Delaware |
6770 |
86-1488707 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Jim Morrone Luke Bergstrom Brian D. Paulson Latham & Watkins LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111 (415) 395-8010 |
Ryan J. Maierson Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, TX 77002 (713) 546-7420 |
Stuart M. Cable Joseph C. Theis, Jr. Stephanie A. Richards Daniel J. Espinoza Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 (617) 570-1000 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
| ||||||||
Title of each class or series of securities to be registered |
Amount to be registered |
Proposed maximum offering price per share security |
Proposed maximum aggregate offering price |
Amount of registration fee | ||||
Common stock (1)(2) |
15,731,231 |
$9.86 (3) |
$155,109,937.66 (3) |
$16,922.49 | ||||
Common stock (1)(4) |
220,966,474 |
$0.000033 (5) |
$7,291.89 (5) |
$0.80 | ||||
Total |
236,697,705(6) |
$155,117,229.55 |
$16,923.29 (7) | |||||
| ||||||||
|
(1) |
Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(2) |
The number of shares of common stock of Khosla Ventures Acquisition Co. (“KVSA”) being registered represents the product of (i) 15,731,231 shares of KVSA common stock reserved for issuance upon the exercise of options to purchase common stock of Valo Health, Inc. (“Valo”) outstanding as of July 31, 2021 and that may be issued after such date pursuant to the terms of the Merger Agreement described herein, which will convert into options to purchase shares of KVSA common stock in accordance with the terms of the Merger Agreement described herein and (ii) an exchange ratio of 1.0 share of KVSA common stock for each share of Valo common stock. |
(3) |
Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of the Class A common stock of KVSA (the company to which New Valo will succeed following the Business Combination) on the Nasdaq on September 20, 2021 ($9.86 per KVSA public share) (such date being within five business days of the date that this amended registration statement was filed with the SEC). This calculation in accordance with Rule 457(f)(1) of the Securities Act. |
(4) |
The number of shares of common stock of KVSA being registered represents 220,966,474 shares of KVSA common stock to be issued in connection with the Merger described herein. |
(5) |
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f)(2) of the Securities Act of 1933. Valo is a private company, no market exists for its securities and has an accumulated deficit. Therefore, the proposed maximum aggregate offering price is one-third of the aggregate par value of the Valo securities expected to be exchanged in the Merger. |
(6) |
It is anticipated that, following the Business Combination, (1) KVSA’s public stockholders are expected to own approximately 11.5% of the outstanding New Valo common stock, (2) Valo Stockholders (without taking into account any public shares held by the Valo Stockholders prior to the consummation of the Business Combination and including the Valo PIPE Investors) are expected to own approximately 79.4% of the outstanding New Valo common stock, (3) the Sponsor and related parties (including the Sponsor Related PIPE Investors) are expected to collectively own approximately 5.6% of the outstanding New Valo common stock and (4) the Third Party PIPE Investors are expected to own approximately 3.5% of the outstanding New Valo common stock. These percentages assume (i) that no public stockholders exercise their redemption rights in connection with the Business Combination, (ii) (a) the vesting of all shares of New Valo common stock received in respect of the New Valo Restricted Shares, (b) the vesting and exercise of all New Valo Options for shares of New Valo common stock that are issued and outstanding as of the Closing, and (c) that New Valo issues shares of New Valo common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement, which in the aggregate equals 229,868,905 shares of New Valo common stock (including 8,902,431 shares of New Valo common stock issuable upon exercise of New Valo Options), (iii) New Valo issues 20,086,250 shares of New Valo common stock to the PIPE Investors pursuant to the PIPE Investment, (iv) New Valo issues zero shares of New Valo common stock to Sponsor (together with any permitted transferees under the Forward Purchase Agreement) pursuant to the Forward Purchase Agreement, (v) the conversion of all outstanding KVSA Class B common stock shares into an aggregate of 6,088,229 shares of New Valo common stock, (vi) the conversion of all outstanding KVSA Class K common stock shares into an aggregate of 8,697,479 shares of New Valo common stock and (vii) the vesting of all shares of New Valo common stock issuable upon the conversion of the KVSA Class K common stock. If the actual facts are different from these assumptions, the percentage ownership retained by the Company’s existing stockholders in the combined company will be different. |
(7) |
A filing fee of $17,012.66 was previously paid. |
• | Proposal No. 1 — The BCA Proposal — Business Combination Merger BCA Proposal |
• | Proposal No. 1 — The BCA Proposal — Merger Agreement Merger Sub Valo Holdco Valo Valo Parties Business Combination Merger Transactions BCA Proposal |
By Order of the Board of Directors |
/s/ Samir Kaul |
Samir Kaul |
Chairman |
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M-1 |
• | “2021 Plan” are to the Valo Health Holdings, Inc. 2021 Stock Option and Incentive Plan attached to this proxy statement/prospectus as Annex L; |
• | “Available Cash” are to the amount as calculated by adding the Trust Amount, the PIPE Investment Amount and the Forward Purchase Amount; |
• | “Business Combination” or “business combination” means the Merger and the other transactions contemplated by the Merger Agreement and related agreements; |
• | “Closing” are to the closing of the Business Combination; |
• | “Company,” “we,” “us” and “our” are to KVSA prior to the Business Combination and to New Valo after the Business Combination, including after its change of name to Valo Health Holdings, Inc.; |
• | “Condition Precedent Approvals” are to approval at the special meeting of the Condition Precedent Proposals; |
• | “Condition Precedent Proposals” are to the BCA Proposal, the Charter Proposal, the Stock Issuance Proposal, the Incentive Award Plan Proposal and the ESPP Proposal, collectively; |
• | “Continental” are to Continental Stock Transfer & Trust Company, as transfer agent and trustee, as applicable; |
• | “DGCL” are to the General Corporation Law of the State of Delaware; |
• | “ESPP” are to the Valo Health Holdings, Inc. 2021 Employee Stock Purchase Plan attached to this proxy statement/prospectus as Annex M; |
• | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
• | “Exchange Ratio” are to the quotient obtained by dividing (i) 225,000,000 by (ii) the aggregate fully—diluted number of shares of Valo common stock issued and outstanding immediately prior to the Merger (with respect to options to purchase Valo common stock, calculated on a treasury stock method basis (at a deemed value of $10.00 per share of New Valo common stock)); |
• | “Existing Bylaws” are to KVSA’s Bylaws; |
• | “Existing Charter” are to KVSA’s Second Amended and Restated Certificate of Incorporation, as amended from time to time; |
• | “Existing Organizational Documents” are to the Existing Bylaws and the Existing Charter; |
• | “Forward Purchase Agreement” are to the Forward Purchase Agreement entered into as of March 3, 2021, between KVSA and Sponsor, as further amended, restated, modified or supplemented from time to time. |
• | “Forward Purchase Amount” are to the aggregate amount of cash that has been funded to and remains with KVSA pursuant to the Forward Purchase Agreement; |
• | “forward-purchase shares” are to shares of KVSA Class A common stock to be issued to the Khosla Entities pursuant to the Forward Purchase Agreement; |
• | “founder shares” are to the KVSA Class B common stock and KVSA Class K common stock purchased by the Sponsor in a private placement prior to the initial public offering, and the KVSA Class A common stock that will be issued upon the conversion thereof; |
• | “GAAP” are to accounting principles generally accepted in the United States of America; |
• | “HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
• | “initial public offering” are to KVSA’s initial public offering that was consummated on March 8, 2021; |
• | “IPO registration statement” are to the Registration Statement on Form S-1 (333-253096) filed by KVSA in connection with its initial public offering, which became effective on March 3, 2021; |
• | “IRS” are to the U.S. Internal Revenue Service; |
• | “JOBS Act” are to the Jumpstart Our Business Startups Act of 2012; |
• | “Khosla Entities” are to the Sponsor and any successors or assigns of the Sponsor, if any, under the Forward Purchase Agreement; |
• | “KVSA” are to Khosla Ventures Acquisition Co. prior to the Business Combination; |
• | “KVSA Board” are to the board of directors of KVSA; |
• | “KVSA Class A common stock” are to KVSA’s Class A common stock, par value $0.0001 per share; |
• | “KVSA Class B common stock” are to KVSA’s Class B common stock, par value $0.0001 per share; |
• | “KVSA Class K common stock” are to KVSA’s Class K common stock, par value $0.0001 per share; |
• | “KVSA common stock” are to (i) the shares of KVSA Class A common stock, KVSA Class B common stock and KVSA Class K common stock prior to the Closing and (ii) shares of KVSA Class A common stock, par value $0.0001 per share, after the Closing (also referred to herein as “ N ew Valo common stock |
• | “Liquidation Date” are to March 9, 2023 (or June 9, 2023 if KVSA has executed a letter of intent, agreement in principle or definitive agreement for an initial business combination within 24 months from the closing of the initial public offering but has not completed the initial business combination within such 24-month period or, if such date is extended at a duly called special meeting, such later date); |
• | “Merger” are to the merger of Merger Sub with and into Valo, with Valo surviving the merger as a wholly owned subsidiary of New Valo; |
• | “Minimum Cash Condition” are to the Available Cash being equal to or greater than $450.0 million; |
• | “Nasdaq” are to the Nasdaq Global Select Market or the Nasdaq Capital Market, as applicable; |
• | “New Valo” means KVSA after the Business Combination, which is expected to be renamed “Valo Health Holdings, Inc.” upon the consummation of the Business Combination. |
• | “New Valo Options” are to options to purchase shares of New Valo common stock; |
• | “New Valo Restricted Stock Award” are to awards of restricted shares of New Valo common stock; |
• | “Person” are to any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind; |
• | “PIPE Investment” are to the purchase of shares of New Valo common stock pursuant to the Subscription Agreements; |
• | “PIPE Investment Amount” are to the aggregate gross purchase price received by KVSA prior to or substantially concurrently with Closing for the shares in the PIPE Investment; |
• | “PIPE Investors” are to those certain investors participating in the PIPE Investment pursuant to the Subscription Agreements; |
• | “private placement shares” are to the KVSA private placement shares outstanding as of the date of this proxy statement/consent solicitation statement/prospectus, other than the founder shares; |
• | “pro forma” are to giving pro forma effect to the Business Combination; |
• | “Proposed Bylaws” are to the amended and restated bylaws of the Company after the Business Combination; |
• | “Proposed Charter” are to the third amended and restated certificate of incorporation of the Company after the Business Combination attached to this proxy statement/prospectus as Annex C; |
• | “Proposed Organizational Documents” are to the Proposed Bylaws and the Proposed Charter; |
• | “public stockholders” are to holders of public shares, whether acquired in KVSA’s initial public offering or acquired in the secondary market; |
• | “public shares” are to the shares of KVSA Class A common stock that were offered and sold by KVSA in its initial public offering and registered pursuant to the IPO registration statement; |
• | “redemption” are to each redemption of public shares for cash pursuant to the Existing Organizational Documents; |
• | “Registration Rights Agreement” are to the Registration Rights Agreement to be entered into at Closing, by and among New Valo, the Sponsor, certain former stockholders of Valo and certain stockholders of KVSA; |
• | “Sarbanes Oxley Act” are to the Sarbanes-Oxley Act of 2002; |
• | “SEC” are to the United States Securities and Exchange Commission; |
• | “Securities Act” are to the Securities Act of 1933, as amended; |
• | “Sponsor” are to Khosla Ventures SPAC Sponsor LLC, a Delaware limited liability company; |
• | “Sponsor Earnout Shares” are to the 8,697,479 shares of New Valo common stock to be issued upon conversion of the KVSA Class K common stock held by Sponsor; |
• | “Sponsor Related PIPE Investor” are to a PIPE Investor that is an affiliate of the Sponsor (together with their permitted transferees); |
• | “Sponsor Support Agreement” are to that certain Sponsor Support Agreement, dated June 9, 2021, by and among the the Valo Parties, Sponsor, KVSA, each member, officer and director of KVSA and Sponsor, as applicable, as amended and modified from time to time; |
• | “Sponsor Vesting Agreement” are to that certain Sponsor Vesting Agreement, dated June 9, 2021, by and among, Sponsor, KVSA and the Valo Parties; |
• | “Stock Exchange” are to (i) Nasdaq prior to such time as the KVSA Class A common stock is listed on the New York Stock Exchange (such time the “Listing Change”) or (ii) the New York Stock Exchange after the Listing Change, as applicable; |
• | “Subscription Agreements” are to the subscription agreements pursuant to which the PIPE Investment will be consummated; |
• | “Third Party PIPE Investment” are to any PIPE Investment made by a Third Party PIPE Investor; |
• | “Third Party PIPE Investment Amount” are to the aggregate gross purchase price received by KVSA prior to or substantially concurrently with Closing for the shares in the Third Party PIPE Investment; |
• | “Third Party PIPE Investor” are to any PIPE Investor who is not (i) a Sponsor Related PIPE Investor, (ii) the Sponsor, or (iii) a Valo PIPE Investor; |
• | “trust account” are to the trust account established at the consummation of KVSA’s initial public offering at JP Morgan Chase Bank, N.A. and maintained by Continental Stock Transfer & Trust Company, acting as trustee; |
• | “Trust Agreement” are to the Investment Management Trust Agreement, dated March 3, 2021, by and between KVSA and Continental Stock Transfer & Trust Company, as trustee; |
• | “Trust Amount” are to the amount of cash available in the trust account as of the Closing, after deducting the amount required to satisfy KVSA’s obligations to its stockholders (if any) that exercise their redemption rights; |
• | “Valo” are to Valo Health, Inc., a Delaware corporation, prior to the Business Combination; |
• | “Valo Awards” are to Valo Options and Valo Restricted Stock Awards; |
• | “Valo common stock” are to shares of Valo common stock, par value $0.001 per share, prior to the consummation of the Business Combination; |
• | “Valo Holdco” are to Valo Health, LLC, a Delaware limited liability company; |
• | “Valo Options” are to options to purchase shares of Valo common stock; |
• | “Valo Parties” are to Valo and Valo Holdco (each, a “ Valo Party |
• | “Valo PIPE Investor” are to a PIPE Investor that is an equity holder of Valo Holdco or holders securities exercisable for or convertible into Valo Holdco equity as of the date of the Merger Agreement and is not a Sponsor Related PIPE Investor; |
• | “Valo Restricted Stock Awards” are to awards of restricted shares of Valo common stock; and |
• | “Valo Stockholders” are to the stockholders of Valo and holders of Valo Options prior to the Business Combination. |
• | KVSA’s ability to complete the Business Combination or, if KVSA does not consummate such Business Combination, any other initial business combination; |
• | satisfaction or waiver (if applicable) of the conditions to the Merger, including, among other things: |
• | (i) approval of the Business Combination and related agreements and transactions by the respective stockholders of KVSA and Valo, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part of, (iii) the receipt of certain regulatory approvals (including, but not limited to, approval for listing on Nasdaq or the New York Stock Exchange of the shares of New Valo common stock to be issued in connection with the Merger and the expiration or early termination of the waiting period or periods under the HSR Act), (iv) that KVSA have at least $5,000,001 of net tangible assets upon Closing, (v) the absence of any injunctions and (vi) solely as it relates to Valo’s obligation to consummate the Merger, the Minimum Cash Condition; |
• | the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | the market opportunity of New Valo; |
• | the ability to obtain or maintain the listing of New Valo common stock on Nasdaq or the New York Stock Exchange following the Business Combination; |
• | our public securities’ potential liquidity and trading; |
• | our ability to raise financing in the future; |
• | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination; |
• | KVSA officers and directors allocating their time to other businesses and potentially having conflicts of interest with KVSA’s business or in approving the Business Combination; |
• | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
• | the impact of the regulatory environment and complexities with compliance related to such environment; and |
• | factors relating to the business, operations and financial performance of Valo and its subsidiaries, including: |
• | the ability of Valo to maintain an effective system of internal controls over financial reporting; |
• | the ability of Valo to grow market share in its existing markets or any new markets it may enter; |
• | the ability of Valo to respond to general economic conditions; |
• | the ability of Valo to manage its growth effectively; |
• | the ability of Valo to achieve and maintain profitability in the future; |
• | the ability of Valo to access sources of capital to finance operations and growth; |
• | the success of strategic relationships with third parties; |
• | the impact of the COVID-19 pandemic; and |
• | other factors detailed under the section entitled “ Risk Factors |
Q: |
Why am I receiving this proxy statement/prospectus? |
A: | KVSA stockholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve the Business Combination. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Valo, with Valo surviving the merger as a wholly owned subsidiary of KVSA, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A and you are encouraged to read it in its entirety. See the section entitled “ BCA Proposal |
Q: |
What proposals are stockholders of KVSA being asked to vote upon? |
A: | At the special meeting, KVSA is asking holders of KVSA common stock to consider and vote upon: |
• | a proposal to approve and adopt the Merger Agreement (the “ BCA Proposal |
• | a proposal to approve, assuming the BCA Proposal is approved and adopted, the Proposed Charter, which will amend and restate the Existing Charter, and which Proposed Charter will be in effect when duly filed with the Secretary of State of the State of Delaware in connection with the Closing (the “ Charter Proposal |
• | several proposals to approve, on a non-binding advisory basis, the following material differences between the Proposed Charter and the Current Charter, which are being presented in accordance with the requirements of the SEC as seven separate sub-proposals (the “Advisory Charter Amendment Proposals |
a. | Advisory Charter Amendment Proposal A — to change the corporate name of KVSA after the Business Combination to “Valo Health Holdings, Inc.”; |
b. | Advisory Charter Amendment Proposal B — to increase KVSA’s capitalization so that it will have authorized shares of a single series of common stock and authorized shares of preferred stock; |
c. | Advisory Charter Amendment Proposal C — to reclassify and convert the 5,000,000 shares of KVSA Class K common stock into 8,697,479 shares of KVSA Class A common stock immediately prior to the Closing; |
d. | Advisory Charter Amendment Proposal D — to provide that the removal of any director be only for cause and by the affirmative vote of the holders of not less than two-thirds of New Valo’s then-outstanding shares of capital stock entitled to vote generally in the election of directors; |
e. | Advisory Charter Amendment Proposal E — to provide that certain amendments to provisions of the Proposed Charter will require the approval of the holders of a majority of New Valo’s then-outstanding shares of capital stock entitled to vote on such amendment; |
f. | Advisory Charter Amendment Proposal F — to make New Valo’s corporate existence perpetual as opposed to KVSA’s corporate existence, which is required to be dissolved and liquidated 24 months following the closing of its initial public offering, and to remove from the Proposed Charter the various provisions applicable only to special purpose acquisition companies; |
g. | Advisory Charter Amendment Proposal G — to provide that New Valo will not be subject to Section 203 of the DGCL, which prohibits Delaware corporations from entering into business combinations with interested stockholders, defined as those that hold 15% or more of the corporation’s voting stock, absent the receipt of specific approvals specified in Section 203 of the DGCL; and |
h. | Advisory Charter Amendment Proposal H — to remove the provisions setting the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain stockholder actions. |
• | a proposal to approve, for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of New Valo common stock to (a) the PIPE Investors, including the Sponsor Related PIPE Investor and the Valo PIPE Investors, pursuant to the PIPE Investment, (b) the New Valo stockholders pursuant to the Merger Agreement and (c) the Sponsor (or its assigns) pursuant to the Forward Purchase Agreement (the “ Stock Issuance Proposal |
• | a proposal to approve the Valo Health Holdings, Inc. 2021 Incentive Award Plan, a copy of which is attached to this proxy statement/prospectus as Annex L (the “ Incentive Award Plan Proposal |
• | a proposal to approve the Valo Health Holdings, Inc. 2021 Employee Stock Purchase Plan, a copy of which is attached to this proxy statement/prospectus as Annex M (the “ ESPP Proposal |
• | a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the special meeting (the “ Adjournment Proposal |
Q: |
Are the proposals conditioned on one another? |
A: | Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the special meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal and the Advisory Charter Amendment Proposals are each not conditioned upon the approval of any other proposal. |
Q: |
Why is KVSA proposing the Business Combination? |
A: | KVSA was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, with one or more businesses or entities. |
Q: |
What will Valo Stockholders receive in return for KVSA’s acquisition of all of the issued and outstanding equity interests of Valo? |
A: | At the effective time of the Merger, among other things, (i) all outstanding shares of capital stock of Valo, including restricted shares of Valo common stock, will be cancelled in exchange for the right to receive an aggregate of 220,966,474 shares of New Valo common stock (at a deemed value of $10.00 per share) and (ii) all outstanding options to purchase shares of Valo common stock will be exchanged for options to purchase an aggregate of 8,902,431 shares of New Valo common stock (“ New Valo Options pre-transaction equity value of Valo of $2.25 billion (the “Aggregate Merger Consideration BCA Proposal — The Merger Agreement — Consideration — Aggregate Merger Consideration |
Q: |
What is the value of the consideration to be received in the Merger? |
A: | The exact value of the consideration to be received by holders of equity interests of Valo at the Closing will depend on the price of shares of common stock of KVSA as of such time and the aggregate fully diluted number of shares of Valo common stock as of such time, and will not be known with certainty until the Closing. |
Q: |
What equity stake will current KVSA stockholders and Valo Stockholders hold in New Valo immediately after the consummation of the Business Combination? |
A: | As of the date of this proxy statement/prospectus, there are 45,490,000 shares of KVSA common stock issued and outstanding, which includes the 10,000,000 founder shares held by the Sponsor and related parties (without giving effect to the conversion of the founder shares into New Valo common stock in connection with the closing of the Business Combination), the 990,000 private placement shares held by the Sponsor and the 34,500,000 public shares. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination), the KVSA fully diluted share capital would be 45,490,000. |
Share Ownership in New Valo |
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Assuming No Redemptions |
Assuming Maximum Redemptions (1) |
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Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
Valo Stockholders BCA Consideration (2) |
229,868,905 | 76.6 | % | 229,868,905 | 79.1 | % | ||||||||||
KVSA public shareholders |
34,500,000 | 11.5 | % | 22,413,226 | 7.7 | % | ||||||||||
Sponsor & related parties founder shares (3) |
15,775,708 | 5.3 | % | 15,775,708 | 5.4 | % | ||||||||||
Valo PIPE Investors |
8,650,000 | 2.9 | % | 8,650,000 | 3.0 | % | ||||||||||
Sponsor Related PIPE Investors |
1,000,000 | 0.3 | % | 3,500,000 | (4) | 1.2 | % | |||||||||
Third Party PIPE Investors |
10,436,250 | 3.5 | % | 10,436,250 | 3.6 | % | ||||||||||
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Total |
300,230,863 | 100.0 | % | 290,644,089 | 100.0 | % | ||||||||||
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(1) | Assumes redemptions of 12,086,774 shares of KVSA common stock in connection with the Business Combination (the estimated maximum number of shares of KVSA common stock that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Cash Condition based on: (i) trust account figures as of June 30, 2021, (ii) a redemption price of approximately $10.00 per share and (iii) the issuance of 2,500,000 shares of New Valo common stock to Sponsor pursuant to the Forward Purchase Agreement). |
(2) | Includes 220,966,474 shares of New Valo common stock expected to be issued to existing Valo Stockholders in connection with the Business Combination and 8,902,431 shares of New Valo common stock underlying New Valo Options issued in connection with the Business Combination. Excludes amounts set forth opposite “Valo PIPE Investors.” |
(3) | Includes 6,088,229 shares of New Valo common stock issued upon conversion of the KVSA Class B Common Stock held by Sponsor and certain directors of Sponsor, 8,697,479 shares of New Valo common stock issued upon conversion of the KVSA Class K Common Stock held by Sponsor and the 990,000 private placement shares held by Sponsor. Excludes amounts set forth opposite “Sponsor Related PIPE Investors.” |
(4) | Includes 2,500,000 shares of New Valo common stock subscribed for by Sponsor in connection with the Forward Purchase Agreement. |
Q: |
What is the maximum number of shares that may be redeemed in order for KVSA to satisfy the Minimum Cash Condition? |
A: | Assuming the PIPE Investment is completed and the full amount of the Forward Purchase Agreement is funded to KVSA (resulting in the issuance of 2,500,000 shares of New Valo common stock to Sponsor pursuant to the Forward Purchase Agreement), the maximum number of shares that may be redeemed in order for KVSA to satisfy the Minimum Cash Condition is 12,086,774. |
Q: |
How has the announcement of the Business Combination affected the trading price of the KVSA Class A public shares? |
A: | On June 8, 2021, the trading date before the public announcement of the Business Combination, KVSA’s public shares closed at $10.22. On September 21, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus, KVSA’s public shares closed at $9.90. |
Q: |
Will the Company obtain new financing in connection with the Business Combination? |
A: | Yes. The PIPE Investors have agreed to purchase in the aggregate 20,086,250 shares of New Valo common stock, for $200,862,500 of gross proceeds, in the PIPE Investment, a portion of which is expected to be funded by the Sponsor Related PIPE Investor and Valo PIPE Investors. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. See “ BCA Proposal — Related Agreements — Subscription Agreements |
Q: |
Do I have redemption rights? |
A: | If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public stockholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the BCA Proposal How do I exercise my redemption rights? |
Q: |
How do I exercise my redemption rights? |
A: | If you are a public stockholder and wish to exercise your right to redeem the public shares, you must: |
i. | hold public shares; |
ii. | submit a written request to Continental, KVSA’s transfer agent, that New Valo redeem all or a portion of your public shares for cash; and |
iii. | deliver your public shares to Continental, KVSA’s transfer agent, physically or electronically through The Depository Trust Company (“ DTC |
Q: |
What are the U.S. federal income tax consequences of exercising my redemption rights? |
A: | It is expected that a U.S. Holder (as defined in “ U.S. Federal Income Tax Considerations U.S. Federal Income Tax Considerations |
Q: |
What happens to the funds deposited in the trust account after consummation of the Business Combination? |
A: | Following the closing of KVSA’s initial public offering, a total of $345,000,000, comprised of proceeds from KVSA’s initial public offering and certain proceeds from the sale of the private placement shares, was placed in the trust account. As of June 30, 2021, funds in the trust account totaled $345,005,244 and were invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended. These funds will remain in the trust account, except for the withdrawal of interest to fund KVSA’s working capital requirements, subject to an annual limit of $500,000, and/or to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the closing of the Business Combination), (2) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Existing Organizational Documents to modify the substance or timing of KVSA’s obligation to redeem 100% of the public shares if it does not complete a business combination within 24 months from the closing of the initial public offering or (ii) with respect to any other provisions relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of all of the Company’s public shares if it is unable to complete its business combination within 24 months from the closing of the initial public offering, subject to applicable law. |
Q: |
What happens if a substantial number of the public stockholders vote in favor of the BCA Proposal and exercise their redemption rights? |
A: | Our public stockholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public stockholders are reduced as a result of redemptions by public stockholders. |
Q: |
What conditions must be satisfied to complete the Business Combination? |
A: | The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Transactions and related matters by KVSA’s stockholders and equity holders of the Valo Parties, (ii) the effectiveness of the Registration Statement of which this proxy statement/prospectus forms a part, (iii) the receipt of certain regulatory approvals (including, but not limited to, approval for listing on Nasdaq or the New York Stock Exchange of the shares of New Valo common stock to be issued in connection with the Merger and the expiration or early termination of the waiting period or periods under the HSR Act), (iv) that KVSA has at least $5,000,001 of net tangible assets upon Closing and (v) the absence of any injunctions. |
Q: |
When do you expect the Business Combination to be completed? |
A: | It is currently expected that the Business Combination will be consummated in the fourth quarter of 2021. This date depends, among other things, on the approval of the proposals to be put to KVSA stockholders at the special meeting. However, such meetings could be adjourned if the Adjournment Proposal is adopted at the special meeting, and KVSA elects to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the special meeting. For a description of the conditions for the completion of the Business Combination, see “ BCA Proposal — The Merger Agreement |
Q: |
What happens if the Business Combination is not consummated? |
A: | If KVSA is not able to complete the Business Combination with Valo by the Liquidation Date and is not able to complete another business combination by such date, in each case, as such date may be extended pursuant to the Existing Organizational Documents, KVSA will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible, but not more than 10 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 and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board, 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. |
Q: |
Do I have appraisal rights in connection with the proposed Business Combination? |
A: | KVSA’s stockholders do not have appraisal rights in connection with the Business Combination under the DGCL. |
Q: |
What do I need to do now? |
A: | KVSA urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a stockholder. KVSA’s stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy cards, as applicable. |
Q: |
How do I vote? |
A: | If you are a holder of record of KVSA Class A common stock and KVSA Class B common stock on the record date for the special meeting, you may vote in person virtually at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy cards, as applicable, in the accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to virtually attend the special meeting and vote in person, obtain a valid proxy from your broker, bank or nominee. In most cases you may vote by telephone or over the Internet as instructed. |
Q: |
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
A: | No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe all the proposals presented to the stockholders will be considered |
non-discretionary and therefore your broker, bank, or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares, as applicable, will not be voted on that proposal. This is called a “broker non-vote.” A broker non-vote will not be counted towards the quorum requirement, as we believe all proposals presented to the stockholders will be considered non-discretionary, or count as a vote cast at the special meeting. |
Q: |
When and where will the special meeting be held? |
A: | The special meeting will be held will be held virtually via live webcast at at , Eastern Time, on , 2021, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals. |
Q: |
How do I attend a virtual meeting? |
A: | As a registered stockholder, you will receive the applicable proxy card(s) from D.F. King & Co., Inc. (“ D.F. King |
Q: |
Who is entitled to vote at the special meeting? |
A: | KVSA has fixed , 2021 as the record date for the special meeting. If you were a stockholder of KVSA at the close of business on the record date, you are entitled to vote on matters that come before the special meeting. However, a stockholder may only vote his or her shares if he or she is present in person virtually or is represented by proxy at the special meeting. |
Q: |
How many votes do I have? |
A: | KVSA stockholders are entitled to: |
(i) | one vote at the special meeting for each share of KVSA Class A common stock held of record as of the record date; and |
(ii) | 1.217646 votes at the special meeting for each share of KVSA Class B common stock held of record as of the record date. |
Q: |
What constitutes a quorum? |
A: | A quorum of KVSA stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting if the holders of outstanding KVSA common stock representing a majority of the voting power of all outstanding shares entitled to vote at the special meeting are represented in person or by proxy at the special meeting. A quorum for purposes of the Charter Proposal also requires that holders of shares of KVSA Class B common stock representing a majority of the voting power of the outstanding shares of KVSA Class B common stock be represented in person or by proxy at the special meeting. As of the record date for the special meeting, an aggregate of 20,789,118 shares of KVSA Class A common stock and KVSA Class B common stock (on an as-converted basis) and, solely with respect to the Charter Proposal, 2,500,001 shares of KVSA Class B common stock would be required to achieve a quorum. |
Q: |
What vote is required to approve each proposal at the special meeting? |
A: | The following votes are required for each proposal at the special meeting: |
i. | BCA Proposal: |
ii. | Charter Proposals: |
iii. | Advisory Charter Amendment Proposals: |
iv. | Stock Issuance Proposal: |
v. | Incentive Award Plan Proposal: |
vi. | ESPP Proposal: |
vii. | Adjournment Proposal: |
Q: |
What are the recommendations of KVSA’s board of directors? |
A: | KVSA’s board of directors believes that the BCA Proposal and the other proposals to be presented at the special meeting are in the best interest of KVSA’s stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” the BCA Proposal, “FOR” the Charter Proposal, “FOR” each of the separate Advisory Charter Amendment Proposals, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the special meeting. |
Q: |
How does the Sponsor intend to vote its shares? |
A: | Unlike some other blank check companies in which the initial stockholders agree to vote their shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, the Sponsor and all of its directors and officers have agreed to vote all of the shares of KVSA common stock they may hold in favor of all the proposals being presented at the special meeting. As of the date of this proxy statement/prospectus, the Sponsor and KVSA’s independent directors collectively own shares of KVSA common stock representing 14.8% of the outstanding voting power. |
Q: |
What happens if I sell my KVSA common stock before the special meeting? |
A: | The record date for the special meeting is earlier than the date of the special meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable record date, but before the special meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such special meeting, as applicable, but the transferee, and not you, will have the ability to redeem such shares (if time permits). |
Q: |
May I change my vote after I have mailed my signed proxy card(s)? |
A: | Yes. Stockholders may send later-dated, signed proxy card(s) to KVSA’s Secretary at KVSA’s address set forth below so that such proxy card(s) received by KVSA’s Secretary prior to the vote at the special meeting, as applicable (which is scheduled to take place on , 2021) or virtually attend the special meeting, as applicable, in person and vote. Stockholders also may revoke their proxy by sending a notice of revocation to KVSA’s Secretary, which must be received by KVSA’s Secretary prior to the vote at the special meeting, as applicable. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote. |
Q: |
What happens if I fail to take any action with respect to the special meeting? |
A: | If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and the Business Combination is consummated, you will become a stockholder of New Valo. If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will remain a stockholder of KVSA. However, if you fail to vote with respect to the special meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits). |
Q: |
What should I do with my share certificates? |
A: | Our stockholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates to Continental, KVSA’s transfer agent, prior to the special meeting. |
Q: |
What should I do if I receive more than one set of voting materials? |
A: | Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card for each applicable meeting. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your KVSA common stock. |
Q: |
Who will solicit and pay the cost of soliciting proxies for the special meeting? |
A: | KVSA will pay the cost of soliciting proxies for the special meeting. KVSA has engaged D.F. King to assist in the solicitation of proxies for the special meeting. KVSA has agreed to pay D.F. King a fee of $25,000, plus disbursements (to be paid with non-trust account funds). KVSA will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of KVSA Class A common stock for their expenses in forwarding soliciting materials to beneficial owners of KVSA Class A common stock and in obtaining voting instructions from those owners. KVSA’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies. |
Q: |
Where can I find the voting results of the special meeting? |
A: | The preliminary voting results will be expected to be announced at the special meeting, as applicable. KVSA will publish final voting results of the special meeting in a Current Report on Form 8-K within four business days after the special meeting. |
Q: |
Who can help answer my questions? |
A: | If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus, any document incorporated by reference in this proxy statement/prospectus or the enclosed proxy cards, you should contact: |
• | Substantially improve the current 5% biopharmaceutical success rate; |
• | Make better medicines with enhanced features against known drug targets; |
• | Make medicines against targets currently understood as “undruggable”; |
• | Create a fully-integrated process to align decision-making; |
• | Use analytics to identify and mitigate risks earlier; |
• | Enable better targeted portfolio design; |
• | Reduce dependency on surrogate systems (e.g., cells, mice etc.), with a focus on human data in the discovery and development process; and |
• | Convert serial processes to parallel approaches. |
• | High density longitudinal data from over 7 million patients; |
• | Over 22 trillion multi-omic data points; |
• | Over 5 billion total drug-like compounds; and |
• | Over 2 billion computation model predictions. |
• | Independently re-discovering clinically validated targets; |
• | Repeatedly and reproducibly identifying causal biomarkers in two months; |
• | Completing new target identification in days-to-weeks |
• | Achieving new molecule identification, validation and transition to hit-to-leads weeks-to-months, |
• | Optimizing leads in months versus the current two-year average standard; and |
• | Third-party blinded tests of our toxicity prediction capabilities, for example, were performed on 154 compounds blinded to us, and showed a greater than 90% accuracy for off-target binding, giving increased confidence preclinically for one of the major causes of clinical-stage failures. |
• | Optimizing the portfolio across our three lead product candidates and 14 active discovery-stage programs with high impact potential; |
• | Expecting several near-term clinical development milestones in a variety of therapeutic areas, including a target IND submission in the first half of 2022 for OPL-0401 and a target IND submission in the second half of 2022 for OPL-0101, depending on FDA interactions in the coming quarters; and |
• | Aiming to create a repeatable flow of two to three preclinical drug candidates annually, starting in 2022. |
Program |
Proposed Indication | |
Cardiovascular |
||
OPAL-0022 | Atherosclerosis | |
OPAL-0004 | Atherosclerosis; Glioblastoma | |
OPAL-0018 | Atherosclerosis | |
OPAL-0003 | Heart failure; Glioblastoma | |
Oncology |
||
OPAL-0021 | Heme-Targeting | |
OPAL-0024 | Defined Tumors | |
OPAL-0001 | Medulla/Glioblastoma Brain Tumors; Breast Cancer | |
OPAL-0014 | Pancreatic Ductal Adenocarcinoma (PDAC), Targeted Defined Tumors | |
OPAL-0023 | Defined Tumors; Immune Modulation | |
OPAL-0012 | Defined Tumors | |
OPAL-0016 | Induced Neuropathy and Cardiomyopathy | |
Neurodegenerative |
||
OPAL-0002 | Neurodegenerative | |
OPAL-0006 | Neurodegenerative; Oncology (metastatic) |
• | addressing a large market that creates the opportunity for attractive long-term growth prospects; |
• | protected by proprietary technology advantages; |
• | that has achieved sufficient technology and business maturity while maintaining significant topline growth potential; |
• | with a creative and ambitious management team with a proven track record of success; |
• | pursuing significant technology innovation that has the potential to have a significant positive impact on the world; |
• | with rapid innovation cycles; |
• | that maintains strong and defensible competitive advantages, which KVSA believes over time will lead to durable and profitable growth; and |
• | where KVSA can materially impact the value of the company in partnership with management. |
• | Promising pipeline of product candidates OPL-0301 is a small molecule, G-protein biased S1P1 receptor (S1P1R) functional agonist in development for the treatment of heart failure and kidney injury. The Valo Parties expect to file an IND (and filed such IND in September 2021) and initiate a Phase 2 clinical trial in heart failure in 2021 and thereafter initiate a Phase 2 clinical trial in acute kidney injury. OPL-0401 is an oral, small molecule ROCK1/2 inhibitor in development for the treatment of diabetic retinopathy and other complications of diabetes. The Valo Parties expect to initiate a Phase 2 clinical trial in diabetic retinopathy in 2022. With the foregoing in-licensed clinical stage assets addressing widespread medical conditions and 14 discovery-stage programs across cardiovascular metabolic renal, oncology, and neurodegenerative diseases, the KVSA Board believes that the Valo Parties are advancing a promising product pipeline. |
• | Scalable, differentiated technology platform. |
• | Extensive, high-quality patient data sources provide significant competitive advantages. de-identified patient data generated by third parties and |
exclusive access to one of the largest prospective studies spanning pan-omics, imaging and medical records. In addition, the Valo Parties generate their own data through every experiment that they run. The KVSA Board believes that the scale and quality of the Valo Parties’ sourced data lake, together with its internally-generated proprietary datasets, provides significant advantages over competitors focused on traditional drug development processes. |
• | Experienced, proven and committed management team. co-founded more than 20 companies across the life sciences and sustainability sectors. Dr. Berry has assembled a team of experts in technology development and therapeutic research and development. The KVSA Board also believes that the willingness of the Valo Parties’ management team to roll over all of their equity stake and agree to prohibitions on the transfer of their New Valo equity for up to 180 days following the consummation of the Business Combination reflected management’s belief in and commitment to New Valo’s continued growth following the consummation of the Business Combination. |
• | Backed by strong investor syndicate. |
• | Financial analysis conducted by KVSA. Summary of KVSA Financial Analysis |
• | Other alternatives. |
• | Negotiated transaction. |
• | Valo’s business risks. COVID-19 pandemic and related macroeconomic uncertainty. The KVSA Board considered that the failure of any of these activities to be completed successfully may decrease the actual benefits of the Business Combination and that KVSA stockholders may not fully realize these benefits to the extent that they expected to retain the public shares following the completion of the Business Combination. For an additional description of these risks, please see “Risk Factors |
• | Liquidation of KVSA. |
• | Exclusivity. |
• | Stockholder vote. |
• | Redemption risk. |
• | Post-business combination corporate governance. The Merger Agreement Management of New Valo Following the Business Combination |
• | Limitations of review. |
• | No underwritten offering. |
• | Closing conditions. |
• | KVSA stockholders holding a minority position in New Valo. |
• | No survival of remedies for breach of representations, warranties or covenants of the Valo Parties |
things, a decrease in the financial performance or worsening of financial condition of the Valo Parties prior to the Closing, whether determined before or after the Closing, without any ability to reduce the number of shares of New Valo common stock to be issued in the Business Combination or recover for the amount of any damages. The KVSA Board determined that this structure was appropriate and customary in light of the fact that it is consistent with market practice for similar transactions and the Valo Parties would not have proceeded with the Business Combination otherwise. |
• | Litigation. |
• | Fees and expenses. |
• | Other risks. “Risk Factors |
Share Ownership in New Valo |
||||||||||||||||
Assuming No Redemptions |
Assuming Maximum Redemptions (1) |
|||||||||||||||
Number of Shares |
Percentage of Outstanding Shares |
Number of Shares |
Percentage of Outstanding Shares |
|||||||||||||
Valo Stockholders BCA Consideration (2) |
229,868,905 | 76.6 | % | 229,868,905 | 79.1 | % | ||||||||||
KVSA public shareholders |
34,500,000 | 11.5 | % | 22,413,226 | 7.7 | % | ||||||||||
Sponsor & related parties founder shares (3) |
15,775,708 | 5.3 | % | 15,775,708 | 5.4 | % | ||||||||||
Valo PIPE Investors |
8,650,000 | 2.9 | % | 8,650,000 | 3.0 | % | ||||||||||
Sponsor Related PIPE Investor |
1,000,000 | 0.3 | % | 3,500,000 | (4) | 1.2 | % | |||||||||
Third Party PIPE Investors |
10,436,250 | 3.5 | % | 10,436,250 | 3.6 | % | ||||||||||
|
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|
|
|
|
|
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Total |
300,230,863 | 100.0 | % | 290,644,089 | 100.0 | % | ||||||||||
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(1) | Assumes redemptions of 12,086,774 shares of KVSA common stock in connection with the Business Combination (the estimated maximum number of shares of KVSA common stock that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Cash Condition based on: (i) trust account figures as of June 30, 2021, (ii) a redemption price of approximately $10.00 per share and (iii) the issuance of 2,500,000 shares of New Valo common stock to Sponsor pursuant to the Forward Purchase Agreement). |
(2) | Includes 220,966,474 shares of New Valo common stock expected to be issued to existing Valo Stockholders in connection with the Business Combination and 8,902,431 shares of New Valo common stock underlying New Valo Options issued in connection with the Business Combination. Excludes amounts set forth opposite “Valo PIPE Investors.” |
(3) | Includes 6,088,229 shares of New Valo common stock issued upon conversion of the KVSA Class B Common Stock held by Sponsor and certain directors of Sponsor, 8,697,479 shares of New Valo common stock issued upon conversion of the KVSA Class K Common Stock held by Sponsor and the 990,000 private placement shares held by Sponsor. Excludes amounts set forth opposite “Sponsor Related PIPE Investor.” |
(4) | Includes 2,500,000 shares of New Valo common stock subscribed for by Sponsor in connection with the Forward Purchase Agreement. |
• | BCA Proposal: |
• | Charter Proposal: |
• | Advisory Charter Amendment Proposals: |
• | Stock Issuance Proposal: |
• | Incentive Award Plan Proposal: |
• | ESPP Proposal: |
• | Adjournment Proposal: |
• | hold public shares; |
• | submit a written request to Continental Stock Transfer & Trust Company (“Continental”), KVSA’s transfer agent, that KVSA redeem all or a portion of your public shares for cash; and |
• | deliver your public shares to Continental, KVSA’s transfer agent, physically or electronically through DTC. |
• | Prior to KVSA’s initial public offering, the Sponsor purchased 10,000,000 founder shares, for approximately $0.002 per share. Subsequent to the share capitalization, the Sponsor transferred 40,000 founder shares to each of Jagdeep Singh, Rajiv Shah, Derek Anthony West, Mario Schlosser, Dmitri Schlosser and Molly Coye, KVSA’s independent directors. If KVSA does not consummate a business combination by the Liquidation Date, it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In such event, the 10,000,000 founder shares owned by the Sponsor and KVSA’s independent directors would be worthless because following the redemption of the public shares, KVSA would likely have few, if any, net assets and because the Sponsor and KVSA’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of the 10,000,000 founder shares held by it if KVSA fails to complete a business combination within the required period. Additionally, in such event, the 990,000 private placement shares purchased by the Sponsor simultaneously with the consummation of the initial public offering for an aggregate purchase price of $9.9 million, will also expire worthless. Mr. Kaul, KVSA’s Chairman and Chief Executive Officer, also has an economic interest in such private placement shares and in the 9,760,000 founder shares owned by the Sponsor. The 14,493,478 shares of New Valo common stock into which the 9,760,000 founder shares held by the Sponsor will automatically convert in connection with the Merger, if unrestricted, fully vested and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such shares of New Valo common stock will be subject to certain restrictions, including those described above, KVSA believes such shares have less value. The 292,230 shares of New Valo common stock into which the 240,000 founder shares held by KVSA’s independent |
directors will automatically convert in connection with the Merger, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on the Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 990,000 shares of New Valo common stock representing the 990,000 private placement shares held by the Sponsor, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on the Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The Sponsor Related PIPE Investors have subscribed for $10,000,000 of the PIPE Investment, for which they will receive 1,000,000 shares of New Valo common stock, which, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. |
• | Due to the low purchase price of the founder shares, our Sponsor and its affiliates may earn a positive return on their investment, even if other stockholders experience a negative return on their investment in New Valo (i.e. our Sponsor and its affiliates may still have a positive return even if, following consummation of the Business Combination, the New Valo Class A common stock trades below $ per share, which is the approximate value that public stockholders would receive if they exercised redemption rights as described herein). |
• | Mr. Kaul, a current director of KVSA, is expected to be a director of New Valo after the consummation of the Business Combination. As such, in the future, Mr. Kaul may receive fees for his service as a director, which may consist of cash or stock-based awards, and any other remuneration that the New Valo board of directors determines to pay to its non-employee directors. |
• | The Sponsor (including its representatives and affiliates) and KVSA’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to KVSA. For example, certain officers and directors of KVSA, who may be considered an affiliate of the Sponsor, have also recently incorporated Khosla Ventures Acquisition Co. II (“ KVSB KVSC KVSD |
• | KVSA’s existing directors and officers will be eligible for continued indemnification and continued coverage under KVSA’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement. |
• | In the event that KVSA fails to consummate a business combination within the prescribed time frame (pursuant to the Existing Organizational Documents), or upon the exercise of a redemption right in connection with the Business Combination, KVSA will be required to provide for payment of claims of creditors that were not waived that may be brought against KVSA within the ten years following such redemption. In order to protect the amounts held in KVSA’s trust account, the Sponsor has agreed that it will be liable to KVSA if and to the extent any claims by a third party (other than KVSA’s independent auditors) for services rendered or products sold to KVSA, or a prospective target business with which KVSA has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 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 fund KVSA’s working capital requirements, subject to an annual limit of $500,000, and/or 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 the indemnity of the underwriters of KVSA’s initial public offering against certain liabilities, including liabilities under the Securities Act. |
• | KVSA’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket |
• | Pursuant to the Registration Rights Agreement, the Sponsor and the Sponsor Related PIPE Investor will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Valo common stock held by such parties following the consummation of the Business Combination. |
Name |
Options |
Intrinsic Value |
||||||
David Berry |
5,374,890 | $ | 28,325,670 | |||||
Graeme Bell |
609,252 | $ | 3,210,758 | |||||
Nish Lathia |
30,218 | $ | 159,249 | |||||
Judy Lewent |
304,626 | $ | 1,605,379 |
Sources |
Uses |
|||||||||
($ in millions) |
||||||||||
Cash and investments held in trust account (1) |
$345 | Cash to balance sheet |
$513.9 | |||||||
PIPE Investment (2) |
200.9 | Transaction expenses (3) |
32 | |||||||
Valo Rollover Equity |
2,250 | Equity Consideration to Existing Investors |
2,250 | |||||||
|
|
|
|
|||||||
Total sources |
$2,795.9 |
Total uses |
$2,795.9 |
|||||||
|
|
|
|
(1) | Calculated as of June 30, 2021 |
(2) | Shares issued in the PIPE Investment are at a deemed value of $10.00 per share. |
(3) | Includes deferred underwriting commission of $12,075,000 and unpaid estimated transaction expenses of $19,869,000. Transaction costs of $1,702,000 have been paid. |
• | We are a technology company with clinical- and preclinical-stage assets and a limited operating history. |
• | We have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future. |
• | We will need to raise additional capital to fund our existing operations, improve our platform and expand our operations. |
• | We have no products approved for commercial sale and have not generated any revenue from product sales. |
• | We have in the past, and may in the future, acquire other companies or technologies or enter into strategic license and collaboration agreements or partnerships, which could divert our management’s attention, result in additional dilution to our stockholders, and otherwise disrupt our operations and adversely affect our operating results. |
• | We have not conducted any clinical trials to date. |
• | The markets in which we participate are highly competitive, and if we do not compete effectively, including for talent necessary to meet our business goals, our business and operating results could be adversely affected. |
• | If we cannot maintain existing agreements with third parties, including data licensing, and/or enter into new licensing or collaboration agreements or similar business arrangements, our business could be adversely affected. |
• | Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation. |
• | We have invested, and expect to continue to invest, in research and development efforts that further enhance our Opal platform and advance product candidates. Such investments in technology and therapeutic development are inherently risky and may affect our operating results. If the return on these investments is lower or develops more slowly than we expect, our operating results may suffer. |
• | We contract with third parties for the manufacture of our product candidates for preclinical development and clinical testing, and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. |
• | If we are unable to adequately protect and enforce our intellectual property and proprietary technology, obtain and maintain patent protection for our technology and products where appropriate or if the scope of the patent protection obtained is not sufficiently broad, or if we are unable to protect the confidentiality of our trade secrets and know-how, our competitors could develop and commercialize technology and products similar or identical to ours, our ability to successfully commercialize our technology and products may be impaired, and our business and competitive position may be otherwise harmed. |
• | A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and our financial results and could cause a disruption to the development of our product candidates. |
• | We have identified material weaknesses in our internal control over financial reporting for the fiscal years ended December 31, 2019 and 2020. If we fail to remediate these material weaknesses or experience material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our common stock. |
• | KVSA has identified material weaknesses in its internal control over financial reporting as of June 30, 2021. If we fail to remediate these material weaknesses or experience material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us and, as a result, the value of our common stock. |
• | KVSA and, following the Business Combination, New Valo, may face litigation and other risks as a result of the material weakness in KVSA’s internal control over financial reporting. |
As of June 30, |
||||
2021 |
||||
Balance Sheet Data: |
||||
Cash and cash equivalents |
$ | 787,378 | ||
Marketable securities held in trust account |
$ | 345,005,244 | ||
Total assets |
$ | 346,979,098 | ||
Total liabilities |
$ | 16,378,557 | ||
Total stockholders’ deficit |
$ | (14,399,459 | ) |
Inception to date June 30, |
||||
2021 |
||||
Statement of Operations Data: |
||||
Loss from operations |
$ | (2,369,443 | ) | |
Financing expenses on derivative classified instrument |
$ | (12,137,500 | ) | |
Gain on marketable securities (net), dividends and interest, held in trust account |
$ | 5,244 | ||
Change in fair value of derivative liabilities |
$ | 9,850,000 | ||
Net loss |
$ | (4,651,699 | ) | |
Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted |
23,900,602 | |||
|
|
|||
Basic and diluted net loss per share, Class A common stock subject to possible redemption |
$ |
(0.13 |
) | |
|
|
|||
Weighted average shares outstanding of Class A non-redeemable common stock, basic and diluted |
685,843 | |||
|
|
|||
Basic and diluted net loss per share, Class A non-redeemable common stock |
$ |
(0.26 |
) | |
|
|
|||
Weighted average shares outstanding Class B non-redeemable common stock, basic and diluted |
5,000,000 | |||
|
|
|||
Basic and diluted net loss per common stock, Class B |
$ |
(0.27 |
) | |
|
|
|||
Statement of Cash Flows Data: |
||||
Net cash used in operating activities |
$ | (1,552,962 | ) | |
Net cash used in investing activities |
$ | (345,000,000 | ) | |
Net cash provided by financing activities |
$ | 347,340,340 |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||
2021 |
2020 |
2020 |
2019 |
|||||||||||||
(in thousands, except unit and per unit amounts) |
||||||||||||||||
Consolidated Statement of Operations Data: |
||||||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
$ | 60,638 | $ | 19,592 | $ | 43,296 | $ | 11,378 | ||||||||
General and administrative |
19,549 | 13,906 | 30,556 | 22,409 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
80,187 | 33,498 | 73,852 | 33,787 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(80,187 | ) | (33,498 | ) | (73,852 | ) | (33,787 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(1,799 | ) | (624 | ) | (2,636 | ) | (180 | ) | ||||||||
Other income (expense), net |
19 | 1 | 282 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense, net |
(1,780 | ) | (623 | ) | (2,354 | ) | (180 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(81,967 | ) | (34,121 | ) | (76,206 | ) | (33,967 | ) | ||||||||
Income tax expense |
(14 | ) | (40 | ) | (78 | ) | (5 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (81,981 | ) | $ | (34,161 | ) | $ | (76,284 | ) | $ | (33,972 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per unit attributable to common unit holders, basic and diluted (1) |
$ | (1.02 | ) | $ | (0.43 | ) | $ | (0.96 | ) | $ | (0.46 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common units outstanding, basic and diluted (1) |
80,418,143 | 79,482,906 | 79,673,199 | 73,778,388 | ||||||||||||
|
|
|
|
|
|
|
|
June 30, 2021 |
December 31, |
|||||||||||
2020 |
2019 |
|||||||||||
(in thousands) |
||||||||||||
Consolidated Balance Sheet Data: |
||||||||||||
Cash and cash equivalents |
$ | 237,498 | $ | 188,095 | $ | 60,916 | ||||||
Working capital (2) |
220,411 | 186,864 | 57,449 | |||||||||
Total assets |
279,677 | 233,261 | 74,274 | |||||||||
Long-term debt, net of discount, including current portion |
22,561 | 22,178 | — | |||||||||
Preferred units |
403,150 | 293,050 | 94,455 | |||||||||
Total members’ deficit |
(171,217 | ) | (94,320 | ) | (24,524 | ) |
(1) | See Note 2 to Valo Holdco’s audited consolidated financial statements and to Valo Holdco’s unaudited condensed consolidated financial statements appearing elsewhere in this proxy statement/prospectus for details on the calculation of basic and diluted net loss per unit attributable to common unit holders. |
(2) | We define working capital as total current assets minus total current liabilities. |
• | Assuming Minimum Redemptions |
• | Assuming Maximum Redemptions: |
KVSA (prior to underwriting commissions or payment of transaction costs) at or prior to the Closing Date and (iii) proceeds of $25.0 million from the Sponsor forward purchase agreement. |
Pro Forma Condensed Combined |
||||||||
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations |
||||||||
Six months ended June 30, 2021 (in thousands, except share and per share data) |
||||||||
Net loss and comprehensive loss |
$ | (86,638 | ) | $ | (86,638 | ) | ||
Pro forma net loss per share, basic and diluted |
$ | (0.32 | ) | $ | (0.34 | ) | ||
Pro forma weighted average shares outstanding, basic and diluted |
267,494,506 | 257,907,732 | ||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations |
||||||||
Year ended December 31, 2020 (in thousands, except share and per share data) |
||||||||
Net loss and comprehensive loss |
$ | (79,642 | ) | $ | (79,642 | ) | ||
Pro forma net loss per share, basic and diluted |
$ | (0.30 | ) | $ | (0.31 | ) | ||
Pro forma weighted average shares outstanding, basic and diluted |
267,494,506 | 257,907,732 | ||||||
Selected Unaudited Pro Forma Condensed Combined Balance Sheet |
||||||||
As of June 30, 2021 (in thousands) |
||||||||
Total assets |
$ | 790,668 | $ | 694,800 | ||||
Total liabilities |
$ | 101,688 | $ | 101,688 | ||||
Total stockholders’ equity |
$ | 688,980 | $ | 593,112 |
Trading Date |
KVSA Class A common stock (KVSA) |
|||
June 8, 2021 |
$ | 10.22 | ||
September 21, 2021 |
$ | 9.90 |
• | the scope, progress, results and costs of our current and future clinical trials and computational analyses, and additional preclinical research or computational efforts for our programs and platform; |
• | the number of future product candidates that we pursue and their computational and development requirements; |
• | the costs, timing, and outcome of regulatory review of our product candidates; |
• | our ability to establish and maintain collaborations on favorable terms, if at all; |
• | the success of any collaborations that we may enter into with third parties; |
• | the extent to which we acquire or invest in businesses, products, and technologies, including entering into licensing or collaboration arrangements for product candidates; |
• | the impact of any business interruptions to our operations, including the timing and enrollment of participants in our planned clinical trials, or to operations of our manufacturers, suppliers, or other vendors resulting from the continuing COVID-19 pandemic or a similar public health crisis or other force majeure event; |
• | the costs of preparing, filing, and prosecuting patent applications, maintaining, protecting, and enforcing our intellectual property rights and defending intellectual property-related claims; |
• | our headcount growth and associated costs as we expand our business operations and our research and development activities; and |
• | the costs of operating as a public company. |
• | successfully complete preclinical studies; |
• | have Investigational New Drug (“IND”), applications cleared by the U.S. Food Drug Administration (“FDA”) or similar applications authorized by foreign regulatory authorities, allowing us to commence clinical trials; |
• | successfully complete computational analyses to optimize clinical trials; |
• | successfully enroll subjects in, and complete, clinical trials; |
• | initiate and successfully complete all preclinical studies and clinical trials required to obtain U.S. and foreign marketing approval for our product candidates; |
• | receive regulatory approvals from applicable regulatory authorities; |
• | establish commercial manufacturing capabilities, make arrangements with third-party manufacturers for clinical supply and commercial manufacturing, or out-license product candidate rights to a third party for commercialization; |
• | obtain and maintain patent and trade secret protection and/or regulatory exclusivity for our product candidates; |
• | launch commercial sales of our drug candidates and/or software solutions, if and when approved (as necessary), whether alone or in collaboration with others; |
• | obtain and maintain acceptance of the drug candidates and/or software solutions, if and when approved (as necessary), by patients, the medical community, and third-party payors; |
• | effectively compete with other therapies and software offerings; |
• | obtain and maintain healthcare coverage and adequate reimbursement; |
• | protect and enforce our intellectual property rights and defend against intellectual property claims; |
• | take temporary precautionary measures to help minimize the impact of the COVID-19 pandemic or other force majeure event on our business; and |
• | maintain a continued acceptable safety profile of the product candidates following approval. |
• | the cost to continue to maintain, develop, and integrate technological advancements; |
• | the timing, quality, regulatory compliance, and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; |
• | our ability to successfully recruit and retain subjects, sites, and staff for clinical trials, and any delays caused by difficulties in such efforts; |
• | our ability to obtain marketing approval for our product candidates, and the timing and scope of any such approvals we may receive; |
• | the timing and cost of, and level of investment in, research and development activities and computational activities relating to our product candidates, which may change from time to time; |
• | the timing, complexity, and cost of manufacturing our product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; |
• | our ability to attract, hire, and retain qualified personnel, including highly specialized scientists, clinicians, data scientists, and engineers; |
• | expenditures that we will or may incur to acquire and /or develop additional product candidates; |
• | the level of demand for our product candidates should they receive approval, which may vary significantly; |
• | the risk/benefit profile, cost, and reimbursement policies with respect to our product candidates, if approved, and existing and potential future therapeutics that compete with our product candidates; |
• | the changing and volatile U.S. and global economic environments, including as a result of the evolving COVID-19 pandemic and terrorism; and |
• | future accounting pronouncements or changes in our accounting policies. |
• | increased operating expenses and cash requirements; |
• | the assumption of indebtedness or contingent liabilities; |
• | the issuance of our equity securities which would result in dilution to our stockholders’ equity; |
• | assimilation of operations, intellectual property, products, and product candidates of an acquired company, including difficulties associated with integrating new personnel; |
• | the diversion of our management’s attention from our existing product programs and initiatives in pursuing or integrating such an acquisition or strategic partnership, which may impact company priorities and could lead to delays or interruptions in our existing product programs; |
• | retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; |
• | risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; |
• | our inability to generate revenue from acquired intellectual property, technology, and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs; and |
• | the risk that we may have insufficient funds available to meet milestone or other payment obligations under existing and future agreements, which could harm our development efforts and may result in our counterparties pursuing various remedies under those agreements that could harm our operations. |
• | be delayed in obtaining marketing approval for our product candidates; |
• | not obtain marketing approval at all; |
• | obtain approval for indications or patient populations that are not as broad as intended or desired; |
• | be subject to post-marketing requirements or commitments; or |
• | have the product removed from the market after obtaining marketing approval. |
• | regulators or institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations (“ CROs |
• | clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials or we may decide to abandon product development programs; |
• | the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate; |
• | our third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; |
• | we may elect to, or regulators or IRBs may require us or our investigators to, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; |
• | the cost of clinical trials of our product candidates may be greater than we anticipate; |
• | the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and |
• | our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs or ethics committees to suspend or terminate the trials, or reports may arise from preclinical or clinical testing of other cancer therapies that raise safety or efficacy concerns about our product candidates. |
• | the severity of the disease under investigation; |
• | the eligibility criteria for the clinical trial in question; |
• | the availability of an appropriate genomic or other screening test; |
• | the perceived risks and benefits of the product candidate under study; |
• | the efforts to facilitate timely enrollment in clinical trials; |
• | the patient referral practices of physicians; |
• | the ability to monitor patients adequately during and after treatment; |
• | the proximity and availability of clinical trial sites for prospective patients; and |
• | factors we may not be able to control, such as current or potential pandemics that may limit patients, principal investigators or staff or clinical site availability (e.g., the spread of COVID-19). |
• | regulatory authorities may withdraw approvals of such products and require us to take our approved product off the market; |
• | regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies; |
• | regulatory authorities may require a medication guide outlining the risks of such side effects for distribution to patients, or that we implement a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the product outweigh its risks; |
• | we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product; |
• | we may be subject to limitations on how we may promote the product; |
• | sales of the product may decrease significantly; |
• | we may be subject to litigation or product liability claims; and |
• | our reputation may suffer. |
• | the research methodology used may not be successful in identifying potential indications, patient subpopulations, and/or product candidates; |
• | potential product candidates may, after further study, be shown to have harmful adverse effects or other characteristics that indicate they are unlikely to be effective products; or |
• | it may take greater computational, human and financial resources than we will possess to identify additional therapeutic opportunities for our product candidates or to develop suitable potential product candidates through internal research programs, thereby limiting our ability to develop, diversify and expand our product portfolio. |
• | the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; |
• | we may not be able to enroll a sufficient number of patients in our clinical studies; |
• | we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication or a related companion diagnostic is suitable to identify appropriate patient populations; |
• | the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; |
• | we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; |
• | the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; |
• | the data collected from clinical trials of product candidates that we may identify and pursue may not be sufficient to support the submission of an NDA, or BLA, or other submission to obtain regulatory approval in the United States or elsewhere; |
• | the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and |
• | the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change such that our clinical data are insufficient for approval. |
• | the efficacy and safety of such product candidates as demonstrated in pivotal clinical trials and published in peer-reviewed journals; |
• | the potential and perceived advantages compared to alternative treatments, including any similar generic treatments; |
• | the ability to offer these products for sale at competitive prices; |
• | the ability to offer appropriate patient access programs, such as co-pay assistance; |
• | convenience and ease of dosing and administration compared to alternative treatments; |
• | the clinical indications for which the product candidate is approved by FDA or comparable regulatory agencies; |
• | product labeling or product insert requirements of the FDA or other comparable foreign regulatory authorities, including any limitations, contraindications or warnings contained in a product’s approved labeling; |
• | restrictions on how the product is distributed; |
• | the timing of market introduction of competitive products; |
• | publicity concerning these products or competing products and treatments; |
• | the strength of marketing and distribution support; |
• | favorable third-party coverage and sufficient reimbursement; and |
• | the prevalence and severity of any side effects or adverse events. |
• | a covered benefit under its health plan; |
• | safe, effective and medically necessary; |
• | appropriate for the specific patient; |
• | cost-effective; and |
• | neither experimental nor investigational. |
• | the potential diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, including the attention of physicians serving as our clinical trial investigators, hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our prospective clinical trials; |
• | limitations on travel that could interrupt key trial and business activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to clinical trial sites, including any government-imposed travel restrictions or quarantines that will impact the ability or willingness of patients, employees or contractors to travel to our clinical trial sites or secure visas or entry permissions, a loss of face-to-face |
• | the potential negative effect on the operations of our third-party manufacturers; |
• | global supply chain disruptions affecting the transport of clinical trial materials, such as tissue samples, investigational drug product and comparator drugs and other supplies used in our studies; |
• | business disruptions caused by potential workplace, laboratory and office closures and an increased reliance on employees working from home, disruptions to or delays in ongoing laboratory experiments and operations, staffing shortages, travel limitations or mass transit; and |
• | disruptions, any of which could adversely impact our business operations or delay necessary interactions with local regulators, ethics committees and other important agencies and contractors. |
• | reliance on the third party for regulatory compliance and quality assurance; |
• | the possible breach of the manufacturing agreement by the third party; |
• | the possible misappropriation of our proprietary information, including our trade secrets and know-how; and |
• | the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. |
• | significant time and effort from our management team; |
• | coordination of our marketing and research and development programs with the marketing and research and development priorities of our collaborators; and |
• | effective allocation of our resources to multiple projects. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | the sublicensing of patent and other rights under our collaborative development relationships; |
• | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and |
• | the priority of invention of patented technology. |
• | others may be able to make products that are similar to our product candidates or utilize similar technology but that are not covered by the claims of the patents that we license or may own; |
• | others may be able to duplicate or utilize similar technology in a manner that infringes our patents but is undetectable, or done in a jurisdiction where we cannot secure or enforce patent rights; |
• | we or our licensors or collaborators might not have been the first to file patent applications covering certain of our or their inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; |
• | it is possible that our present or future pending patent applications (whether owned or licensed) will not lead to issued patents; |
• | issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; |
• | our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; |
• | we may develop additional proprietary technologies that are not considered patentable subject matter; |
• | the patents of others may harm our business; and |
• | we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. |
• | restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; |
• | clinical trial holds; |
• | fines, warning letters or other regulatory enforcement action; |
• | refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us; |
• | product seizure or detention, or refusal to permit the import or export of products; and |
• | injunctions or the imposition of civil or criminal penalties. |
• | the demand for our current or future product candidates, if we obtain regulatory approval; |
• | our ability to set a price that we believe is fair for our products; |
• | our ability to obtain coverage and reimbursement approval for a product; |
• | our ability to generate revenue and achieve or maintain profitability; |
• | the level of taxes that we are required to pay; and |
• | the availability of capital. |
• | the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Pursuant to an order entered by the U.S. District Court for the District of Columbia, the portion of the rule eliminating safe harbor protection for certain rebates related to the sale or purchase of a pharmaceutical product from a manufacturer to a plan sponsor under Medicare Part D has been delayed to January 1, 2023. Implementation of this change and new safe harbors for point-of-sale |
• | the federal civil and criminal false claims laws, including the federal False Claims Act, or FCA, and civil monetary penalties laws, among other things, impose criminal and civil penalties, including through civil whistleblower or qui tam |
In addition, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false of fraudulent claim for purposes of the FCA; |
• | the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; |
• | the federal physician payment transparency requirements, sometimes referred to as the “Sunshine Act” under the ACA, require manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report to the Department of Health and Human Services information related to transfers of value made to physicians (currently defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests of such physicians and their immediate family members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners; |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, (“HITECH Act”), and their implementing regulations, also impose obligations, including mandatory contractual terms, on covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates that perform certain services for them or on their behalf involving the use or disclosure of individually identifiable health information with respect to safeguarding the privacy, security and transmission of individually identifiable health information. We believe we are not a covered entity or typically a business associate for purposes of HIPAA; and |
• | analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers. Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures. |
(i) | We did not design and maintain an effective control environment commensurate with our financial reporting requirements due to an insufficient complement of personnel in the accounting and finance function. This material weakness further contributed to the following material weaknesses: |
(ii) | We did not design and maintain sufficient formal policies, procedures and controls to achieve complete and accurate financial reporting and disclosures, including controls over the preparation and review of journal entries and account reconciliations and segregation of duties. This material weakness impacts substantially all financial statement accounts. |
(iii) | We did not design and maintain effective controls over certain information technology (“ IT |
(a) | program change management controls for financial systems to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately, |
(b) | user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate Company personnel, and |
(c) | computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored. |
• | limiting funds otherwise available for financing our capital expenditures by requiring us to dedicate a portion of our cash flows from operations to the repayment of debt and the interest on this debt; |
• | making us more vulnerable to rising interest rates; and |
• | making us more vulnerable in the event of a downturn in our business. |
• | incur additional indebtedness or other contingent obligations; |
• | create liens; |
• | make investments, acquisitions, loans and advances; |
• | consolidate, merge, liquidate or dissolve; |
• | sell, transfer or otherwise dispose of our assets; |
• | pay dividends on our equity interests or make other payments in respect of capital stock; and |
• | materially alter the business we conduct. |
• | limited in how we conduct our business; |
• | unable to raise additional debt or equity financing to operate during general economic or business downturns; or |
• | unable to compete effectively or to take advantage of new business opportunities. |
• | develop and enhance our platform and technologies; |
• | continue to expand our organization; |
• | hire, train and retain employees; |
• | respond to competitive pressures or unanticipated working capital requirements; or |
• | pursue acquisition and in-licensing opportunities. |
• | Prior to KVSA’s initial public offering, the Sponsor purchased 10,000,000 founder shares, for approximately $0.002 per share. Subsequent to the share capitalization, the Sponsor transferred 40,000 founder shares to each of Jagdeep Singh, Rajiv Shah, Derek Anthony West, Mario Schlosser, Dmitri Schlosser and Molly Coye, KVSA’s independent directors. If KVSA does not consummate a business combination by the Liquidation Date, it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining |
shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In such event, the 10,000,000 founder shares owned by the Sponsor and KVSA’s independent directors would be worthless because following the redemption of the public shares, KVSA would likely have few, if any, net assets and because the Sponsor and KVSA’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of the 10,000,000 founder shares held by them if KVSA fails to complete a business combination within the required period. Additionally, in such event, the 990,000 private placement shares purchased by the Sponsor simultaneously with the consummation of the initial public offering for an aggregate purchase price of $9.9 million, will also expire worthless. Mr. Kaul, KVSA’s Chairman and Chief Executive Officer, also has an economic interest in such private placement shares and in the 9,760,000 founder shares owned by the Sponsor. The 14,493,478 shares of New Valo common stock into which the 9,760,000 founder shares held by the Sponsor will automatically convert in connection with the Merger, if unrestricted, fully vested and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such shares of New Valo common stock will be subject to certain restrictions, including those described above, KVSA believes such shares have less value. The 292,230 shares of New Valo common stock into which the 240,000 founder shares held by KVSA’s independent directors will automatically convert in connection with the Merger, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on the Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 990,000 shares of New Valo common stock representing the 990,000 private placement shares held by the Sponsor, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on the Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The Sponsor Related PIPE Investors have subscribed for $10,000,000 of the PIPE Investment, for which they will receive 1,000,000 shares of New Valo common stock, which, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. |
• | Due to the low purchase price of the founder shares, our Sponsor and its affiliates may earn a positive return on their investment, even if other stockholders experience a negative return on their investment in New Valo (i.e. our Sponsor and its affiliates may still have a positive return even if, following consummation of the Business Combination, the New Valo Class A common stock trades below $ per share, which is the approximate value that public stockholders would receive if they exercised redemption rights as described herein). |
• | Mr. Kaul, a current director of KVSA, is expected to be a director of New Valo after the consummation of the Business Combination. As such, in the future, Mr. Kaul may receive fees for his service as a director, which may consist of cash or stock-based awards, and any other remuneration that the New Valo board of directors determines to pay to its non-employee directors. |
• | The Sponsor (including its representatives and affiliates) and KVSA’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to KVSA. For example, certain officers and directors of KVSA, who may be considered an affiliate of the Sponsor, have also recently incorporated Khosla Ventures Acquisition Co. II (“ KVSB KVSC KVSD |
Mr. Singh are each a director of KVSD. The Sponsor and KVSA’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to KVSA completing its initial business combination. Moreover, certain of KVSA’s directors and officers have time and attention requirements for investment funds of which affiliates of the Sponsor are the investment managers. KVSA’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to KVSA, and the other entities to which they owe certain fiduciary or contractual duties, including KVSB, KVSC and KVSD. Accordingly, they may have had conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in KVSA’s favor and such potential business opportunities may be presented to other entities prior to their presentation to KVSA, subject to applicable fiduciary duties under the DGCL. KVSA’s Existing Organizational Documents provide that KVSA renounces its interest in any corporate opportunity offered to any director or officer of KVSA. |
• | KVSA’s existing directors and officers will be eligible for continued indemnification and continued coverage under KVSA’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement. |
• | In the event that KVSA fails to consummate a business combination within the prescribed time frame (pursuant to the Existing Organizational Documents), or upon the exercise of a redemption right in connection with the Business Combination, KVSA will be required to provide for payment of claims of creditors that were not waived that may be brought against KVSA within the ten years following such redemption. In order to protect the amounts held in KVSA’s trust account, the Sponsor has agreed that it will be liable to KVSA if and to the extent any claims by a third party (other than KVSA’s independent auditors) for services rendered or products sold to KVSA, or a prospective target business with which KVSA has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 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 fund KVSA’s working capital requirements, subject to an annual limit of $500,000, and/or 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 the indemnity of the underwriters of KVSA’s initial public offering against certain liabilities, including liabilities under the Securities Act. |
• | KVSA’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket |
• | Pursuant to the Registration Rights Agreement, the Sponsor and the Sponsor Related PIPE Investor will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Valo common stock held by such parties following the consummation of the Business Combination. |
• | its employees may experience uncertainty about their future roles, which might adversely affect New Valo’s ability to retain and hire key personnel and other employees; |
• | customers, suppliers, business partners and other parties with which New Valo maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with New Valo or fail to extend an existing relationship with New Valo; and |
• | New Valo has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination. |
• | a limited availability of market quotations for New Valo’s securities; |
• | reduced liquidity for New Valo’s securities; |
• | a determination that New Valo common stock is a “penny stock” which will require brokers trading in New Valo common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for New Valo’s securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | changes in the industries in which New Valo and its customers operate; |
• | developments involving New Valo’s competitors; |
• | changes in laws and regulations affecting its business; |
• | variations in its operating performance and the performance of its competitors in general; |
• | actual or anticipated fluctuations in New Valo’s quarterly or annual operating results; |
• | publication of research reports by securities analysts about New Valo or its competitors or its industry; |
• | the public’s reaction to New Valo’s press releases, its other public announcements and its filings with the SEC; |
• | actions by stockholders, including the sale by the Third Party PIPE Investors of any of their shares of New Valo common stock; |
• | additions and departures of key personnel; |
• | commencement of, or involvement in, litigation involving the combined company; |
• | changes in its capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of New Valo common stock available for public sale; and |
• | general economic and political conditions, such as the effects of the COVID-19 outbreak, recessions, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism. |
• | a proposal to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Merger Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, which, among other things, provides for Merger Sub to be merged with and into Valo with Valo being the surviving corporation in the merger as a wholly owned subsidiary of KVSA and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement/prospectus (the “ BCA Proposal |
• | a proposal to approve and adopt the Proposed Charter (the “ Charter Proposal |
• | on a non-binding advisory basis, separate proposals with respect to certain governance provisions in the Proposed Charter presented separately in accordance with SEC requirements (the “Advisory Charter Amendment Proposals |
• | a proposal to approve, for purposes of complying with the applicable provisions of Nasdaq Listing Rule 5635, the issuance of New Valo common stock to (a) the PIPE Investors, including the Sponsor Related PIPE Investor and the Valo PIPE Investors, pursuant to the PIPE Investment, (b) the New Valo stockholders pursuant to the Merger Agreement and (c) the Khosla entities pursuant to the Forward Purchase Agreement (the “ Stock Issuance Proposal |
• | a proposal to approve and adopt the Valo Health Holdings, Inc. 2021 Incentive Award Plan (the “ Incentive Award Plan Proposal |
• | a proposal to approve and adopt the Valo Health Holdings, Inc. 2021 Employee Stock Purchase Plan (the “ ESPP Proposal Condition Precedent Proposals |
• | a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the special meeting (the “ Adjournment Proposal |
• | You can vote by signing and returning the enclosed proxy card(s). If you vote by proxy card(s), your “proxy,” whose name is listed on the proxy card(s), will vote your shares as you instruct on the proxy card(s). If you sign and return the proxy card(s) but do not give instructions on how to vote your shares, your shares will be voted as recommended by KVSA’s board “FOR” the BCA Proposal, “FOR” the Charter Proposal, “FOR” each of the Advisory Charter Amendment Proposals, “FOR” the Stock Issuance Proposal, “FOR” the Incentive Award Plan Proposal, “FOR” the ESPP Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the special meeting, as applicable. Votes received after a matter has been voted upon at the special meeting, as applicable, will not be counted. |
• | You can attend the special meeting and vote in person. You will receive a ballot when you arrive. However, if your shares, as applicable, are held in the name of your broker, bank or another nominee, you must get a valid legal proxy from the broker, bank or other nominee. That is the only way KVSA can be sure that the broker, bank or nominee has not already voted your shares. |
• | you may send another proxy card with a later date; |
• | you may notify KVSA’s Secretary in writing before the special meeting that you have revoked your proxy; or |
• | you may attend the special meeting, as applicable, revoke your proxy, and vote online, as indicated above. |
(i) | any change in applicable laws, GAAP or any COVID-19 measures or any interpretation thereof following the date of the Merger Agreement; |
(ii) | any change in interest rates or economic, political, business or financial market conditions generally; |
(iii) | the taking or not taking of any action required by the Merger Agreement; |
(iv) | any natural disaster (including hurricanes, storms, tornados, flooding, earthquakes, volcanic eruptions or similar occurrences), pandemic, outbreak of disease or illness or public health event (including COVD-19) or change in climate; |
(v) | any acts of terrorism or war, the outbreak or escalation of hostilities, geopolitical conditions, local, national or international political conditions; |
(vi) | any failure of KVSA or the Valo Parties, as applicable, to meet any budgets, projections or forecasts (provided that this clause will not prevent a determination that any Event not otherwise excluded from this definition of Material Adverse Effect underlying such failure to meet projections or forecasts has resulted in a Material Adverse Effect); |
(vii) | any Events generally applicable to the industries or markets in which KVSA or Valo Holdco, Valo or its subsidiaries, as applicable, operate (including increases in the cost of products, supplies, materials or other goods purchased from third party suppliers); |
(viii) | the announcement of the Merger Agreement or pendency or consummation of the transactions contemplated thereby, including any termination of, reduction in or similar adverse impact (but in each case only to the extent attributable to such announcement or consummation) on relationships, contractual or otherwise, with any landlords, customers, suppliers, distributors, partners or employees of KVSA or the Valo Parties and their subsidiaries, as applicable (it being understood that this clause will be disregarded for purposes of the representation and warranties in Section 4.4 and Section 5.3 of the Merger Agreement, as applicable, and the conditions to Closing with respect thereto); or |
(ix) | any action taken by, or at the written request of, the other party. |
• | change, waive or amend the governing documents of the Valo Parties or any of their subsidiaries or form or cause to be formed any new subsidiary of the Valo Parties; |
• | make, declare, set aside, establish a record date for or pay any dividend or distribution to the equityholders of the Valo Parties or make any other distributions in respect of any of the equity interests of the Valo Parties; |
• | split, combine, reclassify, recapitalize or otherwise amend any terms of any shares or series of the Valo Parties’ or any of their subsidiaries’ capital stock or equity interests, except for any such transaction by a wholly owned subsidiary of Valo that remains a wholly owned subsidiary of Valo after consummation of such transaction; |
• | purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, membership interests or other equity interests of any Valo Party or any of their subsidiaries, except for (i) the acquisition by any Valo Party or any of their subsidiaries of any shares of capital stock, membership interests or other equity interests of the Valo Parties or their subsidiaries in connection with the forfeiture or cancellation of such interests, (ii) transactions between Valo Holdco and any wholly-owned subsidiary of Valo Holdco or between wholly owned subsidiaries of Valo Holdco; |
• | except in the ordinary course of business of the Valo Parties, enter into, amend, modify or terminate (other than expiration in accordance with its terms) any material contracts or lease; |
• | except in the ordinary course of business of the Valo Parties, sell, assign, transfer, convey, lease or otherwise dispose of, or subject to a lien (except for certain permitted liens as set forth in the Merger Agreement), any material tangible assets or properties of the Valo Parties or their subsidiaries, except for (i) dispositions of obsolete or worthless equipment (ii) transactions among Valo Holdco and its wholly owned subsidiaries or among its wholly owned subsidiaries; |
• | acquire any ownership interest in any real property; |
• | other than as required by law, contracts in effect as of the date of the Merger Agreement or existing benefit plans, (i) grant or pay any severance (other than severance in the ordinary course of business), retention, special bonus, change in control or termination or similar pay, (ii) terminate, furlough or hire any officer, employee, individual independent contractor or other service provider (other than terminations for cause), except in the ordinary course of business, (iii) terminate, adopt, enter into or materially amend any benefit plan, (iv) increase the compensation or benefits of any employee, officer, manager, director, independent contractor or other individual service provider, except annual merit or promotion-related increases for non-executive employees in the ordinary course of business consistent with past practice, (v) establish any trust or take any other action to secure the payment of any compensation payable by the Valo Parties or any of their subsidiaries, except in the ordinary course of business, or (vi) take any action to amend or waive any performance or vesting criteria or to accelerate the time of payment or vesting of any compensation or benefit payable by the Valo Parties or any of their subsidiaries, except in the ordinary course of business; |
• | acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all or a material portion of the assets of, any corporation, partnership, association, joint venture or other business organization or division thereof; |
• | (i) issue or sell any debt securities or warrants or other rights to acquire any debt securities of any Valo Party or any subsidiary of the Valo Parties or otherwise incur or assume any indebtedness in excess of $5,000,000, or (ii) guarantee any indebtedness of another person, except in the ordinary course of business consistent; |
• | except in the ordinary course of business, (i) make or change any material election in respect of material taxes, (ii) materially amend or modify any filed material tax return, (iii) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (iv) enter into any closing agreement in respect of material taxes executed on or prior to the Closing Date or enter into any tax sharing or similar agreement, (v) settle any claim or assessment in respect of material taxes, or (vi) surrender or allow to expire any right to claim a refund of material taxes; |
• | except in the ordinary course of business, take any action, where such action could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; |
• | except in the ordinary course of business, issue any equity securities of an Valo Party or securities exercisable for or convertible into equity securities of any Valo Party, other than the issuance of shares of Valo common stock or Valo Holdco common units upon the exercise or settlement of Valo Options or Valo Holdco options under the Valo Plan and applicable award agreements, or grant any additional Valo Holdco awards, Valo Awards or other equity or equity-based compensation; |
• | except in the ordinary course of business, adopt a plan of, or otherwise enter into or effect a, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Valo Parties or their subsidiaries (other than the Merger); |
• | waive, release, settle, compromise or otherwise resolve any inquiry, investigation, claim, action, litigation or other legal proceedings, except in the ordinary course of business or where such waivers, releases, settlements or compromises involve only the payment of monetary damages by the Valo Parties in an amount less than $500,000 in the aggregate; |
• | except in the ordinary course of business, grant to, or agree to grant to, any person rights to any intellectual property that is material to the Valo Parties and their subsidiaries, or dispose of, abandon or permit to lapse any rights to any intellectual property that is material to the Valo Parties and their subsidiaries except for the expiration of Valo registered intellectual property in accordance with the applicable statutory term or registration period or in the reasonable exercise of Valo’s or any of its subsidiary’s business judgment as to the costs and benefits of maintaining the item; |
• | except in the ordinary course of business, disclose any trade secret of any Valo Party or any of their subsidiaries, other than pursuant to commercially reasonable obligations to maintain the confidentiality thereof; |
• | except in the ordinary course of business, make or commit to make capital expenditures in excess of the amount disclosed in the Valo Disclosure Letter, in the aggregate; |
• | enter into any contract with any broker, finder, investment banker or other person under which such person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by the Merger Agreement; |
• | enter into or extend any collective bargaining agreement or similar labor agreement or recognize or certify any labor union, labor organization, or group of employees of any of the Valo Parties or their subsidiaries as the bargaining representative for any employees of any of the Valo Parties or their subsidiaries; |
• | terminate without replacement any license that is material to the conduct of the business of the Valo Parties and their subsidiaries, taken as a whole, except in the ordinary course of business; |
• | waive the restrictive covenant obligations of any current or former director, manager, officer, employee or other service provider of any Valo Party or any of their subsidiaries, except in the ordinary course of business; |
• | except in the ordinary course of business, (i) limit the right of any Valo Party or any of their subsidiaries to engage in any line of business or in any geographic area, to develop, market or sell products or services, or to compete with any person or (ii) grant any exclusive or similar rights to any person, in each case, except where such limitation or grant does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect the ordinary course operation of the businesses of the Valo Parties and their subsidiaries, taken as a whole; |
• | except in the ordinary course of business, terminate without replacement or amend in a manner materially detrimental to the Valo Parties and their subsidiaries, taken as a whole, any insurance policy insuring the business of any Valo Party or any of their subsidiaries; or |
• | enter into any agreement to do any of the above actions. |
• | seek any approval from KVSA’s shareholders to change, modify or amend the Trust Agreement or the governing documents of KVSA or Merger Sub, except as otherwise contemplated by the Condition Precedent Proposals; |
• | (A) make or declare any dividend or distribution to the stockholders of KVSA or make any other distributions in respect of any of KVSA’s or Merger Sub’s capital stock, share capital or equity |
interests, (B) split, combine, reclassify or otherwise amend any terms of any shares or series of KVSA’s or Merger Sub’s capital stock or equity interests or (C) purchase, repurchase, redeem or otherwise acquire any issued and outstanding share capital, outstanding shares of capital stock, share capital or membership interests, warrants or other equity interests of KVSA or Merger Sub, other than a redemption of shares of KVSA Class A common stock effected in connection with the Merger; |
• | (A) make or change any material election in respect of material taxes, (B) amend, modify or otherwise change any filed material tax return, (C) adopt or request permission of any taxing authority to change any accounting method in respect of material taxes, (D) enter into any closing agreement in respect of material taxes or enter into any tax sharing or similar agreement, (E) settle any claim or assessment in respect of material taxes, or (F) surrender or allow to expire any right to claim a refund of material taxes; |
• | take any action where such action could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code; |
• | other than as expressly required by the Sponsor Support Agreement or the Forward Purchase Agreement, enter into, renew or amend in any material respect, any transaction or contract with an affiliate of KVSA or Merger Sub (including, for the avoidance of doubt, (x) the Sponsor and (y) any person in which the Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater); |
• | incur or assume any indebtedness or guarantee any indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of KVSA or any of its subsidiaries or guaranty any debt securities of another person, other than indebtedness or borrowed money or guarantees (A) incurred in the ordinary course of business consistent with past practice and in an aggregate amount not to exceed $100,000, (B) pursuant to any Working Capital Loans, (C) incurred between KVSA and Merger Sub, or (D) in respect of any expenses incurred in support of the transactions contemplated by the Merger Agreement and the Ancillary Agreements; |
• | make any loans or advances to, or capital contributions in, any other person; |
• | waive, release, compromise, settle or satisfy any (A) pending or threatened material claim or (B) any other legal proceeding; |
• | authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution; |
• | enter into any contract with any broker, finder, investment banker or other person under which such person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the transactions contemplated by the Merger Agreement; |
• | change its methods of accounting in any material respect, other than changes that are made in accordance with GAAP standards or SEC guidance; |
• | (A) issue any securities of KVSA or securities exercisable for or convertible into securities of KVSA, other than the issuance of the Aggregate Merger Consideration and issuances pursuant to the PIPE Investment and Forward Purchase Agreement, (B) grant any options, warrants or other equity-based awards with respect to securities of KVSA not outstanding on the date of the Merger Agreement; or |
• | enter into any agreement to do any of the above actions. |
• | prior to the Closing Date, approve and adopt the Incentive Equity Plan and the ESPP; |
• | following the effective time of the Merger, file an effective registration statement on Form S-8 (or other applicable form, including Form S-3) with respect to the New Valo common stock issuable under the Incentive Award Plan and/or the ESPP, and use commercially reasonable efforts to maintain the effectiveness of such registration statement(s) for so long as awards granted thereunder remain outstanding; |
• | take certain actions so that the Trust Amount will released from the trust account and so that the trust account will terminate thereafter, in each case, pursuant to the terms and subject to the terms and conditions of the Trust Agreement; |
• | during the Interim Period, use reasonable best efforts to ensure KVSA remains listed as a public company on the Stock Exchange and, prior to the effective time of the Merger, prepare and submit a listing application, if required under the rules of Nasdaq or the New York Stock Exchange, covering the shares of KVSA Class A common stock issuable in the Merger, and obtain approval for the listing of such shares (with reasonable cooperation from the Valo Parties); |
• | during the Interim Period, not, and cause its subsidiaries not to, and instruct its and their representatives acting on its and their behalf not to, initiate any negotiations or enter into any agreements for certain alternative transactions and to terminate any such negotiations ongoing as of the date of the Merger Agreement; provided that any officer, director or affiliate of KVSA or the Sponsor will not be prohibited from taking any such actions with respect to any transaction unrelated to KVSA; |
• | subject to the terms of KVSA’s governing documents, take all such action within its power as may be necessary or appropriate such that immediately following the effective time of the Merger: |
• | the Board of Directors of New Valo shall consist of (A) Samir Kaul (as designated by KVSA), and (B) individuals to be designated by the Valo Parties, subject to requirements of the Stock Exchange, pursuant to written notice to KVSA as soon as reasonably practicable following the date of the Merger Agreement; |
• | the Board of Directors of Valo Health Holdings, Inc. shall have a majority of “independent” directors for the purposes of the Stock Exchange, each of whom shall serve in such capacity in accordance with the terms of the governing documents of New Valo following the effective time of the Merger; and |
• | the initial officers of New Valo will be as set forth in the Valo Disclosure Letter, who will serve in such capacity in accordance with the terms of the governing documents of New Valo following the effective time of the Merger; |
• | subject to confidentiality obligations that may be applicable to information furnished to KVSA by third parties and except for any information that is subject to attorney-client privilege, work-product doctrine or similar privilege, and to the extent permitted by applicable law, afford the Valo Parties and their accountants, counsel and other representatives reasonable access during the Interim Period to their properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and furnish such representatives with all financial and operating data and other information concerning the affairs of KVSA and its subsidiaries as such representatives may reasonably request; provided that KVSA will not be required to furnish any such information of, or access to, the Sponsor or any of its affiliates; |
• | after the effective time of the Merger, indemnify and hold harmless each present and former director, manager and officer of the Valo Parties and KVSA and each of their respective subsidiaries (in the case of the Valo Parties and their subsidiaries, solely to the extent acting in their capacity as such and to the extent such activities are related to the business of the Valo Parties) against any costs, expenses, judgments, fines, losses, claims, damages or liabilities incurred in connection with any legal proceeding, to the fullest extent that would have been permitted under applicable law and the applicable governing documents to indemnify such person; |
• | maintain, and cause its subsidiaries to maintain for a period of not less than six years from the effective time of the Merger (i) provisions in their respective governing documents concerning the indemnification and exoneration of the Valo Parties’, KVSA’s and their respective subsidiaries’ former and current officers, directors, employees and agents, no less favorable than as contemplated by the applicable governing documents of the Valo Parties, KVSA or their respective subsidiaries, as applicable, as of the date of the Merger Agreement, (ii) a “tail” policy providing directors’ and officers’ liability insurance coverage for the benefit of those persons who are currently covered by KVSA’s directors’ and officers’ liability insurance policies on terms (with respect to coverage and amount) that are substantially the same as, and no less favorable in the aggregate than, the terms of such current insurance coverage, except that in no event will KVSA be required to pay an annual premium for such insurance in excess of 350% of the most recent premium paid by KVSA for such insurance policy and (iii) (x) a “tail” policy purchased by Valo at or prior to the Closing providing directors’ and officers’ liability insurance coverage for the benefit of those persons who are currently covered by Valo’s directors’ and officers’ liability insurance policies on terms (with respect to coverage and amount) that are substantially the same as, and no less favorable in the aggregate than, the terms of such current insurance coverage, except that in no event will Valo be required to pay an annual premium for such insurance in excess of 350% of the most recent premium paid by Valo for such insurance policy, or (y) directors’ and officers’ liability insurance for the benefit of those persons who are currently covered by comparable insurance policies of Valo; |
• | during the Interim Period, use reasonable best efforts to keep current and timely file all reports required to be filed or furnished with the SEC and otherwise comply in all material respects with its reporting obligations under applicable law; |
• | except as otherwise approved in writing by any Valo Party (which approval shall not be unreasonably withheld, conditioned or delayed), not permit any amendment or modification (other than any changes to a Subscription Agreement that are solely ministerial and non-economic de minimis changes) to be made to, any waiver (in whole or in part) of, or provide consent to modify (including consent to terminate), any provision or remedy under, or any replacements of, the Forward Purchase Agreement or any of the Subscription Agreements, in each case, other than any assignment or transfer contemplated therein or expressly permitted thereby (without any further amendment, modification or waiver to such assignment or transfer provision) and so long as the initial party to the Forward Purchase Agreement or such Subscription Agreement remains bound by its obligations with respect thereto in the event that the transferee or assignee, as applicable, does not comply with its obligations to consummate the purchase of shares of New Valo common stock contemplated thereby; |
• | use its reasonable best efforts to take, or to cause to be taken, all actions required, necessary or that it deems to be proper or advisable to consummate the transactions contemplated by the Subscription Agreements and the Forward Purchase Agreement on the terms described therein, including using its reasonable best efforts to enforce its rights under (a) the Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) KVSA the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms and (b) the Forward Purchase Agreement to cause the Sponsor to pay to (or as directed by) KVSA the applicable purchase price under the Forward Purchase Agreement in accordance with its terms; and |
• | promptly notify Valo of any (a) requested amendments to the Subscription Agreements or the Forward Purchase Agreement by any counterparty, (b) breach or default to the knowledge of KVSA by any counterparty to a Subscription Agreement or the Forward Purchase Agreement, (c) written communication received by KVSA with respect to any actual or threatened lapse, termination, breach, withdrawal or repudiation of a Subscription Agreement or the Forward Purchase Agreement, or (d) expectation that KVSA will not receive any amount of the applicable purchase price under any Subscription Agreement or the Forward Purchase Agreement in accordance with their terms. |
• | subject to confidentiality obligations that may be applicable to information furnished to the Valo Parties or any of their subsidiaries by third parties and except for any information that is subject to attorney-client privilege, work-product doctrine or similar privilege, and to the extent permitted by applicable law, afford KVSA and its accountants, counsel and other representatives reasonable access during the Interim Period to their properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and furnish such representatives with all financial and operating data and other information concerning the affairs of the Valo Parties and their subsidiaries as such representatives may reasonably request; |
• | act in good faith to deliver to KVSA, as soon as reasonably practicable following the date of the Merger Agreement, (i) audited financial statements (together with the auditor’s reports thereon) of Valo Holdco and its subsidiaries as of and for the year ended December 31, 2020 and any pro forma financial statements that are required to be included in the proxy statement/registration statement, (ii) unaudited financial statements of Valo Holdco and its subsidiaries as of and for the three-month period ended March 31, 2021, (iii) if the Closing has not occurred prior to August 5, 2021, unaudited financial statements of Valo Holdco and its subsidiaries as of and for the three- and six-month period ended June 30, 2021, and (iv) if the Closing has not occurred prior to November 5, 2021, unaudited financial statements of Valo Holdco and its subsidiaries as of and for the three- and nine-month period ended September 30, 2021, in each case, which comply with the applicable accounting requirements and with the applicable rules and regulation of the SEC, the Exchange Act and the Securities Act; |
• | use reasonable best efforts to (i) assist KVSA in the preparation of any other financial information or statements that are required to be included in the proxy statement/registration statement and any other filings to be made by KVSA with the SEC in connection with the transactions contemplated by the Merger Agreement or any Ancillary Agreement and (ii) obtain the consents of its auditors with respect to thereto as may be required by applicable law or requested by the SEC; |
• | terminate or settle all Affiliate Agreements set forth in the Valo Disclosure Letter without further liability to KVSA, the Valo Parties or any of their subsidiaries; |
• | take all actions as are reasonably necessary to consummate the Pre-Closing Restructuring no later than one (1) business day prior to the Closing Date. See “— Pre-Closing Restructuring |
• | during the Interim Period, not, and to direct their its representatives to not, directly or indirectly, (i) initiate any negotiations with any person with respect to certain alternative transactions, (ii) enter into any agreement with respect to any such alternative transactions or proposed transactions, (iii) grant any waiver, amendment or release under any confidentiality agreement or the anti-takeover laws of any state, or (iv) otherwise knowingly facilitate any inquiries, proposals, discussions, or negotiations or any effort or attempt by any person to make a proposal with respect to any such alternative transaction, and immediately following the execution of the Merger Agreement to, and to cause their representatives to, terminate any such negotiations ongoing as of the date of the Merger Agreement. |
• | Each of KVSA and the Valo Parties will (and, to the extent required, will cause its affiliates to) comply promptly, but in no event later than ten (10) business days after the date of the Merger Agreement, with the notification and reporting requirements of the HSR Act. |
• | Each of KVSA and the Valo Parties will substantially comply with any information or document requests with respect to antitrust matters as contemplated by the Merger Agreement. |
• | Each of KVSA and the Valo Parties will (and, to the extent required, will cause its affiliates to) (x) request early termination of any waiting period or periods under the HSR Act and exercise its reasonable best efforts to (i) obtain termination or expiration of the waiting period under the HSR Act and (ii) prevent the entry, in any legal proceeding brought by an antitrust authority or any other person, of any governmental order which would prohibit, make unlawful or delay the consummation of the transactions contemplated by the Merger Agreement. |
• | KVSA and the Valo Parties will jointly prepare and KVSA will file with the SEC the proxy statement/registration statement in connection with the registration under the Securities Act of the shares of New Valo common stock that constitute the Aggregate Merger Consideration to be received by the equityholders of Valo. |
• | Each of KVSA and the Valo Parties will use its reasonable best efforts to cause the proxy statement/registration statement to comply with the rules and regulations promulgated by the SEC; to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and to keep the Registration Statement effective as long as is necessary to consummate the transactions contemplated by the Merger Agreement; to provide such information as may be reasonably necessary, advisable or requested in connection with the proxy statement/registration statement, any current report on Form 8-K or any other statement, filing notice or application in connection with the transactions contemplated by the Merger Agreement and otherwise ensure that the information contained therein contains no untrue statement of material fact or material omission. |
• | KVSA will, (i) as promptly as practicable after the Registration Statement is declared effective under the Securities Act, (A) disseminate the proxy statement to stockholders of KVSA, (B) solely with respect to the Condition Precedent Proposals, give notice, convene and hold a meeting of its stockholders, in accordance with its governing documents and applicable law (including Nasdaq Listing Rule 5620(b)), for a date no later than 30 business days following the date the Registration Statement is declared effective, and (C) solicit proxies from the holders of shares of KVSA common stock to vote in favor of each of the Condition Precedent Proposals, and (ii) provide its stockholders with the opportunity to elect to effect a redemption. |
• | KVSA will, through unanimous approval of its Board of Directors, recommend to its stockholders that they vote in favor of the Condition Precedent Proposals and include such recommendation in the proxy statement. The Board of Directors of KVSA will not withdraw, amend, qualify or modify such recommendation; provided that it may (subject to compliance with certain procedures set forth in the Merger Agreement), prior to obtaining the requisite stockholder approval, modify such recommendation (a “ Modification in Recommendation |
• | Valo Holdco will (i) obtain and deliver to KVSA the consent of the requisite members of Valo Holdco (the “ Member Approvals Written Consent |
• | KVSA and the Valo Parties will each, and will each cause their respective subsidiaries to use reasonable best efforts to obtain all material consents and approvals of third parties (including any |
governmental authority) that any of KVSA, the Valo Parties, or their respective affiliates are required to obtain in order to consummate the Merger and take such other action as soon as practicable as may be reasonably necessary in order to consummate the transactions contemplated by the Merger Agreement. |
• | Each of the Valo Parties and KVSA will, and will each cause their respective subsidiaries and its and their representatives to, prior to the Closing, reasonably cooperate in a timely manner in connection with any financing arrangement the parties mutually agree to seek in connection with the transactions contemplated by the Merger Agreement. |
• | Each of the Valo Parties and KVSA will, prior to the effective time of the Merger, take all reasonable steps as may be required (to the extent permitted under applicable law) to cause any dispositions of shares of Valo common stock or acquisitions of shares of KVSA common stock (including, in each case, securities deliverable upon exercise, vesting or settlement of any derivative securities) resulting from the transactions contemplated by the Merger Agreement by each individual who is or may become subject to the reporting requirements of Section 16(a) of the Exchange Act in connection with the transactions contemplated thereby to be exempt under Rule 16B-3 promulgated under the Exchange Act. |
• | KVSA will use its reasonable best efforts to, and will instruct its financial advisors to, keep the Valo Parties and their financial advisors reasonably informed with respect to the PIPE Investment and consider in good faith any feedback from the Valo Parties or their financial advisors with respect to such matters during the period commencing on the date of announcement of the Merger Agreement or the transactions contemplated thereby until the Closing Date. |
• | During the Interim Period, each of KVSA, on the one hand, and the Valo Parties, on the other hand, will promptly notify and keep each other reasonably informed of the status of any litigation brought or, to their knowledge, threatened in writing against KVSA, the Valo Parties, or any of their subsidiaries or controlled affiliates or any of their respective officers, directors, employees or stockholders by any stockholders or equityholders relating to the Merger Agreement or the transactions contemplated thereby, and will provide the other with the opportunity to participate in the defense of such litigation and will not settle any such litigation without the prior written consent of the other (such consent not to be unreasonably withheld, conditioned or delayed). |
• | Promptly after signing the Merger Agreement and in any event within one (1) business day, KVSA will deliver to the Valo Parties a stockholder written consent signed by KVSA, as sole stockholder of Merger Sub, approving the Merger Agreement and the documents and transactions contemplated thereby. Promptly after signing the Merger Agreement and in any even within 25 days, the Valo Parties will deliver to KVSA a stockholder written consent signed by Valo Holdco, as sole stockholder of Valo, or evidence of approval by Valo Holdco, as sole stockholder of Valo, at a meeting of the stockholders of Valo, in each case, approving the Merger Agreement and the documents and transactions contemplated thereby. |
• | the approval of the Condition Precedent Proposals (other than with respect to the Incentive Award Plan Proposal and the ESPP Proposal) by KVSA’s stockholders will have been obtained; |
• | the Charter Proposal will have been approved at the Acquiror Stockholders’ Meeting by the affirmative vote of the holders of a majority of the shares of KVSA Class A common stock then outstanding and entitled to vote thereon at the Acquiror Stockholders’ Meeting, voting separately as a single series (the “ Class A Common Stock Approval |
• | the Member Approvals shall have been obtained; |
• | the proxy statement/registration statement will have become effective under the Securities Act and no stop order suspending the effectiveness of the proxy statement/registration statement will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC and not withdrawn; |
• | all required filings under the HSR Act will have been completed, and the waiting period or periods (or any extension thereof) under the HSR Act will have expired or been terminated; |
• | there will not be in force any order, judgment, injunction, decree, writ, stipulation, determination or award (entered by or with any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal (a “Governmental Order”), in each case, to the extent such governmental authority has jurisdiction over the parties to the Merger Agreement and the transactions contemplated thereby), statute, rule or regulation enjoining or prohibiting the consummation of the Merger; |
• | KVSA will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) after giving effect to the transactions contemplated by the Merger Agreement, including the exercise of any stockholder redemptions in accordance with KVSA’s governing documents, the PIPE Investment and the Forward Purchase Agreement; |
• | the Pre-Closing Restructuring shall have been completed no later than one (1) business day prior to the Closing Date; and |
• | the shares of New Valo common stock to be issued in connection with the Merger will have been approved for listing on Nasdaq or the New York Stock Exchange, as applicable, and, immediately following the effective time of the Merger, New Valo will satisfy any applicable initial and continuing listing requirements of Nasdaq or the New York Stock Exchange, as applicable, and KVSA will not have received any notice of non-compliance therewith that has not been cured or would not be cured at or immediately following the effective time of the Merger. |
• | certain of the representations and warranties of the Valo Parties pertaining to the capitalization of the Valo Parties will be true and correct in all respects, other than for de minimis de minimis |
• | each of the Valo Fundamental Representations (other than those portions of the capitalization representations referenced above) will be true and correct in all material respects, in each case as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date, except for changes after the date of the Merger Agreement which are contemplated or expressly permitted by the Merger Agreement or the Ancillary Agreements; |
• | each of the remaining representations and warranties of the Valo Parties contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a Valo Material Adverse Effect; |
• | each of the covenants of the Valo Parties to be performed as of or prior to the Closing will have been performed in all material respects; and |
• | the Valo Parties will have delivered, or caused to be delivered, to KVSA, certain ancillary documents required for Closing set forth in the Merger Agreement, including certain third party consents described in the Valo Disclosure Letter. |
• | certain of the representations and warranties of KVSA pertaining to its capitalization will be true and correct in all respects, other than for de minimis de minimis |
• | certain of the representations and warranties of KVSA pertaining to company organization, due authorization, no conflict with governing documents, capitalization (other than those portions of the capitalization representations referenced above) and brokers’ fees will be true and correct in all material respects, in each case as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date; |
• | each of the other representations and warranties of KVSA contained in the Merger Agreement (disregarding any qualifications and exceptions contained therein relating to materiality, material |
adverse effect or any similar qualification or exception) will be true and correct as of the Closing Date, except with respect to such representations and warranties that are made as of an earlier date, which representations and warranties will be true and correct in all material respects at and as of such date, except for, in each case, inaccuracies or omissions that would not, individually or in the aggregate, reasonably be expected to have a KVSA Material Adverse Effect; |
• | each of the covenants of KVSA to be performed as of or prior to the Closing will have been performed in all material respects; |
• | at the Closing, there will be no facts, events or circumstances that would prevent the Board of Directors of New Valo from being comprised of the individuals determined pursuant to the terms of the Merger Agreement; |
• | KVSA will have delivered, or caused to be delivered, to Valo, certain ancillary documents required for Closing set forth in the Merger Agreement; |
• | the Anti-Dilution Waiver (as defined below) will be in full force and effect; |
• | the Minimum Cash Condition. For more information, see “— Minimum Cash Condition |
• | the requisite KVSA stockholders shall have approved the adoption of the Incentive Equity Plan and the ESPP; and |
• | the KVSA board of directors shall have appointed the New Valo directors designated by the Valo Parties pursuant to the terms of the Merger Agreement effective as of the Effective Time. |
• | by mutual written consent of the Valo Parties and KVSA; |
• | by written notice by either the Valo Parties or KVSA if any Governmental Order has become final and nonappealable which has the effect of making consummation of the Merger illegal or otherwise preventing or prohibiting the Merger; |
• | by written notice by either the Valo Parties or KVSA if the KVSA Stockholder Approval will not have been obtained by reason of the failure to obtain the required vote at a meeting of KVSA’s stockholders duly convened therefor or at any adjournment or postponement thereof; |
• | by written notice to the Valo Parties from KVSA in the event of certain uncured breaches on the part of the Valo Parties or if the Closing has not occurred on or before December 9, 2021 (the “ Agreement End Date |
• | by written notice by KVSA, if the Member Approvals shall not have been obtained and delivered to KVSA within five (5) business days after the Registration Statement has been declared effective by the SEC and delivered or made available to stockholders; |
• | by written notice to KVSA from the Valo Parties in the event of certain uncured breaches on the part of KVSA or Merger Sub or if the Closing has not occurred on or before the Agreement End Date, unless the Valo Parties breach of the Merger Agreement is the proximate cause of the failure to close by the Agreement End Date; or |
• | by written notice to KVSA from the Valo Parties if there has been a Modification in Recommendation. |
• | Upon Trading Triggers: First Price Vesting Shares 30-trading day period (the “First Price Vesting Second Price Vesting Shares 30-trading day period (the “Second Price Vesting Third Price Vesting Shares 30-trading day period (the “Third Price Vesting |
• | Upon Qualifying Strategic Transactions: Strategic Transaction |
• | Upon Other Strategic Transactions: |
• | if the First Price Vesting has not occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of New Valo common stock having the right to exchange their shares of New Valo common stock for cash, securities or other property at an effective price greater than $20.00 per share and less than or equal to $30.00 per share (each as may be adjusted), a number of First Price Vesting Shares will vest in an amount equal to (a) the First Price Vesting Shares multiplied by (b) (i) one minus (ii) the quotient of (A) (I) $30.00 minus (II) the effective price per share of New Valo common stock in the Strategic Transaction divided by (B) $10.00 (each as may be adjusted); |
• | if the Second Price Vesting has occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of New Valo common stock having the right to exchange their shares of New Valo common stock for cash, securities or other property at an effective price greater than $30.00 per share and less than or equal to $40.00 per share (each as may be adjusted), then, (i) the First Price Vesting will automatically be deemed satisfied (to the extent it had not already been satisfied) and (ii) a number of Second Price Vesting Shares will vest in an amount equal to (a) the Second Price Vesting Shares multiplied by (b) (i) one minus (ii) the quotient of (A) (I) $40.00 minus the effective price per share of New Valo common stock in the Strategic Transaction divided by (B) $10.00 (each as may be adjusted); |
• | if the Third Price Vesting has not occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of New Valo common stock having the right to exchange their shares of New Valo common stock for cash, securities or other property at an effective price greater than $40.00 per share and less than or equal to $50.00 per share (each as may be adjusted), then, (i) the First Price Vesting and Second Price Vesting will automatically be deemed satisfied (to the extent either had not already been satisfied) and (ii) a number of Third Price Vesting Shares will vest in an amount equal to (a) the Third Price Vesting Shares multiplied by (b) (i) one minus (ii) the quotient of (A) (I) $50.00 minus (II) the effective price per share of New Valo common stock in the Strategic Transaction divided by (B) $10.00 (each as may be adjusted); and |
• | if the Third Price Vesting has not occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of New Valo common stock having the right to exchange their shares of New Valo common stock for cash, securities or other property at an effective price greater than $50.00 per share (as may be adjusted), then each of the First Price Vesting, Second Price Vesting and Third Price Vesting shall automatically be deemed satisfied (to the extent any had not already been satisfied). |
• | KVSA would acquire all of the outstanding equity interests in Valo Holdco (including equity awards and other exercisable and convertible securities) by reverse triangular merger (or similar structure mutually agreed by the parties); |
• | the parties agreed to a pre-transaction equity value for Valo of $2.25 billion (including vested and unvested equity awards and other exercisable or convertible securities of Valo Holdco), with no adjustment for Valo’s cash, debt, working capital, non-cash assets or non-debt liabilities; |
• | total merger consideration would consist of 225,000,000 newly-issued shares of New Valo common stock, reduced for the shares underlying outstanding equity awards of KVSA that would be issued in exchange for all outstanding equity awards of Valo Holdco, valued at $10.00 per share; |
• | KVSA would adopt (i) an equity incentive plan for incentive equity issuances after closing with an unallocated reserve equal to 10% of New Valo’s post-closing outstanding capital stock on an as-converted basis and a 4% “evergreen” provision and (ii) a post-closing employee share purchase plan with an unallocated reserve equal to 2% of New Valo’s post-closing outstanding capital stock on an as-converted basis and a 1% “evergreen” provision; |
• | KVSA would raise no less than $150 million through the PIPE Investment, which would be committed upon signing of the definitive agreement in respect of the transaction; |
• | (i) Mr. Kaul would serve as a director on the New Valo board of directors as designated by the Sponsor, (ii) Valo Holdco would designate the remaining directors, including independent directors as are required to comply with stock exchange and other regulatory requirements and (iii) the New Valo management team would consist of the current Valo Holdco management team; |
• | the definitive transaction agreement would include a customary closing condition (benefiting Valo Holdco only) that KVSA have at least $450 million in cash and cash equivalents at closing after giving effect to all stockholder redemptions and to funds raised from the PIPE Investment and pursuant to the Forward Purchase Agreement (if any); |
• | on closing, all of the outstanding shares of KVSA Class B common stock and KVSA Class K common stock would convert into a fixed number of shares of New Valo common stock, with the shares received on conversion of the KVSA Class K common stock remaining subject to the vesting conditions of the KVSA Class K common stock provided for under the Existing Charter, and the holders of such shares would waive any anti-dilution adjustment to the conversion ratio of such shares provided for under the Existing Charter; and |
• | each of KVSA and Valo Holdco would be subject to an exclusivity period from the date of the LOI until the earlier of (i) 5:00 p.m. Pacific Time, on April 30, 2021 (which would be automatically extended to May 15, 2021 if as of April 30, 2021 the parties are continuing in good faith to negotiate the definitive agreements with respect to the proposed transaction) and (ii) the date, if any, on which KVSA and Valo Holdco enter into a definitive agreement with respect to the proposed transaction. During the exclusivity period, each party agreed that it would not, directly or indirectly, through any representative or otherwise, solicit offers from, negotiate with, encourage, discuss, accept, or consider any proposal of any other person relating to a business combination transaction and Valo Holdco would not furnish any material non-public information concerning Valo Holdco or its assets or business, or afford access to such information, to any other person for the purpose of assisting with or facilitating any such alternative transaction. |
• | addressing a large market that creates the opportunity for attractive long-term growth prospects; |
• | protected by proprietary technology advantages; |
• | that has achieved sufficient technology and business maturity while maintaining significant topline growth potential; |
• | with a creative and ambitious management team with a proven track record of success; |
• | pursuing significant technology innovation that has the potential to have a significant positive impact on the world; |
• | with rapid innovation cycles; |
• | that maintains strong and defensible competitive advantages, which KVSA believes over time will lead to durable and profitable growth; and |
• | where KVSA can materially impact the value of the company in partnership with management. |
• | Promising pipeline of product candidates in-licensed clinical stage assets addressing widespread medical conditions and 14 preclinical programs across cardiovascular metabolic renal, oncology, and neurodegenerative diseases, the KVSA Board believes that the Valo Parties are advancing a promising product pipeline. |
• | Scalable, differentiated technology platform. |
• | Extensive, high-quality patient data sources provide significant competitive advantages. |
utilizing its Opal computational platform, which is designed to use human data and artificial intelligence as the foundation for drug discovery and development. To that end, the Valo Parties have access to over 125 million patient-years of de-identified patient data generated by third parties and exclusive access to one of the largest prospective studies spanning pan-omics, imaging and medical records. In addition, the Valo Parties generate their own data through every experiment that they run. The KVSA Board believes that the scale and quality of the Valo Parties’ sourced data lake, together with its internally-generated proprietary datasets, provides significant advantages over competitors focused on traditional drug development processes. |
• | Experienced, proven and committed management team. co-founded more than 20 companies across the life sciences and sustainability sectors. Dr. Berry has assembled a team of experts in technology development and therapeutic research and development. The KVSA Board also believes that the willingness of the Valo Parties’ management team to roll over all of their equity stake and agree to prohibitions on the transfer of their New Valo equity for up to 180 days following the consummation of the Business Combination reflected management’s belief in and commitment to New Valo’s continued growth following the consummation of the Business Combination. |
• | Backed by strong investor syndicate. |
• | Financial analysis conducted by KVSA. Summary of KVSA Financial Analysis |
• | Other alternatives. |
• | Negotiated transaction. |
• | Valo’s business risks. COVID-19 pandemic and related macroeconomic uncertainty. The KVSA Board considered that the failure of any of these activities to be completed successfully may decrease the actual benefits of the Business Combination and that KVSA stockholders may not fully realize these benefits to the extent that they expected to |
retain the public shares following the completion of the Business Combination. For an additional description of these risks, please see “ Risk Factors |
• | Liquidation of KVSA. |
• | Exclusivity. |
• | Stockholder vote. |
• | Redemption risk. |
• | Post-business combination corporate governance. The Merger Agreement Management of New Valo Following the Business Combination |
• | Limitations of review. |
• | No underwritten offering. |
• | Closing conditions. |
• | KVSA stockholders holding a minority position in New Valo. |
• | No survival of remedies for breach of representations, warranties or covenants of the Valo Parties |
Merger Agreement. As a result, KVSA stockholders could be adversely affected by, among other things, a decrease in the financial performance or worsening of financial condition of the Valo Parties prior to the Closing, whether determined before or after the Closing, without any ability to reduce the number of shares of New Valo common stock to be issued in the Business Combination or recover for the amount of any damages. The KVSA Board determined that this structure was appropriate and customary in light of the fact that it is consistent with market practice for similar transactions and the Valo Parties would not have proceeded with the Business Combination otherwise. |
• | Litigation. |
• | Fees and expenses. |
• | Other risks. “Risk Factors |
• | the Valo Parties will be able to continuously execute on their business plan, both in terms of existing operations and opportunities for future development; |
• | KVSA’s available resources and existing cash and cash equivalents will be sufficient to fund New Valo’s operating expenses and capital expenditure requirements into 2024, allowing for the achievement of meaningful catalysts and value creation as a result of the closing of the Business Combination; |
• | the Valo Parties’ most advanced asset, OPL-0301, will enter Phase 2 clinical trials in 2021; |
• | with respect to the market opportunity and indications for OPL-0301: |
• | as a therapeutic candidate for heart failure, OPL-0301 targets the approximately 60% of post myocardinal infraction patients who have ejection fraction of approximately 20% to 50%; |
• | in relation to OPL-0301 as a therapeutic candidate for kidney injury, the incidence of acute kidney injury of 577 per 100,000 people based on a prospective cohort study in the United Kingdom 1 ; |
• | with respect to the market opportunity for OPL-0401 as a therapeutic candidate for the treatment of diabetic retinopathy: |
• | OPL-0401 will focus on moderate and severe non-proliferative patients, which represent approximately 40% 2 of the estimated 8.6 million diabetic retinopathy patients in the United States, Europe and Japan3 ; |
• | with respect to the market opportunity and indications for OPL-0101 as a therapeutic candidate for the treatment of solid tumors: |
• | approximately 200,000 patients in the United States 4 , approximately 175,000 patients in Europe (UK, Germany, France, Italy, Spain)5,6 and approximately 100,000 patients in Japan7 are diagnosed annually with non-small cell lung cancer; |
• | among the approximately 60,000 patients in the United States 8 , 45,000 patients in Europe9 and 20,000 patients in Japan10 with renal cell cancer, approximately 25% of patients progress to stage IV8 ; and |
• | there is an opportunity for OPL-0101 to focus on BRAF Wild Type advanced melanoma, which represents approximately 40-60% of advanced melanoma cases 11 . |
• | Schrodinger |
• | Recursion Pharmaceuticals |
• | Finch Therapeutics |
Company |
Stage of Lead Comparable Program |
Market Cap ($MM) |
Enterprise Value ($MM) |
|||||||||
Schrodinger 1 |
Preclinical | $ | 5,380 | $ | 4,780 | |||||||
Recursion Pharmaceuticals 2 |
Phase 1 | $ | 5,075 | $ | 5,940 | |||||||
Finch Therapeutics |
Phase 2 | $ | 761 | $ | 663 | |||||||
Mean |
$ | 3,739 | $ | 3,794 | ||||||||
Median |
$ | 5,075 | $ | 4,780 |
(1) | Excludes collaborative programs, which KVSA management believes are not comparable to the Valo in-licensing model. |
(2) | Information as of April 20, 2021, the date of closing of Recursion’s initial public offering. |
• | Prior to KVSA’s initial public offering, the Sponsor purchased 10,000,000 founder shares, for approximately $0.002 per share. Subsequent to the share capitalization, the Sponsor transferred 40,000 founder shares to each of Jagdeep Singh, Rajiv Shah, Derek Anthony West, Mario Schlosser, Dmitri Schlosser and Molly Coye, KVSA’s independent directors. If KVSA does not consummate a business combination by the Liquidation Date, it would cease all operations except for the purpose of winding up, redeeming all of the outstanding public shares for cash and, subject to the approval of its remaining shareholders and its board of directors, dissolving and liquidating, subject in each case to its obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In such event, the 10,000,000 founder shares owned by the Sponsor and KVSA’s independent directors would be worthless because following the redemption of the public shares, KVSA would likely have few, if any, net assets and because the Sponsor and KVSA’s directors and officers have agreed to waive their respective rights to liquidating distributions from the trust account in respect of the 10,000,000 founder shares held by them if KVSA fails to complete a business combination within the required period. Additionally, in such event, the 990,000 private placement shares purchased by the Sponsor simultaneously with the consummation of the initial public offering for an aggregate purchase price of $9.9 million, will also expire worthless. Mr. Kaul, KVSA’s Chairman and Chief Executive Officer, also has an economic interest in such private placement shares and in the 9,760,000 founder shares owned by the Sponsor. The 14,493,478 shares of New Valo common stock into which the 9,760,000 founder shares held by the Sponsor will automatically convert in connection with the Merger, if unrestricted, fully vested and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on Nasdaq on |
, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. However, given that such shares of New Valo common stock will be subject to certain restrictions, including those described above, KVSA believes such shares have less value. The 292,230 shares of New Valo common stock into which the 240,000 founder shares held by KVSA’s independent directors will automatically convert in connection with the Merger, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on the Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The 990,000 shares of New Valo common stock representing the 990,000 private placement shares held by the Sponsor, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on the Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. The Sponsor Related PIPE Investors have subscribed for $10,000,000 of the PIPE Investment, for which they will receive 1,000,000 shares of New Valo common stock, which, if unrestricted and freely tradable, would have had an aggregate market value of approximately $ million based upon the closing price of $ per share on Nasdaq on , 2021, the most recent practicable date prior to the date of this proxy statement/prospectus. |
• | Due to the low purchase price of the founder shares, our Sponsor and its affiliates may earn a positive return on their investment, even if other stockholders experience a negative return on their investment in New Valo (i.e. our Sponsor and its affiliates may still have a positive return even if, following consummation of the Business Combination, the New Valo Class A common stock trades below $ per share, which is the approximate value that public stockholders would receive if they exercised redemption rights as described herein). |
• | Mr. Kaul, a current director of KVSA, is expected to be a director of New Valo after the consummation of the Business Combination. As such, in the future, Mr. Kaul may receive fees for his service as a director, which may consist of cash or stock-based awards, and any other remuneration that the New Valo board of directors determines to pay to its non-employee directors. |
• | The Sponsor (including its representatives and affiliates) and KVSA’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to KVSA. For example, certain officers and directors of KVSA, who may be considered an affiliate of the Sponsor, have also recently incorporated Khosla Ventures Acquisition Co. II (“ KVSB KVSC KVSD |
• | KVSA’s existing directors and officers will be eligible for continued indemnification and continued coverage under KVSA’s directors’ and officers’ liability insurance after the Merger and pursuant to the Merger Agreement. |
• | In the event that KVSA fails to consummate a business combination within the prescribed time frame (pursuant to the Existing Organizational Documents), or upon the exercise of a redemption right in connection with the Business Combination, KVSA will be required to provide for payment of claims of creditors that were not waived that may be brought against KVSA within the ten years following such redemption. In order to protect the amounts held in KVSA’s trust account, the Sponsor has agreed that it will be liable to KVSA if and to the extent any claims by a third party (other than KVSA’s independent auditors) for services rendered or products sold to KVSA, or a prospective target business with which KVSA has discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 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 fund KVSA’s working capital requirements, subject to an annual limit of $500,000, and/or 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 the indemnity of the underwriters of KVSA’s initial public offering against certain liabilities, including liabilities under the Securities Act. |
• | KVSA’s officers and directors and their affiliates are entitled to reimbursement of out-of-pocket |
• | Pursuant to the Registration Rights Agreement, the Sponsor and the Sponsor Related PIPE Investor will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of New Valo common stock held by such parties following the consummation of the Business Combination. |
• | change the name of the new public entity to “Valo Health Holdings, Inc.” as opposed to “Khosla Ventures Acquisition Co.”; |
• | increase KVSA’s capitalization so that it will have authorized shares of a single series of common stock and authorized shares of preferred stock, as opposed to KVSA having 200,000,000 authorized shares of KVSA Class A Common Stock, 30,000,000 authorized shares of KVSA Class B common stock, 30,000,000 authorized shares of KVSA Class K common stock and 1,000,000 authorized shares of preferred stock; |
• | convert the 5,000,000 shares of KVSA Class K common stock into 8,697,479 shares of New Valo common stock immediately prior to the Closing; |
• | require that the removal of any director be only for cause and by the affirmative vote of the holders of not less than two-thirds of New Valo’s then-outstanding shares of capital stock entitled to vote generally in the election of directors; |
• | require that the affirmative vote of the holders of a majority of the outstanding shares of capital stock entitled to vote thereon and the holders of a majority of the outstanding shares of each class entitled to vote thereon as a class be required to amend, alter, change or repeal certain provisions of the Proposed Charter governing the election of the board of directors; |
• | delete the various provisions applicable only to special purpose acquisition companies; |
• | provide that New Valo will not be governed by Section 203 of the DGCL which prohibits Delaware corporations from entering into business combinations with interested stockholders, defined as those that hold more than 15% or more of the corporation’s voting stock, absent the receipt of specific approvals specified in Section 203 of the DGCL; and |
• | remove the provision setting the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain stockholder actions. |
• | the name of the new public entity is desirable to reflect the Business Combination with Valo and the combined business going forward; |
• | the greater number of authorized of shares of capital stock is desirable for KVSA to have sufficient shares to issue to the holders of Valo common stock in the Business Combination and have enough additional authorized shares for financing its business, for acquiring other businesses, for forming strategic partnerships and alliances and for stock dividends and stock splits and of equity grants currently outstanding or made under the Equity Incentive Plan (assuming it is approved at the Special Meeting); |
• | the single series of common stock is desirable because all shares of KVSA Class B common stock and KVSA Class K common stock will be reclassified into New Valo common stock upon consummation of the Business Combination, and because it will allow New Valo to have a streamlined capital structure; |
• | it is desirable to increase the voting threshold required to remove a director from the New Valo Board and amend certain provisions of the Proposed Charter, and to remove the provision allowing stockholder action by written consent, in order to help facilitate corporate governance stability by requiring broad stockholder consensus to effect corporate governance changes, protect minority stockholder interests and enable the New Valo Board to preserve and maximize value for all stockholders in the context of an opportunistic and unsolicited takeover attempt; |
• | it is desirable to delete the provisions that relate to the operation of KVSA as a blank check company on the consummation of its initial business combination because they would not be applicable after the Business Combination (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time); |
• | Section 203 of the DGCL prevents Delaware corporations, under certain circumstances, from engaging in a “business combination” with: |
• | it is desirable to remove the provision that sets the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain stockholder actions because the Board believes that it is better for this provision to be included in KVSA’s bylaws. |
• | the name of Valo Health Holdings, Inc. is desirable to reflect the Business Combination with Valo and the combined business going forward; |
• | the greater number of authorized of shares of capital stock is desirable for New Valo to have sufficient shares to issue to the holders of Valo common stock in the Business Combination and have enough additional authorized shares for financing its business, for acquiring other businesses, for forming strategic partnerships and alliances and for stock dividends and stock splits and of equity grants currently outstanding or made under the Equity Incentive Plan (assuming it is approved at the Special Meeting); |
• | the single series of common stock is desirable because all shares of KVSA Class B common stock and Class K common stock will be exchanged for Class A Common Stock upon consummation of the Business Combination, and because it will allow New Valo to have a streamlined capital structure; |
• | it is desirable to increase the voting threshold required to remove a director from the New Valo Board and amend certain provisions of the Proposed Charter, and to remove the provision allowing stockholder action by written consent, in order to help facilitate corporate governance stability by requiring broad stockholder consensus to effect corporate governance changes, protect minority stockholder interests and enable the New Valo Board to preserve and maximize value for all stockholders in the context of an opportunistic and unsolicited takeover attempt; |
• | it is desirable to delete the provisions that relate to the operation of KVSA as a blank check company prior to the consummation of its initial business combination because they would not be applicable after the Business Combination (such as the obligation to dissolve and liquidate if a business combination is not consummated within a certain period of time); |
• | it is desirable to include a provision that New Valo opts out of Section 203 of the DGCL because it allows New Valo to establish its own rules governing business combinations with interested parties, as Section 203 of the DGCL prevents Delaware corporations, under certain circumstances, from engaging in a “business combination” with: |
• | it is desirable to remove the provision that sets the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain stockholder actions because the Board believes that it is better for this provision to be included in New Valo’s bylaws. |
• | financial institutions or financial services entities; |
• | broker-dealers; |
• | governments or agencies or instrumentalities thereof; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | expatriates or former long-term residents of the United States; |
• | individual retirement or other tax-deferred accounts; |
• | persons owning (actually or constructively) 5% or more of our voting shares; |
• | insurance companies; |
• | dealers or traders subject to a mark-to-market |
• | persons holding KVSA Class A common stock as part of a “straddle,” constructive sale, hedge, conversion or other integrated transaction or similar transaction; |
• | persons owning (actually or constructively) any Valo securities; |
• | U.S. holders (as defined below) whose functional currency is not the U.S. dollar; |
• | partnerships or other pass-through entities or arrangements for U.S. federal income tax purposes and any beneficial owners of such entities; |
• | controlled foreign corporations; |
• | passive foreign investment companies; |
• | a person required to accelerate the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement; |
• | the Sponsor and persons related to the Sponsor; |
• | persons holding founder shares or forward-purchase shares; and |
• | tax-exempt entities. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more “United States persons” (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under the Treasury regulations to be treated as a United States person. |
• | a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax as expatriates); |
• | a corporation (or other entity taxable as a corporation) that is not organized in or under the laws of the United States, any state thereof or the District of Columbia; or |
• | an estate or trust that is not a U.S. holder; |
• | the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or |
• | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held the KVSA Class A common stock, and, in the case where shares of KVSA Class A common stock are regularly traded on an established securities market, the Non-U.S. holder has owned, directly or constructively, more than 5% of the KVSA Class A common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. holder’s holding period for the shares of KVSA Class A common stock. There can be no assurance that the KVSA Class A common stock will be treated as regularly traded on an established securities market for this purpose. |
• | each outstanding Series A preferred unit, Series B preferred unit and common unit of Valo Holdco will be converted into 1.219 (when rounded to the nearest one-thousandth) shares of common stock of Valo; |
• | each outstanding warrant for common units of Valo Holdco will be converted into 1.218 (when rounded to the nearest one-thousandth) shares of common stock of Valo; |
• | each outstanding incentive unit of Valo Holdco that has a strike price of zero (fully vested) will be converted into 1.219 (when rounded to the nearest one-thousandth) shares of common stock of Valo; |
• | outstanding incentive units of Valo Holdco with a weighted average strike price of $0.92 per unit will be converted into shares of common stock of Valo at a weighted average conversion ratio of 1-for-1.127 one-thousandth), to be issued as restricted stock with the same vesting schedule as that of the incentive units; and |
• | each outstanding option to purchase common units of Valo Holdco will be converted into an outstanding option to purchase shares of common stock of Valo adjusted on a 1-for-1.219 one-thousandth) basis, with a corresponding adjustment to the exercise price. |
• | the Pre-Closing Restructuring between Valo Holdco and Valo with Valo surviving the merger; |
• | the merger of Merger Sub with and into Valo, with Valo surviving the merger as a wholly-owned subsidiary of KVSA; |
• | the issuance and sale of 20,086,250 shares of New Valo common stock at $10.00 per share in the PIPE Investment; and |
• | the conversion of all outstanding Valo common stock into New Valo common stock as well as shares underlying Valo Options that will roll over into the post-combination company totaling 8,902,431 shares. |
• | Valo stockholders will have the largest voting interest in the post-combination company; |
• | The board of directors of the post-combination company will have eight members, and Valo will have the ability to nominate the majority of the members of the board of directors; |
• | Valo senior management will comprise the majority of the senior management of the post-combination company; |
• | Valo will comprise the ongoing operations of the post-combination company; |
• | The post-combination company will assume the Valo name; and |
• | The intended strategy of the post-combination entity will continue Valo’s current strategy of pursuing drug discovery and development using human-centric data and artificial intelligence. |
• | Assuming No Redemption |
• | Assuming Maximum Redemption |
Equity value of Valo |
$ | 2,250,000,000 | ||
Aggregate option exercise price |
48,689,048 | |||
|
|
|||
$ | 2,298,689,048 | |||
|
|
|||
Value per share (1) $10.00 |
$ | 10.00 | ||
|
|
|||
Total Share Consideration |
229,868,905 | |||
|
|
(1) | Share Consideration is calculated using a $10.00 reference price. Actual total share consideration will be dependent on the value of KVSA Class A common stock at Closing. |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||||
Shares |
% |
Shares |
% |
|||||||||||||
Valo existing shareholders (1)(2) |
220,966,474 | 75.9 | % | 220,966,474 | 78.4 | % | ||||||||||
KVSA public shareholders |
34,500,000 | 11.8 | % | 22,413,226 | 8.0 | % | ||||||||||
KVSA sponsor and related parties founder shares (3) |
15,775,708 | 5.4 | % | 15,775,708 | 5.6 | % | ||||||||||
Valo PIPE Investors |
8,650,000 | 3.0 | % | 8,650,000 | 3.1 | % | ||||||||||
Sponsor Related PIPE Investor |
1,000,000 | 0.3 | % | 1,000,000 | 0.3 | % | ||||||||||
Third Party PIPE Investors |
10,436,250 | 3.6 | % | 10,436,250 | 3.7 | % | ||||||||||
Forward purchase agreement (sponsor) |
— | 0.0 | % | 2,500,000 | 0.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Closing shares |
291,328,432 | 100.0 | % | 281,741,658 | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
(1) | Amount excludes 8,902,431 shares of New Valo common stock that may be issued upon the exercise of outstanding options issued in connection with the Business Combination. |
(2) | Amount excludes 30,023,086 shares of New Valo common stock available for option issuance under the Valo Health Holdings, Inc. 2021 Incentive Award Plan and 6,004,617 shares of New Valo common stock available for issuance under the Valo Health Holdings, Inc. 2021 Employee Stock Purchase Plan. |
(3) | Amount includes 990,000 shares of New Valo common stock purchased by KVSA in a private placement, 6,088,229 shares of New Valo common stock issuable upon conversion of 5,000,000 shares of KVSA Class B common stock and 8,697,479 shares of New Valo common stock issuable upon conversion of 5,000,000 shares of KVSA Class K common stock that vest only to the extent certain triggering events occur. |
Historical |
Scenario 1 Assuming No Redemptions |
Scenario 2 Assuming Maximum Redemptions |
||||||||||||||||||||||||||
KVSA |
Valo Health, LLC |
Pro Forma Adjustments |
Pro Forma Combined |
Additional Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 787 | $ | 237,498 | $ | 345,005 | (A) | $ | 752,209 | $ | 25,000 | (C) | $ | 656,341 | ||||||||||||||
200,863 | (B) | (120,868 | ) | (K) | ||||||||||||||||||||||||
(12,075 | ) | (D) | ||||||||||||||||||||||||||
(19,869 | ) | (E) | ||||||||||||||||||||||||||
Prepaid expenses and other current assets |
664 | 4,250 | 4,914 | 4,914 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total current assets |
1,451 | 241,748 | 513,924 | 757,123 | (95,868 | ) | 661,255 | |||||||||||||||||||||
Property and equipment, net |
— | 12,442 | 12,442 | 12,442 | ||||||||||||||||||||||||
Goodwill |
— | 4,743 | 4,743 | 4,743 | ||||||||||||||||||||||||
Intangible assets, net |
— | 13,498 | 13,498 | 13,498 | ||||||||||||||||||||||||
Deferred offering costs |
— | 4,832 | (4,832 | ) | (E) | — | — | |||||||||||||||||||||
Marketable securities held in Trust Account |
345,005 | — | (345,005 | ) | (A) | — | — | |||||||||||||||||||||
Other long-term assets |
523 | 2,414 | (75 | ) | (E) | 2,862 | 2,862 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
$ | 346,979 | $ | 279,677 | $ | 164,012 | $ | 790,668 | $ | (95,868 | ) | $ | 694,800 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Liabilities, Preferred Units, Common Stock Subject to Possible Redemption and Stockholders’/Members’ Equity (Deficit) |
||||||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||||||
Accounts payable |
$ | 130 | $ | 3,552 | $ | (768 | ) | (E) | $ | 2,914 | $ | 2,914 | ||||||||||||||||
Franchise tax payable |
100 | — | 100 | 100 | ||||||||||||||||||||||||
Accrued expenses |
1,772 | 16,827 | (2,519 | ) | (E) | 14,308 | 14,308 | |||||||||||||||||||||
(1,772 | ) | (E) | ||||||||||||||||||||||||||
Due to related party |
1 | — | 1 | 1 | ||||||||||||||||||||||||
Current portion of long-term debt |
— | 958 | 958 | 958 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total current liabilities |
2,003 | 21,337 | (5,059 | ) | 18,281 | — | 18,281 | |||||||||||||||||||||
Deferred underwriting fees payable |
12,075 | — | (12,075 | ) | (D) | — | — | |||||||||||||||||||||
Long-term debt, net of discount and current portion |
— | 21,603 | 21,603 | 21,603 | ||||||||||||||||||||||||
Class K Founder Shares derivative liabilities |
2,300 | — | 54,700 | (J) | 57,000 | 57,000 | ||||||||||||||||||||||
Other long-term liabilities |
— | 4,804 | |
4,804 |
|
4,804 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities |
16,378 | 47,744 | 37,566 | 101,688 | — | 101,688 | ||||||||||||||||||||||
Commitments and contingencies |
||||||||||||||||||||||||||||
Preferred units (Series A and B), 76,794,171 units authorized; 76,794,171 units issued and outstanding |
— | 403,150 | (403,150 | ) | (G) | — | — | |||||||||||||||||||||
KVSA Class A common stock subject to possible redemption, 34,500,000 shares at $10.00 redemption value |
345,000 | — | (345,000 | ) | (F) | — | — | |||||||||||||||||||||
Stockholders’/Members’ equity (deficit): |
||||||||||||||||||||||||||||
KVSA preferred stock; $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding |
— | — | — | — | ||||||||||||||||||||||||
KVSA Class A common stock; $0.0001 par value; 200,000,000 shares authorized; 990,000 shares issued and outstanding (excluding 34,500,000 shares subject to possible redemption) |
— | — | 2 | (B) | 28 | (1 | ) | (K) | 27 | |||||||||||||||||||
3 | (F) | |||||||||||||||||||||||||||
9 | (G) | |||||||||||||||||||||||||||
13 | (H) | |||||||||||||||||||||||||||
1 | (I) | |||||||||||||||||||||||||||
KVSA Class B common stock; $0.0001 par value; 30,000,000 shares authorized; 5,000,000 shares issued and outstanding |
1 | — | (1 | ) | (I) | — | — | |||||||||||||||||||||
Valo common units, 80,850,000 units authorized; 79,686,267 units issued and outstanding |
— | 5,940 | (5,940 | ) | (H) | — | — | |||||||||||||||||||||
Valo incentive units, 26,928,033 units authorized; 26,609,455 units issued and outstanding |
— | 297 | (297 | ) | (H) | — | — |
Historical |
Scenario 1 Assuming No Redemptions |
Scenario 2 Assuming Maximum Redemptions |
||||||||||||||||||||||||||
KVSA |
Valo Health, LLC |
Pro Forma Adjustments |
Pro Forma Combined |
Additional Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||
Additional paid-in capital |
— | 15,008 | 200,861 | (B) | 881,414 | 25,000 | (C) | 785,547 | ||||||||||||||||||||
(19,717 | ) | (E) | (120,867 | ) | (K) | |||||||||||||||||||||||
344,997 | (F) | |||||||||||||||||||||||||||
403,141 | (G) | |||||||||||||||||||||||||||
6,224 | (H) | |||||||||||||||||||||||||||
(54,700 | ) | (J) | ||||||||||||||||||||||||||
(14,400 | ) | (L) | ||||||||||||||||||||||||||
Accumulated stockholders’/members’ equity (deficit) |
(14,400 | ) | (192,462 | ) | 14,400 | (L) | (192,462 | ) | (192,462 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total stockholders’/members’ equity (deficit) |
(14,399 | ) | (171,217 | ) | 874,596 | 688,980 | (95,868 | ) | 593,112 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities, preferred units, common stock subject to possible redemption and stockholders’/members’ equity (deficit) |
$ | 346,979 | $ | 279,677 | $ | 164,012 | $ | 790,668 | $ | (95,868 | ) | $ | 694,800 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
January 15, 2021 (inception) through June 30, 2021 |
Six Months Ended June 30, 2021 |
Scenario 1 Assuming No Redemptions |
Scenario 2 Assuming Maximum Redemptions |
|||||||||||||||||||||||
Historical |
Historical |
|||||||||||||||||||||||||
KVSA |
Valo Health, LLC |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||
Research and development |
$ | — | $ | 60,638 | $ | 60,638 | $ | 60,638 | ||||||||||||||||||
General and administrative (1) |
2,369 | 19,549 | 21,918 | 21,918 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating expenses |
2,369 | 80,187 | 82,556 | 82,556 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss from operations |
(2,369 | ) | (80,187 | ) | (82,556 | ) | (82,556 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other income (expense): |
||||||||||||||||||||||||||
Financing expenses on derivative classified instrument |
(12,138 | ) | — | (12,138 | ) | (12,138 | ) | |||||||||||||||||||
Gain on marketable securities (net), dividends and interest, held in Trust Account |
5 | — | (5 | ) | (AA) | — | — | |||||||||||||||||||
Change in fair value of derivative liabilities |
9,850 | — | 9,850 | 9,850 | ||||||||||||||||||||||
Interest expense |
— | (1,799 | ) | (1,799 | ) | (1,799 | ) | |||||||||||||||||||
Other income (expense), net |
— | 19 | 19 | 19 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total other expense, net |
(2,283 | ) | (1,780 | ) | (5 | ) | (4,068 | ) | (4,068 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss before income taxes |
(4,652 | ) | (81,967 | ) | (5 | ) | (86,624 | ) | (86,624 | ) | ||||||||||||||||
Income tax expense |
— | (14 | ) | (14 | ) | (14 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss and comprehensive loss |
$ | (4,652 | ) | $ | (81,981 | ) | $ | (5 | ) | $ | (86,638 | ) | $ | (86,638 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss per unit attributable to common unit holders, basic and diluted |
$ | (1.02 | ) | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Weighted average common units outstanding, basic and diluted |
80,418,143 | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Basic and diluted net loss per share, Class A common stock subject to possible redemption |
$ | (0.13 | ) | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted |
23,900,602 | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Basic and diluted net loss per share, Class A non-redeemable common stock |
$ | (0.26 | ) | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Weighted average shares outstanding of Class A non-redeemable common stock, basic and diluted |
685,843 | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Basic and diluted net loss per common stock, Class B |
$ | (0.27 | ) | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Weighted average shares outstanding of Class B non-redeemable common stock, basic and diluted |
5,000,000 | |||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
Net loss per share, basic and diluted |
$ | (0.32 | ) | $ | (0.34 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||
Weighted average common shares outstanding, basic and diluted |
267,494,506 | 257,907,732 | ||||||||||||||||||||||||
|
|
|
|
(1) | Includes formation costs of $30,000 and franchise tax expense of $100,000. |
Year Ended December 31, 2020 |
Scenario 1 Assuming No Redemptions |
Scenario 2 Assuming Maximum Redemptions |
||||||||||||||||||||||||||||||
Historical (1) |
Historical (2) |
Transaction Accounting Adjustments (3) |
Pro Forma Valo Health, LLC |
|||||||||||||||||||||||||||||
Valo Health, LLC |
Forma |
Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||
Research and development |
$ | 43,296 | $ | 2,114 | $ | 932 | $ | 46,342 | $ | 46,342 | $ | 46,342 | ||||||||||||||||||||
General and administrative |
30,556 | 312 | 30,868 | 30,868 | 30,868 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total operating expenses |
73,852 | 2,426 | 932 | 77,210 | 77,210 | 77,210 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss from operations |
(73,852 | ) | (2,426 | ) | (932 | ) | (77,210 | ) | (77,210 | ) | (77,210 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Other income (expense): |
||||||||||||||||||||||||||||||||
Interest expense |
(2,636 | ) | — | (2,636 | ) | (2,636 | ) | (2,636 | ) | |||||||||||||||||||||||
Other income (expense), net |
282 | — | 282 | 282 | 282 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total other expense |
(2,354 | ) | — | — | (2,354 | ) | (2,354 | ) | (2,354 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Loss before income taxes |
(76,206 | ) | (2,426 | ) | (932 | ) | (79,564 | ) | (79,564 | ) | (79,564 | ) | ||||||||||||||||||||
Income tax expense |
(78 | ) | — | (78 | ) | (78 | ) | (78 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss and comprehensive loss |
$ | (76,284 | ) | $ | (2,426 | ) | $ | (932 | ) | $ | (79,642 | ) | $ | (79,642 | ) | $ | (79,642 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net loss per unit attributable to common unit holders, basic and diluted |
$ | (0.96 | ) | |||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Weighted average common units outstanding, basic and diluted |
79,673,199 | |||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted |
$ | (0.30 | ) | $ | (0.31 | ) | ||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Weighted average common shares outstanding, basic and diluted |
267,494,506 | 257,907,732 | ||||||||||||||||||||||||||||||
|
|
|
|
(1) |
For the year ended December 31, 2020 as reported in Valo Health LLC’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus. |
(2) |
Abbreviated statement of revenue and expenses for the acquired Forma assets for the period from January 1, 2020 through March 16, 2020, the date of acquisition. |
(3) |
Represents adjustments to the statements of operations to eliminate historical depreciation and amortization expense related to the property and equipment acquired and to record depreciation and amortization expense for the year ended December 31, 2020 related to the property and equipment and acquired identifiable intangible assets calculated as if the Forma Acquisition had occurred on January 1, 2020 as follows (in thousands): |
Elimination of Forma’s historical amortization and depreciation |
$ | (261 | ) | |
Amortization and depreciation of acquired Forma’s intangible and tangible assets |
1,193 | |||
|
|
|||
$ | 932 | |||
|
|
• | KVSA’s audited financial statements as of June 30, 2021 and for the period from January 15, 2021 (inception) through June 30, 2021; |
• | Valo Health, LLC’s (a) unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2021 and (b) audited consolidated financial statements for the year ended December 31, 2020; |
• | The abbreviated statement of revenue and expenses for the acquired Forma assets for the period from January 1, 2020 through March 16, 2020, the date of acquisition. The abbreviated statement of revenue and expenses include direct research and development expenses as well as direct general and administrative expenses related to the assets acquired. The abbreviated statement of revenue and expenses do not include revenue as there was no revenue related to the assets acquired, nor does it include selling, distribution or marketing expenses related to the assets purchased, as the assets acquired consisted of research and development assets. |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||
(in thousands) |
||||||||
Advisory, legal, and other fees direct and incremental to the transaction expected to be incurred and adjusted against additional paid in capital |
$ | 7,217 | $ | 7,217 | ||||
PIPE Underwriters’ Fees adjusted against additional paid in capital |
7,593 | 7,593 | ||||||
Valo Health, LLC transaction costs included in accrued expenses and deferred offering costs |
2,519 | 2,519 | ||||||
Valo Health LLC transaction costs included in accounts payable and deferred offering costs |
768 | 768 | ||||||
KVSA transaction costs included in accrued expenses and deferred offering costs |
75 | 75 | ||||||
KVSA transaction costs included in accrued expenses and general and administrative expenses |
1,697 | 1,697 | ||||||
|
|
|
|
|||||
Total Transaction Costs to be paid |
19,869 | 19,869 | ||||||
Total transaction costs paid and included in deferred offering costs |
1,545 | 1,545 | ||||||
Total transaction costs paid and included in general and administrative expenses |
157 | 157 | ||||||
|
|
|
|
|||||
Total Transaction Costs |
$ | 21,571 | $ | 21,571 | ||||
|
|
|
|
Six Months Ended June 30, 2021 |
Year Ended December 31, 2020 |
|||||||||||||||
Assuming No Redemptions |
Assuming Maximum Redemptions |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||
(in thousands except share and per share amounts) |
||||||||||||||||
Numerator: |
||||||||||||||||
Pro forma net loss attributable to common stockholders |
$ | (86,638 | ) | $ | (86,638 | ) | $ | (79,642 | ) | $ | (79,642 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Denominator: |
||||||||||||||||
Weighted average shares outstanding, basic and diluted |
267,494,506 | 257,907,732 | 267,494,506 | 257,907,732 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share attributable to common stockholders, basic and diluted |
$ | (0.32 | ) | $ | (0.34 | ) | $ | (0.30 | ) | $ | (0.31 | ) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding, basic and diluted |
||||||||||||||||
Valo existing shareholders (1) |
205,830,027 | 205,830,027 | 205,830,027 | 205,830,027 | ||||||||||||
KVSA public shareholders |
34,500,000 | 22,413,226 | 34,500,000 | 22,413,226 | ||||||||||||
KVSA sponsor and related parties founder shares (2) |
7,078,229 | 7,078,229 | 7,078,229 | 7,078,229 | ||||||||||||
Valo PIPE Investors |
8,650,000 | 8,650,000 | 8,650,000 | 8,650,000 | ||||||||||||
Sponsor Related PIPE Investor |
1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||||
Third Party PIPE Investors |
10,436,250 | 10,436,250 | 10,436,250 | 10,436,250 | ||||||||||||
Forward purchase agreement (sponsor) |
— | 2,500,000 | — | 2,500,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Pro forma weighted average shares outstanding, basic and diluted |
267,494,506 | 257,907,732 | 267,494,506 | 257,907,732 | ||||||||||||
|
|
|
|
|
|
|
|
(1) | Excludes Valo Health, LLC unvested incentive units that will convert into 15,136,447 shares of unvested restricted stock. |
(2) | Excludes 8,697,479 Sponsor Earnout Shares issued to the Sponsor that vest contingent upon the achievement of certain share price thresholds. |
Six Months Ended June 30, 2021 |
Year Ended December 31, 2020 |
|||||||||||||||
Assuming No Redemptions |
Assuming Maximum Redemptions |
Assuming No Redemptions |
Assuming Maximum Redemptions |
|||||||||||||
Options outstanding |
8,902,431 |
8,902,431 |
8,902,431 |
8,902,431 |
||||||||||||
Unvested restricted stock |
15,136,447 |
15,136,447 |
15,136,447 |
15,136,447 |
||||||||||||
Unvested restricted stock related to sponsor earnout shares |
8,697,479 | 8,697,479 | 8,697,479 | 8,697,479 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total potentially dilutive common share equivalents |
32,736,357 |
32,736,357 |
32,736,357 |
32,736,357 |
||||||||||||
|
|
|
|
|
|
|
|
Name |
Age |
Position | ||||
Founder |
||||||
Vinod Khosla |
66 | Founder | ||||
Officers |
||||||
Samir Kaul |
47 | Chief Executive Officer, Director | ||||
Peter Buckland |
51 | Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary | ||||
Directors |
||||||
Jagdeep Singh |
54 | Director | ||||
Rajiv J. Shah |
48 | Director | ||||
Derek Anthony West |
55 | Director | ||||
Molly Coye |
74 | Director | ||||
Mario Schlosser |
42 | Director | ||||
Dmitri Shklovsky |
45 | Director |
• | may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in KVSA Class B common stock resulted in the issuance of KVSA Class A common stock on a greater than one-to-one basis |
• | may subordinate the rights of holders of KVSA Class A common stock if shares of preferred stock are issued with rights senior to those afforded KVSA Class A common stock; |
• | could cause a change in control if a substantial number of shares of KVSA Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
• | may adversely affect prevailing market prices for KVSA Class A common stock. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
• | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; |
• | our inability to pay dividends on shares of KVSA 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 shares of KVSA common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions and fund other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements and execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
• | Substantially improve the current 5% biopharmaceutical success rate; |
• | Make better medicines with enhanced features against known drug targets; |
• | Make medicines against targets currently understood as “undruggable”; |
• | Create a fully-integrated process to align decision-making; |
• | Use analytics to identify and mitigate risks earlier; |
• | Enable better targeted portfolio design; |
• | Reduce dependency on surrogate systems (e.g., cells, mice etc.), with a focus on human data in the discovery and development process; and |
• | Convert serial processes to parallel approaches. |
• | High density longitudinal data from over 7 million patients; |
• | Over 22 trillion multi-omic data points; |
• | Over 5 billion total drug-like compounds; and |
• | Over 2 billion computation model predictions. |
• | Independently re-discovering clinically validated targets; |
• | Repeatedly and reproducibly identifying causal biomarkers in two months; |
• | Completing new target identification in days-to-weeks |
• | Achieving new molecule identification, validation and transition to hit-to-leads weeks-to-months, |
• | Optimizing leads in months versus the current two-year average standard; and |
• | Third-party blinded tests of our toxicity prediction capabilities, for example, were performed on 154 compounds blinded to us, and showed a greater than 90% accuracy for off-target binding, giving increased confidence preclinically for one of the major causes of clinical-stage failures. |
• | Optimizing the portfolio across our three lead product candidates and 14 active discovery-stage programs with high impact potential; |
• | Expecting several near-term clinical development milestones in a variety of therapeutic areas, including a target IND submission in the first half of 2022 for OPL-0401 and a target IND submission in the second half of 2022 for OPL-0101, depending on FDA interactions in the coming quarters; and |
• | Aiming to create a repeatable flow of two to three preclinical drug candidates annually, starting in 2022. |
Program |
Proposed Indication | |
Cardiovascular |
||
OPAL-0022 | Atherosclerosis | |
OPAL-0004 | Atherosclerosis; Glioblastoma | |
OPAL-0018 | Atherosclerosis | |
OPAL-0003 | Heart failure; Glioblastoma | |
Oncology |
||
OPAL-0021 | Heme-Targeting | |
OPAL-0024 | Defined Tumors | |
OPAL-0001 | Medulla/Glioblastoma Brain Tumors; Breast Cancer | |
OPAL-0014 | Pancreatic Ductal Adenocarcinoma (PDAC), Targeted Defined Tumors | |
OPAL-0023 | Defined Tumors; Immune Modulation | |
OPAL-0012 | Defined Tumors | |
OPAL-0016 | Induced Neuropathy and Cardiomyopathy | |
Neurodegenerative |
||
OPAL-0002 | Neurodegenerative | |
OPAL-0006 | Neurodegenerative; Oncology (metastatic) |
• | electronic medical data; |
• | whole genome data; |
• | DNA methylation data; |
• | RNA sequencing data; |
• | proteomics data; |
• | metabolomics data; |
• | lipidomics data; and |
• | imaging data. |
• | Over 22.5 trillion whole genome sequencing data points; |
• | Over 210 million mRNA sequencing data points; |
• | Over 21 million metabolomic and/or proteomic data points; |
• | Over 320 thousand blood sample aliquots; and |
• | Over 13 thousand clinical images paired with related scoring data. |
CUMULATIVE PROGRESS |
2019 |
2020 |
2021 |
|||||||||
Targets evaluated |
16 | 94 | 202 | |||||||||
Discovery programs 1 |
0 | 5 | 14 | |||||||||
IND-enabling programs |
0 | 0 | 1 | 2 | ||||||||
Clinical programs |
0 | 0 | 2 | 3 | ||||||||
Patents and applications 4 |
5 | >300 | >600 |
EC50 (nM) activation |
IC50 (nM) desensitization |
Activation: desensitization ratio |
||||||||||
OPL-0301 |
26 |
2980 |
114 |
|||||||||
siponimod |
<1 | <0.2 | <0.2 |
|||||||||
ponesimod |
2.4 | 18 | 7.7 |
|||||||||
ozanimod |
27 | 170 | 6.4 |
• | Fasudil (Asahi Kasei) — intravitreal therapeutic marketed for ischemic stroke, cerebral vasospasm and other indications (China, Japan, and South Korea) |
• | Ripasudil (Kowa) — ophthalmologic solution marketed for the treatment of glaucoma (Japan) |
• | Netarsudil mesylate (Aerie) — ophthalmologic solution marketed for the treatment of glaucoma (US) |
• | PD1: Key examples include Keytruda and Opdivo (2020 worldwide sales were ~$14.4B and ~$7B for Keytruda and Opdivo respectively) |
• | CTLA4: Key examples include Yervoy (2020 worldwide sales ~$1.7B) |
• | IL-2: Key examples include Synthorx and Pandion (Sanofi acquired Synthorx for ~$2.5B, and Merck acquired Pandion for ~$1.9B) |
• | Bispecific Antibodies: Key examples include Agenus (BMS licensed Agenus’ anti-TIGIT bispecific antibody program for $200M upfront and up to ~$1.4B in potential milestones) |
• | HLA-G: Key examples include Tizona (Gilead acquired a 49.9% equity interest in Tizona for a $300 million investment and an exclusive option to acquire the remainder of Tizona for up to $1.25B in potential option fees and future milestone payments) |
• | David Berry (Chief Executive Officer and founder, and previous founder of over 20 startup biotech and sustainability companies); |
• | Graeme Bell (Chief Financial Officer and previously chief financial officer at three other biotech companies, as well as chief financial officer of US operations and global head of investor relations at Merck); |
• | Brandon Allgood (Chief Artificial Intelligence Officer, formerly Chief Technology Officer at Numerate); |
• | Nish Lathia (Chief Product Officer, formerly General Manager for multiple world-wide businesses at Amazon); |
• | Dan Troy (Chief Legal Officer and General Counsel, previously GC at GlaxoSmithKline and Chief Counsel at FDA); |
• | Moni Miyashita (Chief Strategy Officer and previously Vice President of Corporate Development at IBM, as well as partner at Innosight); |
• | Cissy Young (Executive Vice President, Chief People Officer and previously Managing Director in the Global Biotech & Pharmaceuticals Practice, the Board & CEO Practice, and the Diversity & Inclusion Practice at Russell Reynolds Associates, Inc.); and |
• | Brett Blackman (Chief Innovation Officer, and previously Chief Scientific Officer for several Flagship Pioneering bioplatform companies). |
• | >100 drug approvals |
• | >1,000 regulatory filings |
• | >1,000 clinical trials and |
• | >28,000 built and deployed artificial intelligence models |
• | Technology-Enabled Drug Discovery Companies |
• | Scalable Platform or Pooled Asset Companies |
• | Traditional Biopharmaceutical Companies |
• | Large Technology Companies |
• | We in-license our OPL-0301 portfolio from Sanofi, which includes three patent families. The first patent family includes a granted U.S. patent, over 50 foreign patents granted in such counties as |
Australia, Canada, China, Germany, France, Israel, Italy, Japan, Mexico, Singapore, and United Kingdom, and patent applications pending in Brazil and Thailand, with claims directed to the composition of matter including our lead product candidate, where the granted patents and pending patent applications, if issued, are expected to expire in 2031, excluding any patent term adjustment or patent term extension. The second patent family includes a granted U.S. patent and a granted European patent (validated in Germany, France and United Kingdom) with claims directed to composition of matter of analogs, where the granted patents are expected to expire in 2028 and 2029, excluding any patent term adjustment or patent term extension. The third patent family includes a granted US patent, over 8 foreign patents allowed or granted in various countries such as Australia, Europe, China, Japan, Mexico, New Zealand and Russia, and over 8 patent applications pending in various countries such as Brazil, Canada, Korea, and Singapore, with claims directed to a method of treating acute kidney injury, where the granted patents and pending patent applications, if granted, are expected to expire in 2034, excluding any patent term adjustment or patent term extension. |
• | We in-license our OPL-0401 portfolio from Sanofi, which includes six patent families. The first patent family includes a granted US patent and over 35 foreign patents granted in various countries such as Germany, France, United Kingdom, Italy, Australia, Canada, China, and Japan, and has claims directed to the composition of matter of isoquinolone derivatives including our lead product candidate, where the foreign patents are expected to expire in 2026, excluding any patent term adjustment or patent term extension. The second patent family includes 5 patents granted in Germany, France, Hungary, Italy and the US, and has claims directed to the process for preparing isoquinolone derivatives, where the granted patents are expected to expire in 2028, excluding any patent term adjustment or patent term extension. The third patent family includes 4 patents granted in Germany, France, United Kingdom and the US, and has claims directed to the composition of matter of isoquinolone derivatives, where the granted patents are expected to expire in 2029, excluding any patent term adjustment or patent term extension. Two patent families include 2 granted US patents and over 70 foreign patents granted in various jurisdictions such as Austria, Belgium, Germany, Denmark, Spain, France, United Kingdom, Italy, Australia, Canada, China, Japan, Singapore, and Vietnam, and have claims directed to the crystalline forms of isoquinolone derivatives, where the granted patents are expected to expire in 2032, excluding any patent term adjustment or patent term extension. The sixth patent family includes a granted US patent, and over 15 foreign patents granted in various jurisdictions such as Germany, France, Italy, Australia, Canada, China, and Japan and has claims directed to the process of preparing isoquinolone derivatives, where the granted patents are expected to expire in 2032, excluding any patent term adjustment or patent term extension. |
• | In regards to our OPAL-0018 program portfolio, we own two patent families. The first patent family, which includes two granted U.S. patents with claims directed to composition of matter and methods of treating cancer, and one pending US patent application, where the granted patents and pending patent application, if granted, are expected to expire in 2027, excluding any patent term adjustment or patent term extension. The one patent with claims directed to methods of treating cancer is co-owned with the H. Lee Moffitt Cancer Center and Research Institute, Inc. The second patent family we own includes one pending US patent application and over 15 patent applications pending in various countries such as Australia, Canada, China, Israel, Japan, and Mexico, with claims directed to the composition of matter of isoindolines, where the granted patent and pending patent applications, if granted, are expected to expire in 2039, excluding any patent term adjustment or patent term extension. |
• | We have yet to file patent applications directed to our all of our preclinical programs in this field. |
• | In regards to our OPL-0101 program, we own two pending PCT applications with claims directed to a composition of matter of bispecific fusion proteins and methods of treating an autoimmune or inflammatory disease, where patent applications claiming the benefit of these PCT applications, if |
issued, are expected to expire in 2040, excluding any patent term adjustment or patent term extension. We also in-license from Washington University two patent families. The first patent family includes a granted European patent, a granted US patent, and a pending US patent application with claims directed to a composition of matter of chimeric peptides, where the granted patents and pending US patent application are expected to expire in 2035, excluding any patent term adjustment or patent term extension. The second patent family that we in-license from Washington University includes a pending US patent application and over 5 foreign patent applications pending in various countries such as Australia, Canada, Europe, China and Japan with claims directed to the composition of matter of chimeric peptides, where the patent applications, if granted, are expected to expire in 2037, excluding any patent term adjustment or patent term extension. |
• | In regards to our OPAL-0021 program portfolio, we own four patent families and co-own five patent families with Genentech. The first patent family we own includes a granted US and a granted EP patent (validated in six countries such as Germany, France, and United Kingdom), with claims directed to the composition of matter of derivatives of squaric acid, where the granted patents are expected to expire in between 2024 and 2027, excluding any patent term adjustment or patent term extension. The second patent family we own includes a granted US patent, a pending US patent application, foreign patents granted in Mexico and Russia, and foreign patent applications pending in India and Japan, with claims directed to the composition of matter of piperidine derivatives, where the granted patents and pending patent application, if granted, are expected to expire in 2031, excluding any patent term adjustment or patent term extension. The third patent family we own includes a granted US patent, foreign patents granted in Europe, Mexico, and Russia, and a pending patent application in Brazil, with claims directed to the composition of matter of guanidine compounds, where the granted patents and pending patent application, if granted, are expected to expire in 2031, excluding any patent term adjustment or patent term extension. The fourth patent family we own includes a granted US patent, a granted patent in Russia, and a pending application in Russia, with claims directed to the composition of matter of inhibitor compounds, where the granted patents and pending patent application, if granted, are expected to expire in 2031, excluding any patent term adjustment or patent term extension. We co-own two patent families which includes 5 granted US patents, two pending US patent applications, over 3 foreign patent granted in countries such as Mexico, Russia, and Europe, and over 5 foreign patent application pending in various countries as Brazil, Mexico and Venezuela, with claims directed to the composition of matter of inhibitor compounds, where the granted patents and pending patent application, if granted, are expected to expire in 2031, excluding any patent term adjustment or patent term extension. The third patent family we co-own includes a granted US patent and a European patent validated in Spain and Italy, with claims directed to the composition of matter of pyridinyl and pyrimidinyl sulfoxide and sulfone compounds, where the granted patents are expected to expire in 2033, excluding any patent term adjustment or patent term extension. The fourth patent family we co-own includes a granted US patent, a pending US patent application and a foreign patent application pending in Singapore, with claims directed to the composition of matter of amido-benzyl sulfoxide and sulfone compounds, where the granted patents and pending patent applications, if granted are expected to expire in 2033, excluding any patent term adjustment or patent term extension. The fifth patent family we co-own includes two granted US patents, a pending US patent application, and over 40 foreign patents granted in such jurisdictions as Austria, Australia, Belgium, Canada, Switzerland, China, Germany, United Kingdom, Italy Japan, and Singapore, with claims directed to the composition of matter of amido spirocyclic amide and sulfonamide compounds, where the granted patents and pending patent application, if granted, are expected to expire in 2033, excluding any patent term adjustment or patent term extension. |
• | In our OPAL-0012 program portfolio, we own five patent families. One patent family includes three granted US patents, one pending US patent application, a granted European patent (validated in 11 countries), 5 foreign patents granted in such countries as China, India, and Japan, and over 15 foreign applications pending in various countries such as Australia, Canada, Korea, Mexico, New Zealand, and South Africa with claims directed to the composition of matter of pyrrolo and pyrazolopyrimidines |
compounds. Patents and patent applications, if granted, in this family are expected to expire in 2035, excluding any patent term adjustment or patent term extension. In the other four patent families, we own over 15 US patents and four pending US patent applications with claims directed to the composition of matter of analog compounds, which are expected to expire between 2035 and 2036, excluding any patent term adjustment or patent term extension. |
• | In regards to our OPAL-0014 and OPAL-0015 program portfolios, we own five patent families. Two patent families include two granted US patents with claims directed to the composition of matter of inhibitor compounds, a pending US patent application, a granted European patent (validated in 8 countries) and over 5 foreign patent applications pending in various countries such as Canada, China, Europe, and India. The granted patents and pending patent applications, if granted, are expected to expire in 2037, excluding any patent term adjustment or patent term extension. One patent family with claims directed to the composition of matter of USP25/28 inhibitor compounds includes a pending US patent application and over 5 foreign patent applications pending in various countries such as Australia, Canada, Europe, and Japan, where if the patent applications are granted, they are expected to expire in 2038, excluding any patent term adjustment or patent term extension. Two patent families include two pending US patent applications, and over 15 foreign patent applications pending in various countries such as Australia, Canada, China, India, Japan and Mexico, where if the patent applications are granted, they are expected to expire in 2039, excluding any patent term adjustment or patent term extension. |
• | We have yet to file patent applications directed to all of our preclinical programs in this field. |
• | In regards to our OPAL-0016 program portfolio, we own eight patent families including over 30 US patents, over 5 pending US patent applications, over 30 foreign patents granted in various countries such as Australia, Germany, Spain, France, Italy, Mexico, Netherlands, and Taiwan, and over 30 foreign patent application pending in various countries such as Brazil, Canada, China, Israel, India, Japan, and Korea with claims directed to the composition of matter of HDAC6 inhibitor compounds. The granted patents and pending patent applications, if granted, are expected to expire 2036 through 2037, excluding any patent term adjustment or patent term extension. |
• | We have yet to file patent applications directed to all of our preclinical programs in this field. |
• | completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with Good Laboratory Practices, or GLP, requirements; |
• | submission to the FDA of an IND, which must become effective before human clinical trials may begin; |
• | approval by an Institutional Review Board, or IRB, or independent ethics committee at each clinical trial site before each human trial may be initiated; |
• | performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, Good Clinical Practices, or GCP, requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication; |
• | submission to the FDA of an NDA or BLA; |
• | a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the filing for review; |
• | satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug or biologic will be produced to assess compliance with Current Good Manufacturing Practices, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug or biologic’s identity, strength, quality and purity; |
• | potential FDA audit of the clinical trial sites that generated the data in support of the NDA or BLA; |
• | payment of user fees for FDA review of the NDA or BLA; and |
• | FDA review and approval of the NDA or BLA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the United States. |
• | Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacologic action, side effect tolerability and safety of the product candidate. |
• | Phase 2 clinical trials involve studies in disease-affected patients to evaluate proof of concept and/or determine the dose required to produce the desired benefits. At the same time, safety and further PK and PD information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy is conducted. |
• | Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product labeling. |
• | restrictions on the marketing or manufacturing of the drug or biologic, suspension of the approval, complete withdrawal of the drug from the market or product recalls; |
• | fines, warning letters or holds on post-approval clinical trials; |
• | refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of drug or biologic approvals; |
• | drug or biologic seizure or detention, or refusal to permit the import or export of drugs; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | made several changes to the Medicaid Drug Rebate Program, including increasing pharmaceutical manufacturers’ rebate liability by raising the minimum basic Medicaid rebate on most branded prescription drugs to 23.1% of average manufacturer price, or AMP, and adding a new rebate calculation for “line extensions” (i.e., new formulations, such as extended release formulations) of solid oral dosage forms of branded products, as well as potentially impacting their rebate liability by modifying the statutory definition of AMP. |
• | imposed a requirement on manufacturers of branded drugs to provide a 70% (increased pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale |
• | extended a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations. |
• | expanded the entities eligible for discounts under the 340B Drug Discount Program. |
• | established a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected. |
• | imposed an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs, apportioned among these entities according to their market share in certain government healthcare programs. |
• | established a Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. The research |
conducted by the Patient-Centered Outcomes Research Institute may affect the market for certain pharmaceutical products. The ACA established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. |
• | The centralized MA is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use (“ CHMP EMA |
biotechnology medicinal products, (ii) designated orphan medicinal products, (iii) advanced-therapy medicinal products (gene therapy, somatic cell-therapy or tissue-engineered medicines) and (iv) medicinal products containing a new active substance indicated for the treatment of HIV/AIDS, cancer, neurodegenerative diseases, diabetes, auto-immune and other immune dysfunctions and viral diseases. The centralized procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU. |
• | National MAs, which are issued by the competent authorities of the EU Member States and only cover their respective territory, are available for products not falling within the mandatory scope of the centralized procedure. Where a product has already been authorized for marketing in an EU Member State, this national MA can be recognized in another Member States through the mutual recognition procedure. If the product has not received a national MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the decentralized procedure. Under the decentralized procedure an identical dossier is submitted to the competent authorities of each of the Member States in which the MA is sought. |
• | a covered benefit under its health plan; |
• | safe, effective and medically necessary; |
• | appropriate for the specific patient; |
• | cost-effective; and |
• | neither experimental nor investigational. |
• | Costs to develop and operate the Opal platform, including personnel-related expenses, such as salaries, benefits, bonuses, and equity-based compensation, consulting costs, data access costs, hosting, support and maintenance and other outsourced technology services; |
• | Drug discovery and development efforts, including personnel-related expenses, such as salaries, benefits, bonuses, and equity-based compensation for employees engaged in research and preclinical development functions, consulting costs, laboratory supplies and consumables, and external costs of vendors and partners engaged to conduct research and development activities as well as up-front payments related to preclinical assets; |
• | Clinical development efforts, including personnel-related expenses, such as salaries, benefits, bonuses, and equity-based compensation for employees engaged in clinical development, payments made under third-party licensing agreements and consulting expenses; and |
• | Facilities costs, depreciation and amortization expense of property and equipment (including internal use software) and acquired intangible assets, and other costs. |
• | continue our platform research and drug discovery and clinical development efforts; |
• | continue to invest in the scale and scope of our platform research capabilities; |
• | invest in or acquire companies or intellectual property that achieves our platform objectives; |
• | utilize our platform to identify and validate additional candidates, technologies, and business opportunities; |
• | initiate preclinical studies or clinical or other trials for existing or future product candidates; |
• | establish agreements with contract research organizations (“ CROs CDMOs |
• | develop manufacturing capacity or capability; |
• | seek regulatory approval for our therapeutic candidates; |
• | acquire or in-license other therapeutic candidates and technologies; |
• | make milestone or other payments under any in-license agreements; |
• | maintain, protect, defend, enforce, and expand our intellectual property portfolio; |
• | add infrastructure to our quality control, quality assurance, legal, compliance, and other groups to support our operations as we progress our therapeutics candidates toward commercialization; and |
• | attract and retain talent. |
Six Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Operating expenses: |
||||||||||||
Research and development |
$ | 60,638 | $ | 19,592 | $ | 41,046 | ||||||
General and administrative |
19,549 | 13,906 | 5,643 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
80,187 | 33,498 | 46,689 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(80,187 | ) | (33,498 | ) | (46,689 | ) | ||||||
|
|
|
|
|
|
|||||||
Other income (expense): |
||||||||||||
Interest expense |
(1,799 | ) | (624 | ) | (1,175 | ) | ||||||
Other income (expense), net |
19 | 1 | 18 | |||||||||
|
|
|
|
|
|
|||||||
Total other expense, net |
(1,780 | ) | (623 | ) | (1,157 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(81,967 | ) | (34,121 | ) | (47,846 | ) | ||||||
Income tax expense |
(14 | ) | (40 | ) | 26 | |||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (81,981 | ) | $ | (34,161 | ) | $ | (47,820 | ) | |||
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Platform technology |
$ | 10,104 | $ | 7,653 | $ | 2,451 | ||||||
Drug discovery and development |
16,543 | 5,101 | 11,442 | |||||||||
Clinical development |
26,773 | 2,485 | 24,288 | |||||||||
Facility costs, depreciation and amortization expense and other costs |
7,218 | 4,353 | 2,865 | |||||||||
|
|
|
|
|
|
|||||||
Total research and development expenses |
$ | 60,638 | $ | 19,592 | $ | 41,046 | ||||||
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||||||
2021 |
2020 |
Change |
||||||||||
(in thousands) |
||||||||||||
Personnel related (including equity-based compensation) |
$ | 11,562 | $ | 7,764 | $ | 3,798 | ||||||
Professional and consultant |
5,724 | 4,876 | 848 | |||||||||
Facility and other costs |
2,263 | 1,266 | 997 | |||||||||
|
|
|
|
|
|
|||||||
Total general and administrative expenses |
$ | 19,549 | $ | 13,906 | $ | 5,643 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2020 |
2019 |
Change |
||||||||||
(in thousands) |
||||||||||||
Operating expenses: |
||||||||||||
Research and development |
$ | 43,296 | $ | 11,378 | $ | 31,918 | ||||||
General and administrative |
30,556 | 22,409 | 8,147 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
73,852 | 33,787 | 40,065 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(73,852 | ) | (33,787 | ) | (40,065 | ) | ||||||
|
|
|
|
|
|
|||||||
Other income (expense): |
||||||||||||
Interest expense |
(2,636 | ) | (180 | ) | (2,456 | ) | ||||||
Other income (expense), net |
282 | — | 282 | |||||||||
|
|
|
|
|
|
|||||||
Total other expense, net |
(2,354 | ) | (180 | ) | (2,174 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(76,206 | ) | (33,967 | ) | (42,239 | ) | ||||||
Income tax expense |
(78 | ) | (5 | ) | (73 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss |
$ | (76,284 | ) | $ | (33,972 | ) | $ | (42,312 | ) | |||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2020 |
2019 |
Change |
||||||||||
(in thousands) |
||||||||||||
Platform technology |
$ | 14,898 | $ | 10,011 | $ | 4,887 | ||||||
Drug discovery and development |
14,366 | — | 14,366 | |||||||||
Clinical development |
4,043 | — | 4,043 | |||||||||
Facility costs, depreciation and amortization expense and other costs |
9,989 | 1,367 | 8,622 | |||||||||
|
|
|
|
|
|
|||||||
Total research and development expenses |
$ | 43,296 | $ | 11,378 | $ | 31,918 | ||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2020 |
2019 |
Change |
||||||||||
(in thousands) |
||||||||||||
Personnel related (including equity-based compensation) |
$ | 16,799 | $ | 8,870 | $ | 7,929 | ||||||
Professional and consultant |
10,630 | 8,975 | 1,655 | |||||||||
Facility and other costs |
3,127 | 4,564 | (1,437 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total general and administrative expenses |
$ | 30,556 | $ | 22,409 | $ | 8,147 | ||||||
|
|
|
|
|
|
• | the costs to scale and expand the scope of our platform technology; |
• | investments we make to acquire companies or intellectual property that achieves our platform objectives; |
• | the identification of additional research programs and product candidates; |
• | the scope, progress, costs and results of preclinical and clinical development for any product candidates we may develop; |
• | the costs, timing and outcome of regulatory review of any product candidates we may develop; |
• | the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any product candidates we may develop for which we receive marketing approval; |
• | the costs of satisfying any post-marketing requirements; |
• | the revenue, if any, received from commercial sales of product candidates we may develop for which we receive marketing approval; |
• | the revenue, if any, we may generate from our Opal platform; |
• | the costs and timing of preparing, filing and prosecuting applications for patents, obtaining, maintaining, defending and enforcing our intellectual property rights and defending against any intellectual property-related claims, including claims of infringement, misappropriation or other violation of third-party intellectual property; |
• | the costs of operational, financial and management information systems and associated personnel; |
• | milestone or other payments we may make under our existing in-license agreements; |
• | the associated costs in connection with any acquisition of in-licensed products, intellectual property and technologies; and |
• | the costs of operating as a public company. |
Six Months Ended June 30, |
Year Ended December 31, |
|||||||||||||||
2021 |
2020 |
2020 |
2019 |
|||||||||||||
(in thousands) |
||||||||||||||||
Cash used in operating activities |
$ | (62,353 | ) | $ | (21,948 | ) | $ | (57,699 | ) | $ | (23,272 | ) | ||||
Cash used in investing activities |
(2,448 | ) | (5,332 | ) | (5,770 | ) | (7,249 | ) | ||||||||
Cash provided by financing activities |
108,710 | 10,835 | 196,955 | 87,170 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
$ | 43,909 | $ | (16,445 | ) | $ | 133,486 | $ | 56,649 | |||||||
|
|
|
|
|
|
|
|
Executive Officers |
Age |
Position | ||
David Berry, M.D., Ph.D. | 43 | Founder, Chief Executive Officer, Director Nominee | ||
Graeme Bell, M.B.A., F.C.M.A. | 54 | Executive Vice President, Chief Financial Officer | ||
Nish Lathia, M.B.A. | 47 | Executive Vice President, Chief Product Officer | ||
Daniel E. Troy, J.D | 61 | Executive Vice President, Chief Legal Officer and General Counsel | ||
Non-Employee Directors |
||||
Ronald W. Hovsepian | 60 | Director and Chairman Nominee | ||
Shreeram Aradhye, M.D. | 58 | Director Nominee | ||
Brett Chugg, M.B.A. | 53 | Director Nominee | ||
David R. Epstein, M.B.A. | 60 | Director Nominee | ||
Samir Kaul, M.B.A. | 47 | Director Nominee | ||
Judy Lewent, M.B.A. | 72 | Director Nominee | ||
Harsha Ramalingam, M.B.A. | 62 | Director Nominee | ||
Significant Employees |
||||
Moni Miyashita, M.B.A. | 66 | Executive Vice President, Chief Strategy Officer | ||
Cissy S. Young, M.B.A., Ph.D. | 52 | Executive Vice President, Chief People Officer | ||
Brett R. Blackman, Ph.D. | 49 | Senior Vice President, Chief Innovation Officer | ||
Brandon Allgood, Ph.D. | 46 | Senior Vice President, Chief Artificial Intelligence Officer |
• | we will have independent director representation on our audit, compensation and nominating and corporate governance committees immediately at the time of the Business Combination, and our independent directors will meet regularly in executive sessions without the presence of our corporate officers or non-independent directors; |
• | at least one of our directors will qualify as an “audit committee financial expert” as defined by the SEC. |
• | the Class I directors will be David A. Berry, M.D., Ph.D., and Judy Lewent, and their terms will expire at the annual meeting of stockholders to be held in 2022; |
• | the Class II directors will be David R. Epstein, Shreeram Aradhye, M.D., and Brett Chugg, and their terms will expire at the annual meeting of stockholders to be held in 2023; and |
• | the Class III directors will be Samir Kaul, Ronald W. Hovsepian and Harsha Ramalingam, and their terms will expire at the annual meeting of stockholders to be held in 2024. |
• | David Berry, its President and Chief Executive Officer; |
• | Hilary Malone, its former Executive Vice President, Chief Operating Officer, Therapeutics; and |
• | Cissy Young, its Executive Vice President, Chief People Officer. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) (1) |
All Other Compensation ($) |
Total ($) |
||||||||||||||||||||
David Berry, M.D., Ph.D. President & Chief Executive Officer |
2020 | 311,647 | 250,750 (2 | ) | 25,075 | 8,550 | (3) | 596,022 | ||||||||||||||||||
Hilary Malone, Ph.D. Executive Vice President, Chief Operating Officer, Therapeutics |
(4 | ) | 2020 | 402,424 | 236,961 (5 | ) | 360,741 | 2,073 | (6) | 1,002,199 | ||||||||||||||||
Cissy Young, Ph.D. Executive Vice President, Chief People Officer |
(7 | ) | 2020 | 288,750 | 115,038 (8 | ) | 347,095 | 751 | (9) | 751,634 |
(1) | The amounts reported represent the aggregate grant date fair value of the profits interest awards granted to our named executive officer during 2020, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the profits interest awards reported in this column are set forth in Note 10 to Valo’s audited consolidated financial statements appearing elsewhere in this proxy statement/prospectus. In |
addition, for Drs. Berry and Malone, the incremental value of the fully vested Valo common units granted in connection with the settlement of each such named executive officer’s annual bonus is included herein, as further described below in the section entitled “ —Annual Bonus |
(2) | Represents $250,750 in a discretionary annual bonus, which was settled in 63,008 fully vested Valo common units on March 9, 2021. As described below in the section entitled “ —Annual Bonus |
(3) | Represents a matching contribution for the account of Dr. Berry under the Flagship Pioneering 401(K) Profit Sharing Plan. |
(4) | The amount reported represents the amounts paid to Dr. Malone since the commencement of her employment on January 13, 2020 (pro-rated based on an annual salary of $415,000). |
(5) | The amounts provided include $500 in a one-time recognition award provided by Valo in recognition for past services, $100,000 in a signing bonus and $136,461 in a discretionary annual bonus. Such annual bonus was settled in 31,731 fully vested Valo common units on March 9, 2021. As further described below in the section entitled “—Annual Bonus, |
(6) | The amounts provided include $946 in Company-paid life insurance, $460 in Company-paid long-term disability insurance, $227 in a one-time miscellaneous credit from Blue Cross Blue Shield in connection with COVID-19 and $440 in Company-paid parking expenses. |
(7) | The amount reported represents the amounts paid to Dr. Young since the commencement of her employment on April 1, 2020 (pro-rated based on an annual salary of $385,000). |
(8) | The amounts provided include $500 in a one-time recognition award provided by Valo in recognition for past services, and $114,538 in discretionary annual bonus. |
(9) | The amounts provided include $391 in Company-paid life insurance and $360 in Company-paid long-term disability insurance. |
Incentive Units(1) |
||||||||||||||||||||
Name |
Vesting Commencement Date |
Number of Incentive Units that have not vested (#) |
Market value of Incentive Units that have not vested ($)(2) ( 3) |
Equity incentive plan awards: Number of unearned Incentive Units that have not vested (#) |
Equity incentive plan awards: Market or payout value of unearned Incentive Units that have not vested ($) |
|||||||||||||||
David Berry |
12/3/2018 | 3,000,000 | 8,850,000 | — | — | |||||||||||||||
— | — | — | 600,000 | (3) | 1,770,000 | |||||||||||||||
— | — | — | 600,000 | (4) | 1,770,000 | |||||||||||||||
Hilary Malone |
1/13/2020 | 542,336 | 639,956 | — | — | |||||||||||||||
Cissy Young |
4/1/2020 | 542,336 | 639,956 | — | — |
(1) | Incentive Units reflected herein refer to awards of “incentive units,” which are intended to qualify as profits interests for federal tax purposes. Such awards vest in accordance with the following schedule: one quarter of each award vests on the first anniversary of the vesting commencement date and followed by quarterly vesting thereafter in 12 substantially equal installments. |
(2) | There is no public market for the Incentive Units. The amount reported above under the heading “Market Value of Incentive Units That Have Not Vested” reflects the intrinsic value of the unvested Incentive Units, based upon the terms of each individual’s Incentive Units. In connection with the business combination, the Incentive Units will be exchanged for shares (or, to the extent unvested at the time of the business combination, restricted shares) of New Valo. |
(3) | The Incentive Units Awards shall vest upon the closing of Valo’s fifth in-licensing deal for a development stage clinical asset, subject to Dr. Berry’s continued employment as our CEO. |
(4) | The Incentive Units were granted to Dr. Berry and later transferred to the Berry Family Irrevocable Trust of 2019 by Dr. Berry and will vest upon the closing of the company’s first collaboration deal that generates at least $50 million in gross revenue, subject to Dr. Berry’s continued employment as our CEO. |
Position |
Severance Period (months) |
Benefit Continuation Period (months) | ||
Chief Executive Officer |
12 | 12 | ||
Executive Vice President |
9 | 9 | ||
Senior Vice President |
6 | 6 | ||
Vice President |
4 | 4 |
Position |
Severance Period (months) |
Bonus Amount |
Benefit Continuation Period (months) | |||
Chief Executive Officer |
18 | 1.5x Target | 18 | |||
Executive Vice President |
12 | 1.0x Target | 12 | |||
Senior Vice President |
9 | 0.75x Target | 9 | |||
Vice President |
6 | 0.5x Target | 6 |
Name |
Fees Earned or Paid in Cash ($) |
Incentive Units ($)(1)(2) |
All Other Compensation ($) |
Total ($) |
||||||||||||
Shreeram Aradhye |
— | 163,656 | — | 163,656 | ||||||||||||
Paul Biondi |
— | 163,656 | — | 163,656 | ||||||||||||
Harsha Ramalingam |
— | 245,484 | — | 245,484 |
(1) | Incentive Units reflected herein refer to awards of “incentive units,” which are intended to qualify as profits interests for federal tax purposes. Such awards vest in accordance with the following schedule: one quarter of each award vests on the first anniversary of the vesting commencement date, followed by monthly vesting thereafter over the next three years. In the event service as a director terminates after having been a member of the Board for 18 months, the Company shall have the option, in its sole discretion, to repurchase any vested Incentive Units at the then current fair market value. There is no public market for the Incentive Units. The amount reported above reflects the intrinsic value of the unvested profits units, based upon the terms of each individual’s profits interests units. In connection with the business combination, the profits units will be exchanged for shares of New Valo. |
(2) | As of December 31, 2020, each of Dr. Aradhye and Messrs. Biondi and Ramalingam held 255,713, 255,713 and 383,569 Incentive Units, respectively. |
Annual Retainer for Board Membership |
||||
Annual service on the board of directors |
$ | 40,000 | ||
Additional retainer for annual service as non-executive chairperson |
$ | 35,000 | ||
Additional Annual Retainer for Committee Membership |
||||
Annual service as audit committee chairperson |
$ | 20,000 | ||
Annual service as member of the audit committee (other than chair) |
$ | 10,000 | ||
Annual service as compensation committee chairperson |
$ | 15,000 | ||
Annual service as member of the compensation committee (other than chair) |
$ | 7,500 | ||
Annual service as nominating and governance committee chairperson |
$ | 10,000 | ||
Annual service as member of the nominating and governance committee (other than chair) |
$ | 5,000 |
• | each person known to be the beneficial owner of more than 5% of Valo common stock; |
• | each of Valo’s current named executive officers and directors; |
• | each person who is known to be the beneficial owner of more than 5% of KVSA common stock and is expected to be the beneficial owner of more than 5% of shares of New Valo common stock post-Business Combination; |
• | each of KVSA’s current executive officers and directors; |
• | each person who will become a named executive officer or director of New Valo post-Business Combination; and |
• | all executive officers and directors of KVSA as a group pre-Business Combination, and all executive officers and directors of New Valo as a group post-Business Combination. |
(i) | a “no redemption” scenario where (i) no public stockholders exercise their redemption rights in connection with the Business Combination or our extension proposal, (ii) New Valo issues 220,966,474 shares of New Valo common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement and (iii) New Valo issues 20,086,250 shares of New Valo common stock to the PIPE Investors pursuant to the PIPE Investment; and |
(ii) | a “maximum redemption” scenario where (i) 12,086,774 of KVSA’s outstanding public shares are redeemed in connection with the Business Combination (the estimated maximum number of shares of common stock that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Cash Condition based on: (a) trust account figures as of June 30, 2021, (b) a redemption price of approximately $10.00 per share and (c) the issuance of 2,500,000 shares of New Valo common stock to Sponsor pursuant to the Forward Purchase Agreement), (ii) New Valo issues 220,966,474 shares of New Valo common stock as the Aggregate Merger Consideration pursuant to the Merger Agreement and (iii) New Valo issues 20,086,250 shares of New Valo common stock to the PIPE Investors pursuant to the PIPE Investment. |
Pre-Business Combination and PIPE Investment |
Post-Business Combination and PIPE Investment |
|||||||||||||||||||||||||||||||||||||||||||||||
Assumption No Redemptions |
Assumption Maximum Redemptions |
|||||||||||||||||||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(1) |
Number of Valo Common Stock |
% of Valo Common Stock |
Number of KVSA Class A Common Stock |
% of KVSA Class A Common Stock |
Number of KVSA Class B Common Stock |
% of KVSA Class B Common Stock |
Number of KVSA Class K Common Stock |
% of KVSA Class K Common Stock |
Number of Shares of New Valo Common Stock |
% |
Number of Shares of New Valo Common Stock |
% |
||||||||||||||||||||||||||||||||||||
5% Holders of Valo, KVSA and New Valo |
||||||||||||||||||||||||||||||||||||||||||||||||
Khosla Ventures SPAC Sponsor LLC (2) |
— | — | 990,000 | 2.8 | % | 4,760,000 | 95.2 | % | 5,000,000 | 100 | % | 16,483,478 | 5.7 | % | 18,983,478 | 6.7 | % | |||||||||||||||||||||||||||||||
Flagship Funds (3) |
104,684,625 | 47.4 | % | — | — | — | — | — | — | 106,684,625 | 36.6 | % | 106,684,625 | 37.9 | % | |||||||||||||||||||||||||||||||||
Funds Affiliated with Koch Industries, Inc. (4) |
22,851,226 | 10.3 | % | 231,800 | * | — | — | — | — | 25,083,026 | 8.6 | % | 25,083,026 | 8.9 | % | |||||||||||||||||||||||||||||||||
Port-Aux-Choix Private InvestmentsInc. (5) |
25,594,852 | 11.6 | % | — | — | — | — | — | — | 25,594,852 | 8.8 | % | 25,594,852 | 9.1 | % | |||||||||||||||||||||||||||||||||
Directors and Named Executive Officers of Valo Pre-Business Combination |
||||||||||||||||||||||||||||||||||||||||||||||||
David A. Berry, M.D., Ph.D. (6) |
8,778,005 | 4.0 | % | — | — | — | — | — | — | 8,778,005 | 3.0 | % | 8,778,005 | 3.1 | % | |||||||||||||||||||||||||||||||||
David Epstein |
1,450,205 | * | — | — | — | — | — | — | 1,450,205 | * | 1,450,205 | * | ||||||||||||||||||||||||||||||||||||
Ronald W. Hovsepian (7) |
2,175,306 | 1.0 | % | — | — | — | — | — | — | 2,175,306 | * | 2,175,306 | * | |||||||||||||||||||||||||||||||||||
Paul Biondi |
263,769 | * | — | — | — | — | — | — | 263,769 | * | 263,769 | * | ||||||||||||||||||||||||||||||||||||
Shreeram Aradhye, M.D. |
263,769 | * | — | — | — | — | — | — | 263,769 | * | 263,769 | * | ||||||||||||||||||||||||||||||||||||
Harsha Ramalingam |
395,653 | * | — | — | — | — | — | — | 395,653 | * | 395,653 | * | ||||||||||||||||||||||||||||||||||||
Adam Smalley |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Brett Chugg |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Judy Lewent |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cissy Young |
559,421 | * | — | — | — | — | — | — | 559,421 | * | 559,421 | * | ||||||||||||||||||||||||||||||||||||
Hilary Malone |
598,085 | * | — | — | — | — | — | — | 598,085 | * | 598,085 | * | ||||||||||||||||||||||||||||||||||||
All Valo directors and executive officers as a group (13 individuals) |
15,519,819 | 7.0 | % | — | — | — | — | — | — | 15,544,819 | 5.3 | % | 15,544,819 | 5.5 | % | |||||||||||||||||||||||||||||||||
Directors and Named Executive Officers of KVSA Pre-Business Combination |
||||||||||||||||||||||||||||||||||||||||||||||||
Vinod Khosla(1) |
— | — | 990,000 | 2.8 | % | 4,760,000 | 95.2 | % | 5,000,000 | 100 | % | 16,483,478 | 5.7 | % | 18,983,478 | 6.7 | % | |||||||||||||||||||||||||||||||
Samir Kaul(1) |
— | — | 990,000 | 2.8 | % | 4,760,000 | 95.2 | % | 5,000,000 | 100 | % | 16,483,478 | 5.7 | % | 18,983,478 | 6.7 | % | |||||||||||||||||||||||||||||||
Peter Buckland |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Jagdeep Singh |
— | — | — | — | 40,000 | * | — | — | 48,705 | * | 48,705 | * | ||||||||||||||||||||||||||||||||||||
Rajiv Shah |
— | — | — | — | 40,000 | * | — | — | 48,705 | * | 48,705 | * | ||||||||||||||||||||||||||||||||||||
Derek Anthony West |
— | — | — | — | 40,000 | * | — | — | 48,705 | * | 48,705 | * | ||||||||||||||||||||||||||||||||||||
Molly Coye |
— | — | — | — | 40,000 | * | — | — | 48,705 | * | 48,705 | * | ||||||||||||||||||||||||||||||||||||
Mario Schlosser |
— | — | — | — | 40,000 | * | — | — | 48,705 | * | 48,705 | * |
Pre-Business Combination and PIPE Investment |
Post-Business Combination and PIPE Investment |
|||||||||||||||||||||||||||||||||||||||||||||||
Assumption No Redemptions |
Assumption Maximum Redemptions |
|||||||||||||||||||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner(1) |
Number of Valo Common Stock |
% of Valo Common Stock |
Number of KVSA Class A Common Stock |
% of KVSA Class A Common Stock |
Number of KVSA Class B Common Stock |
% of KVSA Class B Common Stock |
Number of KVSA Class K Common Stock |
% of KVSA Class K Common Stock |
Number of Shares of New Valo Common Stock |
% |
Number of Shares of New Valo Common Stock |
% |
||||||||||||||||||||||||||||||||||||
Dmitri Shklovsky |
— | — | — | — | 40,000 | * | — | — | 48,705 | * | 48,705 | * | ||||||||||||||||||||||||||||||||||||
All KVSA executive officers and directors as a group (9 individuals) |
— | — | 990,000 | 2.8 | % | 5,000,000 | 100.0 | % | 5,000,000 | 100.0 | % | 16,775,708 | 5.8 | % | 19,275,708 | 6.8 | % | |||||||||||||||||||||||||||||||
Directors, Nominees and Named Executive Officers of New Valo Post-Business Combination |
||||||||||||||||||||||||||||||||||||||||||||||||
David A. Berry, M.D., Ph.D. (6) |
8,778,005 | 4.0 | % | — | — | — | — | — | — | 8,778,005 | 3.0 | % | 8,778,005 | 3.1 | % | |||||||||||||||||||||||||||||||||
David Epstein |
1,450,205 | * | — | — | — | — | — | — | 1,450,205 | * | 1,450,205 | * | ||||||||||||||||||||||||||||||||||||
Ronald W. Hovsepian (7) |
2,175,306 | 1.0 | % | — | — | — | — | — | — | 2,175,306 | * | 2,175,306 | * | |||||||||||||||||||||||||||||||||||
Shreeram Aradhye |
263,769 | * | — | — | — | — | — | — | 263,769 | * | 263,769 | * | ||||||||||||||||||||||||||||||||||||
Harsha Ramalingam |
395,653 | * | — | — | — | — | — | — | 395,653 | * | 395,653 | * | ||||||||||||||||||||||||||||||||||||
Samir Kaul(1) |
— | — | 990,000 | 2.8 | % | 4,760,000 | 95.2 | % | 5,000,000 | 100 | % | 16,483,478 | 5.7 | % | 18,983,478 | 6.7 | % | |||||||||||||||||||||||||||||||
Brett Chugg |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Judy Lewent |
— | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cissy Young |
559,421 | * | — | — | — | — | — | — | 559,421 | * | 559,421 | * | ||||||||||||||||||||||||||||||||||||
Hilary Malone |
598,085 | * | — | — | — | — | — | — | 598,085 | * | 598,085 | * | ||||||||||||||||||||||||||||||||||||
All New Valo directors and executive officers as a group (12 individuals) |
15,256,050 | 6.9 | % | 990,000 | 2.8 | % | 4,760,000 | 95.2 | % | 5,000,000 | 100 | % | 31,764,528 | 10.9 | % | 34,264,528 | 12.2 | % |
* | Indicates less than 1% |
(1) | Unless otherwise noted, the business address of each of those listed in the table above is 399 Boylston Street, Boston, MA 02116. |
(2) | Post-Business Combination, consists of (i) 990,000 shares of New Valo common stock representing the 990,000 private placement shares held by Sponsor, (ii) 5,795,999 shares of New Valo common stock issued upon the conversion of 4,760,000 shares of KVSA Class B common stock, (iii) 8,697,479 shares of New Valo common stock issued upon the conversion of 5,000,000 shares of KVSA Class K common stock, (iv) 1,000,000 shares of New Valo common stock to be issued in the PIPE Investment and (v) in the case of the maximum redemption scenario, 2,500,000 shares of New Valo common stock issued pursuant to the Forward Purchase Agreement. Khosla Ventures SPAC Sponsor LLC is the record holder of the shares. Khosla Ventures SPAC Sponsor Services LLC is the owner of Khosla Ventures SPAC Sponsor LLC. Vinod Khosla and Samir Kaul are the joint managers of Khosla Ventures SPAC Sponsor Services LLC, and indirectly own equity interests in Khosla Ventures SPAC Sponsor Services LLC through VK Services LLC and SK SPAC Services, LLC, respectively. As such, each of VK Services LLC, SK SPAC Services, LLC and Messrs. Khosla and Kaul may be deemed to share beneficial ownership of the shares held directly by Sponsor. The principal mailing address of Khosla Ventures SPAC Sponsor LLC is 2128 Sand Hill Rd, Menlo Park, CA 94025. |
(3) | Pre-Business Combination (but giving effect to the Pre-Closing Restructuring), consists of (i) 91,034,466 shares of Valo common stock held by Flagship VentureLabs VI LLC (“VentureLabs VI Flagship Pioneering VI Nutritional LTP Flagship Opportunities Fund II |
Investment) and (v) 1,000,000 shares of New Valo common stock held by FPN, L.P. (“ FPN Flagship Funds Flagship Pioneering VI GP Flagship Opportunities Fund II GP Nutritional LTP GP VentureLabs VI Manager Flagship Pioneering Flagship General Partners |
(4) | Pre-Business Combination (but giving effect to the Pre-Closing Restructuring), consists of (i) 22,851,226 shares of Valo common stock held by KDT VH Investments, LLC and (ii) 231,800 shares of KVSA Class A common stock held by Spring Creek Capital, LLC. Post-Business Combination, consists of (i) 22,851,226 shares of New Valo common stock held by KDT VH Investments, LLC and (ii) 2,231,800 shares of New Valo common stock held by Spring Creek Capital, LLC (2,000,000 of which shares of New Valo common stock are to be purchased in the PIPE Investment). Voting and investment power over the shares held by KDT VH Investments, LLC is exercised jointly by three individuals who are managers of Koch Disruptive Technologies Holdings, LLC, and voting and disposition decisions require the approval of a majority of such managers. Voting and investment power over the shares held by Spring Creek Capital, LLC is exercised jointly by three individuals who are managers of Spring Creek Capital, LLC, and voting and disposition decisions require the approval of a majority of such managers. Accordingly, none of these managers individually has voting or investment power over such shares pursuant to Exchange Act Rule 13d-3, and therefore no individual is deemed to be the beneficial owner of the shares held by KDT VH Investments, LLC or Spring Creek Capital, LLC. The principal mailing address for each of the foregoing persons is 4111 E 37th St North, Wichita, KS 67220. |
(5) | Pre-Business Combination (but giving effect to the Pre-Closing Restructuring), consists of 25,594,852 shares of Valo common stock held by Port-Aux-Choix Private Investments Inc. (“PSP Investments |
(6) | Pre-Business Combination (but giving effect to the Pre-Closing Restructuring), consists of (i) 7,976,128 shares of Valo common stock held by David Berry 2012 Revocable Trust and (ii) 725,102 shares of Valo common stock held by The Berry Family Irrevocable Trust of 2019. Post-Business Combination, consists of (i) 7,976,128 shares of New Valo common stock held by David Berry 2012 Revocable Trust and (ii) 725,102 shares of New Valo common stock held by The Berry Family Irrevocable Trust of 2019. Dr. Berry is a co-trustee of the David Berry 2012 Revocable Trust and may be deemed to share voting and investment power with respect to the shares held by such trust. Dr. Berry’s spouse is a co-trustee of The Berry Family Irrevocable Trust of 2019, and Dr. Berry may be deemed to share voting and investment power with respect to the shares held by such trust. |
(7) | Pre-Business Combination (but giving effect to the Pre-Closing Restructuring), consists of (i) 1,087,653 shares of Valo common stock held directly by Ronald W. Hovsepian and (ii) 1,087,653 shares of Valo common stock held by Megan S. Hovsepian 2021 Irrevocable Trust, of which Mr. Hovsepian’s spouse is the investment advisor and Mr. Hovsepian’s brother-in-law is the distribution advisor. Post-Business Combination, consists of (i) 1,087,653 shares of New Valo common stock held directly by Ron Hovsepian and (ii) 1,087,653 shares of New Valo common stock held by Megan S. Hovsepian 2021 Irrevocable Trust. |
Holder |
Common Units |
Series A Preferred Units |
Series B Preferred Units |
Approximate Purchase Price |
||||||||||||
Flagship Funds (1) |
74,710,000 | 6,949,821 | 4,252,568 | $ | 53,284,281 | |||||||||||
Port-Aux-Choix Private Investments Inc.(2) |
— | 12,500,000 | 8,505,137 | $ | 99,999,999 | |||||||||||
KDT VH Investments, LLC (3) |
— | — | 18,753,503 | $ | 110,248,093 | |||||||||||
Graeme Bell (4) |
— | — | 21,400 | $ | 125,806 |
(1) | The Flagship Funds consist of VentureLabs VI, Flagship Pioneering VI, Flagship Pioneering Special Opportunities Fund II, L.P. (“ Opportunities Fund II Nutritional LTP |
(2) | Port-Aux-Choix Private Investments Inc. (“PSP |
(3) | KDT VH Investments, LLC (“ KDT |
(4) | Graeme Bell is the Chief Financial Officer of Valo Holdco. |
Valo |
Valo Health Holdings, Inc. | |
Name Change | ||
Valo’s current name is Valo Health, Inc. | KVSA will change its corporate name to Valo Health Holdings, Inc. | |
Authorized Capital Stock | ||
The total number of shares of all classes of capital stock which Valo is authorized to issue is |
The total number of shares of all capital stock which Valo Health Holdings, Inc. shall have authority to issue is | |
Rights of Preferred Stock | ||
The Current Charter does not authorize or provide for the issuance of preferred stock. | The Proposed Charter permits the Board of Directors of Valo Health Holdings, Inc. to issue one or more series of preferred stock and to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, and other rights, all to the fullest extent now or hereafter permitted by the DGCL. | |
Number and Qualification of Directors | ||
Subject to the rights of holders of any series of preferred stock to elect directors, the number of directors shall be established by the stockholders or the Board of Directors of Valo. Directors need not be stockholders of Valo. | The number of directors shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors of Valo Health Holdings, Inc., provided such Board of Directors shall consist of at least one member. No director need be a stockholder of Valo Health Holdings, Inc. |
Structure of Board; Election of Directors | ||
Subject to the rights of the holders of one or more series of preferred stock to elect directors, the election of directors shall be determined by a plurality of the votes cast. | Delaware law permits a corporation to classify its board of directors into as many as three classes with staggered terms of office. Under the Proposed Charter, the Board of Directors of Valo Health Holdings, Inc. will be classified into three classes of directors with staggered terms of office. If one or more series of preferred stock are granted the right to elect one or more directors, those directors shall be excluded from the allocation of directors into three classes. Subject to the rights of the holders of one or more series of preferred stock to elect directors, the election of directors shall be determined by a plurality of the votes cast. | |
Removal of Directors | ||
Except as otherwise provided by the DGCL, any one or more or all of the directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except that the directors elected by the holders of a particular class or series of stock may be removed without cause only by vote of the holders of a majority of the outstanding shares of such class or series. | Subject to the rights of any outstanding series of preferred stock to elect and remove directors, any director may be removed from office (i) only for cause and (ii) only by the affirmative vote of the holders of not less than two-thirds (2/3) of the outstanding shares of capital stock then entitled to vote at an election of directors. | |
Voting | ||
Except as otherwise required by statute or any preferred stock designation, the Valo common stock holders possess all power of voting, and each share of Valo common stock shall entitle the holder to one vote. The Valo common stock holders shall generally vote as a single class. | Except as otherwise required by statute, Valo Health Holdings, Inc. common stock will possess all power of voting, and each share shall entitle the holder to one vote. Subject to the rights of the holders of preferred stock to elect directors, the election of directors shall be determined by a plurality of the votes cast. All other matters presented to the stockholders at a meeting at which a quorum is present shall be determined by the vote of a majority of the votes, unless the matter is one upon which a different vote is required, in which case such provision shall govern and control. Valo Health Holdings, Inc. common stock shall not have the right to vote on any amendment to the Proposed Charter affecting the rights of any series of preferred stock if the Proposed Charter or DGCL grants exclusive rights to vote on the amendment to one or more specified series of preferred stock. | |
Supermajority Voting Provisions | ||
The Current Charter and the Current Bylaws do not provide for supermajority voting. | Removal of any director during their term may only be for cause and must be pursuant to the affirmative vote of at least two-thirds (2/3) of the voting power of all then outstanding capital shares entitled to vote |
in the election of such director, voting together as a single series. The Proposed Bylaws may be amended or repealed by the affirmative vote of at least two-thirds (2/3) of the outstanding shares of capital stock entitled to vote on such amendment or repeal, voting together as a single class; provided, however, that if the Board of Directors of Valo Health Holdings, Inc. recommends that stockholders approve such amendment or repeal at such meeting of stockholders, such amendment or repeal by the stockholders shall only require the affirmative vote of the majority of outstanding shares of capital stock entitled to vote on such amendment or repeal, voting together as a single class. | ||
Cumulative Voting | ||
The DGCL provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation; however, the Current Charter does not grant stockholders this right. | The DGCL provides that a corporation may grant stockholders cumulative voting rights for the election of directors in its certificate of incorporation; however, the Proposed Charter bars cumulative voting. | |
Vacancies on the Board of Directors | ||
Vacancies may be filled, unless and until filled by the stockholders, by a majority of the directors then in office, though not less than a quorum, or by a sole remaining director. Any director so chosen shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. | Vacancies may be filled exclusively by a majority of the directors then in office, though less than a quorum, or by a sole remaining director (and not by stockholders). Any director so chosen shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal. | |
Special Meeting of the Board of Directors | ||
A special meeting of the Valo Board of Directors may be held at any time and place designated in a call by the Chairman of the Board, the Chief Executive Officer, the President, two or more directors, or by one director in the event that there is only a single director in office. | A special meeting of the Board of Directors of Valo Health Holdings, Inc. may be called, orally or in writing, by or at the request of a majority of the directors, the Chairperson of the Board, if one is elected, or the President. The person calling any such special meeting may fix the hour, date and place thereof. | |
Special Stockholder Meetings | ||
Special meetings of stockholders may be called at any time by only the Valo Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President, and may not be called by any other person or persons. The Valo Board of Directors may postpone or reschedule any previously scheduled special meeting of | Except as otherwise required by statute and subject to the rights of the holders of any series of preferred stock, special meetings of the stockholders may be called only by the Board of Directors of Valo Health Holdings, Inc. acting pursuant to a resolution approved by the affirmative vote of a majority of the |
stockholders. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. | directors then in office. The Board of Directors of Valo Health Holdings, Inc. may postpone or reschedule any previously scheduled special meeting of stockholders. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. Nominations of persons for election to the Board of Directors of Valo Health Holdings, Inc. and stockholder proposals of other business shall not be brought before a special meeting of stockholder unless such special meeting is held in lieu of an annual meeting in accordance with the Proposed Bylaws, in which case such special meeting in lieu thereof shall be deemed an annual meeting. | |
Stockholder Nominations of Persons for Election as Directors | ||
Stockholder nominations are governed by the DGCL absent being specifically addressed in the Current Charter and the Current Bylaws. | Nominations of persons for election to the Board of Directors of Valo Health Holdings, Inc. may be brought before an annual meeting (i) by or at the direction of the Board of Directors of Valo Health Holdings, Inc. or (ii) by any stockholder who was a stockholder of record at the time of giving notice, who is entitled to vote at the meeting, who is present at the meeting and who complies with the proper notice procedures. Notice will be required to be received by the Secretary at the principal executive offices of Valo Health Holdings, Inc., not later than the close of business on the 90th day nor earlier than the close of business on the 120th day before the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that in the event that the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. The stockholder’s notice to the Secretary must be in proper form, including all information to be required by the Proposed Bylaws and comply with all applicable requirements of the Exchange Act. | |
Stockholder Proposals (Other than Nomination of Persons for Election as Directors) | ||
Stockholder proposals are governed by the DGCL absent being specifically addressed in the Current Charter and the Current Bylaws. | In order for a stockholder to bring a matter before the annual meeting, the stockholder will be required to give timely notice to the Secretary, as described in the Proposed Bylaws and outlined immediately above in Stockholder Nominations of Persons for Election |
as Directors 14a-8 (or any successor thereof) of the Exchange Act. | ||
Limitation of Liability of Directors and Officers | ||
Except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty, no director shall be personally liable to Valo or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability. | To the fullest extent permitted by the DGCL, a director shall not be personally liable to Valo Health Holdings, Inc. or its stockholders for monetary damages for breach of fiduciary duty as a director, unless they violated their duty of loyalty, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or redemptions, or derived improper personal benefit from their actions as a director. | |
Indemnification of Directors, Officers, Employees and Agents | ||
Valo shall indemnify against all expenses reasonably incurred by or on behalf of any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she is, was, or agreed to become a director or officer of Valo, or is, was, or agreed to become, at the request of Valo, a director, officer, partner, employee or trustee of another corporation, partnership, joint venture, trust or other enterprise, if such person acted in good faith and in a manner which they reasonably believed to be in, or not opposed to, the best interests of Valo, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. | Valo Health Holdings, Inc. shall indemnify and hold harmless each director, each officer and, at the discretion of the Board of Directors of Valo Health Holdings, Inc., each non-officer employee, to the fullest extent authorized by the DGCL and to the extent authorized in the Proposed Bylaws, which provide that Valo Health Holdings, Inc. shall indemnify such persons against all liabilities and expenses incurred by or on their behalf if made or threatened to be made a party to a proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she is, was, or agreed to become a director, officer or non-officer employee of Valo Health Holdings, Inc., or is, was, or agreed to become, at the request of Valo Health Holdings, Inc., a director, officer, partner, employee, or trustee, among other positions, of another corporation, partnership, joint venture, trust or other enterprise, if such person acted in good faith and in a manner which they reasonably believed to be in, or not opposed to, the best interests of Valo Health Holdings, Inc., and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. | |
Corporate Opportunity Provision | ||
The Current Charter limits the application of the doctrine of corporate opportunity under certain circumstances. | The doctrine of corporate opportunity, as applied under the DGCL, would apply without modification to directors and officers under the Proposed Charter. | |
Dividends, Distributions and Stock Repurchases | ||
Dividends, distributions and stock repurchases are governed by the DGCL absent being specifically | The Proposed Bylaws provide that dividends may be declared and paid or set apart for payment upon the |
addressed in the Current Charter and the Current Bylaws. | common stock out of any assets or funds of Valo Health Holdings, Inc. legally available for the payment of dividends, but only when, as and if declared by the Board of Directors of Valo Health Holdings, Inc., and that distributions of the net assets of Valo Health Holdings, Inc. will be made pro rata to the holders of common stock upon the voluntary or involuntary liquidation, dissolution or winding up of Valo Health Holdings, Inc. | |
Amendment to Certificate of Incorporation | ||
The Current Charter may be amended as permitted under the DGCL. | Except as otherwise required by law, whenever any vote of the holders of capital stock of Valo Health Holdings, Inc. is required to amend or repeal any provision of the Proposed Charter, such amendment or repeal shall require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment or repeal, and the affirmative vote of the majority in voting power of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose. | |
Amendment to Bylaws | ||
The Current Bylaws may be amended by the Valo Board of Directors or the holders of a majority of the shares of the capital stock issued and outstanding and entitled to vote. | The Proposed Bylaws may be amended by the Board of Directors of Valo Health Holdings, Inc. or the holders of two-thirds (2/3) of the outstanding shares of capital stock issued and outstanding and entitled to vote. | |
Quorum | ||
Board of Directors: The greater of (a) a majority of the directors at any time in office and (b) one-third (1/3) of the number of directors fixed pursuant to the Current Bylaws shall constitute a quorum. If at any meeting there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.Stockholders: The holders of a majority of the shares of capital stock issued and outstanding and entitled to vote shall constitute a quorum for the transaction of business at a stockholder meeting, except where otherwise provided by the Proposed Charter, the Proposed Bylaws or the DGCL If a separate vote by a class or classes or series of capital stock is required on a particular matter, the |
Board of Directors: A majority of the directors shall constitute a quorum for the transaction of business, but if less than a quorum is present at a meeting, a majority of the directors present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice. For purposes of this section, the total number of directors includes any unfilled vacancies on the Board of Directors of Valo Health Holdings, Inc. Stockholders: The holders of a majority of the shares of capital stock issued and outstanding and entitled to vote shall constitute a quorum for the transaction of business at a stockholder meeting. If a quorum is not present, the holders of voting stock representing a majority of the voting power present at the meeting or the presiding |
holders of a majority in voting power of the shares of such class or classes or series of the capital stock issued and outstanding and entitled to vote shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum. | officer may adjourn the meeting until a quorum is present. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. | |
Stockholder Action by Written Consent | ||
Under the Current Bylaws, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote on such action were present and voted. Except as otherwise provided by the Current Charter, stockholders may elect directors by written consent; provided, however, that, if such consent is less than unanimous, such action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action. | Under the Proposed Charter, any action required or permitted to be taken by the stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders. | |
Lockup | ||
The Current Bylaws and the Current Charter do not subject stockholders to any lockup restrictions. | The Proposed Bylaws provide that holders of Valo Health Holdings, Inc. common stock issued in connection with the Business Combination and certain directors, officers and employees upon the exercise or settlement of equity awards immediately following the Business Combination may not transfer certain shares for 180 days after the Business Combination, subject to certain exceptions. | |
Choice of Forum | ||
The Current Charter sets the Court of Chancery in the State of Delaware as the sole and exclusive forum for any stockholder bringing certain claims identified in the Current Charter, except for such claims where the Court of Chancery determines that there is an indispensable party not subject to its jurisdiction, the claim is vested in the exclusive jurisdiction of a different court or a claim for which the Court of Chancery does not have subject matter jurisdiction. | The Proposed Bylaws sets the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain state law claims identified in the Proposed Bylaws and sets the federal district courts of the United States as the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. |
• | the designation of the series; |
• | the number of shares of the series, which New Valo’s board of directors may, except where otherwise provided in the preferred stock designation, increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares then outstanding); |
• | whether dividends, if any, will be cumulative or non-cumulative and the dividend rate of the series; |
• | the dates at which dividends, if any, will be payable; |
• | the redemption rights and price or prices, if any, for shares of the series; |
• | the terms and amounts of any sinking fund provided for the purchase or redemption of shares of the series; |
• | the amounts payable on shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding-up of New Valo’s affairs; |
• | whether the shares of the series will be convertible into shares of any other class or series, or any other security, of New Valo or any other corporation, and, if so, the specification of the other class or series or other security, the conversion price or prices or rate or rates, any rate adjustments, the date or dates as of which the shares will be convertible and all other terms and conditions upon which the conversion may be made; |
• | restrictions on the issuance of shares of the same series or of any other class or series; and |
• | the voting rights, if any, of the holders of the series. |
• | 1% of the total number of New Valo common stock then outstanding; or |
• | the average weekly reported trading volume of New Valo’s common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | not earlier than the 90 th day; and |
• | not later than the 120 th day, |
Page(s) |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7 to F-19 |
Page(s) |
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Audited Consolidated Financial Statements of Valo Health, LLC: |
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F-20 | ||||
F-21 | ||||
F-22 | ||||
F-23 | ||||
F-25 | ||||
F-26 to F-54 | ||||
Unaudited Condensed Consolidated Financial Statements of Valo Health, LLC: |
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F-55 | ||||
F-56 | ||||
F-57 | ||||
F-58 | ||||
F-59 to F-82 |
ASSETS |
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Cash and cash equivalents |
$ | |||
Prepaid expenses |
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Total current assets |
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Marketable securities held in trust account |
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Other assets |
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Total assets |
$ |
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LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable |
$ | |||
Franchise tax payable |
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Accrued expenses |
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Due to related party |
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Total current liabilities |
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Deferred underwriting fee payable |
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Class K Founder Shares derivative liabilities |
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Total liabilities |
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Commitments and Contingencies (Note 5) |
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Class A Common stock subject to possible redemption, redemption value |
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Stockholders’ Deficit: |
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Preferred stock, $ |
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Class A common stock, $ shares authorized; ( |
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Class B common stock, $ |
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Additional paid-in capital |
— |
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Accumulated Deficit |
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Total stockholders’ deficit |
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Total Liabilities, Common Stock Subject to Possible Redemption, and Stockholders’ Deficit |
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From January 15, 2021 (inception) through June 30, 2021 |
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Formation and operating costs |
$ |
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General and administrative expenses |
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Franchise tax expense |
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Loss from operations |
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( |
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Financing expenses on derivative classified instrument |
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( |
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Gain on marketable securities (net), dividends and interest, held in Trust Account |
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Change in fair value of derivative liabilities |
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Loss before income tax expense |
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Net loss |
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Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted |
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Basic and diluted net loss per share, Class A common stock subject to possible redemption |
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Weighted average shares outstanding of Class A non-redeemable common stock, basic and diluted |
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Basic and diluted net loss per share, Class A non-redeemable common stock |
$ |
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Weighted average shares outstanding of Class B non-redeemable common stock, basic and diluted |
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Basic and diluted net loss per common stock, Class B |
$ |
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Common Stock Subject to Possible Redemption |
Common Stock |
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Class A |
Class A |
Class B |
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Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||
Balance as of January 15, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
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Issuance of common stock to Sponsor |
— | — | — |
— |
— | |||||||||||||||||||||||||||||||
Sale of Public Shares, net of $ issuance costs |
— | — | — | — | — |
— | — |
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Sale of Private Placement Shares |
— | — | — | — | — | |||||||||||||||||||||||||||||||
Accretion of Class A Common Stock to redemption value |
— |
— | — | — | — | ( |
) | ( |
) |
( |
) | |||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | ( |
) | ( |
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Balance as of March 31, 2021 (unaudited) |
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$ |
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$ |
— |
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$ |
( |
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$ |
( |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance as of June 30, 2021 (audited) |
$ |
$ |
$ |
$ |
— |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||||||
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For the period from January 15, 2021 (inception) through June 30, 2021 |
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Cash Flows from Operating Activities |
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Net Loss |
$ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Financing expenses on derivative classified instrument |
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Change in fair value of derivative liabilities |
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( |
) |
Gain on marketable securities (net), dividends and interest, held in Trust Account |
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( |
) |
Changes in operating assets and liabilities |
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Prepaid expenses and other assets |
( |
) | ||
Accounts payable and accrued expenses |
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Net cash used in operating activities |
( |
) | ||
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Cash Flows from Investing Activities |
||||
Investment of cash into Trust Account |
( |
) | ||
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Net cash used in investing activities |
( |
) | ||
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Cash Flows from Financing Activities |
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Proceeds from issuance of Class B and Class K common stock to Sponsor |
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Advances from related party |
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Proceeds from sale of Public Shares, net of transaction costs paid |
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Proceeds from sale of Private Placement Shares |
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Net cash provided by financing activities |
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Net increase in cash |
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Cash – beginning of period |
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Cash – end of period |
$ | |||
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Supplemental disclosure of noncash investing and financing activities: |
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Deferred underwriting fees payable |
$ | |||
|
|
|
|
|
• |
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
• | Level 2: Observable inputs other than Level 1 inputs. Example of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
• | Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
For the period from January 15 , 2021 (inception)through June 30, 2021 |
||||
Net loss |
$ |
( |
) | |
Accretion of temporary equity to redemption value |
( |
) | ||
|
|
|||
Net loss including accretion of temporary equity to redemption value |
$ |
( |
) | |
|
|
For the period from January 1 5 , 2021 (inception)through June 30, 2021 |
||||||||||||
Class A-t |
Class A-p |
Class B |
||||||||||
Basic and diluted net income (loss) per share |
||||||||||||
Numerator |
||||||||||||
Allocation of net loss including accretion of temporary equity |
( |
) |
( |
) |
( |
) | ||||||
Accretion of temporary equity to redemption value |
— |
— |
||||||||||
|
|
|
|
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|
|||||||
Allocation of net income (loss) |
( |
) |
( |
) |
( |
) | ||||||
Denominator |
||||||||||||
Weighted-average shares outstanding |
||||||||||||
Basic and diluted net income (loss) per share |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Description |
Level |
June 30, 2021 |
||||||
Assets: |
||||||||
Marketable securities held in Trust Account |
1 | $ | ||||||
Liabilities: |
||||||||
Derivative liability – Class K Founder Shares |
3 | $ |
Input |
January 19 , 2021 |
June 30, 2021 |
||||||
Risk-free interest rate |
% | % | ||||||
Term to business combination |
||||||||
Expected volatility |
% | % | ||||||
Stock Price |
$ | $ | ||||||
Dividend yield |
% | % |
Class K Founder Shares Derivative Liability |
||||
Fair value, January 19 , 2021 |
$ | |||
Change in fair value of Class K Founder Shares liability |
( |
) | ||
Fair value, March 31, 2021 (unaudited) |
||||
Change in fair value of Class K Founder Shares liability |
( |
) | ||
Fair value, June 30, 2021 (audited) |
$ |
|||
December 31, |
||||||||
Assets |
2020 |
2019 |
||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 188,095 | $ | 60,916 | ||||
Restricted cash |
5,000 | — | ||||||
Prepaid expenses and other current assets |
4,229 | 453 | ||||||
|
|
|
|
|||||
Total current assets |
197,324 | 61,369 | ||||||
Property and equipment, net |
12,864 | 8,302 | ||||||
Goodwill |
4,743 | 3,910 | ||||||
Intangible assets, net |
15,318 | — | ||||||
Other long-term assets |
3,012 | 693 | ||||||
|
|
|
|
|||||
Total assets |
$ | 233,261 | $ | 74,274 | ||||
|
|
|
|
|||||
Liabilities, Preferred Units and Members’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 1,847 | $ | 515 | ||||
Accrued expenses |
8,613 | 3,405 | ||||||
|
|
|
|
|||||
Total current liabilities |
10,460 | 3,920 | ||||||
Long-term debt, net of discount |
22,178 | — | ||||||
Other long-term liabilities |
1,893 | 423 | ||||||
|
|
|
|
|||||
Total liabilities |
34,531 | 4,343 | ||||||
Commitments and contingencies (Note 13) |
||||||||
Preferred units (Series A and B), 76,794,171 and 50,000,000 units authorized at December 31, 2020 and 2019, respectively; 58,040,668 and 23,687,321 units issued and outstanding at December 31, 2020, and 2019, respectively; aggregate liquidation preference of $296,001 as of December 31, 2020 |
293,050 | 94,455 | ||||||
Members’ deficit: |
||||||||
Common units, 80,850,000 and 80,250,000 units authorized at December 31, 2020 and 2019, respectively; 79,524,602 and 80,169,602 units issued and outstanding at December 31, 2020 and 2019, respectively |
5,447 | 5,447 | ||||||
Incentive units, 40,000,000 and 24,000,000 units authorized at December 31, 2020 and 2019, respectively; 26,663,790 and 23,669,219 units issued and outstanding at December 31, 2020 and 2019, respectively |
142 | 29 | ||||||
Additional paid-in capital |
10,572 | 4,197 | ||||||
Accumulated members’ deficit |
(110,481 | ) | (34,197 | ) | ||||
|
|
|
|
|||||
Total members’ deficit |
(94,320 | ) | (24,524 | ) | ||||
|
|
|
|
|||||
Total liabilities, preferred units and members’ deficit |
$ | 233,261 | $ | 74,274 | ||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Operating expenses: |
||||||||
Research and development |
$ | 43,296 | $ | 11,378 | ||||
General and administrative |
30,556 | 22,409 | ||||||
|
|
|
|
|||||
Total operating expenses |
73,852 | 33,787 | ||||||
|
|
|
|
|||||
Loss from operations |
(73,852 | ) | (33,787 | ) | ||||
|
|
|
|
|||||
Other income (expense): |
||||||||
Interest expense |
(2,636 | ) | (180 | ) | ||||
Other income (expense), net |
282 | — | ||||||
|
|
|
|
|||||
Total other expense, net |
(2,354 | ) | (180 | ) | ||||
|
|
|
|
|||||
Loss before income taxes |
(76,206 | ) | (33,967 | ) | ||||
Income tax expense |
(78 | ) | (5 | ) | ||||
|
|
|
|
|||||
Net loss and comprehensive loss |
$ | (76,284 | ) | $ | (33,972 | ) | ||
|
|
|
|
|||||
Net loss per unit attributable to common unit holders, basic and diluted |
$ | (0.96 | ) | $ | (0.46 | ) | ||
|
|
|
|
|||||
Weighted average common units outstanding, basic and diluted |
79,673,199 | 73,778,388 | ||||||
|
|
|
|
Series A and B |
Additional Paid-in Capital |
Accumulated Members’ Deficit |
Total Members’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Preferred Units |
Common Stock |
Common Units |
Incentive Units |
|||||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Shares |
Amount |
Units |
Amount |
Units |
Amount |
|||||||||||||||||||||||||||||||||||||
Balances at December 31, 2018 |
— | $ | — | 14,000,000 | $ | 14 | — | $ | — | — | $ | — | $ | — | $ | (225 | ) | $ | (211 | ) | ||||||||||||||||||||||||
Conversion of common stock into common units |
— | — | (14,000,000 | ) | (14 | ) | 70,000,000 | 14 | — | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of Series A preferred units, net of issuance costs of $294 |
20,487,500 | 81,656 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Conversion of convertible notes and accrued interest into Series A preferred units |
3,199,821 | 12,799 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of common units in connection with acquisition |
— | — | — | — | 4,169,602 | 4,962 | — | — | — | — | 4,962 | |||||||||||||||||||||||||||||||||
Issuance of restricted common units |
— | — | — | — | 1,290,000 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of common units |
— | — | — | — | 4,710,000 | 471 | — | — | — | — | 471 | |||||||||||||||||||||||||||||||||
Issuance of incentive units |
— | — | — | — | — | — | 24,260,419 | — | — | — | — | |||||||||||||||||||||||||||||||||
Forfeitures of incentive units |
— | — | — | — | — | — | (591,200 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||
Exercise of incentive units |
— | — | — | — | — | — | — | 29 | — | — | 29 | |||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | — | — | 4,197 | — | 4,197 | |||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | (33,972 | ) | (33,972 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A and B |
Additional Paid-in Capital |
Accumulated Members’ Deficit |
Total Members’ Deficit |
|||||||||||||||||||||||||||||||||||||||||
Preferred Units |
Common Stock |
Common Units |
Incentive Units |
|||||||||||||||||||||||||||||||||||||||||
Units |
Amount |
Shares |
Amount |
Units |
Amount |
Units |
Amount |
|||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 |
23,687,321 | $ | 94,455 | — | $ | — | 80,169,602 | $ | 5,447 | 23,669,219 | $ | 29 | $ | 4,197 | $ | (34,197 | ) | $ | (24,524 | ) | ||||||||||||||||||||||||
Issuance of Series A preferred units |
375,000 | 1,500 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of Series B preferred units, net of issuance costs of $2,657 |
32,277,320 | 187,095 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Issuance of Series B preferred units in connection with acquisition |
1,701,027 | 10,000 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Forfeiture of unvested restricted common units |
— | — | — | — | (645,000 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of incentive units |
— | — | — | — | — | — | 7,307,198 | — | — | — | — | |||||||||||||||||||||||||||||||||
Forfeitures of incentive units |
— | — | — | — | — | — | (4,312,627 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||
Exercise of incentive units |
— | — | — | — | — | — | — | 113 | — | — | 113 | |||||||||||||||||||||||||||||||||
Issuance of warrant for common units |
— | — | — | — | — | — | — | — | 325 | — | 325 | |||||||||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | — | — | 6,050 | — | 6,050 | |||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | (76,284 | ) | (76,284 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Balances at December 31, 2020 |
58,040,668 | $ | 293,050 | — | $ | — | 79,524,602 | $ | 5,447 | 26,663,790 | $ | 142 | $ | 10,572 | $ | (110,481 | ) | $ | (94,320 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (76,284 | ) | $ | (33,972 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization expense |
7,809 | 754 | ||||||
Equity-based compensation expense |
6,050 | 4,197 | ||||||
Related-party payable settled in preferred units |
— | 2,589 | ||||||
Noncash interest expense |
981 | 180 | ||||||
Deferred taxes |
78 | 5 | ||||||
Changes in operating assets and liabilities, excluding impact of acquisitions: |
||||||||
Prepaid expenses and other current assets |
(2,660 | ) | (406 | ) | ||||
Other long-term assets |
(1,012 | ) | — | |||||
Accounts payable and accrued expenses |
5,947 | 2,963 | ||||||
Other long-term liabilities |
1,392 | 418 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(57,699 | ) | (23,272 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(2,688 | ) | (649 | ) | ||||
Cash paid for acquisitions of businesses |
(3,082 | ) | (6,600 | ) | ||||
|
|
|
|
|||||
Net cash used in investing activities |
(5,770 | ) | (7,249 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of preferred units, net of issuance costs paid |
188,723 | 81,670 | ||||||
Proceeds from issuance of long-term debt, net of issuance costs paid |
22,181 | — | ||||||
Deferred payment in connection with acquisition of business |
(14,062 | ) | — | |||||
Proceeds from related-party convertible notes |
— | 5,000 | ||||||
Proceeds from issuance of common units |
— | 471 | ||||||
Proceeds from exercise of incentive units |
113 | 29 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
196,955 | 87,170 | ||||||
|
|
|
|
|||||
Net increase in cash, cash equivalents and restricted cash |
133,486 | 56,649 | ||||||
Cash, cash equivalents, and restricted cash at beginning of period |
61,609 | 4,960 | ||||||
|
|
|
|
|||||
Cash, cash equivalents, and restricted cash at end of period |
$ | 195,095 | $ | 61,609 | ||||
|
|
|
|
|||||
Supplemental disclosure of noncash information: |
||||||||
Equity units issued in connection with acquisitions |
$ | 9,341 | $ | 4,962 | ||||
Conversion of convertible notes and accrued interest into Series A preferred units |
$ | — | $ | 12,799 | ||||
Issuance of common unit warrants in connection with long-term debt |
$ | 325 | $ | — | ||||
Series B preferred units issuance costs included in accounts payable and accrued expenses |
$ | 580 | $ | — | ||||
Other receivable from investor for preferred units |
$ | 452 | $ | — | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest |
$ | 1,528 | $ | — | ||||
Reconciliation of cash, cash equivalents and restricted cash |
||||||||
Cash and cash equivalents |
$ | 188,095 | $ | 60,916 | ||||
Restricted cash |
5,000 | — | ||||||
Restricted cash included in other long-term assets |
2,000 | 693 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows |
$ | 195,095 | $ | 61,609 | ||||
|
|
|
|
Estimated Useful Life | ||
Internal use software | 3 years | |
Computers and equipment | 3 years | |
Lab equipment | 5 years | |
Furniture and fixtures | 5 years | |
Leasehold improvements | Shorter of remaining term of lease or useful life |
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Preferred units (as converted to common units) |
58,040,668 | 23,687,321 | ||||||
Restricted common units |
— | 967,500 | ||||||
Incentive units (vested and unvested) |
26,296,215 | 23,653,594 | ||||||
|
|
|
|
|||||
84,336,883 | 48,308,415 | |||||||
|
|
|
|
Fair Value Measurements at December 31, 2020 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 185,595 | $ | — | $ | — | $ | 185,595 | ||||||||
Restricted cash: |
||||||||||||||||
Money market funds |
5,000 | — | — | 5,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 190,595 | $ | — | $ | — | $ | 190,595 | |||||||||
|
|
|
|
|
|
|
|
Cash paid |
$ | 6,600 | ||
Equity consideration |
4,962 | |||
|
|
|||
Total purchase price consideration |
$ | 11,562 | ||
|
|
|||
Assets acquired and liabilities assumed: |
||||
Prepaid expenses and other current assets |
$ | 47 | ||
Property and equipment |
8,409 | |||
Goodwill, including workforce |
3,910 | |||
|
|
|||
Total assets acquired |
12,366 | |||
Accounts payable |
(804 | ) | ||
|
|
|||
Total allocation of purchase price consideration |
$ | 11,562 | ||
|
|
Cash paid |
$ | 17,144 | ||
Equity consideration |
9,341 | |||
|
|
|||
Total purchase price consideration |
$ | 26,485 | ||
|
|
|||
Assets acquired and liabilities assumed: |
||||
Prepaid expenses and other current assets |
$ | 664 | ||
Property and equipment |
6,801 | |||
Identified intangible assets |
18,200 | |||
Goodwill, including workforce |
833 | |||
|
|
|||
Total assets acquired |
26,498 | |||
Accrued expenses |
(13 | ) | ||
|
|
|||
Total allocation of purchase price consideration |
$ | 26,485 | ||
|
|
Year ended December 31, |
||||||||
2020 |
2019 |
|||||||
Pro forma net loss |
$ | (79,077 | ) | $ | (55,734 | ) |
Balance at December 31, 2018 |
$ | — | ||
Goodwill acquired during the year |
3,910 | |||
|
|
|||
Balance at December 31, 2019 |
3,910 | |||
Goodwill acquired during the year |
833 | |||
|
|
|||
Balance at December 31, 2020 |
$ | 4,743 | ||
|
|
Weighted Average Useful Life |
December 31, 2020 |
|||||||||||||||
Gross Amount |
Accumulated Amortization |
Carrying Value |
||||||||||||||
(in years) |
||||||||||||||||
Developed technology |
5 | $ | 18,200 | $ | 2,882 | $ | 15,318 | |||||||||
|
|
|
|
|
|
|||||||||||
$ | 18,200 | $ | 2,882 | $ | 15,318 | |||||||||||
|
|
|
|
|
|
Year Ending December 31, |
||||
2021 |
$ | 3,640 | ||
2022 |
3,640 | |||
2023 |
3,640 | |||
2024 |
3,640 | |||
2025 |
758 | |||
|
|
|||
$ | 15,318 | |||
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Internal use software |
$ | 8,400 | $ | 8,400 | ||||
Computers and equipment |
1,310 | 443 | ||||||
Lab equipment |
6,122 | — | ||||||
Furniture and fixtures |
796 | 215 | ||||||
Leasehold improvements |
1,919 | — | ||||||
|
|
|
|
|||||
18,547 | 9,058 | |||||||
Less: Accumulated depreciation and amortization |
(5,683 | ) | (756 | ) | ||||
|
|
|
|
|||||
$ | 12,864 | $ | 8,302 | |||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Accrued employee compensation and benefits |
$ | 6,995 | $ | 2,012 | ||||
Accrued professional fees |
1,421 | 615 | ||||||
Accrued other |
197 | 778 | ||||||
|
|
|
|
|||||
$ | 8,613 | $ | 3,405 | |||||
|
|
|
|
December 31, 2020 |
||||
Principal amount of long-term debt |
$ | 23,000 | ||
Less: Current portion of long-term debt |
— | |||
|
|
|||
Long-term debt, net of current portion |
23,000 | |||
Debt discount, net of accretion |
(822 | ) | ||
|
|
|||
Long-term debt, net of discount and current portion |
$ | 22,178 | ||
|
|
Year Ending December 31: |
||||
2021 |
$ | 4,472 | ||
2022 |
7,667 | |||
2023 |
7,667 | |||
2024 |
3,194 | |||
|
|
|||
$ | 23,000 | |||
|
|
December 31, 2020 |
||||||||||||||||
Preferred Units Authorized |
Preferred Units Issued and Outstanding |
Carrying Value |
Liquidation Preference |
|||||||||||||
Series A preferred units |
24,062,321 | 24,062,321 | $ | 95,955 | $ | 96,249 | ||||||||||
Series B preferred units |
52,731,850 | 33,978,347 | 197,095 | 199,752 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
76,794,171 | 58,040,668 | $293,050 | $296,001 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
December 31, 2019 |
||||||||||||||||
Preferred Units Authorized |
Preferred Units Issued and Outstanding |
Carrying Value |
Liquidation Preference |
|||||||||||||
Series A preferred units |
50,000,000 | 23,687,321 | $ | 94,455 | $ | 94,749 | ||||||||||
|
|
|
|
|
|
|
|
• | First, the holders of Series B preferred units will receive, in preference to any distribution to the holders of Series A preferred units, common units or incentive units, on a pro rata basis, an amount |
equal to the Series B preferred unit Original Issue Price per unit less such amounts per Series B preferred unit previously distributed to holders of Series B preferred units; |
• | Second, the holders of Series A preferred units will receive, in preference to any distribution to the holders of common units or incentive units, on a pro rata basis, an amount equal to the Series A preferred unit Original Issue Price per unit less such amounts per Series A preferred unit previously distributed to holders of Series A preferred units; |
• | Third, the holders of vested common units and vested Incentive Units will receive, pro rata in proportion to the remaining amount to be distributed to such Units, amounts available for distribution until such holders have received an aggregate amount equal to the Series A Preferred Original Issuance Price; |
• | Fourth, the holders of Series A preferred units, vested common units and vested Incentive Units will receive, pro rata in proportion to the remaining amount to be distributed to such Units, amounts available for distribution until each such holder of each Series A preferred unit, vested common unit and each such vested Incentive Unit has received an aggregate amount equal to the Series B Preferred Original Issuance Price; and |
• | Thereafter, the holders of all vested units pro rata in proportion to each holder’s Percentage Interest will receive the remaining proceeds, subject to certain limitations. For purposes of this calculation, Percentage Interest is defined as (i) the sum of the holder’s Series A preferred units multiplied by the Series A Adjustment Rate plus the holder’s Series B preferred units multiplied by the Series B Adjustment Rate plus the holder’s common units and vested incentive units divided by (ii) the sum of all Series A preferred units outstanding multiplied by the Series A Adjustment Rate plus all Series B preferred units outstanding multiplied by the Series B Adjustment Rate plus all common and vested incentive units outstanding. The Adjustment Rate is defined as the Original Issue Price of each class divided by the Adjustment Price of each Series. |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Risk-free interest rate |
0.4 | % | 1.8 | % | ||||
Expected volatility |
69.0 | % | 68.0 | % | ||||
Expected dividend yield |
— | — | ||||||
Expected term (in years) |
1.9 | 1.7 |
Units |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding incentive units at December 31, 2019 |
22,469,219 | $ | 0.97 | |||||
Issued |
7,307,198 | $ | 0.64 | |||||
Forfeited |
(4,312,627 | ) | $ | 0.77 | ||||
|
|
|||||||
Outstanding incentive units at December 31, 2020 |
25,463,790 | $ | 0.91 | |||||
|
|
|||||||
Vested incentive units |
8,902,633 | $ | 1.02 | |||||
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Research and development expenses |
$ | 1,129 | $ | 617 | ||||
General and administrative expenses |
4,921 | 3,580 | ||||||
|
|
|
|
|||||
$ | 6,050 | $ | 4,197 | |||||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Federal statutory income tax rate |
21.0 | % | 21.0 | % | ||||
State taxes, net of federal benefit |
2.3 | 2.0 | ||||||
Federal and state research and development tax credits |
1.1 | 0.3 | ||||||
Other |
(2.4 | ) | (2.8 | ) | ||||
Change in deferred tax asset valuation allowance |
(22.1 | ) | (20.5 | ) | ||||
|
|
|
|
|||||
Effective income tax rate |
(0.1 | )% | 0.0 | % | ||||
|
|
|
|
December 31, |
||||||||
2020 |
2019 |
|||||||
Deferred tax assets: |
||||||||
Net operating loss carryforwards |
$ | 18,755 | $ | 5,437 | ||||
Tax credit carryforwards |
908 | 100 | ||||||
Accrued expenses |
2,063 | 627 | ||||||
Intangible |
3,295 | 2,838 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
25,021 | 9,002 | ||||||
|
|
|
|
|||||
Deferred tax liabilities: |
||||||||
Property and equipment |
(1,119 | ) | (1,966 | ) | ||||
Goodwill |
(94 | ) | (16 | ) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
(1,213 | ) | (1,982 | ) | ||||
|
|
|
|
|||||
Valuation allowance |
(23,891 | ) | (7,025 | ) | ||||
|
|
|
|
|||||
Net deferred tax liability |
$ | (83 | ) | $ | (5 | ) | ||
|
|
|
|
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Valuation allowance as of beginning of year |
$ | 7,025 | $ | 58 | ||||
Increases recorded to income tax provision |
16,866 | 6,967 | ||||||
|
|
|
|
|||||
Valuation allowance as of end of year |
$ | 23,891 | $ | 7,025 | ||||
|
|
|
|
Year Ending December 31, |
||||
2021 |
$ | 4,318 | ||
2022 |
5,286 | |||
2023 |
5,436 | |||
2024 |
4,726 | |||
2025 |
4,809 | |||
Thereafter |
10,203 | |||
|
|
|||
Total future minimum lease payments |
$ | 34,778 | ||
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 237,498 | $ | 188,095 | ||||
Restricted cash |
— | 5,000 | ||||||
Prepaid expenses and other current assets |
4,250 | 4,229 | ||||||
|
|
|
|
|||||
Total current assets |
241,748 | 197,324 | ||||||
Property and equipment, net |
12,442 | 12,864 | ||||||
Goodwill |
4,743 | 4,743 | ||||||
Intangible assets, net |
13,498 | 15,318 | ||||||
Deferred offering costs |
4,832 | — | ||||||
Other long-term assets |
2,414 | 3,012 | ||||||
|
|
|
|
|||||
Total assets |
$ | 279,677 | $ | 233,261 | ||||
|
|
|
|
|||||
Liabilities, Preferred Units and Members’ Deficit |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 3,552 | $ | 1,847 | ||||
Accrued expenses |
16,827 | 8,613 | ||||||
Current portion of long-term debt |
958 | — | ||||||
|
|
|
|
|||||
Total current liabilities |
21,337 | 10,460 | ||||||
Long-term debt, net of discount and current portion |
21,603 | 22,178 | ||||||
Other long-term liabilities |
4,804 | 1,893 | ||||||
|
|
|
|
|||||
Total liabilities |
47,744 | 34,531 | ||||||
Commitments and contingencies (Note 11) |
||||||||
Preferred units (Series A and B), 76,794,171 units authorized; 76,794,171 and 58,040,668 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $406,249 as of June 30, 2021 |
403,150 | 293,050 | ||||||
Members’ deficit: |
||||||||
Common units, 80,850,000 units authorized; 79,686,267 and 79,524,602 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively |
5,940 | 5,447 | ||||||
Incentive units, 26,928,033 and 40,000,000 units authorized at June 30, 2021 and December 31, 2020, respectively; 26,609,455 and 26,663,790 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively |
297 | 142 | ||||||
Additional paid-in capital |
15,008 | 10,572 | ||||||
Accumulated members’ deficit |
(192,462 | ) | (110,481 | ) | ||||
|
|
|
|
|||||
Total members’ deficit |
(171,217 | ) | (94,320 | ) | ||||
|
|
|
|
|||||
Total liabilities, preferred units and members’ deficit |
$ | 279,677 | $ | 233,261 | ||||
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Operating expenses: |
||||||||
Research and development |
$ | 60,638 | $ | 19,592 | ||||
General and administrative |
19,549 | 13,906 | ||||||
|
|
|
|
|||||
Total operating expenses |
80,187 | 33,498 | ||||||
|
|
|
|
|||||
Loss from operations |
(80,187 | ) | (33,498 | ) | ||||
|
|
|
|
|||||
Other income (expense): |
||||||||
Interest expense |
(1,799 | ) | (624 | ) | ||||
Other income (expense), net |
19 | 1 | ||||||
|
|
|
|
|||||
Total other expense, net |
(1,780 | ) | (623 | ) | ||||
|
|
|
|
|||||
Loss before income taxes |
(81,967 | ) | (34,121 | ) | ||||
Income tax expense |
(14 | ) | (40 | ) | ||||
|
|
|
|
|||||
Net loss and comprehensive loss |
$ | (81,981 | ) | $ | (34,161 | ) | ||
|
|
|
|
|||||
Net loss per unit attributable to common unit holders, basic and diluted |
$ | (1.02 | ) | $ | (0.43 | ) | ||
|
|
|
|
|||||
Weighted average common units outstanding, basic and diluted |
80,418,143 | 79,482,906 | ||||||
|
|
|
|
Series A and B Preferred Units |
Common Units |
Incentive Units |
Additional Paid-in Capital |
Accumulated Members’ Deficit |
Total Members’ Deficit |
|||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
|||||||||||||||||||||||||||||||
Balances at December 31, 2020 |
58,040,668 | $ | 293,050 | 79,524,602 | $ | 5,447 | 26,663,790 | $ | 142 | $ | 10,572 | $ | (110,481 | ) | $ | (94,320 | ) | |||||||||||||||||||
Issuance of Series B preferred units, net of issuance costs of $148 |
18,753,503 | 110,100 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Issuance of common units in lieu of accrued bonus |
— | — | 161,665 | 493 | — | — | — | — | 493 | |||||||||||||||||||||||||||
Issuance of incentive units |
— | — | — | — | 730,250 | — | — | — | — | |||||||||||||||||||||||||||
Forfeitures of incentive units |
— | — | — | — | (784,585 | ) | — | — | — | — | ||||||||||||||||||||||||||
Exercise of incentive units |
— | — | — | — | — | 155 | — | — | 155 | |||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | 4,436 | — | 4,436 | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | (81,981 | ) | (81,981 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balances at June 30, 2021 |
76,794,171 | $ | 403,150 | 79,686,267 | $ | 5,940 | 26,609,455 | $ | 297 | $ | 15,008 | $ | (192,462 | ) | $ | (171,217 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Series A and B Preferred Units |
Common Units |
Incentive Units |
Additional Paid-in Capital |
Accumulated Members’ Deficit |
Total Members’ Deficit |
|||||||||||||||||||||||||||||||
Units |
Amount |
Units |
Amount |
Units |
Amount |
|||||||||||||||||||||||||||||||
Balances at December 31, 2019 |
23,687,321 | $ | 94,455 | 80,169,602 | $ | 5,447 | 23,669,219 | $ | 29 | $ | 4,197 | $ | (34,197 | ) | $ | (24,524 | ) | |||||||||||||||||||
Issuance of Series A preferred units |
375,000 | 1,500 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Issuance of incentive units |
— | — | — | — | 6,481,456 | — | — | — | — | |||||||||||||||||||||||||||
Forfeitures of incentive units |
— | — | — | — | (1,038,086 | ) | — | — | — | — | ||||||||||||||||||||||||||
Issuance of warrant for common units |
— | — | — | — | — | — | 135 | — | 135 | |||||||||||||||||||||||||||
Equity-based compensation expense |
— | — | — | — | — | — | 2,999 | — | 2,999 | |||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | (34,161 | ) | (34,161 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balances at June 30, 2020 |
24,062,321 | $ | 95,955 | 80,169,602 | $ | 5,447 | 29,112,589 | $ | 29 | $ | 7,331 | $ | (68,358 | ) | $ | (55,551 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | (81,981 | ) | $ | (34,161 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization expense |
4,690 | 3,295 | ||||||
Equity-based compensation expense |
4,436 | 2,999 | ||||||
Noncash interest expense |
677 | 624 | ||||||
Deferred taxes |
14 | 40 | ||||||
Changes in operating assets and liabilities, excluding impact of acquisitions: |
||||||||
Prepaid expenses and other current assets |
(21 | ) | (438 | ) | ||||
Other long-term assets |
104 | (370 | ) | |||||
Accounts payable and accrued expenses |
6,978 | 4,557 | ||||||
Other long-term liabilities |
2,750 | 1,506 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(62,353 | ) | (21,948 | ) | ||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(2,448 | ) | (2,250 | ) | ||||
Cash paid for acquisition of business |
— | (3,082 | ) | |||||
|
|
|
|
|||||
Net cash used in investing activities |
(2,448 | ) | (5,332 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from issuance of preferred units, net of issuance costs paid |
110,100 | 1,500 | ||||||
Payments of offering costs |
(1,545 | ) | — | |||||
Proceeds from exercise of incentive units |
155 | — | ||||||
Proceeds from issuance of long-term debt, net of discount |
— | 9,335 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
108,710 | 10,835 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
43,909 | (16,445 | ) | |||||
Cash, cash equivalents, and restricted cash at beginning of period |
195,095 | 61,609 | ||||||
|
|
|
|
|||||
Cash, cash equivalents, and restricted cash at end of period |
$ | 239,004 | $ | 45,164 | ||||
|
|
|
|
|||||
Supplemental disclosure of noncash information: |
||||||||
Common units issued in lieu of accrued bonus |
$ | 493 | $ | — | ||||
Deferred offering costs included in accounts payable and accrued expenses |
$ | 3,287 | $ | — | ||||
Equity units to be issued in connection with acquisition |
$ | — | $ | 9,341 | ||||
Deferred payment in connection with acquisition of business |
$ | — | $ | 14,062 | ||||
Issuance of common unit warrants in connection with long-term debt |
$ | — | $ | 135 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest |
$ | 1,061 | $ | — | ||||
Reconciliation of cash, cash equivalents and restricted cash |
||||||||
Cash and cash equivalents |
$ | 237,498 | $ | 39,481 | ||||
Restricted cash |
— | 5,000 | ||||||
Restricted cash included in other-long term assets |
1,506 | 683 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows |
$ | 239,004 | $ | 45,164 | ||||
|
|
|
|
• | Level 1—Quoted prices in active markets for identical assets or liabilities. |
• | Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Preferred units (as converted to common units) |
76,794,171 | 24,062,321 | ||||||
Restricted common units |
— | 645,000 | ||||||
Incentive units (vested and unvested) |
25,945,032 | 29,096,964 | ||||||
Options to purchase common units |
5,664,555 | — | ||||||
|
|
|
|
|||||
108,403,758 | 53,804,285 | |||||||
|
|
|
|
Fair Value Measurements at June 30, 2021 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 233,882 | $ | — | $ | — | $ | 233,882 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurements at December 31, 2020 Using: |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets: |
||||||||||||||||
Cash equivalents: |
||||||||||||||||
Money market funds |
$ | 185,595 | $ | — | $ | — | $ | 185,595 | ||||||||
Restricted cash: |
||||||||||||||||
Money market funds |
5,000 | — | — | 5,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 190,595 | $ | — | $ | — | $ | 190,595 | |||||||||
|
|
|
|
|
|
|
|
Cash paid |
$ | 17,144 | ||
Equity consideration |
9,341 | |||
|
|
|||
Total purchase price consideration |
$ | 26,485 | ||
|
|
|||
Assets acquired and liabilities assumed: |
||||
Prepaid expenses and other current assets |
$ | 664 | ||
Property and equipment |
6,801 | |||
Identified intangible assets |
18,200 | |||
Goodwill, including workforce |
833 | |||
|
|
|||
Total assets acquired |
26,498 | |||
Accrued expenses |
(13 | ) | ||
|
|
|||
Total allocation of purchase price consideration |
$ | 26,485 | ||
|
|
June 30, 2020 |
||||
Pro forma net loss |
$ | (36,954 | ) |
June 30, 2021 |
||||||||||||||||
Weighted Average Useful Life |
Gross Amount |
Accumulated Amortization |
Carrying Value |
|||||||||||||
(in years) |
||||||||||||||||
Developed technology |
5 | $ | 18,200 | $ | 4,702 | $ | 13,498 | |||||||||
|
|
|
|
|
|
|||||||||||
$ | 18,200 | $ | 4,702 | $ | 13,498 | |||||||||||
|
|
|
|
|
|
December 31, 2020 |
||||||||||||||||
Weighted Average Useful Life |
Gross Amount |
Accumulated Amortization |
Carrying Value |
|||||||||||||
(in years) |
||||||||||||||||
Developed technology |
5 | $ | 18,200 | $ | 2,882 | $ | 15,318 | |||||||||
|
|
|
|
|
|
|||||||||||
$ | 18,200 | $ | 2,882 | $ | 15,318 | |||||||||||
|
|
|
|
|
|
Year Ending December 31, |
||||
2021 (Remaining six months) |
$ | 1,820 | ||
2022 |
3,640 | |||
2023 |
3,640 | |||
2024 |
3,640 | |||
2025 |
758 | |||
|
|
|||
$ | 13,498 | |||
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Accrued employee compensation and benefits |
$ | 7,452 | $ | 6,995 | ||||
Accrued license fee |
3,530 | — | ||||||
Accrued professional fees |
3,298 | 1,421 | ||||||
Accrued external research and development expenses |
1,869 | — | ||||||
Accrued other |
678 | 197 | ||||||
|
|
|
|
|||||
$ | 16,827 | $ | 8,613 | |||||
|
|
|
|
June 30, 2021 |
December 31, 2020 |
|||||||
Principal amount of long-term debt |
$ | 23,000 | $ | 23,000 | ||||
Less: Current portion of long-term debt |
(958 | ) | — | |||||
|
|
|
|
|||||
Long-term debt, net of current portion |
22,042 | 23,000 | ||||||
Debt discount, net of accretion |
(439 | ) | (822 | ) | ||||
|
|
|
|
|||||
Long-term debt, net of discount and current portion |
$ | 21,603 | $ | 22,178 | ||||
|
|
|
|
Year Ending December 31: |
||||
2021 (Remaining six months) |
$ | — | ||
2022 |
6,708 | |||
2023 |
11,500 | |||
2024 |
4,792 | |||
|
|
|||
$ | 23,000 | |||
|
|
June 30, 2021 |
||||||||||||||||
Preferred Units Authorized |
Preferred Units Issued and Outstanding |
Carrying Value |
Liquidation Preference |
|||||||||||||
Series A preferred units |
24,062,321 | 24,062,321 | $ | 95,955 | $ | 96,249 | ||||||||||
Series B preferred units |
52,731,850 | 52,731,850 | 307,195 | 310,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
76,794,171 | 76,794,171 | $ | 403,150 | $ | 406,249 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
December 31, 2020 |
||||||||||||||||
Preferred Units Authorized |
Preferred Units Issued and Outstanding |
Carrying Value |
Liquidation Preference |
|||||||||||||
Series A preferred units |
24,062,321 | 24,062,321 | $ | 95,955 | $ | 96,249 | ||||||||||
Series B preferred units |
52,731,850 | 33,978,347 | 197,095 | 199,752 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
76,794,171 | 58,040,668 | $ | 293,050 | $ | 296,001 | |||||||||||
|
|
|
|
|
|
|
|
• | First, the holders of Series B preferred units will receive, in preference to any distribution to the holders of Series A preferred units, common units or incentive units, on a pro rata basis, an amount equal to the Series B preferred unit Original Issue Price per unit less such amounts per Series B preferred unit previously distributed to holders of Series B preferred units; |
• | Second, the holders of Series A preferred units will receive, in preference to any distribution to the holders of common units or incentive units, on a pro rata basis, an amount equal to the Series A preferred unit Original Issue Price per unit less such amounts per Series A preferred unit previously distributed to holders of Series A preferred units; |
• | Third, the holders of vested common units and vested Incentive Units will receive, pro rata in proportion to the remaining amount to be distributed to such Units, amounts available for distribution until such holders have received an aggregate amount equal to the Series A Preferred Original Issuance Price; |
• | Fourth, the holders of Series A preferred units, vested common units and vested Incentive Units will receive, pro rata in proportion to the remaining amount to be distributed to such Units, amounts available for distribution until each such holder of each Series A preferred unit, vested common unit and each such vested Incentive Unit has received an aggregate amount equal to the Series B Preferred Original Issuance Price; and |
• | Thereafter, the holders of all vested units pro rata in proportion to each holder’s Percentage Interest will receive the remaining proceeds, subject to certain limitations. For purposes of this calculation, Percentage Interest is defined as (i) the sum of the holder’s Series A preferred units multiplied by the Series A Adjustment Rate plus the holder’s Series B preferred units multiplied by the Series B Adjustment Rate plus the holder’s common units and vested incentive units divided by (ii) the sum of all Series A preferred units outstanding multiplied by the Series A Adjustment Rate plus all Series B preferred units outstanding multiplied by the Series B Adjustment Rate plus all common and vested incentive units outstanding. The Adjustment Rate is defined as the Original Issue Price of each class divided by the Adjustment Price of each Series. |
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Risk-free interest rate |
0.2 | % | 0.4 | % | ||||
Expected volatility |
61.5 | % | 69.0 | % | ||||
Expected dividend yield |
— | — | ||||||
Expected term (in years) |
2.0 | 1.9 |
Units |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding incentive units at December 31, 2020 |
25,463,790 | $ | 0.91 | |||||
Issued |
730,250 | $ | 5.12 | |||||
Forfeited |
(784,585 | ) | $ | 0.80 | ||||
|
|
|||||||
Outstanding incentive units at June 30, 2021 |
25,409,455 | $ | 1.04 | |||||
|
|
|||||||
Vested incentive units at June 30, 2021 |
12,474,628 | $ | 0.98 | |||||
|
|
Six Months Ended June 30, 2021 |
||||
Risk-free interest rate |
1.0 | % | ||
Expected volatility |
64.0 | % | ||
Expected dividend yield |
— | |||
Expected term (in years) |
6.25 |
Number of Shares |
Weighted Average Exercise Price |
Weighted Average Contractual Term |
Aggregate Intrinsic Value |
|||||||||||||
(in years) |
(in thousands) |
|||||||||||||||
Outstanding as of December 31, 2020 |
— | $ | — | — | $ | — | ||||||||||
Granted |
5,664,555 | 5.76 | ||||||||||||||
Exercised |
— | — | ||||||||||||||
Forfeited |
— | — | ||||||||||||||
|
|
|||||||||||||||
Outstanding as of June 30, 2021 |
5,664,555 | $ | 5.76 | 9.8 | $ | 22,715 | ||||||||||
|
|
|||||||||||||||
Vested and expected to vest as of June 30, 2021 |
3,358,444 | $ | 5.76 | 9.8 | $ | 13,467 | ||||||||||
Options exercisable as of June 30, 2021 |
5,000 | $ | 5.76 | 9.8 | $ | 20 |
Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Research and development expenses |
$ | 780 | $ | 559 | ||||
General and administrative expenses |
3,656 | 2,440 | ||||||
|
|
|
|
|||||
$4,436 | $2,999 | |||||||
|
|
|
|
Year Ending December 31, |
||||
2021 (Remaining six months) |
$ | 2,368 | ||
2022 |
5,286 | |||
2023 |
5,436 | |||
2024 |
4,726 | |||
2025 |
4,809 | |||
Thereafter |
10,203 | |||
|
|
|||
Total future minimum lease payments |
$ | 32,828 | ||
|
|
Page |
||||||
ARTICLE I | | |||||
CERTAIN DEFINITIONS | | |||||
Section 1.1. |
Definitions | A-3 | ||||
Section 1.2. |
Construction | A-17 | ||||
Section 1.3. |
Knowledge | A-17 | ||||
ARTICLE II | | |||||
THE MERGER; CLOSING | | |||||
Section 2.1. |
The Merger | A-17 | ||||
Section 2.2. |
Effects of the Merger | A-18 | ||||
Section 2.3. |
Closing; Effective Time | A-18 | ||||
Section 2.4. |
Closing Deliverables | A-18 | ||||
Section 2.5. |
Governing Documents | A-20 | ||||
Section 2.6. |
Directors and Officers | A-20 | ||||
Section 2.7. |
Tax Free Reorganization Matters | A-20 | ||||
ARTICLE III | | |||||
EFFECTS OF THE MERGER ON THE COMPANY CAPITAL STOCK AND EQUITY AWARDS | | |||||
Section 3.1. |
Conversion of Securities | A-20 | ||||
Section 3.2. |
Exchange Procedures | A-21 | ||||
Section 3.3. |
Treatment of Company Options; Restricted Stock Awards | A-22 | ||||
Section 3.4. |
Allocation Schedule | A-23 | ||||
Section 3.5. |
Withholding | A-23 | ||||
Section 3.6. |
Dissenting Shares | A-23 | ||||
ARTICLE IV | | |||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY PARTIES | | |||||
Section 4.1. |
Company Organization | A-24 | ||||
Section 4.2. |
Subsidiaries | A-24 | ||||
Section 4.3. |
Due Authorization | A-24 | ||||
Section 4.4. |
No Conflict | A-25 | ||||
Section 4.5. |
Governmental Authorities; Consents | A-25 | ||||
Section 4.6. |
Capitalization of the Company Parties | A-26 | ||||
Section 4.7. |
Capitalization of Subsidiaries | A-27 | ||||
Section 4.8. |
Financial Statements | A-27 | ||||
Section 4.9. |
Undisclosed Liabilities | A-28 | ||||
Section 4.10. |
Litigation and Proceedings | A-28 | ||||
Section 4.11. |
Legal Compliance | A-28 | ||||
Section 4.12. |
Contracts; No Defaults | A-29 | ||||
Section 4.13. |
Company Benefit Plans | A-31 | ||||
Section 4.14. |
Labor Relations; Employees | A-32 | ||||
Section 4.15. |
Taxes | A-34 | ||||
Section 4.16. |
Brokers’ Fees | A-36 | ||||
Section 4.17. |
Insurance | A-36 | ||||
Section 4.18. |
Licenses | A-36 | ||||
Section 4.19. |
Equipment and Other Tangible Property | A-36 | ||||
Section 4.20. |
Real Property | A-36 |
Page |
||||||
Section 4.21. |
Intellectual Property | A-37 | ||||
Section 4.22. |
Regulatory Compliance | A-39 | ||||
Section 4.23. |
Privacy and Cybersecurity | A-41 | ||||
Section 4.24. |
Environmental Matters | A-42 | ||||
Section 4.25. |
Absence of Changes | A-43 | ||||
Section 4.26. |
Anti-Corruption Compliance | A-43 | ||||
Section 4.27. |
Sanctions and International Trade Compliance | A-43 | ||||
Section 4.28. |
Information Supplied | A-43 | ||||
Section 4.29. |
Vendors | A-44 | ||||
Section 4.30. |
Government Contracts | A-44 | ||||
Section 4.31. |
No Outside Reliance | A-44 | ||||
Section 4.32. |
No Additional Representation or Warranties | A-44 | ||||
ARTICLE V | | |||||
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB | | |||||
Section 5.1. |
Company Organization | A-45 | ||||
Section 5.2. |
Due Authorization | A-45 | ||||
Section 5.3. |
No Conflict | A-45 | ||||
Section 5.4. |
Litigation and Proceedings | A-46 | ||||
Section 5.5. |
SEC Filings | A-46 | ||||
Section 5.6. |
Internal Controls; Listing; Financial Statements | A-46 | ||||
Section 5.7. |
Governmental Authorities; Consents | A-47 | ||||
Section 5.8. |
Trust Account | A-47 | ||||
Section 5.9. |
Investment Company Act; JOBS Act | A-48 | ||||
Section 5.10. |
Absence of Changes | A-48 | ||||
Section 5.11. |
No Undisclosed Liabilities | A-48 | ||||
Section 5.12. |
Capitalization of Acquiror | A-48 | ||||
Section 5.13. |
Brokers’ Fees | A-50 | ||||
Section 5.14. |
Indebtedness | A-50 | ||||
Section 5.15. |
Taxes | A-50 | ||||
Section 5.16. |
Business Activities | A-51 | ||||
Section 5.17. |
Stock Market Quotation | A-52 | ||||
Section 5.18. |
Registration Statement, Proxy Statement and Proxy Statement/Registration Statement | A-52 | ||||
Section 5.19. |
No Outside Reliance | A-52 | ||||
Section 5.20. |
No Additional Representation or Warranties | A-53 | ||||
ARTICLE VI | | |||||
COVENANTS OF THE COMPANY PARTIES | | |||||
Section 6.1. |
Conduct of Business | A-53 | ||||
Section 6.2. |
Inspection | A-56 | ||||
Section 6.3. |
Preparation and Delivery of Additional Company Financial Statements | A-56 | ||||
Section 6.4. |
Affiliate Agreements | A-57 | ||||
Section 6.5. |
Pre-Closing Restructuring |
A-57 | ||||
Section 6.6. |
Acquisition Proposals | A-57 |
Page |
||||||
ARTICLE VII | | |||||
COVENANTS OF ACQUIROR | | |||||
Section 7.1. |
Employee Matters | A-58 | ||||
Section 7.2. |
Trust Account Proceeds and Related Available Equity | A-58 | ||||
Section 7.3. |
Listing | A-58 | ||||
Section 7.4. |
No Solicitation by Acquiror | A-59 | ||||
Section 7.5. |
Acquiror Conduct of Business | A-59 | ||||
Section 7.6. |
Post-Closing Directors and Officers of Acquiror | A-61 | ||||
Section 7.7. |
Inspection | A-61 | ||||
Section 7.8. |
Indemnification and Insurance | A-61 | ||||
Section 7.9. |
Acquiror Public Filings | A-63 | ||||
Section 7.10. |
PIPE Subscriptions; Forward Purchase Agreement | A-63 | ||||
ARTICLE VIII | | |||||
JOINT COVENANTS | | |||||
Section 8.1. |
HSR Act; Other Filings | A-63 | ||||
Section 8.2. |
Preparation of Proxy Statement/Registration Statement; Stockholders’ Meeting and Approvals | A-64 | ||||
Section 8.3. |
Support of Transaction | A-67 | ||||
Section 8.4. |
Section 16 Matters | A-68 | ||||
Section 8.5. |
Cooperation; Consultation | A-68 | ||||
Section 8.6. |
Stockholder Litigation | A-68 | ||||
Section 8.7. |
Stockholder Approval | A-69 | ||||
ARTICLE IX | | |||||
CONDITIONS TO OBLIGATIONS | | |||||
Section 9.1. |
Conditions to Obligations of Acquiror, Merger Sub, and the Company | A-69 | ||||
Section 9.2. |
Conditions to Obligations of Acquiror and Merger Sub | A-70 | ||||
Section 9.3. |
Conditions to the Obligations of the Company | A-70 | ||||
ARTICLE X | | |||||
TERMINATION/EFFECTIVENESS | | |||||
Section 10.1. |
Termination | A-71 | ||||
Section 10.2. |
Effect of Termination | A-72 | ||||
ARTICLE XI | | |||||
MISCELLANEOUS | | |||||
Section 11.1. |
Trust Account Waiver | A-72 | ||||
Section 11.2. |
Waiver | A-73 | ||||
Section 11.3. |
Notices | A-73 | ||||
Section 11.4. |
Assignment | A-74 | ||||
Section 11.5. |
Rights of Third Parties | A-74 | ||||
Section 11.6. |
Expenses | A-74 | ||||
Section 11.7. |
Governing Law | A-75 | ||||
Section 11.8. |
Headings; Counterparts | A-75 |
Page |
||||||
Section 11.9. |
Company Disclosure Letter | A-75 | ||||
Section 11.10. |
Entire Agreement | A-75 | ||||
Section 11.11. |
Amendments | A-75 | ||||
Section 11.12. |
Publicity | A-75 | ||||
Section 11.13. |
Severability | A-76 | ||||
Section 11.14. |
Jurisdiction; Waiver of Jury Trial | A-76 | ||||
Section 11.15. |
Enforcement | A-77 | ||||
Section 11.16. |
Non-Recourse |
A-77 | ||||
Section 11.17. |
Non-Survival of Representations, Warranties and Covenants |
A-77 | ||||
Section 11.18. |
Conflicts and Privilege | A-77 |
Exhibit A | Form of Acquiror Amended and Restated Certificate of Incorporation | |
Exhibit B | Form of Acquiror Amended and Restated Bylaws | |
Exhibit C | Form of Registration Rights Agreement | |
Exhibit D | Form of Incentive Equity Plan | |
Exhibit E | Form of Employee Stock Purchase Plan |
(a) | If to Acquiror or Merger Sub, to: |
Attention: | Samir Kaul |
Peter Buckland |
Email: | sk@khoslaventures.com |
pb@khoslaventures.com |
Attention: | Jim Morrone |
Luke J. Bergstrom Lauren Lefcoe |
Email: | jim.morrone@lw.com |
luke.bergstrom@lw.com |
lauren.lefcoe@lw.com |
(b) | If to the Company Parties or the Surviving Corporation, to: |
Attention: | David A. Berry, MD, Ph.D. |
Jeffrey Prowda |
Email: | dberry@valohealth.com |
jprowda@valohealth.com |
Attention: | Stuart M. Cable |
Joseph C. Theis |
Email: | scable@goodwinlaw.com |
jtheis@goodwinlaw.com |
KHOSLA VENTURES ACQUISITION CO. | ||
By: | /s/ Samir Kaul | |
Name: Samir Kaul | ||
Title: Chief Executive Officer | ||
KILLINGTON MERGER SUB INC. | ||
By: | /s/ Samir Kaul | |
Name: Samir Kaul | ||
Title: President | ||
VALO HEALTH, LLC | ||
By: | /s/ David A. Berry | |
Name: David A. Berry, M.D., Ph.D | ||
Title: President and Chief Executive Officer | ||
VALO HEALTH, INC. | ||
By: | /s/ David A. Berry | |
Name: David A. Berry, M.D., Ph.D | ||
Title: Chief Executive Officer |
KHOSLA VENTURES ACQUISITION CO. | ||
By: | /s/ Samir Kaul |
Name: | Samir Kaul | |
Title: | Chief Executive Officer |
KILLINGTON MERGER SUB INC. | ||
By: | /s/ Samir Kaul |
Name: | Samir Kaul | |
Title: | President |
VALO HEALTH, LLC | ||
By: | /s/ David A. Berry |
Name: | David A. Berry, M.D., Ph.D | |
Title: | President and Chief Executive Officer |
VALO HEALTH, INC. | ||
By: | /s/ David A. Berry |
Name: | David A. Berry, M.D., Ph.D | |
Title: | Chief Executive Officer |
By: |
/s/ Peter Buckland | |
Peter Buckland, Chief Financial Officer |
VALO HEALTH HOLDINGS, INC. |
By: |
Name: |
Title: |
Attention: | Samir Kaul |
Peter Buckland |
Email: | sk@khoslaventures.com |
pb@khoslaventures.com |
Attention: | Jim Morrone |
Luke J. Bergstrom |
Lauren Lefcoe |
Email: | jim.morrone@lw.com |
luke.bergstrom@lw.com |
lauren.lefcoe@lw.com |
Attention: | David A. Berry, MD, Ph.D.; |
Jeffrey Prowda |
Email: | dberry@valohealth.com |
jprowda@valohealth.com |
Attention: | Stuart M. Cable |
Joseph C. Theis |
Email: | scable@goodwinlaw.com |
jtheis@goodwinlaw.com |
Attention: | Jim Morrone |
Luke J. Bergstrom |
Lauren Lefcoe |
Email: | jim.morrone@lw.com |
luke.bergstrom@lw.com |
lauren.lefcoe@lw.com |
SPONSORS: | ||
KHOSLA VENTURES SPAC SPONSOR LLC | ||
By: | /s/ Samir Kaul | |
Name: Samir Kaul | ||
Title: President and Chief Executive Officer | ||
/s/ Vinod Khosla | ||
Name: Vinod Khosla | ||
/s/ Samir Kaul | ||
Name: Samir Kaul | ||
/s/ Peter Buckland | ||
Name: Peter Buckland | ||
/s/ Jagdeep Singh | ||
Name: Jagdeep Singh | ||
/s/ Derek Anthony West | ||
Name: Derek Anthony West | ||
/s/ Rajiv Shah | ||
Name: Rajiv Shah | ||
/s/ Molly Coye | ||
Name: Molly Coye | ||
/s/ Mario Schlosser | ||
Name: Mario Schlosser | ||
/s/ Dmitri Shklovsky | ||
Name: Dmitri Shklovsky |
ACQUIROR: | ||
KHOSLA VENTURES ACQUISITION CO. | ||
By: | /s/ Peter Buckland | |
Name: Peter Buckland | ||
Title: Chief Operating Officer, Chief Financial Officer and Secretary |
COMPANY HOLDCO: | ||
VALO HEALTH LLC | ||
By: | /s/ David A. Berry | |
Name: /s/ David A. Berry, M.D., Ph.D. | ||
Title: President and Chief Executive Officer | ||
COMPANY: | ||
VALO HEALTH, INC. | ||
By: | /s/ David A. Berry | |
Name: /s/ David A. Berry, M.D., Ph.D. | ||
Title: President and Chief Executive Officer |
Sponsor |
Acquiror Class A Common Stock |
Acquiror Class B Common Stock |
Acquiror Class K Common Stock |
|||||||||
Khosla Ventures SPAC Sponsor LLC c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
990,000 | 4,760,000 | 5,000,000 | |||||||||
Vinod Khosla c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | (1) |
– | (1) |
– | (1) | ||||||
Samir Kaul c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | (1) |
– | (1) |
– | (1) | ||||||
Peter Buckland c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | – | – | |||||||||
Jagdeep Singh c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | 40,000 | – | |||||||||
Derek Anthony West c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | 40,000 | – | |||||||||
Rajiv Shah c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | 40,000 | – | |||||||||
Molly Coye c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | 40,000 | – | |||||||||
Mario Schlosser c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | 40,000 | – | |||||||||
Dmitri Shklovsky c/o Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 |
– | 40,000 | – |
1. | Registration Rights Agreement, dated March 3, 2021, between Acquiror, Sponsor Holdco and certain other security holders named therein. |
2. | Letter Agreement, dated March 3, 2021, between Acquiror and the Sponsors. |
3. | Sponsor Voting Agreement, dated March 26, 2021, between Acquiror and Sponsor Holdco. |
4. | Private Placement Shares Purchase Agreement, dated March 3, 2021, between Acquiror and Sponsor Holdco. |
5. | Forward Purchase Agreement, dated March 3, 2021, between Acquiror and Sponsor Holdco. |
6. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Peter Buckland. |
7. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Jagdeep Singh. |
8. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Derek Anthony West. |
9. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Rajiv Shah. |
10. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Molly Coye. |
11. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Mario Schlosser. |
12. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Dmitri Shklovsky. |
13. | Indemnity Agreement, dated March 3, 2021, between Acquiror and Samir Kaul. |
14. | Subscription Agreement, dated June 9, 2021, between Acquiror and an affiliate of certain of the Sponsors. |
Attention: | Samir Kaul |
Peter Buckland |
Email: | sk@khoslaventures.com |
pb@khoslaventures.com |
Attention: | Jim Morrone |
Luke J. Bergstrom |
Lauren Lefcoe |
Email: | jim.morrone@lw.com |
luke.bergstrom@lw.com |
lauren.lefcoe@lw.com |
Attention: | David A. Berry, MD, Ph.D.; |
Jeffrey Prowda |
Email: dberry@valohealth.com |
jprowda@valohealth.com |
Attention: | Stuart M. Cable |
Joseph C. Theis |
Email: | scable@goodwinlaw.com |
jtheis@goodwinlaw.com |
Attention: | Stuart M. Cable |
Joseph C. Theis |
Email: | scable@goodwinlaw.com |
jtheis@goodwinlaw.com |
MEMBERS: | ||
KDT VH INVESTMENTS, LLC | ||
By: | /s/ Brett Chugg | |
Name: Brett Chugg | ||
Title: Managing Director |
P ORT - AUX -C HOIX PRIVATE INVESTMENTS INC . | ||
By: | /s/ Adam Smalley | |
Name: Adam Smalley | ||
Title: Authorized Person | ||
By: | /s/ Jonathan Ostrzega | |
Name: Jonathan Ostrzega | ||
Title: Authorized Person |
Address: 1250 René-Lévesque Boulevard West, Suite 1400 Montréal, Québec Canada H3B 5E9 With a copy to: Charlotte E. Muellers at CEMuellers@investpsp.com Adam Smalley at ASmalley@investpsp.com Brian Myers at BMyers@investpsp.com |
MEMBERS: | ||
Flagship Pioneering Fund VI, L.P. | ||
By: | Flagship Pioneering Fund VI General Partner LLC Its General Partner | |
By: | Flagship Pioneering, Inc. It’s Manager | |
By: | /s/ Noubar B. Afeyan | |
Name: Noubar B. Afeyan, Ph.D. | ||
Title: Chief Executive Officer | ||
Flagship VentureLabs VI LLC | ||
By: | Flagship VentureLabs VI Manager LLC Its Manager | |
By: | Flagship Pioneering, Inc. Its sole member | |
By: | /s/ Noubar B. Afeyan | |
Name: Noubar B. Afeyan | ||
Title: Chief Executive Officer | ||
Flagship Pioneering Special Opportunities Fund II, L.P. | ||
By: | Flagship Pioneering Special Opportunities Fund II General Partner LLC Its General Partner | |
By: | Flagship Pioneering, Inc. Its Manager | |
By: | /s/ Noubar B. Afeyan | |
Name: Noubar B. Afeyan | ||
Title: Chief Executive Officer |
MEMBERS: | ||
DAVID BERRY 2012 REVOCABLE TRUST | ||
By: | /s/ Yelena Dudochkin | |
Name: Yelena Dudochkin | ||
Title: Trustee | ||
THE BERRY FAMILY IRREVOCABLE TRUST OF 2019 | ||
By: | /s/ Yelena Dudochkin | |
Name: Yelena Dudochkin | ||
Title: Trustee |
MEMBERS: |
/s/ David Epstein |
Name: David Epstein |
MEMBERS: | ||
/s/ Ronald W. Hovsepian | ||
Name: Ronald Hovsepian | ||
MEGAN S HOVSEPIAN 221 IRREVOCABLE TRUST | ||
By: | /s/ Sean Becker | |
Name: Sean Becker | ||
Title: Vice President |
MEMBERS: |
/s/ Paul Biondi |
Name: Paul Biondi |
MEMBERS: |
/s/ Shreeram Aradhye |
Name: Shreeram Aradhye |
MEMBERS: |
/s/ Harsha Ramalingam |
Name: Harsha Ramalingam |
MEMBERS: |
/s/ Graeme Bell |
Name: Graeme Bell |
MEMBERS: |
/s/ Daniel Troy |
Name: Daniel Troy |
MEMBERS: |
/s/ Nish Lathia |
Name: Nish Lathia |
MEMBERS: |
/s/ Hilary Malone |
Name: Hilary Malone |
MEMBERS: |
/s/ Adam Smalley |
Name: Adam Smalley |
MEMBERS: |
/s/ Brett Chugg |
Name: Brett Chugg |
MEMBERS: |
/s/ Judy Lewent |
Name: Judy Lewent |
ACQUIROR: | ||
KHOSLA VENTURES ACQUISITION CO. | ||
By: | /s/ Samir Kaul | |
Name: Samir Kaul | ||
Title: Chief Executive Officer |
COMPANY HOLDCO: | ||
VALO HEALTH, LLC | ||
By: | /s/ David Berry | |
Name: David A. Berry, M.D., Ph.D | ||
Title: President and Chief Executive Officer | ||
COMPANY: | ||
VALO HEALTH, INC. | ||
By: | /s/ David Berry | |
Name: David A. Berry, M.D., Ph.D | ||
Title: Chief Executive Officer |
Holder |
Common Units |
Series A Preferred Units |
Series B Preferred Units |
Incentive Units |
Notice Information | |||||
KDT VH Investments, LLC | 0 | 0 | 18,753,503 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: c/o Koch Disruptive Technologies, LLC 4111 East 37th Street North Wichita, Kansas 67220 | |||||
Port-aux-Choix |
0 | 12,500,000 | 8,505,137 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: 1250 René-Lévesque Boulevard West, Suite 1400Montréal, Québec Canada H3B 5E9 With a copy to: Charlotte E. Muellers at CEMuellers@investpsp.com Adam Smalley at ASmalley@investpsp.com Brian Myers at BMyers@investpsp.com | |||||
Flagship VentureLabs VI, LLC | 74,710,000 | 0 | 0 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: 55 Cambridge Parkway, Suite 800E Cambridge, MA 02142 | |||||
Flagship Pioneering Fund VI, L.P. | 0 | 6,199,821 | 1,701,027 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: 55 Cambridge Parkway, Suite 800E Cambridge, MA 02142 |
Holder |
Common Units |
Series A Preferred Units |
Series B Preferred Units |
Incentive Units |
Notice Information | |||||
Nutritional Health Fund LTP, L.P. | 0 | 750,000 | 0 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: 55 Cambridge Parkway, Suite 800E Cambridge, MA 02142 | |||||
Flagship Pioneering Special Opportunities Fund II, L.P. | 0 | 0 | 2,551,541 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: 55 Cambridge Parkway, Suite 800E Cambridge, MA 02142 | |||||
David Berry 2012 Revocable Trust | 0 | 0 | 0 | 6,000,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
David Berry 2012 Revocable Trust | 0 | 0 | 0 | 600,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
The Berry Family Irrevocable Trust of 2019 |
0 | 0 | 0 | 600,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
David Berry | 0 | 0 | 0 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
David Epstein | 0 | 0 | 0 | 1,200,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Ronald Hovsepian | 0 | 0 | 0 | 900,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Megan S Hovsepian 2021 Irrevocable Trust | 0 | 0 | 0 | 900,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Paul Biondi | 0 | 0 | 0 | 255,713 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: c/o Flagship Pioneering 55 Cambridge Parkway, Cambridge MA 02142 |
Holder |
Common Units |
Series A Preferred Units |
Series B Preferred Units |
Incentive Units |
Notice Information | |||||
Shreeram Aradhye | 0 | 0 | 0 | 255,713 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Harsha Ramalingam | 0 | 0 | 0 | 383,569 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Graeme Bell | 0 | 0 | 21,400 | 542,336 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Daniel Troy | 0 | 0 | 0 | 602,596 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Nish Lathia | 0 | 0 | 0 | 248,000 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Hilary Malone | 0 | 0 | 0 | 542,336 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Adam Smalley | 0 | 0 | 0 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: c/o PSP Investments 1250 Rene-Levesque Blvd, Suite 1400, Montreal, QC H3B 5E9 Canada | |||||
Brett Chugg | 0 | 0 | 0 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 With a copy to: c/o Koch Disruptive Technologies, LLC 4111 East 37th Street North Wichita, Kansas 67220 | |||||
Judy Lewent | 0 | 0 | 0 | 0 | c/o Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | |||||
Total: |
74,710,000 |
19,449,821 |
31,532,608 |
13,030,263 |
1. | Series A Milestone Closing Side Letter, dated as of July 5, 2019, by and between Company Holdco and Port-aux-Choix |
2. | Side Letter, dated as of December 11, 2020, by and between Company Holdco and Port-aux-Choix |
3. | Series A Management Rights Letter dated as of July 5, 2019, by and between Flagship Pioneering Fund VI, L.P., Flagship VentureLabs VI, LLC, Nutritional Health LTP Fund, L.P. and Company Holdco. |
4. | Series B Preferred Unit Investment Management Rights Letter dated as of February 26, 2021 by and between Company Holdco and KDT VH Investments, LLC. |
(a) | Upon Trading Triggers |
(i) | The First Price Vesting Shares will vest as of the day following the First Price Vesting. |
(ii) | The Second Price Vesting Shares will vest as of the day following the Second Price Vesting. |
(iii) | The Third Price Vesting Shares will vest as of the day following the Third Price Vesting. |
(b) | Upon Qualifying Strategic Transactions |
(c) | Upon Other Strategic Transactions one-year anniversary of the Closing Date that results in all of the holders of Common Stock having the right to exchange their Common Stock for cash, securities or other property at an effective price of at least $20.00 per share of Common Stock (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), the Unvested Shares shall vest proportionately as follows: |
(i) | if (and only if) the First Price Vesting shall not have occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of Common Stock having the right to exchange their shares of Common Stock for cash, securities or other property at an effective price greater than $20.00 per share of Common Stock and less than or equal to $30.00 per share of Common Stock (each as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), a number of First Price Vesting Shares will vest in an amount equal to (a) the First Price Vesting Shares multiplied by (b) (i) one minus (ii) the quotient of (A) (I) $30.00 minus (II) the effective price per share of Common Stock in the Strategic Transaction divided by (B) $10.00 (each as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like); |
(ii) | if (and only if) the Second Price Vesting shall not have occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of Common Stock |
having the right to exchange their shares of Common Stock for cash, securities or other property at an effective price greater than $30.00 per share of Common Stock and less than or equal to $40.00 per share of Common Stock (each as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), then, (i) the First Price Vesting shall automatically be deemed satisfied (to the extent it had not already been satisfied) and (ii) a number of Second Price Vesting Shares will vest in an amount equal to (a) the Second Price Vesting Shares multiplied by (b) (i) one minus (ii) the quotient of (A) (I) $40.00 minus the effective price per share of Common Stock in the Strategic Transaction divided by (B) $10.00 (each as adjusted for share sub- divisions, share capitalizations, reorganizations, recapitalizations and the like); |
(iii) | if (and only if) the Third Price Vesting shall not have occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of Common Stock having the right to exchange their shares of Common Stock for cash, securities or other property at an effective price greater than $40.00 per share of Common Stock and less than or equal to $50.00 per share of Common Stock (each as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), then, (i) the First Price Vesting and Second Price Vesting shall automatically be satisfied (to the extent either had not already been satisfied) and (ii) a number of Third Price Vesting Shares will vest in an amount equal to (a) the Third Price Vesting Shares multiplied by (b) (i) one minus (ii) the quotient of (A) (I) $50.00 minus (II) the effective price per share of Common Stock in the Strategic Transaction divided by (B) $10.00 (each as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like); and |
(iv) | if (and only if) the Third Price Vesting shall not have occurred prior to or in connection with such Strategic Transaction and such Strategic Transaction results in the holders of Common Stock having the right to exchange their shares of Common Stock for cash, securities or other property at an effective price greater than $50.00 per share of Common Stock (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), then each of the First Price Vesting, Second Price Vesting and Third Price Vesting shall automatically be satisfied (to the extent any had not already been satisfied). |
(d) | Forfeiture |
c/o Khosla Ventures SPAC Sponsor LLC 2128 Sand Hill Rd. Menlo Park, CA 94025 | ||||
Attention: |
Samir Kaul Peter Buckland | |||
Email: | sk@khoslaventures.com pb@khoslaventures.com |
with copies to (which shall not constitute notice): | ||||
Latham & Watkins LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111 | ||||
Attention: |
Jim Morrone Luke J. Bergstrom Lauren Lefcoe | |||
Email: | jim.morrone@lw.com luke.bergstrom@lw.com lauren.lefcoe@lw.com |
Khosla Ventures Acquisition Co. 2128 Sand Hill Rd. Menlo Park, CA 94025 | ||||
Attention: |
Samir Kaul Peter Buckland | |||
Email: | sk@khoslaventures.com pb@khoslaventures.com |
with copies to (which shall not constitute notice): | ||||
Latham & Watkins LLP 505 Montgomery Street, Suite 2000 San Francisco, CA 94111 | ||||
Attention: |
Jim Morrone Luke J. Bergstrom Lauren Lefcoe | |||
Email: | jim.morrone@lw.com luke.bergstrom@lw.com lauren.lefcoe@lw.com |
Valo Health, Inc. 399 Boylston Street Boston, MA 02116 | ||||
Attention: |
David A. Berry, MD, Ph.D Jeffrey Prowda | |||
Email: | dberry@valohealth.com jprowda@valohealth.com |
with copies to (which shall not constitute notice): | ||||
Goodwin Procter LLP 100 Northern Avenue Boston, MA 02210 | ||||
Attention: |
Stuart M. Cable Joseph C. Theis | |||
Email: | scable@goodwinlaw.com jtheis@goodwinlaw.com |
KHOSLA VENTURES SPAC SPONSOR LLC | ||||
By: | /s/ Samir Kaul | |||
Name: | Samir Kaul | |||
Title: | President and Chief Executive Officer | |||
KHOSLA VENTURES ACQUISITION CO. | ||||
By: | /s/ Samir Kaul | |||
Name: | Samir Kaul | |||
Title: | Chief Executive Officer | |||
VALO HEALTH, LLC | ||||
By: | | |||
Name: | ||||
Title: | ||||
VALO HEALTH, INC. | ||||
By: | | |||
Name: | ||||
Title: |
VALO HEALTH, INC. | ||||
By: | /s/ David A. Berry | |||
Name: | David A. Berry, M.D., Ph. D | |||
Title: | President and Chief Executive | |||
VALO HEALTH, INC. | ||||
By: | /s/ David A. Berry | |||
Name: | David A. Berry, M.D., Ph. D | |||
Title: | Chief Executive Officer |
Attention: | General Counsel (SPAC) |
Email: | jd@khoslaventures.com |
Attention: | Jim Morrone |
Luke Bergstrom |
Brian Paulson |
Email: | jim.morrone@lw.com |
luke.bergstrom@lw.com |
brian.paulson@lw.com |
Attention: | David Berry, M.D., Ph.D. |
Email: | dberry@valohealth.com |
Attention: | Stuart M. Cable |
Joseph C. Theis, Jr. |
Stephanie Richards |
Email: | scable@goodwinlaw.com |
jtheis@goodwinlaw.com |
srichards@goodwinlaw.com |
Attention: | Richard Segal |
Eric Blanchard |
Email: rsegal@cooley.com |
eblanchard@cooley.com |
Name of Investor: | State/Country of Formation or Domicile: | |
By: ____________________________________ | ||
Name: __________________________________ | ||
Title: ___________________________________ | ||
Name in which Shares are to be registered (if different): | Date: ________, 2021 | |
Investor’s EIN: | ||
Business Address-Street: | Mailing Address-Street (if different): | |
City, State, Zip: | City, State, Zip: | |
Attn: ___________________________________ | Attn: ___________________________________ | |
Telephone No.: | Telephone No.: | |
Facsimile No.: | Facsimile No.: | |
Number of Shares subscribed for: | ||
Aggregate Subscription Amount: $ | Price Per Share: $10.00 |
KHOSLA VENTURES ACQUISITION CO. | ||
By: | | |
Name: Peter Buckland | ||
Title: Chief Financial Officer |
A. | QUALIFIED INSTITUTIONAL BUYER STATUS |
☐ | We are a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), and have marked and initialed the appropriate box below indicating the provision under which we qualify as a qualified institutional buyer. |
☐ | The Investor is an entity that, acting for its own account or the accounts of other qualified institutional buyers, in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the Investor and: |
☐ | The Investor is an insurance company. |
☐ | The Investor is an investment company registered under the Investment Company Act or any business development company as defined in section 2(a)(48) of that Act. |
☐ | The Investor is a Small Business Investment Company licensed by the US Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958. |
☐ | The Investor is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees. |
☐ | The Investor is a trust fund whose trustee is a bank or trust company and whose participants are exclusively plans established for the benefit of state employees or employee benefit plans, except trust funds that include as participants individual retirement accounts or H.R. 10 plans. |
☐ | The Investor is a business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940. |
☐ | The Investor is an organization described in section 501(c)(3) of the Internal Revenue Code, corporation (other than a bank as defined in section 3(a)(2) of the Act, a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act, a foreign bank or savings and loan association, or equivalent institution), partnership, or Massachusetts or similar business trust. |
☐ | The Investor is an investment adviser registered under the Investment Advisers Act. |
☐ | The Investor is registered dealer, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the Investor. |
☐ | The Investor is a registered dealer acting in a riskless principal transaction on behalf of a qualified institutional buyer. |
☐ | The Investor is an investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with Investor or are part of such family of investment companies. |
☐ | The Investor is an entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers. |
☐ | The Investor is a bank or any savings and loan association or other institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with it and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale under Rule 144A in the case of a US bank or savings and loan association, and not more than 18 months preceding the date of sale for a foreign bank or savings and loan association or equivalent institution. |
B. | ACCREDITED INVESTOR STATUS |
1. | ☐ We are an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) or an entity in which all of the equity holders are accredited investors within the meaning of Rule 501(a) under the Securities Act, and have marked and initialed the appropriate box on the following page indicating the provision under which we qualify as an “accredited investor.” |
2. | ☐ We are not a natural person. |
☐ | Any bank, registered broker or dealer, insurance company, registered investment company, business development company, or small business investment company; |
☐ | Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000; |
☐ | Any employee benefit plan, within the meaning of the Employee Retirement Income Security Act of 1974, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5,000,000; |
☐ | Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000. For purposes of calculating a natural person’s net worth: (a) the person’s primary residence shall not be included as an asset; (b) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of securities, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (c) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability; |
☐ | Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000; |
☐ | Any trust with assets in excess of $5,000,000, not formed to acquire the securities offered, whose purchase is directed by a sophisticated person; or |
☐ | Any entity in which all of the equity owners are accredited investors meeting one or more of the above tests. |
C. | INSTITUTIONAL ACCOUNT STATUS |
☐ | We are an “institutional account” (as defined in FINRA Rule 4512). |
COMPANY: | ||
VALO HEALTH HOLDINGS, INC. | ||
a Delaware corporation | ||
By: | | |
Name: | ||
Title: |
HOLDERS: | ||
KHOSLA VENTURES SPAC SPONSOR LLC a Delaware limited liability company | ||
By: | | |
Name: | ||
Title: | ||
| ||
| ||
| ||
| ||
[TARGET HOLDERS, IF ANY] |
|
Signature of Stockholder |
|
Print Name of Stockholder |
Its: |
Address: | | |
| ||
|
Agreed and Accepted as of |
, 20 |
VALO HEALTH HOLDINGS, INC. |
By: |
| |
Name: |
||
Its: |
399 Boylston St. | ||
Boston, MA 02116 | ||
Attention: | Jeff Prowda | |
Email: | jprowda@valohealth.com |
Goodwin Procter LLP | ||
100 Northern Avenue | ||
Boston, Massachusetts 02210 | ||
Attention: | Stuart M. Cable | |
Joseph C. Theis, Jr. | ||
Stephanie Richards | ||
E-mail: |
SCable@goodwinlaw.com | |
JTheis@goodwinlaw.com | ||
SRichards@goodwinlaw.com |
COMPANY : | ||
VALO HEALTH HOLDINGS, INC. |
By: | |
Name: | ||
Title: |
HOLDER: |
By: | |
Name: |
Address for Notice: |
Valo Health Holdings, Inc. | ||||
399 Boylston St. | ||||
Boston, MA 02116 | ||||
Attention: | Jeff Prowda | |||
Email: | jprowda@valohealth.com |
Goodwin Procter LLP | ||||
100 Northern Avenue | ||||
Boston, Massachusetts 02210 | ||||
Attention: | Stuart M. Cable | |||
Joseph C. Theis, Jr. | ||||
Stephanie Richards | ||||
E-mail: | SCable@goodwinlaw.com | |||
JTheis@goodwinlaw.com | ||||
SRichards@goodwinlaw.com |
COMPANY : | ||
VALO HEALTH HOLDINGS, INC. |
By: | |
Name: | ||
Title: |
HOLDER: |
By: | |
Name: | ||
Title: | ||
Address for Notice: |
SECTION 1. | GENERAL PURPOSE OF THE PLAN; DEFINITIONS |
SECTION 2. | ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS |
SECTION 3. | STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION |
1 |
To include an amount representing 10% of the Company’s outstanding capital stock on an as-converted basis as of immediately following the Closing, in accordance with the Merger Agreement. |
2 |
Will equal the number of shares in the Initial Reserve. |
SECTION 4. | ELIGIBILITY |
SECTION 5. | STOCK OPTIONS |
SECTION 6. | STOCK APPRECIATION RIGHTS |
SECTION 7. | RESTRICTED STOCK AWARDS |
SECTION 8. | RESTRICTED STOCK UNITS |
SECTION 9. | UNRESTRICTED STOCK AWARDS |
SECTION 10. | CASH-BASED AWARDS |
SECTION 11. | DIVIDEND EQUIVALENT RIGHTS |
SECTION 12. | TRANSFERABILITY OF AWARDS |
SECTION 13. | TAX WITHHOLDING |
SECTION 14. | SECTION 409A AWARDS |
SECTION 15. | TERMINATION OF SERVICE RELATIONSHIP, TRANSFER, LEAVE OF ABSENCE, ETC. |
SECTION 16. | AMENDMENTS AND TERMINATION |
SECTION 17. | STATUS OF PLAN |
SECTION 18. | GENERAL PROVISIONS |
SECTION 19. | EFFECTIVE DATE OF PLAN |
SECTION 20. | GOVERNING LAW |
1 |
To equal 2% of the post-closing outstanding capital stock on an as-converted basis, in accordance with the Merger Agreement. |
2 |
To equal 10x the initial reserved shares. |
(a) | A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful. |
(b) | A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. |
(c) | (1) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. For indemnification with respect to any act or omission occurring after December 31, 2020, references to “officer” for purposes of these paragraphs (c)(1) and (2) of this section shall mean only a person who at the time of such act or omission is deemed to have consented to service by the delivery of process to the registered agent of the corporation pursuant to § 3114(b) of Title 10 (for purposes of this sentence only, treating residents of this State as if they were nonresidents to apply § 3114(b) of Title 10 to this sentence). |
(2) | The corporation may indemnify any other person who is not a present or former director or officer of the corporation against expenses (including attorneys’ fees) actually and reasonably incurred by such person to the extent he or she has been successful on the merits or otherwise in defense of any action, |
suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein. |
(d) | Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer of the corporation at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. |
(e) | Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. |
(f) | The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to or repeal or elimination of the certificate of incorporation or the bylaws after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred. |
(g) | A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. |
(h) | For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. |
(i) | For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit |
plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section. |
(j) | The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. |
(k) | The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).” |
Exhibit Number |
Description | |
10.16 (10) | Indemnity Agreement, dated as of March 8, 2021, by and between the Registrant and Jagdeep Singh | |
10.17 (11) | Indemnity Agreement, dated as of March 8, 2021, by and between the Registrant and Mario Schlosser | |
10.18 (12) | Indemnity Agreement, dated as of March 8, 2021, by and between the Registrant and Peter Buckland | |
10.19 | Valo Health Holdings, Inc. 2021 Incentive Award Plan (included as Annex L to the proxy statement/prospectus) | |
10.20 | Form of Stock Option Agreement (included in Exhibit 10.19) | |
10.21 | Form of Restricted Stock Unit Award Agreement (included in Exhibit 10.10) | |
10.22 | Valo Health Holdings, Inc. 2021 Employee Stock Purchase Plan (included as Annex M to the proxy statement/prospectus) | |
10.23* | License Agreement between Sanofi and Valo Health, Inc. dated as of February 8, 2021 | |
10.24* | License Agreement between Sanofi and Valo Health, Inc. dated as of May 10, 2021 | |
10.25 | Offer Letter between the Company and Hilary Malone dated April 21, 2021 | |
10.26 | Offer Letter between the Company and Cissy Young dated April 21, 2021 | |
10.27 | Offer Letter between the Company and David Berry dated August 19, 2021 | |
16.1 (13) | Letter dated August 12, 2021 from Marcum LLP | |
23.1 | Consent of BDO USA, LLP | |
23.2 | Consent of PricewaterhouseCoopers LLP | |
23.3* | Consent of Latham & Watkins LLP (included in Exhibit 5.1) | |
24.1** | Power of Attorney (included on signature page of the Registration Statement) | |
99.1* | Form of Proxy Card for Special Meeting | |
99.2* | Consent of Samir Kaul to be named as a director | |
99.3* | Consent of David A. Berry, M.D., Ph.D. to be named as a director | |
99.4* | Consent of Judy Lewent to be named as a director | |
99.5* | Consent of David R. Epstein to be named as a director | |
99.6* | Consent of Shreeram Aradhye, M.D. to be named as a director | |
99.7* | Consent of Brett Chugg to be named as a director | |
99.8* | Consent of Ronald W. Hovsepian to be named as a director | |
99.9* | Consent of Harsha Ramalingam to be named as a director | |
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL 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. |
Exhibit Number |
Description | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | The Cover Page Interactive Data File, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
* | To be filed by amendment. |
** | Previously filed. |
+ | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
(1) | Incorporated by reference to Exhibit 4.1 to Amendment No. 1 to Registration Statement on Form S-1 filed by the Registrant on February 25, 2021. |
(2) | Incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(3) | Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(4) | Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(5) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(6) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(7) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(8) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(9) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(10) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(11) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(12) | Incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on March 9, 2021. |
(13) | Incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed by the Registrant on August 12, 2021. |
1. | The undersigned Registrant hereby undertakes: |
(a) | To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the |
aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; and |
(b) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment that contains a form of prospectus will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
(c) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(d) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, will be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(e) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
2. | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such |
indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. |
3. | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
4. | The registrant undertakes that every prospectus: (1) that is filed pursuant to the immediately preceding paragraph, or (2) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
5. | The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. |
6. | The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. |
KHOSLA VENTURES ACQUISITION CO. II | ||
By: | /s/ Peter Buckland | |
Name: | Peter Buckland | |
Title: | Chief Financial Officer |
Signature |
Title |
Date | ||
/s/ Samir Kaul Samir Kaul |
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) |
September 22, 2021 | ||
/s/ Peter Buckland Peter Buckland |
Chief Financial Officer (Principal Financial and Accounting Officer) |
September 22, 2021 | ||
* Jagdeep Singh |
Director |
September 22, 2021 | ||
* Rajiv Shah |
Director |
September 22, 2021 | ||
* Molly Coye |
Director |
September 22, 2021 | ||
* Mario Schlosser |
Director |
September 22, 2021 | ||
* Dmitri Shklovsky |
Director |
September 22, 2021 | ||
* Derek Anthony West |
Director |
September 22, 2021 | ||
*By: /s/ Peter Buckland Peter Buckland |
Attorney-in-fact |
September 22, 2021 |