248,878 | ) | |
| (184,845,836 | ) | |
|
Net cash used in financing activities | |
| (1,659,490 | ) | |
| (183,724,021 | ) | |
|
| |
| | | |
| | | |
|
Net change in cash | |
| 11,685 | | |
| (188,967 | ) | |
|
Cash, beginning of the year | |
| 4,519 | | |
| 193,486 | | |
|
Cash, end of the year | |
$ | 16,204 | | |
$ | 4,519 | | |
|
Supplemental disclosure of cash flow information: | |
| | | |
| | | |
|
Income taxes paid, inclusive of interest and penalties | |
$ | 173,727 | | |
$ | 912,437 | | |
|
Excise tax payable attributable to redemption of common stock | |
$ | 16,838 | | |
$ | 1,864,106 | | |
|
Accretion of common stock to redemption value | |
$ | 768,980 | | |
$ | 2,137,638 | | |
|
Reclassification of common stock subject to redemption to common stock to be redeemed | |
$ | | | |
$ | 1,565,078 | | |
*The
accompanying notes are an integral part of the consolidated financial statements.*
F-6
**Note
1 Description of Organization and Business Operations**
NorthView
Acquisition Corporation (the Company or Northview) is a blank check company incorporated in Delaware on April
19, 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 (Business Combination). The Company has identified a target
company for a business combination and is consummating the acquisition of Profusa.
The
Company has a wholly-owned subsidiary, NV Profusa Merger Sub Inc. (Merger Sub), a Delaware corporation incorporated on
October 13, 2022, formed solely in contemplation of the Merger with Profusa (See Note 6). Merger Sub has not commenced any operations
and has only nominal assets and no liabilities or contingent liabilities, nor any outstanding commitments other than in connection with
the Merger.
On
December 22, 2021, the Company consummated its Initial Public Offering (IPO) of 18,975,000 units (the Units),
which included 2,475,000 Units issued pursuant to the full exercise of the over-allotment option granted to the underwriters. Each Unit
consists of one share of common stock of the Company, par value $0.0001 per share, one right (the Rights), and one-half
of one redeemable warrant of the Company (the Warrants). Each Right entitles the holder thereof to receive one-tenth (1/10)
of one share of common stock. Each Warrant entitles the holder thereof to purchase one share of 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 $189,750,000.
Simultaneously
with the closing of the IPO, the Company completed the private sale of an aggregate of 7,347,500 warrants (the Private Placement
Warrants), which included 697,500 Private Placement Warrants issued pursuant to the full exercise of the over-allotment option
granted to the underwriters, to NorthView Sponsor I, LLC (the Sponsor), I-Bankers Securities, Inc., and Dawson James Securities,
Inc. at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $7,347,500, which is discussed
in Note 4.
Transaction
costs amounted to $7,959,726 consisting of $3,450,000 of underwriting discount, $3,570,576 of Representatives Shares cost, $259,527
of Representatives Warrants cost and $679,623 of other offering costs.
The
Companys Business Combination must be with one or more target businesses that together have a fair market value equal to at least
80% of the value of the assets held in the Trust Account (as defined below) (excluding taxes payable on the interest earned on the Trust
Account) at the time of the signing a definitive agreement in connection with 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. There is no assurance that the Company will be able to successfully effect a Business Combination.
Following
the closing of the Public Offering on December 22, 2021, an amount of $191,647,500 ($10.10 per Unit), excluding $741,228 that was wired
to the Companys operating bank account on December 31, 2021 for working capital purposes, from the net proceeds of the sale of
the public units in the IPO and the sale of the Private Placement Warrants was placed in a Trust Account (Trust Account)
and invested 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 as determined by the Company.
Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if
any, the proceeds from the IPO will not be released from the Trust Account until the earliest of (i) the completion of the Companys
initial Business Combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend
the Companys amended and restated certificate of incorporation (A) to modify the substance or timing of the Companys obligation
to redeem 100% of the public shares if the Company does not complete the initial Business Combination within the extended period (or
any additional extension from the closing of our IPO if we extend the period of time to consummate a business combination) (the Combination
Period), or (B) with respect to any other provision relating to stockholders rights or pre-Business Combination activity,
and (iii) the redemption of all of the Companys public shares if the Company is unable to complete the Business Combination within
the Combination Period, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of
the Companys creditors, if any, which could have priority over the claims of the Companys public stockholders.
F-7
The
Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion
of the initial Business Combination either (i)in connection with a stockholder meeting called to approve the initial Business Combination
or (ii)by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed initial
Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled
to redeem all or a portion of their public shares upon the completion of the initial Business Combination at a per-shareprice,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation
of the initial Business Combination, including interest (which interest shall be net of taxes payable) divided by the number of then
outstanding public shares, subject to the limitations described herein. The per share amount the Company will distribute to investors
who properly redeem their shares will not be reduced by the fee payable to I-Bankersand Dawson James pursuant to the Business Combination
Marketing Agreement (see Note 6).
If
the Company is unable to complete an initial Business Combination within the Combination Period, it 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
(which interest shall be net of taxes payable, and 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 liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the Companys remaining stockholders and its board of directors, dissolve
and liquidate, subject in each case to the Companys obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Companys
rights and warrants, which will expire worthless if the Company fails to complete the Business Combination within the Combination Period.
On March 10, 2023, the Company held a vote to
amend its amended and restated certificate of incorporation to extend the date by which the Company must consummate a Business Combination
from March 22, 2023 to December 22, 2023 (the First Extension Meeting).
On
December 21, 2023, the Company held a special meeting of stockholders to vote on extending the Combination Period. As a result, the
Company extended the Combination Period from December 22, 2023 to March 22, 2024. In connection with the extension, 140,663 shares
of the Companys common stock were redeemed, with 6,027,219 shares of Common Stock remaining outstanding after the Redemption;
833,469 shares of Common Stock remaining outstanding after the Redemption are shares issued in connection with our initial public
offering. In January 2024, $1,565,078 was paid from the Trust Account to redeeming stockholders in connection with the
extension.
On
January 2, 2024, the Company and Continental Stock Transfer & Trust Company (CST) entered into Amendment No. 1 to Investment
Management Trust Agreement, dated December 20, 2021, by and between the Company and CST, to allow CST, upon written instruction of the
Company, to (i) hold the funds in the Companys trust account uninvested or (ii) hold the funds in an interest-bearing bank demand
deposit account.
On
January 10, 2024, the Companys Board of Directors approved, and the Company amended, its Convertible Working Capital Promissory
Note (the Note) with the sponsor to increase the principal amount of the Note that could be drawn on to $1.5million.
The amended and restated Note also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares
of Company common stock at a price of $2.22 per share at the election of the sponsor. On May 31, 2024, the Companys Board of Directors
approved and the Company entered into a second amendment of its Convertible Working Capital Promissory Note with the sponsor to increase
the principal amount of the Note that could be drawn on to $2.5million. The second amended and restated Note also allows for the
conversion of the outstanding principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22per
share at the election of the sponsor.
On
March 21, 2024, the Company held its 2024 Annual Meeting of Stockholders (the Meeting). At the meeting, the Companys
stockholders approved the amendment of the Companys amended and restated certificate of incorporation to extend the date by which
the Company must consummate a business combination or, if it fails to do so, cease its operations and redeem or repurchase 100% of the
shares of the Companys common stock issued in the Companys initial public offering, from March 22, 2024, monthly for up
to six additional months at the election of the Company and only upon contribution of $0.05 per month per outstanding public share, ultimately
until September 22, 2024.
In
connection with the meeting, the holders of95,394Public Shares properly exercised their right to redeem, with 5,931,825 shares
of Common Stock remaining outstanding after the Redemption; 738,075 shares of Common Stock remaining outstanding after the Redemption
are shares issued in connection with the initial public offering. Consequently, the contribution is $36,904per month needed for
the Company to continue to extend the Combination Period monthly. On May 8, 2024 and May 31, 2024, the Company made two deposits of $36,904
each for April and May extension contributions. On September 10, 2024, the Company made a deposit of $112,114, of which $110,714 was
for June, July and August extension contributions and $1,400 for lost interest due to late trust payments.
F-8
On September 19, 2024, the Company held an extraordinary
general meeting of stockholders (the Meeting). At the Meeting, the Companys stockholders approved an amendment to
the Companys amended and restated certificate of incorporation to extend the date by which the Company must consummate its initial
Business Combination to March 22, 2025. In connection with the approval of the extension amendment, holders of50,556shares
of the Companys common stock exercised their right to redeem, with 5,881,269 shares of common stock remaining outstanding after
the redemption; 687,519 shares of common stock remaining outstanding after the redemption are shares issued in connection with our initial
public offering. Consequently, the contribution is $34,376per month needed for the Company to continue to extend the Combination
Period monthly. On December 13, 2024, the Company made a deposit of $68,752 for the October and November extension contributions and on
December 23, 2024, the company made a deposit of 34,376 for the December extension contribution. In October 2024, $595,439 was paid from
the trust account to redeeming stockholders in connection with the extension. On February 27, 2025, the Company made a deposit of $49,376
for the January extension contribution and a portion ($15,000) of the February extension contribution. On March 7, 2025, the Company deposited
the remainder of the February extension contribution of $19,376, plus interest.
On March 18, 2025, the company commenced a special
meeting of stockholders, which was adjourned until March 21, 2025 without conducting any business. On March 21, 2025, the Company reconvened
the meeting and the stockholders approved the extension of the business combination period until June 22, 2025. In connection with the
approval of the extension amendment, holders of532,958shares of the Companys common stock exercised their right to
redeem, for an aggregate redemption amount of approximately $6.5 million, with 5,348,311 shares of common stock remaining outstanding
after the redemption; 154,561 shares of common stock remaining outstanding after the redemption are shares issued in connection with our
initial public offering. As a condition of the extension, the Company contributed $30,000 to the Trust Account, for the entire extension
period, on March 21, 2025. Additionally, the stockholders at the meeting approved the amendment of the Companys charter to remove
the requirement that prevented the Company from redeeming public shares to the extent that it would cause the Companys net tangible
assets to be less than $5,000,001 (the NTA Requirement), and our charter was amended on March 21, 2025 to reflect the extension
of the business combination and the removal of the NTA Requirement.
All of the Public Shares, or shares of our common
stock sold as part of the IPO, contain a redemption feature which allows for the redemption of such Public Shares in connection with our
liquidation, if there is a stockholder vote or tender offer in connection with our initial business combination and in connection with
certain amendments to our amended and restated certificate of incorporation. In accordance with SEC and its guidance on redeemable equity
instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common
stock subject to redemption to be classified outside of permanent equity. Given that the Public Shares were issued with other freestanding
instruments (i.e., public warrants), the initial carrying value of common stock classified as temporary equity was the allocated proceeds
determined in accordance with ASC 470-20. The common stock is subject to ASC 480-10-S99. If it is probable that the equity instrument
will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date
of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption
date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the
instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.
The
Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares and public shares
in connection with the completion of the initial Business Combination, (ii) waive their rights to liquidating distributions from the
Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the Combination
Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold
if the Company fails to complete the Business Combination within such time period); and (iii) vote their Founder Shares and any public
shares purchased during or after the IPO in favor of the initial Business Combination.
F-9
The
Companys Sponsor has agreed that it will 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 to below (i) $10.10 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 which may be released to the Company to pay 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 indemnity of the underwriters of
the IPO 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, the Sponsor will not be responsible to the extent of any liability for such third-party
claims.
*Nasdaq
Delisting Notification*
On December 20,
2024, the Company received a written notice from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market that the Companys
securities would be delisted from The Nasdaq Stock Market by reason of the failure of the Company to complete its initial business combination
by December 20, 2024 (36 months from the effectiveness of its IPO registration statement) as required by Listing Rule IM-5101-2. Accordingly,
trading in the Companys Common Stock, Rights and Warrants was suspended at the opening of business on December 27, 2024 and a
Form 25-NSE was filed by Nasdaq with the Securities and Exchange Commission, which removed the Companys securities from on the
Nasdaq Stock Market. The Companys Common Stock, Rights and Warrants began to be quoted its on the Pink Markets operated on The
OTC Market systems (OTC Market) under the symbols NVAC, NVACR and NVACW.
**Liquidity
and Going Concern**
As ofDecember 31, 2024, the Company had $16,204 in cash and a
working capital deficit of $12,254,024. Prior to the completion of the Companys IPO, the Companys liquidity needs had been
satisfied through a capital contribution from the Sponsor of $25,000 for the founder shares to cover certain of the offering costs and
the loan under an unsecured promissory note from the Sponsor of $204,841, which was fully paid upon the IPO. Subsequent to the consummation
of the Initial Public Offering and Private Placement, the Companys liquidity needs have been satisfied through the proceeds from
the consummation of the Private Placement not held in the Trust Account, and the drawdowns on the convertible promissory note.
In
order to finance transaction costs in connection with an intended Business Combination, the initial stockholders or an affiliate of the
initial stockholders or certain of the Companys officers and directors may, but are not obligated to, provide the Company Working
Capital Loans (see Note 5).
On
April 27, 2023, the Company signed a Convertible Working Capital Promissory Note (the Note) with the Sponsor for $1,200,000.
The Note is non-interest bearing and is due the earlier of the consummation of a business combination or the date of liquidation. The
Sponsor may elect to convert all or any portion of the unpaid principal balance of this Note into warrants, at a price of $1.00 per warrant.
On
January 10, 2024, the Companys Board of Directors approved, and the Company amended the Note to increase the principal amount
of the Note that could be drawn on to $1.5million. The amended and restated Note also allows for the conversion of the outstanding
principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22 per share at the election of the sponsor.
On May 31, 2024, the Companys Board of
Directors approved, and the Company second amended its Note to increase the principal amount of the Note that could be drawn on to $2.5million.
The second amended and restated Note also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares
of Company common stock at a price of $2.22per share at the election of the sponsor.
The Company had principal outstanding of $1,919,796 and is presenting
the Note at fair value on its balance sheet at December 31, 2024 in the amount of $8,908,052. As of December 31, 2024, no amounts were
repaid against the loan.
The Company has until June 22, 2025 to consummate
a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by June 22, 2025. If a Business
Combination is not consummated by the required date, there will be an option to either extend the time available for us to consummate
our initial business combination or execute a mandatory liquidation and subsequent dissolution. In connection with the Companys
assessment of going concern considerations in accordance with the authoritative guidance in Financial Accounting Standards Board (FASB)
Accounting Standards Update (ASU) 2014-15, Disclosure of Uncertainties About an Entitys Ability to Continue
as a Going Concern, management has determined that mandatory liquidation, and subsequent dissolution, should the Company be unable
to complete a business combination, raises substantial doubt about the Companys ability to continue as a going concern for the
next twelve months from the issuance of these consolidated financial statements. No adjustments have been made to the carrying amounts
of assets and liabilities should the Company be required to liquidate after June 22, 2025.
F-10
**Risks
and Uncertainties**
On
August 16, 2022, the Inflation Reduction Act of 2022 (the IR Act) was signed into federal law. The IR Act provides for,
among other things, a new U.S. federal 1% excise tax on certain repurchases of stock occurring on or after January 1, 2023, by publicly
traded U.S. domestic corporations, by certain U.S. domestic subsidiaries of publicly traded foreign corporations, by covered surrogate
foreign corporations (as defined in the IR Act) and by certain affiliates of the foregoing. The excise tax is imposed on the repurchasing
corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair
market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing
corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases
during the same taxable year. In addition, certain exceptions apply to the excise tax.
Any
redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise,
may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business
Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions
and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii)
the nature and amount of any PIPE or other equity issuances in connection with a Business Combination (or otherwise issued
not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content
of regulations and other guidance from the Treasury. The foregoing could cause a reduction in the cash available on hand to complete
a Business Combination and in the Companys ability to complete a Business Combination.
On March 22, 2023 and December 21, 2023, the Companys
stockholders redeemed 18,000,868 and 140,663 shares, respectively, for a total of $184,845,836 and $1,565,078, respectively. On March
26, 2024, the Companys stockholders redeemed 95,394 shares for a total of $1,088,361. On September 30, 2024, the Companys
stockholders redeemed 50,556 shares for a total of $595,439. The Company determined that an excise tax liability should be recorded due
to the redeemed shares. As of December 31, 2024, the Company has a charge to stockholders deficit of $1,880,944 of excise tax liability,
including $16,838 charged during the year ended December 31, 2024, calculated as 1% of the value of shares redeemed.
On July 3, 2024, the Treasury issued final regulations
with respect to the procedure and administration of the Excise Tax. These regulations provided that the filing and payment deadline for
any liability incurred during the period from January 1, 2023 to December 31, 2023 would be October 31, 2024. As of December 31, 2024
and the date of this report, the excise tax was not paid and recorded as excise tax payable. Any amount of such Excise Tax not paid in
full, could be subject to additional interest and penalties which are currently estimated at 7% interest per annum and a 5% underpayment
penalty per month or portion of a month up to 25% of the total liability for any amount that is unpaid.
As of December 31, 2024 and 2023, $1,880,944 and $1,864,106 were accrued
on the accompanying consolidated balance sheets, respectively. On January 29, 2025, the Company claimed disaster relief under IRC Section
7508A relating to Hurricane Beryl as announced in IRS Announcement TX-2024-08. Under the disaster relief claim, the time for filing
of the September 30, 2024 Quarterly Federal Excise Tax Return and payment of the 2023 excise taxes on repurchases of corporate stock normally
due on October 31, 2024 should be postponed to February 3, 2025. The Company was not subject to excise tax interest and penalties until
February 3, 2025. On January 29, 2025, the Company filed their 2024 excise tax return. No excise tax payment had been made by the
Company.
**NOTE
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
**Basis
of Presentation**
The
accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United
States of America (GAAP) and pursuant to the rules and regulations of the SEC.
**Principles
of Consolidation**
The
accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany
balances and transactions have been eliminated in consolidation.
**Emerging
Growth Company Status**
The
Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved.
F-11
****
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period, which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Companys consolidated financial statements with another public
company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
**Use
of Estimates**
The
preparation of these consolidated financial statements in conformity with GAAP requires 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 consolidated
financial statements.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future confirming events. Some of the more significant
estimates are in connection with determining the fair value of the warrant liabilities and convertible promissory note. Accordingly,
the actual results could differ significantly from those estimates.
**Concentration
of Credit Risk**
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account.
**Cash
and Cash Equivalents**
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of December 31, 2024 and 2023.
**Cash
and Marketable Securities Held in Trust Account**
At
December 31, 2024, substantially all of the assets held in the Trust Account were held in an interest-bearing demand deposit account
at a bank and at December 31, 2023, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills. All of
the Companys investments held in the Trust Account are classified as trading securities. Trading securities are presented on the
consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value
of investments held in the Trust Account are shown in the accompanying statements of operations. The estimated fair values of investments
held in the Trust Account are determined using available market information.
During the year ended December 31, 2024, pursuant
to the trust agreement dated as of December 20, 2021 between the Company and Continental Stock Transfer & Trust Company (CST),
the trustee of the Trust Account, $204,459 of interest income from the Trust Account was withdrawn by the Company for the payment of franchise
and income taxes.
During the year ended December 31, 2023, pursuant
to the trust agreement dated as of December 20, 2021 between the Company and Continental Stock Transfer & Trust Company (CST),
the trustee of the Trust Account, $1,192,438 of interest income from the Trust Account was withdrawn by the Company for the payment of
franchise and income taxes.
|
| |
Fair Value as of December 31, 2024 | | |
Fair Value as of December31, 2023 | | |
|
Cash | |
$ | 8,330,835 | | |
$ | 1,406 | | |
|
U.S. Treasury Bills | |
| | | |
| 10,872,000 | | |
|
| |
$ | 8,330,835 | | |
$ | 10,873,406 | | |
F-12
On December 21, 2023, the Company held a special
meeting of stockholders to vote on extending the Combination Period. As a result, the Company extended the Combination Period from December
22, 2023 to March 22, 2024, which was later extended to March 22, 2025. In connection with the extension voted on December 21, 2023, 140,663
shares of the Companys common stock were redeemed. In January 2024, $1,565,078 was paid from the Trust Account to redeeming stockholders
in connection with the extension. As a result, the Company recorded a liability of $1,565,078 as common stock to be redeemed and reduced
common stock subject to possible redemption as of December 31, 2023 on the balance sheet. Additionally, as part of the adjustment of common
stock subject to possible redemption, the Company classified $1,565,078 of the trust account as a current asset on the consolidated balance
sheets, which was paid from the Trust Account in January 2024 to redeeming stockholders.
On March 18, 2025, the company commenced a special
meeting of stockholders, which was adjourned until March 21, 2025 without conducting any business. On March 21, 2025, the Company reconvened
the special meeting to approve an extension of time for the Company to consummate an initial business combination from March 22, 2025
to June 22, 2025. The meeting was adjourned until March 21, 2025, at which the stockholders approve the extension of the business combination
period until June 22, 2025. As a condition of the extension, the Company contributed $30,000 to the Trust Account, for the entire extension
period, on March 21, 2025.
As of December 31, 2024, all of the Trust assets
were classified as noncurrent assets.
**Fair Value of Financial Instruments**
****
The fair value of the Companys assets and
liabilities approximates the carrying amounts represented in the accompanying consolidated balance sheets, primarily due to their short-term
nature, except for the warrant liabilities and convertible promissory note.
**Income Taxes**
The Company accounts for income taxes under ASC
740, Income Taxes. ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the consolidated financial statements and tax basis of assets and liabilities and for the expected future
tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established
when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of December 31, 2024 and 2023, the
Companys deferred tax asset had a full valuation allowance recorded against it.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position 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. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company recognizes interest and penalties
related to unrecognized tax benefits as a formation cost expense. The Company is currently not aware of any issues under review that could
result in significant payments, accruals or material deviation from its position. Interest and penalties expense amounted to $0 and $19,158
during the years ended December 31, 2024 and 2023, respectively.
The Company has identified the United States as
its only major tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state tax laws. The Companys management does not expect that the total amount of unrecognized tax benefits
will materially change over the next twelve months.
**Derivative Financial Instruments**
The Company evaluates its financial instruments,
such as warrants, 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-valuedat each reporting date, with changes in the fair value reported in the consolidated statements of operations. Derivative
assets and liabilities are classified in the consolidated balance sheets as current or non-currentbased on whether or not net-cashsettlement
or conversion of the instrument could be required within 12months of the balance sheet date.
**Convertible Promissory Note**
The fair value of the Companys convertible
promissory note is valued using a compound option formula on the convertible feature and a present value of the host contract. The valuation
technique requires inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect managements
own assumption about the assumptions a market participant would use in pricing the working capital loan.
F-13
**Warrant
Liabilities**
****
The
Company accounts for the17,404,250warrants issued in connection with the IPO (the9,487,500Public Warrants, the7,347,500Private
Placement Warrants, and the569,250Representative Warrants inclusive of the underwriters over-allotmentoption)
in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for
equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company has classified each warrant as a
liability at its fair value. This liability is subject to re-measurementat each balance sheet date. With each such re-measurement,
the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Companys consolidated
statements of operations (See Note 8).
In
determining the fair value of the Private Placement Warrants and the Representatives Warrants, assumptions related to expected
share-price volatility, expected life and risk-free interest rate are utilized. The Company estimates the volatility of its common stock
based on historical volatility that matches the expected remaining life of the warrants.
**Net
(Loss) Income Per Common Stock**
**
The
Company has two categories of shares, which are referred to as common stock subject to possible redemption and common stock. Earnings
and losses are shared pro rata between the two categories of shares. The17,404,250potential shares of common stock for outstanding
warrants to purchase the Companys shares were excluded from diluted earnings per share for the years ended December 31, 2024 and
2023 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net (loss)
income per share of common stock is the same as basic net (loss) income per share of common stock for the periods presented.The
table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net (loss) income per share
for each category of common stock:
|
| |
For the Year Ended December 31, 2024 | | |
For the Year Ended December 31, 2023 | | |
|
| |
Common stock subject to possible redemption | | |
Common stock | | |
Common stock subject to possible redemption | | |
Common stock | | |
|
Basic and diluted net (loss) income per share: | |
| | |
| | |
| | |
| | |
|
Numerator: | |
| | |
| | |
| | |
| | |
|
Allocation of net (loss) income | |
$ | (1,096,239 | ) | |
$ | (7,615,380 | ) | |
$ | 562,049 | | |
$ | 599,861 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
|
Denominator: | |
| | | |
| | | |
| | | |
| | | |
|
Weighted-average shares outstanding | |
| 747,644 | | |
| 5,193,750 | | |
| 4,866,356 | | |
| 5,193,750 | | |
|
Basic and diluted net (loss) income per share | |
$ | (1.47 | ) | |
$ | (1.47 | ) | |
$ | 0.12 | | |
$ | 0.12 | | |
**Common
Stock Subject to Possible Redemption**
The
Companys common stock sold as part of the Units in the IPO (public common stock) contain a redemption feature which
allows for the redemption of such public shares in connection with the Companys liquidation, or if there is a stockholder vote
or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies
public common stock outside of permanent equity as the redemption provisions are not solely within the control of the Company. The public
common stock was issued with other freestanding instruments (i.e., Public Warrants) and as such, the initial carrying value of public
common stock classified as temporary equity was the allocated proceeds determined in accordance with ASC 470-20.
As
of December 31, 2024 and 2023, the amount of public common stock reflected on the consolidated balance sheets is reconciled in the following
table:
|
Contingently redeemable common stock, December 31, 2022 | |
| 193,525,484 | | |
|
Less: | |
| | | |
|
Partial redemption | |
| (186,410,914 | ) | |
|
Plus: | |
| | | |
|
Accretion of redeemable common stock | |
| 2,137,638 | | |
|
Contingently redeemable common stock, December 31, 2023 | |
$ | 9,252,208 | | |
|
Less: | |
| | | |
|
Partial redemption | |
| (1,683,800 | ) | |
|
Plus: | |
| | | |
|
Accretion of redeemable common stock | |
| 768,980 | | |
|
Contingently redeemable common stock, December 31, 2024 | |
$ | 8,337,388 | | |
F-14
**Recently
Issued Accounting Standards**
*Standards Adopted*
****
In November 2023, the FASB issuedASU2023-07,Segment
Reporting(Topic280): Improvements to Reportable Segment Disclosures. The amendments in thisASUrequire disclosures,
on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker
(CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.
TheASUrequires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the
reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities
will be required to provide all annual disclosures currently required by Topic280in interim periods, and entities with a single
reportable segment are required to provide all the disclosures required by the amendments in thisASUand existing segment disclosures
in Topic280. ThisASUis effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal
years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07, which was applied retrospectively
to all prior periods presented. See Note 10 for further details regarding this adoption.
*Standards not yet Adopted*
In
December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09),
which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional
information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income
taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.
ASU 2023-09 will become effective for annual periods beginning after December 15, 2024. The Company is still reviewing the impact of
ASU 2023-09.
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material
effect on the Companys consolidated financial statements.
**Note
3 Initial Public Offering**
****
**Public
Units**
On
December 22, 2021, the Company sold 18,975,000 Units, (which included 2,475,000 Units issued pursuant to the full exercise of the over-allotment
option) at a purchase price of $10.00 per Unit. Each unit that the Company is offering has a price of $10.00 and consists of one share
of common stock, one right, and one-halfof one redeemable warrant. Each right entitles the holder thereof to receive one-tenth(1/10)
of one share of common stock upon the consummation of an initial business combination. Each whole warrant entitles the holder thereof
to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as described herein.
**Public
Warrants**
Each
whole warrant entitles the holder to purchase one share of common stock at a price of $11.50per share, subject to adjustment as
discussed herein. In addition, if (x)the Company issues additional shares of common stock or equity-linkedsecurities for
capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price
of less than $9.20per share of common stock (with such issue price or effective issue price to be determined in good faith by the
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 such stockholders or their affiliates, as applicable, prior to such issuance (the Newly Issued Price)),
(y)the aggregate gross proceeds from such issuances represent more than60% of the total equity proceeds, and interest thereon,
available for funding the initial Business Combination (net of redemptions), and (z)the volume weighted average trading price of
the common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the Business
Combination (such price, the Market Value) is below $9.20per share, the exercise price shall be adjusted (to the
nearest cent) to be equal to115% of the higher of the Market Value and the Newly Issued Price, and the $18.00per share redemption
trigger price described in the section Redemption of warrants will be adjusted (to the nearest cent) to be equal to180%
of the higher of the Market Value and the Newly Issued Price.
The
warrants will become exercisable on the later of 12months from the closing of the IPO or 30days after the completion of its
initial Business Combination and will expire five years after the completion of the Companys initial Business Combination, at
5:00 p.m., NewYork City time, or earlier upon redemption or liquidation.
The
Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business
Combination, the Company will use its reasonable best efforts to file, and within 60 business days after the closing of the initial Business
Combination, to have declared effective, a registration statement relating to those shares of common stock, and to maintain a current
prospectus relating to such shares of common stock until the warrants expire or are redeemed. Notwithstanding the foregoing, if a registration
statement covering the shares of common stock issuable upon exercise of the warrants is not effective within the above specified period
following the consummation of the initial 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 Section3(a)(9) of the Securities Act of 1933, as amended, or 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.
F-15
**Redemption
of Warrants**
Once
the warrants become exercisable, the Company may redeem the outstanding warrants:
|
| in
whole and not in part; |
|
|
| at
a price of $0.01 per warrant; |
|
|
| upon
a minimum of 30days prior written notice of redemption (the 30-dayredemption period); |
|
|
| if,
and only if, the last sale price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-tradingday
period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
|
If
the Company calls the warrants for redemption as described above, 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, management will consider, among other factors, the Companys cash position, the number of warrants
that are outstanding and the dilutive effect on the stockholders of issuing the maximum number of shares of common stock issuable upon
the exercise of the warrants. In such event, each holder would pay the exercise price by surrendering the warrants for that number of
shares of common stock equal to the quotient obtained by dividing (x)the product of the number of shares of common stock underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the fair market value (defined
below) by (y)the fair market value. The fair market value shall mean the average reported last sale price of the
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.
**Note
4 Private Placement**
The
Companys Sponsor, I-Bankers and Dawson James have purchased an aggregate of 7,347,500 Private Placement Warrants (which included
697,500 Private Placement Warrants issued pursuant to the full exercise of the over-allotment option) at a price of $1.00 per warrant
($7,347,500 in the aggregate) in a private placement that closed simultaneously with the closing of the IPO. Of such amount, 5,162,500
Private Placement Warrants were purchased by the Sponsor and 2,185,000 Private Placement Warrants were purchased by I-Bankers and Dawson
James.
The
Private Placement Warrants are identical to the warrants included in the units sold in the IPO, except that the Private Placement Warrants:
(i) will not be redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, in each case so long as they are
held by the initial purchasers or any of their permitted transferees. If the Private Placement Warrants are held by holders other than
the initial purchasers or any of their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable
by the holders on the same basis as the warrants included in the Units being sold in the IPO.
**Note
5 Related Party Transactions**
**Founder
Shares**
In
April 2021, the Sponsor paid $25,000, or approximately $0.005 per share, to cover certain of the offering costs in exchange for an aggregate
of 5,175,000 shares of common stock, par value $0.0001 per share (the Founder Shares). In October 2021, the Sponsor irrevocably
surrendered to the Company for cancellation and for no consideration 862,500 shares of common stock. On December 20, 2021, the Company
effected a 1.1- for-1 stock dividend of its common stock, resulting in the Sponsor holding an aggregate of 4,743,750 shares of common
stock. The Founder Shares include an aggregate of up to 618,750 shares subject to forfeiture if the over-allotment option is not exercised
by the underwriters in full. On December 22, 2021, the over-allotment option was fully exercised and such shares are no longer subject
to forfeiture.
The
Sponsor has 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 the initial Business Combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or
other similar transaction after the initial Business Combination that results in all of the Companys public stockholders having
the right to exchange their shares of common stock for cash, securities or other property (the Lock-up). Notwithstanding
the foregoing, if the last sale price of the Companys 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, the Founder Shares will be released from the Lock-up.
F-16
**Convertible
Promissory Note Related Party**
On April 27, 2023, the Company signed a Convertible Working Capital
Promissory Note (the Note) with the Sponsor for $1,200,000. The Note is non-interest bearing and is due the earlier of the
consummation of a business combination or the date of liquidation. The Sponsor may elect to convert all or any portion of the unpaid principal
balance of this Note into warrants, at a price of $1.00 per warrant. On January 10, 2024, the Companys Board of Directors approved,
and the Company amended the Note to increase the principal amount of the Note that could be drawn on to $1.5million. The amended
and restated Note also allows for the conversion of the outstanding principal balance of the Note to be repaid in shares of Company common
stock at a price of $2.22 per share at the election of the sponsor. On May 31, 2024, the Companys Board of Directors approved and
the Company entered into a second amendment of its Convertible Working Capital Promissory Note with the sponsor to increase the principal
amount of the Note that could be drawn on to $2.5million. The second amended and restated Note also allows for the conversion of
the outstanding principal balance of the Note to be repaid in shares of Company common stock at a price of $2.22per share at the
election of the sponsor. As of December 31, 2024, the Company had principal outstanding of $1,919,796 and is presenting the Note at fair
value on its balance sheet at December 31, 2024 in the amount of $8,908,052.
**Related
Party Loans**
In
order to finance transaction costs in connection with an intended initial Business Combination, the initial stockholders or an affiliate
of the initial stockholders or certain of the Companys officers and directors may, but are not obligated to, loan the Company
funds as may be required (the Working Capital Loans). If the Company completes the initial Business Combination, the Company
would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid
only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may
use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account
would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible, at the option of the lender, into warrants
at a price of $1.00 per warrant of the post Business Combination entity. The warrants would be identical to the Private Placement Warrants,
including as to exercise price, exercisability and exercise period. At December 31, 2024 and 2023, the Company had no borrowings under
the Working Capital Loans, other than the Note described in Note 5 Related Party Transactions Convertible Promissory
Note Related Party.
****
**Administrative
Service Fee**
Commencing on the effective date of the IPO, the Company began paying
its Sponsor a total of $5,000per month for office space, utilities, secretarial support and other administrative and consulting
services. As of June 30, 2023, the Company and the Sponsor terminated this agreement. For the year ended December 31, 2024, $0 had been
incurred and billed relating to the administrative service fee, respectively. For the year ended December 31, 2023, $30,000 had been incurred
and billed relating to the administrative service fee. As of December 31, 2024 and 2023, $50,000 relating to the administrative service
fee was not paid and recorded as due to related party.
**Advances
from Profusa**
During
the year ending December 31, 2024, Profusa agreed to advance funds to the Company to pay for operating expenses. As of December 31, 2024,
there was $791,407 owed to Profusa, which is due upon demand or at the completion of the Business Combination.
**Note
6 Commitments and Contingencies**
**Registration
Rights**
The
holders of the Founder Shares, the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital
Loans (and any underlying securities) are entitled to registration rights pursuant to a registration rights agreement signed on the
closing date of the IPO requiring the Company to register such securities for resale. The holders of these securities are entitled
to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have
certain piggy-back registration rights with respect to registration statements filed subsequent to the completion of
the initial Business Combination. However, the registration rights agreement provides that the Company will not permit any
registration statement filed under the Securities Act to become effective until termination of the applicable Lock-upperiod
described in Note 5. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
****
**Underwriters
Agreement**
The
underwriters had a 30-dayoption from the date of IPO to purchase up to an additional2,475,000units to cover over-allotments,
if any. On December 22, 2021, the over-allotment was fully exercised.
The
underwriters received a cash underwriting discount of approximately1.82% of the gross proceeds of the IPO, or $3,450,000.
**Business
Combination Marketing Agreement**
Under a Business Combination marketing agreement, the Company engaged
I-Bankers and Dawson James as advisors in connection with the Business Combination to assist the Company in holding meetings with the
stockholders to discuss the potential Business Combination and the target businesss attributes, introduce the Company to potential
investors that are interested in purchasing the Companys securities in connection with the potential Business Combination, assist
the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings
in connection with the Business Combination. The Company was obligated to pay I-Bankers and Dawson James a cash fee for such marketing
services upon the consummation of the initial Business Combination in an amount of3.68% of the gross proceeds of the IPO, or $6,986,250.
The agreement was amended on November 7, 2022 to allow for the 3.68% business combination fee to be paid as (a) 27.5% cash and (b) 72.5%
to be rolled into equity at closing. Subsequently, on January 19, 2025, the agreement was modified by the parties such that the Company
will be required to pay $2,000,000, payable in cash, if a business combination is consummated.
F-17
**Representatives
Shares**
On
December 22, 2021, the Company issued450,000shares (Representative Shares) of common stock (which included37,500Representative
Shares issued pursuant to the full exercise of the over-allotment option) at the consummation of the IPO to I-Bankersand Dawson
James (and/or their designees). I-Bankersand Dawson James (and/or their designees) have agreed not to transfer, assign or sell
any such shares until the completion of the initial Business Combination. In addition, I-Bankersand Dawson James (and/or their
designees) have agreed (i)to waive their redemption rights with respect to such shares in connection with the completion of the
initial Business Combination and (ii)to waive their rights to liquidating distributions from the Trust Account with respect to
such shares if the Company fails to complete its initial Business Combination within the Combination Period. The fair value of the Representatives
Shares issued are recognized asoffering costs directly attributable to the issuance of an equity contract to be classified in equity
and are recorded as a reduction of equity (see Note 1).
**Representatives
Warrants**
The
Company granted to I-Bankersand Dawson James (and/or their designees) 569,250 warrants (which
included 74,250 warrants issued pursuant to the full exercise of the over-allotment option) exercisable at $11.50per
share (or an aggregate exercise price of $6,546,375) at the closing of the IPO. The Representative Warrants issued are recognized as
derivative liabilities in accordance with ASC 815-40 and recorded as liabilities at fair value each reporting period (see Notes 1
and 8). The warrants may be exercised for cash or on a cashless basis, at the holders option, at any time during the period
commencing on the later of the first anniversary of the effective date of the registration statement of which the IPO forms a part
and the closing of the initial Business Combination and terminating on the fifth anniversary of such effectiveness date.
Notwithstanding anything to the contrary, I-Bankersand Dawson James have agreed that neither they nor their designees will be
permitted to exercise the warrants after thefive yearanniversary of the effective date of the registration statement of
which the IPO forms a part. The warrants and such shares purchased pursuant to the warrants have been deemed compensation by FINRA
and are therefore subject to a lock-upfor a period of 180days immediately following the date of the effectiveness of the
registration statement of which the IPO forms a part pursuant to FINRA Rule5110I(1). Pursuant to FINRA Rule5110I(1),
these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the
economic disposition of the securities by any person for a period of 180days immediately following the effective date of the
registration statement of which the IPO forms a part, nor may they be sold, transferred, assigned, pledged or hypothecated for a
period of 180days immediately following the effective date of the registration statement of which the IPO forms a part except
to any underwriter and selected dealer participating in the offering and their bona fide officers or partners. The warrants grant to
holders demand and piggy back rights for periods of five and seven years, respectively, from the effective date of the
registration statement of which the IPO forms a part with respect to the registration under the Securities Act of the shares
issuable upon exercise of the warrants. The Company will bear all fees and expenses attendant to registering the securities, other
than underwriting commissions, which will be paid for by the holders themselves. The exercise price and number of shares issuable
upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or the
Companys recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances
of shares at a price below its exercise price. The Company will have no obligation to net cash settle the exercise of the warrants.
The holder of the warrants will not be entitled to exercise the warrants for cash unless a registration statement covering the
securities underlying the warrants is effective or an exemption from registration is available.
****
**Merger
Agreement**
On
November 7, 2022, NorthView entered into a Merger Agreement and Plan of Reorganization (the Merger Agreement), by and among
Merger Sub., and Profusa, Inc., a California corporation (Profusa). The Merger Agreement provides that, among other things,
at the closing of the transactions contemplated by the Merger Agreement, Merger Sub will merge with and into Profusa (the Merger),
with Profusa surviving as a wholly-owned subsidiary of NorthView. In connection with the Merger, NorthView will change its name to Profusa,
Inc.
The
Business Combination is subject to customary closing conditions, including the satisfaction of the minimum available cash condition of
$15,000,000, the receipt of certain governmental approvals and the required approval by the stockholders of NorthView and Profusa. There
is no assurance that the Business Combination will be completed.
F-18
**Advisory
Agreement**
On December 19, 2024, the Company engaged A.G.P to serve as the placement
agent in connection with a proposed business combination transaction. The Company shall pay to A.G.P. a cash fee (the Cash Fee)
equal to 9.0% in a convertible note offering, note, or other similar equity-linked offerings, and shall be calculated from the face value
of notes issued, which is payable at the close of a Business Combination. If the Business Combination does not successfully close, A.G.P.
will not be entitled to any cash fee.
**Note
7 Stockholders Deficit**
**Preferred
stock** The Company is authorized to issue1,000,000shares of preferred stock with a par value of $0.0001and
with such designations, rights and preferences as may be determined from time to time by the Companys board of directors.As
of December 31, 2024 and 2023, there was no preferred stock issued or outstanding.
****
**Common Stock** The Company
is authorized to issue a total of100,000,000shares of common stock at par value of $0.0001each. In April 2021, the Company
issued5,175,000shares of common stock to its Sponsor for $25,000, or approximately $0.005per share. In October 2021,
the Sponsor irrevocably surrendered to the Company for cancellation and for no consideration862,500shares of common stock.On
December20, 2021,the Company effected a 1.1- for-1stock dividend of its common stock, resulting in an aggregate of 4,743,750
Founder Shares issuedand outstanding.On December 22, 2021, the Company has also issued450,000shares (Representatives
Shares) of common stock (which included37,500Representative Shares issued pursuant to the full exercise of the over-allotment
option) at the consummation of the IPO to I-Bankersand Dawson James (and/or their designees).As of December 31, 2024 and 2023,
there were5,193,750 shares of common stock issued and outstanding, excluding687,519 and 833,469 shares of common stock subject
to redemption, respectively.
Common
stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in
the Companys 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 the Companys common stock that are voted is required
to approve any such matter voted on by the stockholders. There is no cumulative voting with respect to the election of directors, with
the result that the holders of more than50% of the shares voted for the election of directors can elect all of the directors (prior
to consummation of the initial Business Combination). The Companys stockholders are entitled to receive ratable dividends when,
as and if declared by the board of directors out of funds legally available therefor.
**Note
8 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 establishes 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). The Companys financial
instruments are classified as either Level 1, Level 2 or Level 3. 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 techniques in which one or more significant inputs or significant value drivers are unobservable. |
|
F-19
The
following tables present information about the Companys assets and liabilities that are measured at fair value on December 31,
2024 and 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
| |
December31, 2024 | | |
Quoted Prices In Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Other Unobservable Inputs (Level 3) | | |
|
Assets: | |
| | |
| | |
| | |
| | |
|
Cash and marketable securities held in trust | |
$ | 8,330,835 | | |
$ | 8,330,835 | | |
$ | | | |
$ | | | |
|
Liabilities: | |
| | | |
| | | |
| | | |
| | | |
|
Warrant liabilities Public Warrants | |
$ | 379,500 | | |
$ | | | |
$ | 379,500 | | |
$ | | | |
|
Warrant liabilities Private Placement Warrants | |
| 293,900 | | |
| | | |
| | | |
| 293,900 | | |
|
Warrant liabilities Representatives Warrants | |
| 22,770 | | |
| | | |
| | | |
| 22,770 | | |
|
Convertible promissory note | |
| 8,908,052 | | |
| | | |
| | | |
| 8,908,052 | | |
|
Total | |
$ | 9,604,222 | | |
$ | | | |
$ | 379,500 | | |
$ | 9,224,722 | | |
|
| |
December31, 2023 | | |
Quoted Prices In Active Markets (Level 1) | | |
Significant Other Observable Inputs (Level 2) | | |
Significant Other Unobservable Inputs (Level 3) | | |
|
Assets: | |
| | |
| | |
| | |
| | |
|
Cash and marketable securities held in trust | |
$ | 10,873,406 | | |
$ | 10,873,406 | | |
$ | | | |
$ | | | |
|
Liabilities: | |
| | | |
| | | |
| | | |
| | | |
|
Warrant liabilities Public Warrants | |
$ | 85,388 | | |
$ | 85,388 | | |
$ | | | |
$ | | | |
|
Warrant liabilities Private Placement Warrants | |
| 66,128 | | |
| | | |
| | | |
| 66,128 | | |
|
Warrant liabilities Representatives Warrants | |
| 5,123 | | |
| | | |
| | | |
| 5,123 | | |
|
Convertible promissory note | |
| 944,118 | | |
| | | |
| | | |
| 944,118 | | |
|
Total | |
$ | 1,100,757 | | |
$ | 85,388 | | |
$ | | | |
$ | 1,015,369 | | |
The
Public Warrants, the Private Placement Warrants and the Representatives Warrants were accounted for as liabilities in accordance
with ASC 815-40 and are presented within liabilities on the consolidated balance sheets. The warrant liabilities are measured at fair
value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities
in the consolidated statements of operations.
The
Company utilized a Monte Carlo simulation model for the initial valuation of the Public Warrants. The subsequent measurement of the Public
Warrants at December 31, 2024 was classified as Level 2 due to the lack of an active market. At December 31, 2023, the Public Warrants
was classified as Level 1 due to the use of an observable market quote in an active market. As of December 31, 2024 and 2023, the aggregate
value of Public Warrants was $379,500 and $85,388, respectively.
The Company uses a Monte Carlo simulation model
to value the Private Placement Warrants and the Representatives Warrants. The Private Placement Warrants and the Representatives
Warrants were classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs. Inherent in pricing models
are assumptions related to expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility
of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate
is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants.
The expected life of the warrants is assumed to be equivalent to their remaining contractual term.
F-20
The
key inputs into the Monte Carlo simulation model for the warrant liabilities were as follows at December 31, 2024 and 2023:
|
| |
December31, 2024 | | |
December31, 2023 | | |
|
Input | |
| | |
| | |
|
Risk-free interest rate | |
| 4.18 | % | |
| 5.06 | % | |
|
Expected term (years) | |
| 0.89 | | |
| 0.71 | | |
|
Expected volatility | |
| De
minimis | % | |
| De
minimis | % | |
|
Exercise price | |
$ | 11.50 | | |
$ | 11.50 | | |
|
Fair value of Common stock | |
$ | 12.12 | | |
$ | 11.16 | | |
The
key inputs into the Monte Carlo simulation model for the convertible promissory note were as follows at December 31, 2024 and 2023:
|
| |
December31, 2024 | | |
December31, 2023 | | |
|
Input | |
| | |
| | |
|
Risk-free interest rate | |
| 4.18 | % | |
| 5.48 | % | |
|
Expected term (years) | |
| 0.27 | | |
| 0.19 | | |
|
Expected volatility | |
| De
minimis | % | |
| De
minimis | % | |
|
Exercise price | |
$ | 11.50 | | |
$ | 11.50 | | |
|
Fair value of Common stock | |
$ | 12.12 | | |
$ | 11.16 | | |
The following table provides a summary of the changes in the fair value
of the Companys Level 3 financial instruments that are measured at fair value on a recurring basis for the years ended December
31, 2024 and 2023:
|
| |
Private Placement Warrants | | |
Representatives Warrants | | |
Warrant Liability | | |
|
Fair value at December 31, 2023 | |
$ | 66,128 | | |
$ | 5,123 | | |
$ | 71,251 | | |
|
Change in fair value of warrant liabilities | |
| 227,772 | | |
| 17,647 | | |
| 245,419 | | |
|
Fair value at December 31, 2024 | |
$ | 293,900 | | |
$ | 22,770 | | |
$ | 316,670 | | |
|
| |
Private Placement Warrants | | |
Representatives Warrants | | |
Warrant Liability | | |
|
Fair value at December 31, 2022 | |
$ | 377,857 | | |
$ | 29,274 | | |
$ | 407,131 | | |
|
Change in fair value of warrant liabilities | |
| (311,729 | ) | |
| (24,151 | ) | |
| (335,880 | ) | |
|
Fair value at December 31, 2023 | |
$ | 66,128 | | |
$ | 5,123 | | |
$ | 71,251 | | |
|
| |
Convertible Promissory Note | | |
|
Fair value at December 31, 2023 | |
$ | 944,118 | | |
|
Principal borrowing | |
| 797,981 | | |
|
Change in fair value of convertible promissory note | |
| 7,165,953 | | |
|
Fair value at December 31, 2024 | |
$ | 8,908,052 | | |
|
| |
Convertible Promissory Note | | |
|
Fair value at December 31, 2022 | |
$ | | | |
|
Principal borrowing | |
| 1,121,815 | | |
|
Change in fair value of convertible promissory note | |
| (177,697 | ) | |
|
Fair value at December 31, 2023 | |
$ | 944,118 | | |
The fair value of the Companys convertible
promissory note is valued using a compound option formula on the convertible feature and a present value of the host contract. The valuation
technique requires inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect managements
own assumption about the assumptions a market participant would use in pricing the working capital loan.
F-21
The convertible promissory note was classified
within Level 3 of the fair value hierarchy due to the use of unobservable inputs. Inherent in pricing models are assumptions related to
expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its common stock based
on historical volatility that matches the expected remaining life of the note. The risk-free interest rate is based on the U.S. Treasury
zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the note. The expected life of the
note is assumed to be equivalent to their remaining contractual term.
**Note
9 Income Taxes**
****
The
Companys net deferred tax assets are as follows:
|
| |
December31, 2024 | | |
December31, 2023 | | |
|
Deferred tax asset/(liability) | |
| | |
| | |
|
Organizational costs/Startup expenses | |
$ | 694,480 | | |
$ | 436,196 | | |
|
Unrealized gain/loss - Trust | |
| | | |
| (13,661 | ) | |
|
Net deferred tax asset | |
| 694,480 | | |
| 422,535 | | |
|
Valuation allowance | |
| (694,480 | ) | |
| (436,196 | ) | |
|
Deferred tax (liability), net of allowance | |
$ | | | |
$ | (13,661 | ) | |
The
income tax provision consists of the following:
|
| |
For the Year Ended December31, 2024 | | |
For the Year Ended December31, 2023 | | |
|
Federal | |
| | |
| | |
|
Current | |
$ | 94,174 | | |
$ | 480,069 | | |
|
Deferred | |
| (271,945 | ) | |
| (226,991 | ) | |
|
State | |
| | | |
| | | |
|
Change in valuation allowance | |
| 258,284 | | |
| 203,712 | | |
|
Income tax provision | |
$ | 80,513 | | |
$ | 456,790 | | |
As
of December 31, 2024 and 2023, the Company had $0 in U.S. federal net operating loss carryovers available to offset future taxable income.
In
assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies
in making this assessment. After consideration of all of the information available, management believes that significant uncertainty
exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the
years ended December 31, 2024 and 2023, the change in the valuation allowance was $258,284 and $203,712.
A reconciliation of the federal income tax rate
to the Companys effective tax rate is as follows:
|
| |
December31, 2024 | | |
December31, 2023 | | |
|
Statutory federal income tax rate | |
| 21.0 | % | |
| 21.0 | % | |
|
Prior Year Trueup | |
| 0.00 | | |
| 0.00 | | |
|
Change in fair value of warrant liabilities | |
| (18.7 | ) | |
| (11.4 | ) | |
|
Business combination expenses | |
| 0.00 | | |
| 5.8 | | |
|
Penalties and interest | |
| 0.00 | | |
| 0.2 | | |
|
Change in valuation allowance | |
| (3.0 | ) | |
| 12.6 | | |
|
Income tax provision | |
| (0.90 | )% | |
| 28.2 | % | |
The Company files income tax returns in the U.S.
federal, New York and New York City jurisdictions and is subject to examination by the various taxing authorities since inception.
F-22
**Note
10 Segment Information**
ASC
Topic 280,Segment Reporting, establishes standards for companies to report in their financial statement information
about operating segments, products, services, geographic areas, and major customers.Operating segments are defined as components
of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial
information is available that is regularly evaluated by the Companys chief operating decision maker, or group, in deciding how
to allocate resources and assess performance.
The Companys chief operating decision maker
(CODM) has been identified as its Chief Financial Officer, who reviews the assets, operating results, and financial metrics
for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has
determined that there is only one reportable segment.
The
CODM assesses performance for the single segment and decides how to allocate resources based on net loss that also is reported on the
statement of operations as net loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating
the Companys performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included
in net (loss) income and total assets, which include the following:
|
| |
For the Year Ended December31, 2024 | | |
For the Year Ended December31, 2023 | | |
|
Trust Account | |
$ | 8,330,835 | | |
$ | 10,873,406 | | |
|
Cash | |
$ | 16,204 | | |
$ | 4,519 | | |
|
| |
For the Year Ended December31, 2024 | | |
For the Year Ended December31, 2023 | | |
|
General and administrative expenses | |
$ | (1,351,038 | ) | |
$ | (1,508,683 | ) | |
|
Interest earned on the Trust Account | |
$ | 425,416 | | |
$ | 2,248,538 | | |
The
key measures of segment profit or loss reviewed by our CODM are interest earned on the Trust Account and general and administrative expenses.
The CODM reviews interest earned on the Trust Account to measure and monitor stockholder value and determine the most effective strategy
of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses
are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination
within the business combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual
agreements to ensure costs are aligned with all agreements and budget.
F-23
**Note 11 Subsequent Events**
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based on the Companys
review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial
statements, other than as previously disclosed, and as described below.
On February 11, 2025, the Company entered into
a securities purchase agreement (the SPA) with an institutional investor (the Investor). Pursuant to the SPA,
the Investor is expected, subject to the conditions relating to such purchase set forth in the SPA, to purchase from the Company senior
secured convertible promissory notes in an aggregate principal amount of up to $22,222,222 (the Convertible Notes) for a
purchase price of up to $20,000,000, after a 10% original issue discount (OID).
On March 21, 2025, the Sponsor and its designees
have now agreed to contribute an amount (the Revised Contribution Amount) equal to $30,000 for the entire Extension Period.
All funds in the Companys trust account, including those funds deposited in connection with the Revised Contribution Amount, will
be held in an interest-bearing demand deposit account at a bank until the earlier of the consummation of the Companys initial business
combination or liquidation. The Revised Contribution Amount will be deposited in the Companys trust account promptly at the beginning
of the Extension Period.
The Company announced that is has agreed to waive
its right to withdraw up to $100,000 of interest from the Companys trust account to pay dissolution expenses, should the Company
ultimately liquidate prior to a business combination (the Dissolution Expense Waiver). As a result, the Company will not
be able to withdraw up to $100,000 of interest for such dissolution expenses upon liquidation, and such interest will be held in the trust
account and no be released 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 Company is unable to complete its initial Business Combination within the Extension,
and (iii)the redemption of Public Shares in connection with a vote seeking to amend the provisions of our Charter.
The Company also announced that is has agreed
to waive its right to withdraw interest from the Companys trust account to pay the Companys tax expenses (the Tax
Expense Waiver). As a result, the Company will not be able to withdraw interest in order to pay future tax expenses, and such interest
will be held in the trust account and not be released 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 Company is unable to complete its initial Business Combination
within the Extension, and (iii)the redemption of Public Shares in connection with a vote seeking to amend the provisions of our
Charter.
Prior to such announcement, and subsequent to
the record date of February 21, 2025, for the Special Meeting, the Company withdrew approximately $23,400 of interest from the trust account
for tax expenses.
F-24
**SIGNATURES**
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
|
NORTHVIEW ACQUISITION CORP. | |
|
|
|
| |
|
|
By: |
/s/ Jack Stover | |
|
|
|
Jack Stover | |
|
|
|
Chief Executive Officer | |
Date: March 28, 2025
Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities
and on the dates indicated.
|
Signature |
|
Title |
|
Date | |
|
|
|
|
|
| |
|
/s/ Jack Stover |
|
Chief Executive Officer and Director |
|
March 28, 2025 | |
|
Jack Stover |
|
(Principal Executive Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Fred Knechtel |
|
Chief Financial Officer, Executive Vice |
|
March 28, 2025 | |
|
Fred Knechtel |
|
President, Director |
|
| |
|
|
|
(Principal Financial and Accounting Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Peter ORourke |
|
Director |
|
March 28, 2025 | |
|
Peter ORourke |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Ed Johnson |
|
Director |
|
March 28, 2025 | |
|
Ed Johnson |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Lauren Chung |
|
Director |
|
March 28, 2025 | |
|
Lauren Chung |
|
|
|
| |
64