Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-K
 
 
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
     
to
     
Commission file number: 001-40843
 
 
Berenson Acquisition Corp. I
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
87-1070217
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
667 Madison Avenue, 18
th
Floor
New York,
NY
 
10065
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (212935-7676
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Class A common stock, par value $0.0001 per share
 
BACA
 
NYSE American LLC
Securities registered pursuant to Section 12(g) of the Act: None
 
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐  No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes ☐  No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. 
If securities are registered pursuant to Section 12(b) of the Act, indicate by check
mark
whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. 
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  No ☐
As of June 30, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the
shares of Class A common stock of the registrant
(based upon the closing price of the registrant’s Class A shares of common stock at that date as reported by the New York Stock Exchange), excluding outstanding shares of common stock beneficially owned by persons who may be deemed affiliates of the registrant, was approximately $26,808,510.17.
As of May 31, 2024, there were
 7,942,968 shares of our common stock issued and outstanding, consisting of 4,045,468 shares of Class A common stock, par value $0.0001 per share, and 3,897,500 shares of Class B common stock, par value $0.0001 per share,
and 1,000,000 shares of Series A preferred stock issued and outstanding.
 
 
 


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TABLE OF CONTENTS

 

PART I      6
Item 1.   Business    6
Item 1A.   Risk Factors    15
Item 1B.   Unresolved Staff Comments    52
Item 1C.   Cybersecurity    52
Item 2.   Properties    52
Item 3.   Legal Proceedings    52
Item 4.   Mine Safety Disclosures    52
PART II      53
Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities    53
Item 6.   [Reserved]    55
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations    55
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk    60
Item 8.   Financial Statements and Supplementary Data    60
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure    60
Item 9A.   Controls and Procedures    61
Item 9B.   Other Information    62
Item 9C.   Disclosure Regarding Foreign Jurisdictions that Prevent Inspections    62
PART III      63
Item 10.   Directors, Executive Officers and Corporate Governance    63
Item 11.   Executive Compensation    68
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters    69
Item 13.   Certain Relationships and Related Transactions, and Director Independence    70
Item 14.   Principal Accountant Fees and Services    72
PART IV      73
Item 15.   Exhibits and Financial Statement Schedules    73
Item 16.   Form 10-K Summary    75
Signatures     


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CERTAIN TERMS

Unless otherwise stated in this Annual Report on Form 10-K (this “report”) or unless the context otherwise requires:

 

   

references to “we,” “us,” “our,” “the company” or “our company” refer to Berenson Acquisition Corp. I, a Delaware corporation;

 

   

references to our “sponsor” refer to Berenson SPAC Holdings I, LLC, a Delaware limited liability company;

 

   

references to “common stock” refer to our Class A common stock, par value $0.0001 per share, and our Class B common stock, par value $0.0001 per share, collectively;

 

   

references to “public shares” refer to shares of our Class A common stock sold as part of the units in our initial public offering (whether purchased in our initial public offering or thereafter in the open market);

 

   

references to “founder shares” refer to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to our initial public offering, and the shares of our Class A common stock issuable upon the conversion thereof;

 

   

references to “public warrants” refer to our redeemable warrants sold as part of the units in our initial public offering (whether purchased in our initial public offering or thereafter in the open market), to the private placement warrants if held by third parties other than our sponsor (or permitted transferees), and to any private placement warrants issued upon conversion of working capital loans that are sold to third parties that are not initial purchasers or our executive officers or directors (or permitted transferees), in each case, following the consummation of our initial business combination;

 

   

references to “private placement warrants” refer to the warrants issued to our sponsor in a private placement simultaneously with the closing of our initial public offering;

 

   

references to “warrants” refer to the public warrants and the private placement warrants;

 

   

references to “public stockholders” refer to the holders of our public shares, including our initial stockholders and management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” shall only exist with respect to such public shares;

 

   

references to “management” or our “management team” refer to our officers and directors;

 

   

references to “initial stockholders” refer to holders of our founder shares prior to our initial public offering; and

 

   

references to “anchor investors” refer to the 11 qualified institutional buyers or institutional accredited investors which are not affiliated with us, our sponsor, our directors or any member of our management and that have purchased units in our initial public offering.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY

Certain of the statements contained in this report constitute “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for purposes of federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including with respect to our proposed business combination with Custom Health, Inc. (“Custom Health”). In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:

 

   

we are a recently incorporated company with no operating history and no revenues;

 

   

public stockholders’ lack of opportunity to vote on our proposed business combination;

 

   

lack of protections normally afforded to investors of blank check companies;

 

   

our initial stockholders controlling a substantial interest in us;

 

   

deviation from acquisition criteria and guidelines;

 

   

our ability to complete our initial business combination, including the proposed business combination with Custom Health;

 

   

our expectations around the performance of Custom Health or any other prospective target business or businesses

 

   

completing a business combination with a company located in a foreign jurisdiction;

 

   

issuance of equity and/or debt securities to complete a business combination;

 

   

lack of working capital;

 

   

our ability to obtain additional financing to complete our initial business combination;

 

   

dependence on key personnel;

 

   

past performance by our management team is not indicative of future performance of an investment in us;

 

   

conflicts of interest of our sponsor, officers and directors;

 

   

the delisting of our securities by the NYSE American LLC (the “NYSE American”);

 

   

the ongoing and past impacts of the COVID-19 pandemic and related risks, the invasion of Ukraine by Russia and resulting sanctions, military conflict between Hamas and Israel and other events (such as terrorist attacks, geopolitical unrest, natural disasters or a significant outbreak of other infectious diseases);

 

   

delay in receiving distributions from the trust account;

 

   

the exercise of registration rights by our security holders may have an adverse effect on the market price of our Class A common stock;

 

   

warrant holders limited to exercising warrants only on a “cashless basis;”

 

   

ability to amend the terms of our warrants with the approval by the holders of at least 50% of the then outstanding public warrants;

 

   

shares being redeemed and warrants becoming worthless;

 

   

adverse effect of warrants and founder shares on the market price of our Class A common stock;

 

   

changes in laws or regulations, or our failure to comply with any laws and regulations;

 

   

uncertain or adverse U.S. federal income tax consequence;

 

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difficulties and limitations in protecting your interests, and your ability to protect your rights through the U.S. federal courts; and

 

   

the other risks and uncertainties discussed in “Item 1A. Risk Factors” and elsewhere in this report and in our other filings with the U.S. Securities and Exchange Commission (“SEC”), including in our preliminary prospectus/proxy statement to be included in a Registration Statement on Form S-4 that we will file with the SEC relating to the proposed business combination with Custom Health.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

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Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those highlighted in Item I, Part 1A. “Risk Factors,” that represent challenges that we face in connection with the successful implementation of our strategy. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may adversely affect our ability to effect a business combination, and may have an adverse effect on our business, cash flows, financial condition and results of operations. This summary only highlights the more detailed information appearing elsewhere in this report. You should read this entire report carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this report, before investing.

 

   

We are a blank check company with no operating history and, accordingly, you have no basis on which to evaluate our ability to achieve our business objective.

 

   

If we are unable to consummate our initial business combination, our public stockholders may be forced to wait until September 30, 2024 before receiving distributions from the trust account.

 

   

Custom Health or any other target business with which we ultimately consummate a business combination, may be materially adversely affected by the past and ongoing impact and uncertainty resulting from the COVID-19 pandemic, the invasion of Ukraine by Russia and resulting sanctions, military conflict between Hamas and Israel and other events and risks (such as geopolitical unrest or a significant outbreak of other infectious diseases) and the status of debt and equity markets.

 

   

Our public stockholders may not be afforded an opportunity to vote on our proposed business combination.

 

   

Our public stockholders lack protections normally afforded to investors of blank check companies.

 

   

Our initial stockholders control a substantial interest in us and thus may influence certain actions requiring a stockholder vote.

 

   

Our deviation from acquisition criteria and guidelines.

 

   

Our ability to complete our initial business combination including the proposed business combination with Custom Health.

 

   

Our expectations around the performance of Custom Health or any other prospective target business or businesses.

 

   

Completing a business combination with a company located in a foreign jurisdiction.

 

   

We may issue shares of our capital stock to complete our initial business combination, which would reduce the equity interest of our stockholders and likely cause a change in control of our ownership

 

   

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

 

   

We may not have sufficient working capital to cover our operating expenses.

 

   

Our ability to obtain additional financing to complete our initial business combination.

 

   

Our dependence on key personnel.

 

   

The past performance by our management team is not indicative of future performance of an investment in us.

 

   

The conflicts of interest of our sponsor, officers and directors.

 

   

The NYSE American may delist our securities from quotation on its exchange which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

   

The exercise of registration rights by our security holders may have an adverse effect on the market price of our Class A common stock.

 

   

Warrant holders may be limited to exercising warrants only on a “cashless basis.”

 

   

The ability to amend the terms of our warrants with the approval by the holders of at least 50% of the then outstanding public warrants;

 

   

Shares being redeemed and warrants becoming worthless.

 

   

The adverse effect of warrants on the market price of our Class A common stock.

 

   

Changes in laws or regulations, or our failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination.

 

   

A new 1% U.S. federal excise tax could be imposed on us in connection with redemptions.

 

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If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

 

   

To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities held in the trust account and instead to hold the funds in the trust account in cash until the earlier of the consummation of our initial business combination or our liquidation. As a result, following the liquidation of securities in the trust account, the interest earned on the funds held in the trust account may be materially reduced, which would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.

 

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PART I

Item 1. Business

Introduction

We are a blank check company incorporated on June 1, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to in this report as our initial business combination.

On June 25, 2021, we issued 7,187,500 founder shares to our sponsor for an aggregate purchase price of $25,000, or approximately $0.004 per share. On September 15, 2021, our sponsor transferred an aggregate of 25,000 founder shares to each of our independent directors and our special advisor (for a total of 125,000 founder shares) for their original purchase price. Subsequently, on September 30, 2021, our sponsor sold an aggregate of 1,872,159 founder shares to the anchor investors at their original purchase price. Following the expiration of the underwriter’s over-allotment option, on November 12, 2021 our sponsor forfeited 310,000 founder shares. Our initial stockholders currently own approximately 86.6% of our issued and outstanding shares of common stock.

On September 27, 2021, the registration statement on Form S-1 (File No. 333-259470) relating to our initial public offering was declared effective by the U.S. Securities and Exchange Commission (the “SEC”). On September 30, 2021, we consummated our initial public offering of 25,000,000 units, with each unit consisting of one share of Class A common stock and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment. The units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $250,000,000.

Simultaneously with the consummation of our initial public offering, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating total proceeds of $7,000,000 (the “private placement”).

On October 22, 2021, the underwriters of the initial public offering partially exercised their over-allotment option and purchased 2,510,000 additional units at $10.00 per unit, generating additional gross proceeds of $25,100,000. In addition, on October 22, 2021, simultaneously with the partial exercise of the over-allotment option by the underwriters, the sponsor purchased an additional 502,000 private placement warrants at $1.00 per private placement warrant, generating additional gross proceeds of $502,000.

A total of $275,100,000 (or $10.00 per unit sold in our initial public offering) of the net proceeds from our initial public offering (including the partial exercise of the underwriter’s over-allotment option) and the private placement was placed in a trust account established for the benefit of our public stockholders (the “trust account”), with Continental Stock Transfer & Trust Company acting as trustee, and has been invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the funds held in the trust account will not be released from the trust account until the earliest of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2024 or (b) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we do not complete our initial business combination by September 30, 2024, subject to applicable law.

Transaction costs amounted to $6,008,471, consisting of $5,502,000 in underwriting discounts and commissions and $506,471 for other costs and expenses related to our initial public offering. In addition, the underwriters of our initial public offering agreed to defer $9,628,500 in underwriting commissions, which amount will be payable upon consummation of our initial business combination, if consummated. As of December 31, 2022, we had $250,453 in our operating bank accounts, $278,782,399 in cash and marketable securities held in the trust account and a working capital deficit of $200,719.

Our units began trading on September 28, 2021 on the New York Stock Exchange (the “NYSE”) under the symbol “BACA.U.” Commencing on November 18, 2021, the Class A common stock and warrants comprising the units began separate trading on the NYSE under the symbols “BACA” and “BACA WS,” respectively. We received approval to transfer the listing of our Class A common stock from the NYSE to the NYSE American on March 1, 2023 and on March 13, 2023, our Class A common stock began trading on the NYSE American under the

 

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symbol “BACA.” Following the notice of delisting and suspension of trading of our warrants by the NYSE, effective February 3, 2023, our warrants are trading on the OTC Market under the symbol “BACA WS.” In addition, in connection with the transfer, effective March 13, 2023, any remaining units were mandatorily separated into its component parts and the units are no longer traded on the NYSE. On March 30, 2023, we held a special meeting in lieu of our 2023 annual meeting of stockholders (the “Special Meeting”) at which our stockholders approved an amendment to our amended and restated certificate of incorporation (the “Charter Amendment”) and an amendment to the Investment Management Trust Agreement, dated as of September 27, 2021 (the “Trust Agreement”), by and between us and Continental Stock Transfer & Trust Company, (the “Trust Amendment”). The Charter Amendment and the Trust Amendment extend the date by which we must consummate our initial business combination (the “First Extension”) from March 30, 2023 to September 30, 2023 or such earlier date as determined by our board of directors (the “First Extension,” such date, the “First Extended Date”).

In connection with the stockholder vote to approve the First Extension, the holders of 24,899,629 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.18 per share, for an aggregate redemption amount of approximately $253.4 million, leaving approximately $26.6 million in the trust account, immediately following the redemptions. In connection with the First Extension, we entered into a non-redemption agreement with our sponsor and one or more unaffiliated third party or parties, pursuant to which such third party or parties agreed to not redeem an aggregate 1,959,269 shares of Class A common stock in connection with the extension vote, in exchange for our sponsor’s commitment to transfer an aggregate of 489,819 founder shares (the “Transfer Shares”) to such third party or parties immediately following the closing of an initial business combination. On September 27, 2023, we held the special meeting at which our stockholders approved the Charter Amendment to extend the date by which we must consummate our initial business combination (the “Second Extension”) from the First Extended Date to September 30, 2024 or such earlier date as determined by our board of directors (the “Second Extended Date”).

In connection with the stockholder vote to approve the Second Extension, the holders of 1,544,903 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.40 per share, for an aggregate redemption amount of approximately $16.1 million, leaving approximately $11.1 million in the trust account. In connection with the Second Extension, we entered into a non-redemption agreement with our sponsor and one or more unaffiliated third party or parties, pursuant to which such third party or parties agreed to not redeem an aggregate 655,715 shares of Class A common stock of the Company sold in its initial public offering in connection with the vote to approve the Second Extension.

Proposed Business Combination

Business Combination Agreement

On December 22, 2023, the Company entered into a business combination agreement (as amended, the “Business Combination Agreement”) with Custom Health, Inc., a Delaware corporation (“Custom Health”), and Continental Merger Sub Inc., a Delaware corporation and wholly-owned direct subsidiary of the Company (“Merger Sub”). If the Business Combination Agreement and the transactions contemplated thereby are adopted and approved by our stockholders, and the Business Combination is subsequently completed, Merger Sub will merge with and into Custom Health (the “Merger”), with Custom Health continuing as the surviving company after the Merger, as a result of which Custom Health will become a wholly-owned subsidiary of the Company (the “Business Combination,” and together with other transactions contemplated by the Business Combination and the ancillary agreements, the “Proposed Transaction”). The Proposed Transaction is subject to customary conditions of the respective parties, including the approval of the business combination by our stockholders. In connection with the closing of the Business Combination, the Company will be renamed as “Custom Health, Inc.” and is referred to herein as the “Post-Combination Company” as of the time following such change of name.

Stockholder Support Agreement

Concurrently with the execution and delivery of the Business Combination Agreement, the Company, Custom Health and certain stockholders of Custom Health holding at least a majority of the shares of common stock of Custom Health entered into a stockholder support agreement (the “Stockholder Support Agreement”), pursuant to which, among other things, such stockholders of Custom Health agreed to (a) vote all of their shares of common stock of Custom Health in favor of the adoption and approval of the Business Combination Agreement and the Proposed Transaction (in any event, within five business days after the Registration Statement becomes effective) and (b) subject their shares of common stock of Custom Health to certain transfer restrictions; in each case, on the terms and subject to the conditions set forth therein.

Sponsor Support Agreement

Concurrently with the execution and delivery of the Business Combination Agreement, the sponsor, the Company and Custom Health entered into the Sponsor Support Agreement, pursuant to which, among other things, the sponsor agreed to (i) vote all of its shares of common stock of the Company (or execute and deliver an action by written consent) in favor of the Proposed Transaction, including the Merger; (ii) not redeem its shares of common stock of the Company, and waive its anti-dilution protection with respect to its shares of Class B common stock of the Company; and (iii) subject to forfeiture 1,719,375 of the shares (“Post-Combination Company Common Stock”) of the combined company (the “Founder Earn-Out Shares”) held by our sponsor and by certain other stockholders of the Company who agree to participate in such earn-out.

 

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Form of Registration Rights and Lock-Up Agreement

In connection with the Closing, the Company, certain stockholders of the Company and certain stockholders of Custom Health which will collectively own at least 70% of the total issued and outstanding capital stock of Custom Health as of immediately prior to the Closing will enter into a Registration Rights and Lock-Up Agreement (the “Registration Rights and Lock-Up Agreement”), pursuant to which, among other things: (i) the Company will agree to provide such holders with customary registration rights with respect to their shares of Post-Combination Company Common Stock; (ii) the former stockholders of Custom Health will agree to not effect any sale or distribution of Post-Combination Company Common Stock during the period the period beginning on the date of Closing and ending on the date that is the earlier of (x) six months following the Closing, or (y) such date that is subsequent to the Closing that the last sale price of the common stock of the Company equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after the Closing, subject to customary exceptions; and (iii) the original stockholders of the Company will agree to not effect any sale or distribution of Post-Combination Company Common Stock during the period the period beginning on the date of closing (“Closing”) of the Business Combination and ending on the date that is the earlier of (x) twelve months following the Closing, or (y) such date that is subsequent to the Closing that the last sale price of the common stock of the Company equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing after the Closing, subject to customary exceptions.

The Business Combination Agreement, the Stockholder Support Agreement, Sponsor Support Agreement and the Form of Registration Rights and Lock-Up Agreement are more fully described in [Note 1] to the financial statements included in Item 8 of this report. A copy of each of the foregoing agreements was included as an exhibit to the Current Report on Form 8-K filed with the SEC on December 29, 2023 and are also filed as exhibits to this report.

Unless specifically stated, this report does not give effect to the Proposed Transaction and does not contain the risks associated with the Proposed Transaction. Such risks and effects relating to the Proposed Transaction will be included in our preliminary prospectus/proxy statement to be included in a Registration Statement on Form S-4 that we will file with the SEC relating to the Proposed Transaction.

Series A Convertible Preferred Stock

On December 20, 2023, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock with the Delaware Secretary of State (the “Certificate of Designation”) authorizing up to 1,000,000 Series A Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series A Preferred Stock”) and fixing the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions of the Series A Preferred Stock. The Series A Preferred Shares issued pursuant to the Share Purchase Agreement represent all of the 1,000,000 shares of Series A Preferred Stock authorized by the Certificate of Designation.

Pursuant to the Certificate of Designation, holders of Series A Preferred Shares will not be entitled to receive any dividends in respect of the Series A Preferred Shares or have any voting rights except as otherwise required by applicable law. Notwithstanding the foregoing, pursuant to the Certificate of Designation, so long as any Series A Preferred Shares are outstanding, the Company may not, without first obtaining the approval by vote or written consent (in the manner permitted by applicable law) of the holders of at least a majority of the total number of Series A Preferred Shares then outstanding, voting together as a single series, amend the Certificate of Designation in any manner that would alter or change the powers, preferences or special rights of the Series A Preferred Shares so as to affect them adversely; provided, however, that in no event shall the foregoing be construed to permit or entitle the holders of Series A Preferred Shares to vote on any initial Business Combination or any amendment to Article X of the Company’s certificate of incorporation.

Pursuant to the Certificate of Designation, other than with respect to certain conversion and redemption rights described herein, the holders of Series A Preferred Shares have no rights upon the dissolution, liquidation and winding up of the Company. Pursuant to the Certificate of Designation, each Series A Preferred Share may be converted into twenty-six (26) shares of Common Stock at the option of the holder on the closing of business on the earlier of (i) December 20, 2024, (ii) the effective date of the dissolution of the Company and (iii) the closing of the Business Combination (the “Conversion Date”) provided that the holder of Series A Preferred Shares provides the Company with at least 30 days written notice as provided in the Certificate of Designation. Pursuant to the Certificate of Designation, each Series A Preferred Share outstanding on close of business the first business day following the Conversion Date (the “Redemption Date”) shall, except to the extent prohibited by Delaware law governing distributions to stockholders, be redeemed by the Company.

Share Purchase Agreement

On December 21, 2023, the Company entered into a share purchase agreement (the “Share Purchase Agreement”) with ACM ARRT N LLC, a Delaware limited liability company and special purpose vehicle (the “Preferred Investor”), pursuant to which the Company issued 1,000,000 shares of the Company’s Series A Convertible Preferred Stock (collectively, the “Series A Preferred Shares” and each, a “Series A Preferred Share”), for a purchase price of $260.00 per share representing an aggregate purchase price of $260,000,000.00 (the “Aggregate Purchase Price”). Each Series A Preferred Share may be converted at the election of the holder thereof into twenty-six (26) shares of the Company’s Class A common stock on the date of the Closing and each Series A Preferred Share not so converted, will automatically be redeemed by the Company for $260 per Series A Preferred Share on the first business day after the date of the Closing.

Share Forward Transaction

On December 21, 2023, the Company (the Company is referred to in the Confirmation Agreement (as defined below) as the “Counterparty” prior to the consummation of the Business Combination (as defined in the Confirmation Agreement), while the post-Business Combination combined company is referred to as the “Counterparty” in the Confirmation Agreement) and the Preferred Investor (referred to as “Seller” in the Confirmation Agreement) entered into the Confirmation Agreement for the Cash-Settled Equity Derivative Transaction (the “Confirmation Agreement” and the transactions contemplated by the Confirmation Agreement together with the Pricing Date Notice(s), a form of which is attached as Schedule A to the Confirmation Agreement, the “Share Forward Transaction”) with respect to, prior to the closing of the Business Combination, Series A Preferred Shares, and, after the Closing, shares of Common Stock into which one or more Series A Preferred Shares are converted on the Conversion Date (as defined below) pursuant to the Certificate of Designation (as defined below) (the “Shares”) at the initial price of, prior to the Closing, $260.00 and, after the Closing with respect to the shares of Common Stock into which one or more of the Series A Preferred Shares are converted on the Conversion Date pursuant to the Certificate of Designation, $10.00 (the “Initial Price”). The “Maximum Number of Shares” subject to the Share Forward Transaction is 1,000,000 Series A Preferred Shares, and then

 

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such number of shares of Common Stock into which the Series A Preferred Shares have been converted on the Conversion Date pursuant to the Certificate of Designation; provided that, the Maximum Number of Shares is reduced upon the Closing by the number of Redeemed Shares (as defined below), but in no event following such reduction, will the Maximum Number of Shares be more than 6,000,000 shares of Common Stock following the Closing.

On the Redemption Date (as defined below), pursuant to the Certificate of Designation the Company will, except to the extent prohibited by Delaware law governing distributions to stockholders, be required to redeem any Series A Preferred Shares that were not converted into shares of Common Stock on the Conversion Date pursuant to the Certificate of Designation (“Redeemed Shares”). Upon such redemption, (i) Seller is required to return the Redeemed Shares to the Counterparty, (ii) Seller will retain the Prepayment Amount relevant to the Redeemed Shares, and (iii) the number of shares subject to the Share Forward Transaction will be reduced by such number of Redeemed Shares. To the extent Seller chooses, in its sole discretion, to convert Series A Preferred Shares into an amount of Class A shares of Common Stock in excess of the Maximum Number of Shares, Seller will retain such Series A Preferred Shares and release to the Counterparty the corresponding Prepayment Amount.

At the Company’s sole option, upon 45 days’ written notice to Seller (the “PIPE Notice”), which notice would include the reasonably estimated total number of outstanding shares of Common Stock on a post-Closing pro forma basis, the Company may request that Seller enter into a mutually agreeable PIPE subscription agreement to commit to purchase an amount up to (i) $1.00 multiplied by (ii) the number of Shares Seller identifies in a preliminary notice in substantially the form of the Pricing Date Notice, to be delivered by Seller within two (2) trading days following receipt of the PIPE Notice, with each Share to be purchased in the PIPE to be purchased by Seller at $6.00 per share (the “PIPE Transaction”); provided that Seller shall have no obligation to purchase shares in the PIPE Transaction if Seller provides written notice to Counterparty at least 30 days prior to the Closing that Seller will not be purchasing shares in the PIPE Transaction. Should Seller decline to purchase PIPE shares, the Company may terminate the Confirmation Agreement without penalty (but shall still be responsible for payment of Consideration Shares (as defined below) to Seller and reimbursement of certain legal fees and operating expenses). Upon any such termination, Seller will return the Recycled Shares (as defined in the Confirmation Agreement) to Counterparty and Seller will retain the Prepayment Amount for the Recycled Shares. The shares purchased by Seller in the PIPE Transaction may be sold by Seller at any time and at any price, subject to the requirements of securities laws, without payment by Seller to Counterparty of any Early Termination Obligation (as defined below). In the event the Counterparty enters into one or more other similar subscription agreements, with any other investor at any time during the term of the Share Forward Transaction, that provide for terms materially more favorable to such other investor thereunder than the terms of the PIPE Transaction, the Counterparty will promptly inform Seller of such more favorable terms in writing, and Seller will have the right to elect to have such more favorable terms included in the subscription agreement for the PIPE Transaction, and if Seller has already entered into such subscription agreement for the PIPE Transaction, the parties will promptly amend the subscription agreement for the PIPE Transaction to effect the same.

For purposes of the Share Forward Transaction, the valuation date (the “Valuation Date”) will be the earlier to occur of (a) the date that is three years after the date of the Closing, (b) the date after the Closing specified by Seller in a written notice to be delivered to Counterparty at Seller’s sole discretion (which Valuation Date will not be earlier than the day such notice is effective) after the occurrence of any of (x) a VWAP Trigger Event (as defined below), (y) a Delisting Event (as defined in the Confirmation Agreement), or (z) a Registration Failure (as defined in the Confirmation Agreement) and (c) the date in which the number of Shares is zero. The VWAP Trigger Event will occur if (i) provided that Seller has purchased shares of Common Stock pursuant to the PIPE Transaction, the volume average price per share (“VWAP Price”), for any 40 trading days during a 60 consecutive trading day-period is below $3.00 per Share, and (ii) provided that Seller does not purchase shares of Common Stock pursuant to the PIPE Transaction, the VWAP Price, for any 20 trading days during a 30 consecutive trading day-period is below $3.00 per Share. On the Valuation Date, the Counterparty is obligated to pay to Seller a cash amount equal to the number of Shares as of the Valuation Date, multiplied by the VWAP Price over the Valuation Period (as defined in the Confirmation Agreement), provided that the amount may be adjusted as follows (as adjusted “Settlement Adjustment Amount”): if the Counterparty, at its option, has requested that Seller purchase Shares in the PIPE Transaction pursuant to the terms of the Confirmation Agreement, then (1) (a) the Maximum Number of Shares less (b) any Terminated Shares (as defined below) as of the Valuation Date, multiplied by (2) $2.00, and in all other cases, then (A) (i) the Maximum Number of Shares less (ii) any Terminated Shares as of the Valuation Date, multiplied by (B) the sum of (i) $1.00 and (ii) the product of (y)(I) the gross proceeds in the PIPE Transaction divided by (II) $6,000,000; provided however, that no Settlement Adjustment Amount shall be due if more than 50% of the Recycled Shares as of the Business Combination have been terminated prior to the Valuation Date.

The Counterparty has agreed to indemnify and hold harmless Seller, its affiliates, assignees and other parties described therein (the “Indemnified Parties”) from and against all losses, claims, damages and liabilities under the Confirmation Agreement and reimburse the Indemnified Parties for their reasonable expenses incurred in connection with such liabilities, subject to certain exceptions described therein, and has agreed to contribute to any amounts required to be paid by any Indemnified Parties if such indemnification is unavailable or insufficient to hold such party harmless.

As consideration for entering into the Share Forward Transaction, Counterparty will either (i) issue to Seller 500,000 Shares of Common Stock upon the Closing (the “Consideration Shares”), or (ii) to the extent Seller has already purchased Consideration Shares in the open market from third parties or otherwise holds such Consideration Shares and so notifies Counterparty prior to the date of the Closing, then on the Prepayment Date (as defined in the Confirmation Agreement), Counterparty will pay to Seller directly from the Seller’s trust account an amount equal to the product of (x) the number of Consideration Shares held by Seller at Closing and (y) the Redemption Price as defined in Section 9.2(a) of the Certificate of Incorporation (as defined below). Such Consideration Shares may be sold by Seller at any time and at any price, subject to the requirements of securities laws, without payment by Seller to Counterparty of any Early Termination Obligation (as defined below).

After the Closing, Seller may, in its absolute discretion, terminate the Share Forward Transaction, in whole or in part, by providing written notice to Counterparty which would specify the quantity by which the number of Shares will be reduced (such quantity, the “Terminated Shares”) and the Counterparty will be entitled to an amount from Seller, equal to the product of (x) the number of Terminated Shares and (y) the Reset Price (as defined below) in respect of such early termination price (an “Early Termination Obligation”). The Reset Price will initially be the Initial Price and upon the conversion of Series A Preferred Shares, the Initial Price will be $10.00 per Share and provided further that the Reset Price may be further reduced by any dilutive agreement executed by the Counterparty (other than certain grants or issuances under Counterparty’s equity compensation plans or shares underlying the warrants issued in connection with the Business Combination or pursuant to the PIPE Transaction).

Without the prior written consent of Seller, Counterparty will not, and Counterparty shall cause the target in the Business Combination to not enter into, negotiate or exchange terms with any other party for any other Share Forward Transaction or any other similar arrangement to the Share Forward Transaction until the earlier action (i) the termination of the Share Forward Transaction and (ii) the Closing.

 

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On December 21, 2023, the Seller issued to the Counterparty Pricing Date Notice with respect to the 1,000,000 Series A Preferred Shares. The parties agreed for the Counterparty to pay the Prepayment Amount ($260,000,000) by netting such amount against the Aggregate Purchase Price owed by the Investor pursuant to the Share Purchase Agreement ($260,000,000).

On January 19, 2024, we received a written notice (the “Notice”) from the staff of NYSE Regulation of the New York Stock Exchange (“NYSE Regulation”) indicating that we were not in compliance with Section 1003(b)(i)(B) of the NYSE American LLC Company Guide (the “Company Guide”), which requires us to maintain a minimum of 300 public stockholders on a continuous basis. On February 15, 2024, we submitted a business plan to regain compliance with the minimum public shareholders requirement by September 30, 2024. NYSE Regulation accepted the plan and we are subject to periodic reviews including quarterly monitoring for compliance with such plan.

On April 17, 2024, the Company received an official notice of noncompliance (the “Delinquency Notice”) from NYSE Regulation stating that we were not in compliance with NYSE American continued listing standards (the “Filing Delinquency Notification”) due to the failure to timely file the Form 10-K for the year ended December 31, 2023 (the “Delinquent Report”) by the filing due date of April 16, 2024 (the “Filing Delinquency”). Within five days of the Filing Delinquency Notification, we (a) contacted NYSE Regulation to discuss the status of the Delinquent Report and (b) issued a press release disclosing the occurrence of the Filing Delinquency. We have been provided a six-month cure period, with an optional additional six-month cure period at the discretion of NYSE Regulation, who reserve the right at any time to immediately truncate the cure period or immediately commence suspension and delisting procedures. We believe that upon the filing of this Annual Report on 10-K on May 31, 2024, we will have cured the Filing Delinquency, however there can be no assurance that the Company will continue to comply with the NYSE American continued listing requirements.

Our Management Team

Our sponsor is affiliated with Berenson Holdings LLC (“Berenson”), a merchant bank founded in 1990 with two principal lines of business: investment banking and private equity investing. In addition, an affiliate of Navigation Capital Partners LLC (“Navigation”) is an investor in our sponsor. Navigation Capital is an Atlanta-based private equity firm that partners and invests with successful CEOs to launch companies into the public market.

We are seeking to create an investment vehicle that will benefit from our long heritage of investment and advisory capability servicing corporations, entrepreneurs and private investors as they identify, evaluate and implement opportunities to realize and capitalize on their long-term strategic vision. We expect to rely on significant proprietary deal flow, and along with our board of directors, to identify and analyze businesses that we believe will benefit from Berenson’s experience and networks to accelerate and realize growth and shareholder value creation. Navigation will provide resources including a network of relationships, extensive SPAC knowledge base and a standardized SPAC operating system to streamline the business combination process.

Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any member of our management team will devote in any time period to our company will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.

The past performance of our management team or their affiliates is not a guarantee of either (i) success with respect to a business combination that may be consummated or (ii) the ability to successfully identify and execute a transaction. You should not rely on the historical record of management or their affiliates as indicative of future performance.

Business Strategy

We will seek to capitalize on the significant industry experience and contacts of our management team and board of directors to identify, evaluate and acquire a target business. Our objective is to acquire a high-quality business that can generate attractive, risk-adjusted returns for stockholders. Our selection process will leverage Berenson’s and Navigation’s extensive global network of relationships, deep industry knowledge across multiple geographies, transaction execution experience and deal sourcing capabilities that provide access to a broad spectrum of acquisition opportunities, which we believe will differentiate us as a partner of choice to potential business combination opportunities.

We believe that the following differentiated value propositions will allow us to bring to the public market a highly attractive business:

 

   

Proprietary Sourcing Capabilities: Our network of deep relationships with CEOs, founders, boards of directors and private equity sponsors provides us with a differentiated avenue for sourcing target businesses;

 

   

Proven Experience in Consummating Transactions: We believe that our extensive M&A experience, with a distinct reputation for navigating transaction complexities, is a significant advantage. Our team has demonstrated the ability to negotiate and structure transactions, evaluate corporate strategies, access growth capital, and develop appropriate capital structures;

 

   

Extensive Understanding of Capital Markets and Public Market Investors: We have significant experience in formulating a variety of structures for companies across a number of industries. Much of this structuring capability is based on familiarity with the key performance indicators and growth metrics of companies in our target industries;

 

   

Significant Software and Technology-enabled Services Investment Experience: We have extensive experience in analyzing attractive companies in our target sectors

If we elect to pursue an investment outside of those industries, our management’s expertise related to those industries may not be directly applicable to its evaluation or operation.

 

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Business Combination Criteria

We seek to merge with a private company operating in the software and technology-enabled services sector with recurring/predictable revenue and the prospect for high free cash flow conversion at scale. We focus on businesses with as many of the following characteristics as possible:

 

   

Passionate Management: We are drawn to teams that “live and breathe” their end-markets and have a unique understanding for the current and future needs of their clients. We recognize that execution capability is critical and look for teams with demonstrable past success;

 

   

Large and Growing End Markets: We seek to identify businesses that are solving problems in large and growing markets. We focus primarily on the products / services that the business currently offers and are careful to not be influenced by “blue-sky” opportunities (though we view their credible presence as upside);

 

   

Resilient Barriers to Entry: We seek established and emerging market leaders with defensible and self-reinforcing competitive advantages such as high switching costs, network effects, proprietary data / integrations and learning effects;

 

   

Mission-Critical Offerings: For us, an ideal business demonstrates low price elasticity, though we are careful to make sure that it is not over-earning / rent-seeking. We especially like products and services that provide high value at a low nominal cost; we believe this represents pricing power;

 

   

Organic Volume Growth: We prefer businesses that have historically driven growth through volume; we look to isolate pricing from overall revenue growth;

 

   

Attractive Unit Economics: We analyze unit economics in order to identify businesses with long- term strong free cash flow generation potential at scale;

 

   

A Well-Defined Corporate Culture: We believe that companies are built by teams, not individuals; much of the value of exceptional leaders lies in their ability to cultivate a strong, defined and evolving corporate culture which can be used to attract and retain talent. Key attributes include accountability, ethics, empowerment, transparency and diversity of thought; and

 

   

Potential to Benefit from Our Expertise: We will rely on our advisory heritage to assist management in identifying, negotiating, financing and structuring transactions including acquisition and/or capital raises to support and accelerate long- term growth.

We believe we can enhance the value proposition of a business combination through, among other things:

 

   

Growth Strategies: We can assist the company in developing and executing organic and inorganic growth strategies, including operational and management enhancements, as well as identifying and executing on acquisitions;

 

   

Capital Formation: We can continually monitor capital markets and advise on opportunities to optimize capital structure and transition the company’s investor base to fundamental, long-term holders; and

 

   

Public Company Readiness: We can assist a company in creating an appropriate public company accounting and reporting infrastructure and obtaining relevant analyst coverage.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination, including the Business Combination with Custom Health, may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which would be in the form of proxy solicitation materials or tender offer documents that we would file with the SEC.

Sourcing of Potential Initial Business Combination Targets

Business combination targets that are developing core technologies and pursuing disruptive commercialization strategies often need access to stable capital but lack access to public markets. Our team has the necessary technical, operating and transactional expertise to identify attractive acquisition targets that would most benefit from the value we seek to deliver to our shareholders vis-à-vis our initial business combination. The primary sourcing activities of our team will emanate from its access to high quality deal flow that meets our acquisition criteria—the result of successfully investing in, scaling and operating innovative companies.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or completing the business combination through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of the Financial Industry Regulatory Authority (“FINRA”), or an independent accounting firm stating that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

 

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Members of our management team directly or indirectly own founder shares and/or private placement warrants and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such other entity. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We do not believe, however, that the fiduciary duties or contractual obligations of our officers and directors will materially affect our ability to complete our initial business combination.

In addition, our sponsor, officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. Our officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

Affiliates of our sponsor are not prohibited from sponsoring other special purpose acquisition companies and such affiliates, including Navigation and Berenson, expect to sponsor special purpose acquisition companies in the future. Any such companies may pursue similar targets and compete with us for business combination opportunities. Any such companies may present additional conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates. However, we do not currently expect that any such other special purpose acquisition company would materially affect our ability to complete our initial business combination.

Initial Business Combination

The NYSE American listing rules require that our initial business combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the assets held in the trust account (excluding taxes payable on the income earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. We refer to this as the 80% fair market value test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent accounting firm, with respect to the satisfaction of such criteria. Additionally, pursuant to the NYSE American rules, any initial business combination must be approved by a majority of our independent directors. Notwithstanding the foregoing, if we are not listed on the NYSE American at the time of our initial business combination, these rules will not be applicable to us.

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own or acquire shares will own or acquire 100% of the outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In such cases, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our

 

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outstanding shares subsequent to our initial business combination. If less than 100% of the outstanding equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% fair market value test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses.

Our units began trading on September 28, 2021 on the New York Stock Exchange the NYSE under the symbol “BACA.U.” Commencing on November 18, 2021, the Class A common stock and warrants comprising the units began separate trading on the NYSE under the symbols “BACA” and “BACA WS,” respectively. We received approval to transfer the listing of our Class A common stock from the NYSE to the NYSE American on March 1, 2023 and on March 2, 2023, we filed with the SEC a Current Report on Form 8-A with respect to the registration of our securities on the NYSE American. Commencing on March 13, 2023, our Class A common stock began trading on the NYSE American under the ticker symbol “BACA,” and effective February 3, 2023, our warrants are trading on the OTC Market under the symbol “BACA WS.”

Following the transfer of our listing from the NYSE to the NYSE American, we intend to continue to file the same periodic reports and other information we currently file with the SEC.

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares Class A common stock upon the completion of our initial business combination either: (i) in connection with a stockholder meeting called to approve the business combination; or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirements. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirements, or we choose to seek stockholder approval for business or other reasons.

We have until September 30, 2024 to complete our initial business combination. If we do not complete our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination by September 30, 2024.

Competition

We have in the past and, if the Business Combination with Custom Health is not completed, may in the future encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.

Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do, and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there will be numerous target businesses we could potentially acquire, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. Our sponsor or any of its affiliates may make additional investments in us, although our sponsor and its affiliates have no obligation or other duty to do so. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating and completing an initial business combination.

Employees

We currently have two officers. Members of our management team are not obligated to devote any specific number of hours to our matters, but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any member of our management team will devote in any time period to our company will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.

Our Website

Our corporate website address is www.berensonacquisitioncorp.com. The information contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference into this report.

 

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Periodic Reporting and Audited Financial Statements

We have registered our units, Class A common stock and warrants under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. Such reports and other information filed by the company with the SEC are available free of charge on our website and on the SEC’s website at www.sec.gov. The contents of this website are not incorporated into this report. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.

We will provide stockholders with audited financial statements of a prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, United States generally accepted accounting principles (“U.S. GAAP”) or international financial reporting standards (“IFRS”), depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”). These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination with, including the Proposed Transaction with Custom Health, because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We intend to file with the SEC a registration statement on Form S-4 relating to the Proposed Transaction that will include the audited financial statements of Custom Health. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with U.S. GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.

We are required to evaluate our internal control procedures for the fiscal year ending December 31, 2023 as required by the Sarbanes- Oxley Act of 2002 (the “Sarbanes-Oxley Act”). Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the worldwide market value of our common stock that is held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter; or (ii) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.

 

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Item 1A. Risk Factors

An investment in our securities involves a high degree of risk. You should carefully consider all of the risks described below, together with the other information contained in this report. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. For risk factors related to Custom Health and our proposed Business Combination, please review the S-4 Registration Statement, including the preliminary proxy statement/prospectus of the Company to be included therein, and the definitive proxy statement/prospectus, to be filed by the Company.

Risks Relating to Our Business and Financial Position

Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”

As of December 31, 2023, we had $115,435 of cash in our operating account and working capital deficit of $4,004,819. We incurred and expect to continue to incur significant costs in pursuit of its initial business combination. We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. Although we are continuing our pursuit of an initial business combination, including the proposed Business Combination, there is no assurance that our plans to consummate an initial business combination will be successful by the Second Extended Date. As outlined in our amended and restated certificate of incorporation, if we do not complete an initial business combination by the Second Extended Date, we will cease operations and redeem our public shares through a wind-up of the Company and liquidation. These factors, among others, raise substantial doubt about our ability to continue as a going concern for one year from the issuance of these financial statements. Our financial statements contained in this Annual Report do not include any adjustments that might be necessary should we be unable to continue as a going concern.

We have identified a material weakness in our internal control over financial reporting as of December 31, 2023. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

We have identified a material weakness in our internal controls over financial reporting surrounding our technical accounting for complex transactions. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or, detected and corrected on a timely basis. In such a case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, our securities price may decline and we may face litigation as a result. Further, effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.

In light of the material weakness identified, although we have to identify and appropriately apply applicable accounting requirements, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply our financial statements. The plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. There can be no assurance that the measures taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

Risks Relating to Our Search for, and Consummation of or Inability to Consummate, a Business Combination

We are an early stage company with no operating history and, accordingly, you have no basis on which to evaluate our ability to achieve our business objective.

We are an early stage company with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination, including the Business Combination with Custom Health. If we fail to complete our initial business combination, we will never generate any operating revenues.

Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons. For instance, if we were seeking to acquire a target business where the consideration we were paying in the transaction was all cash, we would typically not be required to seek shareholder approval to complete such a transaction. However, except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority of the outstanding shares of our common stock do not approve of the business combination we consummate.

If we seek stockholder approval of our initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination and the anchor investors have agreed to vote their founder shares in favor of such initial business combination, regardless of how our public stockholders vote.

Our sponsor, officers and directors have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. Our sponsor, officers and directors own shares representing 62.7% of our outstanding shares of common stock as of December 31, 2023. Because we generally only need a majority of the outstanding shares to be voted in favor of a proposed business combination to have such transaction approved, if our initial stockholders, officers and directors vote their shares as agreed, we have enough votes to have our initial business combination approved even if none of our public stockholders approve the transaction.

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash.

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Additionally, since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Further, because we generally only need a majority of the outstanding shares to be voted in favor of a proposed business combination to have such transaction approved, if our initial stockholders, officers and directors vote their shares as agreed, we have enough votes to have our initial business combination approved even if none of our public stockholders approve the transaction. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.

 

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The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential target businesses, which may make it difficult for us to enter into a business combination with a target.

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, we will only redeem our public shares so long as (after such redemptions) our net tangible assets, will be at least $5,000,001 either prior to or upon consummation of an initial business combination, after payment of the deferred underwriting commission related to our initial public offering (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to not be at least $5,000,001 either prior to or upon consummation of an initial business combination, after payment of the deferred underwriting commission, or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

At the time we enter into another agreement for our initial business combination (if the Business Combination with Custom Health is not completed), we will not know how many stockholders may exercise their redemption rights in connection with the approval of the business combination and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.

 

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If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an

 

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aggregate of 15% of the shares sold in the initial public offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. As a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisor or any of their affiliates may purchase public shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisor or any of their affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they are under no obligation to do so.

Such a purchase may include a contractual acknowledgement that such public stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or any of their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling public stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose of any such transaction could be to (i) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, (ii) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met or (iii) reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such transaction may result in the completion of our initial business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Any target business with which we ultimately consummate a business combination, including Custom Health, may be materially adversely affected by the past and ongoing impacts of COVID-19 coronavirus pandemic (including any potential public health crises) and the status of debt and equity markets.

The COVID-19 pandemic has adversely affected, and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely affect, the economies and financial markets worldwide, and the business of any potential target business with which we consummate an initial business combination could be materially and adversely affected. Furthermore, we may be unable to complete an initial business combination if outbreak of illnesses, pandemics and other public health crises that are outside of our control restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for an initial business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 (including variant mutations of the virus) and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of time, our ability to consummate an initial business combination or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

In addition, our ability to consummate a transaction may be dependent upon its ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or at all.

 

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Any target business with which we ultimately consummate a business combination, including the Business Combination with Custom Health, may be materially adversely affected by negative impacts on the global economy, capital markets or other geopolitical conditions resulting from the invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities and the ongoing military conflict between Israel and Hamas.

The United States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the invasion of Ukraine by Russia in February 2022. In response to such invasion, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe. The United States, the United Kingdom, the European Union and other

 

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countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system. The invasion of Ukraine by Russia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing military conflict in Ukraine is highly unpredictable, the conflict could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Additionally, Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. In early October 2023, Hamas launched assaults against Israeli citizens in Israel. Israel has responded aggressively with operations inside Gaza against Hamas. The foregoing events have caused substantial regional instability and world-wide concern and potential involvement.

Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine and subsequent sanctions and the military conflict between Israel and Hamas could adversely affect our search for a business combination and any target business with which we ultimately consummate a business combination. The extent and duration of the Russian invasion of Ukraine, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale. Any such disruptions may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities, cross-border transactions or our ability to raise equity or debt financing in connection with any particular business combination. If these disruptions or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, such as the Business Combination with Custom Health, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

In addition, the invasion of Ukraine by Russia and Belarus, and the impact of sanctions against Russia, Belarus, and related individuals and entities and the potential for retaliatory acts, could result in increased cyber-attacks against U.S. companies.

Inflation could adversely affect our business and results of operations.

In recent years, the economy in the United States and global markets encountered a material increase in the level of inflation. The past and ongoing impact of the COVID-19 pandemic, geopolitical developments such as the Russia-Ukraine conflict and military conflict between Israel and Hamas, and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, including whether inflation will continue and how long, and at what rate. Increases in inflation raise our costs for commodities, labor, materials and services and other costs required to grow and operate our business, and failure to secure these on reasonable terms may adversely impact our financial condition. Additionally, increases in inflation, along with the uncertainties surrounding the COVID-19 pandemic, geopolitical developments and global supply chain disruptions, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which may make it more difficult, costly or dilutive for us to secure additional financing. A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.

The requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination may limit the type and number of companies with which we may complete such a business combination.

The NYSE American listing rules and our amended and restated certificate of incorporation require that the target business or businesses that we acquire must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding any taxes payable) at the time of the execution of a definitive agreement for our initial business combination. This restriction may limit the type and number of companies that we may complete a business combination with. If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account, which may be less than $10.00 per share.

The requirement that we complete our initial business combination by September 30, 2024 may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination target, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination by September 30, 2024. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the end of the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation. On March 30, 2023, we held the special meeting at which our stockholders approved the Charter Amendment and the Trust Amendment. The Charter Amendment and the Trust Amendment extend the date by which we must consummate our initial business combination from March 30, 2023 to September 30, 2023 or such earlier date as determined by our board of directors. On September 27, 2023, we held the special meeting at which our stockholders approved the Second Extension to extend the date by which we must consummate our initial business combination from September 30, 2023 to September 30, 2024, or such earlier date as determined by our board of directors. Accordingly, we have until September 30, 2024, or such earlier date as determined by our board of directors, to consummate an initial business combination.

 

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We may not be able to complete our initial business combination by September 30, 2024, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

Our amended and restated certificate of incorporation provides that we must complete our initial business combination by September 30, 2024. We may not be able to complete Business Combination with Custom Health or find another suitable target business and complete our initial business combination with them within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein.

 

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If we have not completed our initial business combination within such time period or during any extension period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, 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. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. See “If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

Because of our limited resources and the significant competition for business combination opportunities, if we are unable to complete the Business Combination with Custom Health and have to seek another target, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their stock, and our warrants will expire worthless.

If we are unable to complete the Business Combination with Custom Health and have to seek another target, we may encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do, and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there will be numerous target businesses we could potentially acquire with the net proceeds of the initial public offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for shares of our Class A common stock, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

As the number of special purpose acquisition companies increases, there may be more competition to find an attractive target for an initial business combination. If the Business Combination with Custom Health is not completed and we have to seek another target company, this could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our initial business combination.

Because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions, including the recent invasion of Ukraine by Russia and the resulting sanctions and military conflict between Hamas and Israel, or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial business combination on terms favorable to our investors altogether.

 

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If the net proceeds of the initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate at least until September 30, 2024, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.

Of the net proceeds of the initial public offering and the sale of the private placement warrants, only approximately $1,000,000 was made available to us initially outside the trust account to fund our working capital requirements.

If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to loan funds to us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

On September 26, 2023, we issued an unsecured promissory note (the “Note”) in the principal amount of up to $750,000 to our sponsor, which may be drawn down from time to time prior to the Maturity Date (defined below) upon request by us. The Note does not bear interest and the principal balance will be payable on the date on which we consummate our initial business combination (such date, the “Maturity Date”). The Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Note and all other sums payable with regard to the Note becoming immediately due and payable. The issuance of the Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. As of December 31, 2023, an aggregate amount of $100,000 was outstanding under the Note.

If we have not completed our initial business combination within the prescribed timeframe because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. See “If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

You will not be entitled to protections normally afforded to investors of many other blank check companies.

Since the net proceeds of the initial public offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we will have net tangible assets in excess of $5,000,000 and have filed a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if the initial public offering had been subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of our initial business combination.

Changes in the market for directors’ and officers’ liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.

Recently, the market for directors’ and officers’ liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.

The increased cost and decreased availability of directors’ and officers’ liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms. Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.

In addition, after completion of any initial business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.

 

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If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third-party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue. The underwriters of the initial public offering will not execute agreements with us waiving such claims to the monies held in the trust account.

Examples of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors.

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 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 the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor, which is a newly formed entity, has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per public share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

In the event that the proceeds in the trust account are reduced below the lesser of: (i) $10.00 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 the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in certain instances. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

 

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If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our public stockholders in connection with our liquidation would be reduced.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination, and results of operations.

On March 30, 2022, the SEC issued the SPAC Rule Proposals that would, among other items, impose additional disclosure requirements in business combination transactions involving SPACs and private operating companies; amend the financial statement requirements applicable to business combination transactions involving such companies; update and expand guidance regarding the general use of projections in SEC filings, as well as when projections are disclosed in connection with proposed business combination transactions; increase the potential liability of certain participants in proposed business combination transactions; and impact the extent to which SPACs could become subject to regulation under the Investment Company Act. On January 24, 2024, the SEC issued final rules and guidance (the “Final Rules”) relating to special purpose acquisition companies, regarding, among other things, disclosure in SEC filings in connection with initial business combination transactions; the financial statement requirements applicable to transactions involving shell companies; the use of projections in SEC filings in connection with a proposed business combination transaction; and the potential liability of certain participants in proposed business combination transactions. These rules may materially adversely affect our business, including our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto. The need for compliance with the Final Rules may cause us to liquidate the funds in the trust account or liquidate our company at an earlier time than we might otherwise choose. Were we to liquidate our company, our shareholders would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction, and our warrants would expire worthless.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the Delaware General Corporation Law (the “DGCL”), stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be

 

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barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible after September 30, 2024 (or the end of any further extension period) in the event we do not complete our initial business combination and, therefore, we do not intend to comply with those procedures.

Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that provides for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

 

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We may not hold an annual meeting of stockholders until after the consummation of our initial business combination.

In accordance with the NYSE American corporate governance requirements, we are not required to hold an annual meeting of stockholders until no later than one year after our first fiscal year end following our listing on the NYSE American. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

The forward purchase investors have the ability to excuse themselves from their obligation to purchase forward purchase shares for any reason.

Pursuant to the forward purchase agreements, the forward purchase investors may purchase up to an aggregate of 5,000,000 forward purchase shares for total gross proceeds of up to $50,000,000. We have agreed with one of our forward purchase investors that it will have the right to acquire up to $25,000,000 of securities. At our option, the securities offered to the forward purchaser may be equity securities, convertible debt securities or non-convertible debt instruments. The form of securities offered are in our discretion, although the forward purchaser is not obligated to purchase any securities from us. Pursuant to the forward purchase agreements, if, upon notification of our intention to enter into an initial business combination, a forward purchase investor decides not to purchase such forward purchase shares for any reason, such forward purchase investor will be excused from its obligation to purchase such forward purchase shares. This excusal right could give the forward purchase investors significant influence over our decision of whether or not to proceed with an initial business combination with a particular target business. We may not be able to obtain any or enough additional funds to account for such shortfall, which may impact our ability to consummate an initial business combination. Any such shortfall would also reduce the amount of funds that we have available for working capital of the post- business combination company.

In evaluating a prospective target business for our initial business combination, our management may rely on the availability of all of the funds from the sale of the forward purchase shares to be used as part of the consideration to the sellers in the initial business combination. If the sale of some or all of the forward purchase shares fails to close, for any reason, we may lack sufficient funds to consummate our initial business combination.

In connection with our initial public offering, we entered into forward purchase agreements pursuant to which the forward purchase investors have committed to purchase the forward purchase shares for up to $50,000,000 in the aggregate, in a private placement to close immediately prior to the closing of our initial business combination. We have agreed with one of our forward purchase investors that it will have the right to acquire up to $25,000,000 of securities. At our option, the securities offered to the forward purchaser may be equity securities, convertible debt securities or non-convertible debt instruments. The form of securities offered are in our discretion, although the forward purchaser is not obligated to purchase any securities from us. The funds from the sale of the forward purchase shares may be used as part of the consideration to the sellers in our initial business combination, expenses in connection with our initial business combination or for working capital in the post transaction company. Notwithstanding the foregoing, each forward purchase investor will have the right to be excused from its purchase obligation in connection with any specific business combination under certain circumstances.

If the sale of some or all of the forward purchase shares fails to close for any reason, including by reason of the forward purchase investors deciding not to purchase their forward purchase shares, we may lack sufficient funds to consummate our initial business combination. The forward purchase investors’ obligations to purchase forward purchase shares will be subject to fulfillment of customary closing conditions. In the event of any such failure to fund by the forward purchase investors, any obligation is so terminated or any such closing condition is not satisfied and not waived by the forward purchase investors, we may lack sufficient funds to consummate our initial business combination.

Our forward purchase investors have entered into contingent forward purchase agreements with us that provide for the purchase of an aggregate of up to 5,000,000 forward purchase shares, at a price of $10.00 per forward purchase share, in a private placement to close immediately prior to the closing of our initial business combination. We have agreed with one of our forward purchase investors that it will have the right to acquire up to $25,000,000 of securities. At our option, the securities offered to the forward purchaser may be equity securities, convertible debt securities or non-convertible debt instruments. The form of securities offered are in our discretion, although the forward purchaser is not obligated to purchase any securities from us. Each forward purchase investor will have the right to be excused from its purchase obligation in connection with any specific business combination if, within five days following written notice delivered by us of our intention to enter into a specific business combination, the forward purchase investor notifies us that it has decided not to proceed with the purchase for any reason. If either forward purchase investor exercises such right, or otherwise fails to purchase the forward purchase shares allocated to it, such forward purchase investor will forfeit a pro rata portion of its interest in our sponsor or its right to purchase founder shares from our sponsor, as applicable. Any funds from the sale of the forward purchase shares may be used as part of the consideration to the sellers in the initial business combination, for expenses in connection with the initial business combination or for the combined company’s working capital needs.

 

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Pursuant to the forward purchase agreements, we have agreed that we will use our commercially reasonable efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with the SEC registering the resale of the forward purchase shares and the private units (and underlying securities) held by the forward purchase investors, (ii) to cause such registration statement to be declared effective as soon as practicable thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of (a) such date as all of the securities covered thereby have been sold or otherwise transferred and (b) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act, and without the requirement to be in compliance with Rule 144(c)(1) under the Securities Act. We will bear the costs and expenses of filing such registration statement.

The grant of registration rights to our initial stockholders and their permitted transferees and the anchor investors may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

Pursuant to a registration rights agreement entered into in connection with the initial public offering, at or after the time of our initial business combination, our initial stockholders and their permitted transferees and the anchor investors can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock. In addition, our sponsor and its permitted transferees can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to complete. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the common stock owned by our initial stockholders or their permitted transferees, the private placement warrants owned by our sponsor or their permitted transferees, warrants issued in connection with working capital loans or Class A common stock issuable upon conversion of the founder shares held by the anchor investors are registered for resale.

If we were unable to complete the Business Combination with Custom Health and have to select another target business with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any such other target business’ operations.

We may pursue acquisition opportunities in any geographic region. While we may pursue an acquisition opportunity in any business industry or sector, we focused our search on companies operating in the software and technology-enabled services sector and remain open to evaluating other potential targets that meet our identified business combination criteria. Except that we are not, under our amended and restated certificate of incorporation, permitted to complete our initial business combination solely with another blank check company or similar company with nominal operations, we have flexibility in identifying and selecting a prospective acquisition candidate. Accordingly, if we were unable to complete the Business Combination with Custom Health, there is no basis for you to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which we may ultimately acquire. To the extent we consummate our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all the significant risk factors relevant to such acquisition or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a target business. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such security holders are unlikely to have a remedy for such reduction in value.

If we were unable to complete the Business Combination with Custom Health, we may seek acquisition opportunities in industries outside of the software and technology-enabled services industry (which industries may or may not be outside of our management’s area of expertise).

Although we have focused on identifying business combination targets in the software and technology-enabled services industry, we will consider a business combination outside of the software and technology-enabled services industry (which industries may be outside our management’s area of expertise) if a business combination target is presented to us and we determine that such target offers an attractive acquisition opportunity for our company or we are unable to identify a suitable candidate in the software and technology-enabled services industry. Although our management will endeavor to evaluate the risks inherent in any particular business combination target, we may not adequately ascertain or assess all of the risks. An investment in our securities may ultimately prove to be less favorable to investors than a direct investment, if an opportunity were available, in a business combination target.

 

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In the event we elect to pursue an acquisition outside of the software and technology-enabled services industry, our management’s expertise may not be directly applicable to its evaluation or operation.

Because we intend to seek a business combination with a target business in the software and technology- enabled services industry, we expect our future operations to be subject to risks associated with this industry.

Business combinations with businesses in the software and technology-enabled services industry entail special considerations and risks. If we are successful in completing a business combination with such a target business including the Business Combination with Custom Health, we may be subject to, and possibly adversely affected by, the following risks:

 

   

if we do not develop successful new products or improve existing ones, our business will suffer;

 

   

we may invest in new lines of business that could fail to attract or retain users or generate revenue;

 

   

we will face significant competition and if we are not able to maintain or improve our market share, our business could suffer;

 

   

the loss of one or more members of our management team, or our failure to attract and retain other highly qualified personnel in the future, could seriously harm our business;

 

   

if our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users’ ability to access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether, which could seriously harm our business;

 

   

malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of our products could seriously harm our business and reputation;

 

   

if we are unable to successfully grow our user base and further monetize our products, our business will suffer;

 

   

if we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed;

 

   

we may be subject to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business;

 

   

components used in our products may fail as a result of a manufacturing, design, or other defect over which we have no control, and render our devices inoperable;

 

   

an inability to manage rapid change, increasing consumer expectations and growth;

 

   

an inability to build strong brand identity and improve subscriber or customer satisfaction and loyalty;

 

   

an inability to deal with our subscribers’ or customers’ privacy concerns;

 

   

an inability to license or enforce intellectual property rights on which our business may depend;

 

   

an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;

 

   

potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute;

 

   

competition for the leisure and entertainment time and discretionary spending of subscribers or customers, which may intensify in part due to advances in technology and changes in consumer expectations and behavior; and

 

   

disruption or failure of our networks, systems or technology as a result of computer viruses, “cyber- attacks,” misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events.

Any of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses are not limited to businesses in the software and technology-enabled services industry. Accordingly, if we acquire a target business in another industry, these risks we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.

 

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Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, if we are unable to complete the Business Combination with Custom Health, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum

 

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net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

If we are unable to complete the Business Combination with Custom Health, we may seek acquisition opportunities with an early- stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.

To the extent we complete our initial business combination with an early-stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors, and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

We are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.

Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, as is the case with the Business Combination with Custom Health, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

We may issue additional shares of Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein. Any such issuances would dilute the interest of our stockholders and likely present other risks.

Our amended and restated certificate of incorporation will authorize the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of March 24, 2023, there are 34,387,500 shares of our common stock outstanding, consisting of 30,490,000 shares of Class A common stock and 3,897,500 shares of Class B common stock and 1,000,000 shares of Series A preferred stock outstanding. Shares of Class B common stock are automatically convertible into shares of our Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment.

Additional dilution may be caused by the conversion of Series A Convertible Preferred Stock issued pursuant to the Share Purchase Agreement. Further, we may enter into one or more subscription agreements with certain PIPE investors (each, a “PIPE Subscription Agreement”), to, among other things, to increase the likelihood of Custom Health meeting the Closing Available Cash Conditions (as defined in the Business Combination Agreement) in connection with the Business Combination. Any equity issuances under such PIPE Subscription Agreements could result in dilution of the relative ownership interest of the non-redeeming public stockholders following the Business Combination.

We may issue a substantial number of additional shares of Class A common stock and may issue shares of preferred stock, in order to complete our initial business combination (including pursuant to a specified future issuance) or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions described herein. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (1) extend the time we have to consummate a business combination beyond September 30, 2024 or (2) amend the foregoing provisions. The issuance of additional shares of common or preferred stock:

 

   

may significantly dilute the equity interest of investors in the initial public offering, which dilution would increase if the anti-dilution provisions in the founder shares resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the founder shares;

 

   

may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

 

   

could cause a change of control if a substantial number of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

 

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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;

 

   

may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and

 

   

may not result in adjustment to the exercise price of our warrants.

Resources have, in the past, and could, in the future, be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event has, in the past, and will, if it occurs in the future, result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors which may raise potential conflicts of interest.

In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors. Our officers and directors also serve as officers and board members for other entities. Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our company and our public stockholders as they would be absent any conflicts of interest.

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

Although, except for the Note from the sponsor, we have no commitments as of the date of this report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our initial business combination and affiliates of our sponsor could potentially provide such financing. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

 

   

default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

 

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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 our common stock;

 

   

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

   

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 

   

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

   

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

We may only be able to complete one business combination with the proceeds of the initial public offering and the sale of the private placement warrants less redemption payments to date, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may materially negatively impact our operations and profitability.

As of December 31, 2023, we only had $11,214,335 held in our trust account. We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

 

   

solely dependent upon the performance of a single business, property or asset; or

 

   

dependent upon the development or market acceptance of a single or limited number of products, processes or services.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

 

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We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which a substantial majority of our stockholders do not agree.

Our amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that we will only redeem our public shares so long as (after such redemptions) our net tangible assets, will be at least $5,000,001 (i) in the case of our initial business combination, either prior to or upon consummation of such initial business combination, after payment of the deferred underwriting commission or (ii) in the case of an amendment to our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination by September 30, 2024 or (b) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, upon such amendment (in each case such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that some of our stockholders may not support.

In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/ or other securities. We cannot assure you that we will not seek to amend our charter or governing instruments, including to extend the time to consummate an initial business combination in order to effectuate our initial business combination.

Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of at least 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our stockholders may not support.

Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination activity, without approval by holders of a certain percentage of the company’s stockholders. In those companies, amendment of these provisions typically requires approval by holders holding between 90% and 100% of the company’s public shares. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of the initial public offering and the private placement warrants into the trust account and not release such amounts except in specified circumstances) may be amended if approved by holders of at least 65% of our common stock who attend and vote in a stockholder meeting, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our outstanding common stock. In all other instances, our amended and restated certificate of incorporation provides that it may be amended by holders of a majority of our outstanding common stock, subject to applicable provisions of the DGCL or applicable stock exchange rules. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Class B common stock is required to approve the election or removal of directors. Our initial stockholders, who currently beneficially own 86.6% of our issued and outstanding shares common stock,

 

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and may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which will govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree.

Our sponsor, officers and directors have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2024 or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors, which is filed as an exhibit to this report. Our public stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

Certain agreements related to the initial public offering may be amended without stockholder approval.

Certain agreements, including the letter agreement among us and our sponsor, officers and directors, and the registration rights agreement among us and our initial stockholders and the anchor investors, may be amended without stockholder approval. These agreements contain various provisions, including transfer restrictions on our founder shares, that our public stockholders might deem to be material. While we do not expect our board of directors to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement in connection with the consummation of our initial business combination. Any such amendments would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.

We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure-or abandon a particular business combination.

We are likely to be required to seek additional financing to allow us to complete our initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our sponsor, officers, directors or stockholders or any of their respective affiliates is required to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.

Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to public shares they may acquire during or after the initial public offering), a conflict of interest may arise in determining whether a particular target business is appropriate for our initial business combination.

On June 25, 2021, our sponsor purchased an aggregate of 7,187,500 founder shares for an aggregate purchase price of $25,000, or $0.004 per share. In September 2021, our sponsor transferred an aggregate of 25,000 founder shares (for a total of 125,000 founder shares) to each of our independent directors and our special advisor at their original purchase price. Subsequently, on September 30, 2021, our sponsor sold an aggregate of 1,872,159 founder shares to the anchor investors at their original purchase price. Following the expiration of the underwriter’s over-allotment option, on November 12, 2021, our sponsor forfeited 310,000 founder shares. Additionally, on March 10, 2023, 2,980,000 founder shares were converted from Class B shares of common stock into 2,9800,000 shares of Class A common stock on a one-for-one basis, resulting in 3,897,500 outstanding as of December 31, 2023. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has purchased an aggregate of 7,502,000 private placement warrants for an aggregate purchase price of $7,502,000, or $1.00 per warrant, that will also be worthless if we do not complete our initial business combination.

 

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The personal and financial interests of our sponsor, officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the deadline for the completion of our initial business combination nears.

Additionally, since our initial shareholders only paid approximately $0.004 per founder share, our officers and directors could potentially make a substantial profit even if we acquire a target business that subsequently declines in value and is unprofitable for public investors. Thus, such parties may have more of an economic incentive for us to enter into an initial business combination with a riskier, weaker-performing entity or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their founder shares.

Our initial stockholders and anchor investors will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

Prior to our initial business combination, holders of our Class B common stock, all of which are held by our initial stockholders and anchor investors, will have the right to appoint all of our directors and may remove members of our board of directors for any reason. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by holders of a majority of at least 90% of the outstanding shares of our Class B common stock voting at a stockholder meeting. As a result, you will not have any influence over the election of directors prior to our initial business combination.

Neither our sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions.

If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote. For example, our initial stockholders have sufficient vote to approve an initial business combination even if none of our initial stockholders approve the transaction.

Since only holders of our Class B common stock will have the right to vote on the election of directors, upon the listing of our shares on the NYSE American, the NYSE American may consider us to be a “controlled company” within the meaning of the NYSE American rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.

Since only holders of our Class B common stock have the right to vote on the election of directors prior to our initial business combination, the NYSE American may consider us to be a “controlled company” within the meaning of the NYSE American corporate governance standards. Under the NYSE American corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements that:

 

   

we have a board that includes a majority of ‘independent directors,’ as defined under the rules of the NYSE American;

 

   

we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities

We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the NYSE American, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to all of the NYSE American corporate governance requirements.

 

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A provision of our warrant agreement may make it more difficult for us to consummate an initial business combination.

If we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “newly issued price”), the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the newly issued price. This may make it more difficult for us to consummate an initial business combination with a target business.

Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.

The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with this report. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business combination.

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, such as Custom Health, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.

If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

 

   

costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;

 

   

rules and regulations regarding currency redemption;

 

   

complex corporate withholding taxes on individuals;

 

   

laws governing the manner in which future business combinations may be effected;

 

   

tariffs and trade barriers;

 

   

regulations related to customs and import/export matters;

 

   

longer payment cycles;

 

   

tax consequences, such as tax law changes, including termination or reduction of tax and other incentives that the applicable government provides to domestic companies, and variations in tax laws as compared to the United States;

 

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currency fluctuations and exchange controls;

 

   

rates of inflation;

 

   

challenges in collecting accounts receivable;

 

   

cultural and language differences;

 

   

employment regulations;

 

   

Social unrest, crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars, such as the recent invasion of Ukraine by Russia and military conflict between Israel and Hams;

 

   

deterioration of political relations with the United States;

 

   

obligatory military service by personnel; and

 

   

government appropriation of assets.

We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such combination or, if we complete such combination, our operations might suffer, either of which may adversely impact our results of operations and financial condition.

There may be tax consequences to our initial business combination that may adversely affect us.

While we expect to undertake any initial business combination so as to minimize taxes both to the acquired business and/or asset and us, such initial business combination might not meet the statutory requirements of a tax-free reorganization, or the parties might not obtain the intended tax-free treatment upon a transfer of shares or assets. A non-qualifying reorganization could result in the imposition of substantial taxes.

Our initial business combination and our structure thereafter may not be tax-efficient to our stockholders and warrant holders. As a result of our business combination, our tax obligations may be more complex, burdensome and uncertain.

Although we will attempt to structure our initial business combination in a tax-efficient manner, tax structuring considerations are complex, the relevant facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our initial business combination and subject to any requisite stockholder approval, we may structure our business combination in a manner that requires stockholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination with a target company in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target company or business is located). We do not intend to make any cash distributions to shareholders or warrant holders to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder or a warrant holder may need to satisfy any liability resulting from our initial business combination with cash from its own funds or by selling all or a portion of the shares or warrants received. In addition, stockholders and warrant holders may also be subject to additional income, withholding or other taxes with respect to their ownership of us after our initial business combination.

In addition, we may effect a business combination with a target company that has business operations outside of the United States, such as Custom Health, and possibly, business operations in multiple jurisdictions. If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial condition.

We would be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”), for U.S. federal income tax purposes.

A U.S. corporation will generally be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds, and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).

 

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Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds, and charitable trusts, it is possible that more than 50% of our stock will be owned or deemed owned (pursuant to the constructive ownership rules) by five or fewer such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a PHC. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently imposed at a rate of 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.

 

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A new 1% U.S. federal excise tax could be imposed on the Company in connection with redemptions.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. corporations and certain U.S. subsidiaries of publicly traded non-U.S. corporations (each, a “covered corporation”). Because our securities are trading on the NYSE American, we are a “covered corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the excise tax. The IRA applies only to repurchases that occur after December 31, 2022.

Since we have not consummated an initial business combination before December 31, 2023, any redemption or other repurchase that occurs after December 31, 2022 may be subject to the excise tax. At December 31, 2023, we have recorded an excise tax liability of $2,079,276. The foregoing could cause a reduction in the cash available on hand to complete our initial business combination.

We may not be able to complete an initial business combination with a U.S. target company if such initial business combination is subject to U.S. foreign investment regulations and review by a U.S. government entity such as the Committee on Foreign Investment in the United States (CFIUS), and ultimately prohibited by the same.

Our sponsor is Berenson SPAC Holdings I, LLC, a Delaware limited liability company. The sponsor currently owns 4,880,341 shares of common stock of the Company. BAC Brigade Holdings, LLC, is the managing member of the Sponsor and Jeffrey Berenson is the managing member of BAC Brigade Holdings, LLC. Jefferey Berenson is a U.S. person. U.S. persons hold a majority economic interest in the sponsor. We are a Delaware company. All of our officers and directors, except for one director, are U.S. persons. Custom Health is a Delaware corporation that is headquartered in the U.S. and Canada.

If CFIUS considers us to be a “foreign person” and Custom Health a U.S. business that may affect national security, we could be subject to such foreign ownership restrictions and/or CFIUS review. If the Business Combination with Custom Health falls within the scope of applicable foreign ownership restrictions, we may be unable to consummate the Business Combination. In addition, if the Business Combination falls within CFIUS’s jurisdiction, we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with the Business Combination without notifying CFIUS and risk CFIUS intervention, before or after closing the Business Combination.

Although we do not believe that we would be considered a “foreign person”, CFIUS may take a different view and decide to block or delay the Business Combination, impose conditions to mitigate national security concerns with respect to the Business Combination, order us to divest all or a portion of a U.S. business of the combined company if we had proceeded without first obtaining CFIUS clearance, or impose penalties if CFIUS believes that the mandatory notification requirement applied. Additionally, the laws and regulations of other U.S. government entities may impose review or approval procedures on account of any foreign ownership by the sponsor. If we were to seek an initial Business Combination other than the Business Combination, the pool of potential targets with which we could complete the Business Combination may be limited as a result of any such regulatory restriction. Moreover, the process of any government review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete the Business Combination, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public shareholders would be entitled to redemption of 100% of the public shares, at a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest not previously released to us to pay our income taxes (less up to $100,000 of interest to pay dissolution expenses), by (B) the total number of then-issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any). Moreover, the public shareholders would lose the investment opportunity in a target company, any price appreciation in the combined companies, and the warrants would expire worthless.

 

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The SEC issued final rules to regulate special purpose acquisition companies that may increase our costs and the time needed to complete our initial business combination.

With respect to the regulation of special purpose acquisition companies like the Company (“SPACs”), on January 24, 2024, the SEC adopted the previously proposed rules (the “2024 SPAC Rules “) on January 24, 2024 relating to, among other items, disclosures in business combination transactions involving SPACs and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions. These 2024 SPAC Rules may increase the costs of and the time needed to negotiate and complete the Business Combination, and may constrain the circumstances under which we could complete the Business Combination.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

 

   

restrictions on the nature of our investments; and

 

   

restrictions on the issuance of securities,

 

   

each of which may make it difficult for us to complete our initial business combination. In addition, we may have imposed upon us burdensome requirements, including:

 

   

registration as an investment company;

 

   

adoption of a specific form of corporate structure; and

 

   

reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business is to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long term. We do not intend to spend a considerable amount of time actively managing the assets in the trust account for the primary purpose of achieving investment returns. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be held as cash or invested in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we have not consummated our initial business combination within the completion window or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination within the completion window, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.

Further, under the subjective test of a “investment company” pursuant to Section 3(a)(1)(A) of the Investment Company Act, even if the funds deposited in the trust account were invested in the assets discussed above, such assets, other than cash, are “securities” for purposes of the Investment Company Act and, therefore, there is a risk that we could be deemed an investment company and subject to the Investment Company Act.

In the adopting release for the Final Rules, the SEC provided guidance that a SPAC’s potential status as an “investment company” depends on a variety of factors, such as a SPAC’s duration, asset composition, business purpose and activities and “is a question of facts and circumstances” requiring individualized analysis. If we were deemed to be subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. Unless we are able to modify our activities so that we would not be deemed an investment company, we would either register as an investment company or wind down and abandon our efforts to complete an initial business combination and instead liquidate the Company. As a result, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and would be unable to realize the potential benefits of an initial business combination, including the possible appreciation of the combined company’s securities.

 

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To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities held in the trust account and instead to hold the funds in the trust account in cash until the earlier of the consummation of our initial business combination or our liquidation. As a result, following the liquidation of securities in the trust account, the interest earned on the funds held in the trust account may be materially reduced, which would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.

We intend to initially hold the funds in the trust account as cash or in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. U.S. government treasury obligations are considered “securities” for purposes of the Investment Company Act, while cash is not. As noted above, one of the factors the SEC identified as relevant to the determination of whether a SPAC which holds securities could potentially be deemed an “investment company” under the Investment Company Act is the SPAC’s duration. To mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, instruct Continental Stock Transfer & Trust Company, the trustee with respect to the trust account, to liquidate the U.S. government treasury obligations or money market funds held in the trust account and thereafter to hold all funds in the trust account in cash until the earlier of consummation of our initial business combination or liquidation of the company. Following such liquidation, the rate of interest we receive on the funds held in the trust account may be materially decreased. However, interest previously earned on the funds held in the trust account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, any decision to liquidate the securities held in the trust account and thereafter to hold all funds in the trust account in cash would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the company.

Risks Relating to the Post-Business Combination Company

Subsequent to our completion of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire less than 100% of the outstanding equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post- transaction company owns or acquires 50% or more of the outstanding voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in our initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target, or issue a substantial number of new shares to third-parties in

 

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connection with financing our initial business combination. In such cases, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.

We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information.

Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure of a target business’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.

Risks Relating to Our Management Team

We are dependent upon our directors and officers and their departure could adversely affect our ability to operate.

Our operations are dependent upon a relatively small group of individuals and in particular, we believe that our success depends on the continued service of our directors and officers, at least until we have completed our initial business combination. In addition, our directors and officers are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our sponsor are the investment managers. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.

Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post- combination business.

Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.

In addition, the officers and directors of an acquisition target may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of a business combination target’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition target’s management team will remain associated with the acquisition target following our initial business combination, it is possible that members of the management of an acquisition target will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.

 

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Past performance by members of our management team and their respective affiliates may not be indicative of future performance of an investment in us.

Information regarding performance by, or businesses associated with, members of our management team and their respective affiliates, including Berenson and Navigation, is presented for informational purposes only. Any past experience and performance, including related to acquisitions, of members of our management team and their respective affiliates, including Berenson and Navigation, is not a guarantee either: (i) that we will be able to successfully identify a suitable candidate for our initial business combination; or (ii) of any results with respect to any initial business combination we may consummate. You should not rely on the historical record of our management team’s or their affiliates’ performance, including that of Berenson and Navigation, as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment in Berenson or Navigation.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

Our key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.

Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.

Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers and our Chairman is engaged in other business endeavors for which he may be entitled to substantial compensation and our officers and our Chairman are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors may also serve as officers or board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.

Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities that are engaged in a similar business.

Each of our officers and directors presently has, and any of them in the future may further have, fiduciary or contractual obligations to at least one other entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor these obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

 

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Our officers, directors and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

We have not adopted a policy that expressly prohibits our directors, officers or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

The personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest. If this were the case, it could be a breach of their fiduciary duties and we or our stockholders might have a claim against such individuals for infringing on our stockholders’ rights. However, we might not ultimately be successful in any claim we may make against them for such reason.

We may not have sufficient funds to satisfy indemnification claims of our directors and officers.

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

Following our initial business combination, any or all of our management could resign from their positions as officers of the post-business combination company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

Risks Relating to Our Securities

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the completion of our initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2024 or (b) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) the redemption of all of our public shares if we have not completed our initial business combination by September 30, 2024, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial business combination by September 30, 2024 for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond by September 30, 2024 before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 

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NYSE American may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

Our Class A common stock is listed on the NYSE American. We cannot assure you that our securities will continue to be listed on the NYSE American in the future or prior to our initial business combination. On January 19, 2024, we received the Notice from the staff of NYSE Regulation of the NYSE Regulation indicating that we were not in compliance with Section 1003(b)(i)(B) of the Company Guide which requires us to maintain a minimum of 300 public stockholders on a continuous basis. On February 15, 2024, we submitted a business plan to regain compliance with the minimum public shareholders requirement by September 30, 2024. NYSE Regulation accepted the plan and we are subject to periodic reviews including quarterly monitoring for compliance with such plan. On April 17, 2024, we received the Delinquency Notice from NYSE Regulation due to the Filing Delinquency. We believe that upon the filing of this Annual Report on Form 10-K we will have cured the Filing Delinquency, however there can be no assurance that we will continue to comply with the NYSE American continued listing requirements.

In order to continue listing our securities on the NYSE American prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in stockholders equity and a minimum number of holders of our securities. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with the NYSE initial listing requirements, which are more rigorous than the NYSE American’s continued listing requirements, in order to continue to maintain the listing of our securities on the NYSE American. For instance, our stock price would generally be required to be at least $3.00 per share our total market capitalization would be required to be at least $75.0 million, the aggregate market value of publicly held shares would be required to be at least $20.0 million and we would be required to have at least 400 shareholders upon the consummation of our initial business combination. We may not be able to meet those initial listing requirements at that time.

 

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If NYSE American delists any of our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our Class A common stock will qualify as covered securities under such statute. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the NYSE American, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.

A market for our securities may not fully develop or be sustained, which would adversely affect the liquidity and price of our securities.

The price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 pandemic, the invasion of Ukraine by Russia and resulting sanctions, military conflict between Israel and Hamas, and other events (such as terrorist attacks, geopolitical unrest, natural disasters or a significant outbreak of other infectious diseases). An active trading market for our securities may not fully develop or be sustained. Additionally, if our securities become delisted from the NYSE American for any reason, and are quoted on the OTC Pink Sheets, an inter-dealer automated quotation system for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if we were listed on the NYSE American or another national exchange. You may be unable to sell your securities unless a market can be fully developed and sustained.

The nominal purchase price paid by our sponsor for the founder shares may significantly dilute the implied value of your public shares in the event we complete an initial business combination. In addition, the value of the sponsor’s founder shares will be significantly greater than the amount our sponsor paid to purchase such shares in the event we complete an initial business combination, even if the business combination causes the trading price of our shares of Class A common stock to materially decline.

Our sponsor paid only a nominal purchase price of approximately $0.004 per share for the founder shares. The value of your public shares may be significantly diluted as a result of the automatic conversion of our sponsor’s founder shares into shares of Class A common stock upon our completion of an initial business combination.

The following table shows the public stockholders’ and our sponsor’s investment per share and how these compare to the implied value of one share of Class A common stock upon the completion of our initial business combination. The following table assumes that (i) our valuation is $11,315,472 (which is the approximate amount we have in the trust account for our initial business combination as of March 4, 2024), (ii) no interest is earned on the funds held in the trust account, (iii) no public shares are redeemed in connection with our initial business combination and (iv) all founder shares are held by our initial stockholders upon completion of our initial business combination, and does not take into account other potential impacts on our valuation at the time of the initial business combination such as (i) the value of our public and private placement warrants, (ii) the trading price of our Class A common stock, (iii) any equity issued or cash paid to the target’s sellers, (iv) any equity issued to other third-party investors, or (v) the target’s business itself.

 

Class A common stock held by public stockholders

     1,065,468 shares  

Founder Shares held by our initial stockholders

     6,877,500 shares  

Total shares of common stock

     7,942,968 shares  

Total funds in trust at the initial business combination

   $ 11,315,472  

Public stockholders’ investment per share of Class A common stock(1)

   $ 10.00  

Our initial stockholders’ investment per share of founder shares(2)

   $ 0.004  

Implied value per share of Class A common stock upon the initial business combination(3)

   $ 1.42  

 

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(1)

While the public stockholders’ investment is in both the public shares and the public warrants, for purposes of this table the full investment amount is ascribed to the public shares only.

(2)

Our initial stockholders’ total investment in the equity of the company, inclusive of the founder shares and the sponsor’s $7,502,000 investment in the private placement warrants, is $7,525,000. For purposes of this table, the full investment amount is ascribed to the founder shares only.

(3)

All founder shares held by our initial stockholders would automatically convert into shares of Class A common stock upon completion of our initial business combination.

Based on these assumptions, each share of Class A common stock would have an implied value of $1.42 per share upon completion of our initial business combination, representing an 82% decrease from the initial implied value of $8.00 per public share. While the implied value of $1.42 per share of Class A common stock upon completion of our initial business combination would represent a dilution to our public stockholders, this would represent a significant increase in value for our initial stockholders relative to the price they paid for each founder share. At $1.42 per share of Class A common stock, the 6,877,500 shares of Class A common stock that our initial stockholders would own upon completion of our initial business combination (assuming the underwriters’ overallotment option is not exercised and after automatic conversion of the 3,897,500 founder shares) would have an aggregate implied value of $9,766,050. As a result, even if the trading price of our Class A common stock significantly declines, the value of the founder shares held by our initial stockholders will be significantly greater than the amount our initial stockholders paid to purchase such shares. In addition, our initial stockholders could potentially recoup their entire investment in our company even if the trading price of our Class A common stock after the initial business combination is as low as $1.42 per share. As a result, our initial stockholders are likely to earn a substantial profit on their investment in us upon disposition of its shares of Class A common stock even if the trading price of our Class A common stock declines after we complete our initial business combination even if the value of the public shares declines significantly. Our initial stockholders may therefore be economically incentivized to complete an initial business combination with a riskier, weaker- performing or less-established target business than would be the case if our initial stockholders had paid the same per share price for the founder shares as our public stockholders paid for their public shares.

This dilution would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination and would become exacerbated to the extent that public stockholders seek redemptions from the trust. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.

We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock, the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.

Our warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

Our warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the

 

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scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (i) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (ii) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and may result in a diversion of the time and resources of our management and board of directors.

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of Class A common stock and equity-linked securities as described above) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to: (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants; or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by the sponsor or its permitted transferees.

In addition, we may redeem your warrants after they become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants prior to redemption for a number of Class A common stock determined based on the redemption date and the fair market value of our Class A common stock. In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A common stock had your warrants remained outstanding.

Our warrants are accounted for as a warrant liability and will be recorded at fair value upon issuance with any changes in fair value each period reported in earnings, which may have an adverse effect on the market price of our securities or may make it more difficult for us to consummate an initial business combination.

We have 21,257,000 warrants outstanding (including the 13,755,000 warrants included in the units and the 7,502,000 private placement warrants) in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40. We currently account for these warrants as a warrant liability, which means that we record them at fair value upon issuance with any changes in fair value each period reported in earnings. Our valuation model utilizes inputs such as assumed share prices, volatility, discount factors and other assumptions and may not be reflective of the price at which such warrants can be settled. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities. In addition, potential targets may seek a business combination partner that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business combination with a target business.

Our warrants may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.

We issued warrants to purchase 13,755,000 shares of our Class A common stock as part of the units sold in the initial public offering and, simultaneously with the initial public offering (and the exercise of the over-allotment option), we issued in a private placement an aggregate of 7,502,000 private placement warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per whole share (subject to adjustment as provided herein). In addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. To the extent we issue shares of Class A common stock to effectuate our initial

 

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business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of outstanding shares of our Class A common stock and reduce the value of the Class A common stock issued to complete the business combination. Therefore, our warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.

The private placement warrants are identical to the warrants sold as part of the units in the initial public offering except that, so long as they are held by our sponsor or its permitted transferees: (i) they will not be redeemable by us; (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination; (iii) they may be exercised by the holders on a cashless basis; and (iv) they (including the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights. The private placement warrants will not vote on any amendments to the warrant agreement discussed elsewhere in this report.

Because each unit offered in the initial public offering contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit offered in the initial public offering contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole warrants will trade. This is different from other offerings similar to ours whose units include one share of Class A common stock and one whole warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.

Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred shares, and the fact that prior to the completion of our initial business combination only holders of our shares of Class B common stock, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or proceeding brought on behalf of our company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company to our company or our stockholders, or any claim for aiding and abetting any such alleged breach, (iii) action asserting a claim against our company or any director or officer of our company arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our bylaws, or (iv) action asserting a claim against us or any director or officer of our company governed by the internal affairs doctrine except for, as to each of (i) through (iv) above, any claim (a) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or (c) for which the Court of Chancery and the U.S. federal district court for the District of Delaware does not have subject matter jurisdiction, as to which the Court of Chancery and the federal district court for the District of Delaware shall concurrently be the sole and exclusive forums. Notwithstanding the foregoing, our amended and restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22

 

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of the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulation thereunder. Accordingly, there is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation, however, we note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us and may have the effect of discouraging lawsuits against our directors and officers.

If any action the subject matter of which is within the scope the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (ii) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.

This choice-of-forum provision may make it more costly for a stockholder to bring a claim, and it may also limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company or its directors, officers or other employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our amended and restated certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

General Risk Factors

Data privacy and security breaches, including, but not limited to, those resulting from cyber incidents or attacks, acts of vandalism or theft, computer viruses and/or misplaced or lost data, could result in information theft, data corruption, operational disruption, reputational harm, criminal liability and/or financial loss.

In searching for targets for our initial business combination, we may depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or privacy and security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information, and sensitive or confidential data. As an early-stage company without significant investments in data privacy or security protection, we may not be sufficiently protected against such occurrences and therefore could be liable for privacy and security breaches, including potentially those caused by any of our subcontractors. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents or other incidents that result in a privacy or security breach. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to reputational harm, criminal liability and/or financial loss.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

 

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Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that fiscal year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

We are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.

We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

We are a special purpose acquisition company with no business operations. Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk. Our board of directors is generally responsible for the oversight of risks from cybersecurity threats, if any.

Item 2. Properties

We currently maintain our principal executive offices at 667 Madison Avenue, 18th Floor, New York, New York 10065. Our executive offices are provided to us by our sponsor. The cost for this space is included in the $10,000 per month fee our sponsor began charging us for office space, secretarial and administrative support commencing on September 28, 2021 pursuant to a letter agreement between us and our sponsor. We consider our current office space adequate for our current operations.

Item 3. Legal Proceedings

There is no material litigation, arbitration, governmental proceeding or any other legal proceeding currently pending or known to be contemplated against us or any members of our management team in their capacity as such.

Item 4. Mine Safety Disclosures

Not applicable.

 

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our units began trading on September 28, 2021 on the NYSE under the symbol “BACA.U.” Commencing on November 18, 2021, the Class A common stock and warrants comprising the units began separate trading on the NYSE under the symbols “BACA” and “BACA WS,” respectively. On March 1, 2023, we received approval to transfer the listing of our Class A common stock from the NYSE to the NYSE American and on March 13, 2023, our Class A common stock began trading on the NYSE American under the symbol “BACA.” Following notice of delisting and suspension of trading of our warrants by the NYSE, effective February 3, 2023, our warrants are trading on the OTC Market under the symbol “BACA WS.” In addition, in connection with the transfer, effective March 13, 2023, any remaining units were mandatorily separated into its component parts and the units are no longer traded on the NYSE.

On March 10, 2023, 2,980,000 shares of Class B common stock held by our sponsor were converted into 2,980,000 shares of Class A common stock on a one-for-one basis. As of March 22, 2024, there were 7,942,968 shares of common stock issued and outstanding, consisting of 4,045,468 shares of Class A common stock and 3,897,500 shares of Class B common stock, and there were 1,000,000 shares of preferred stock issued and outstanding.

Holders of Record

On March 10, 2024, there were two holders of record of our Class A common stock, 36 holders of record of our Class B common stock and two holders of record of our warrants. Such numbers do not include beneficial owners holding our securities through nominee names.

 

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Dividends

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements, general financial condition and overall financial goals and objectives of our management team subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Recent Sales of Unregistered Securities

On June 25, 2021, we issued 7,187,500 founder shares to our sponsor for an aggregate purchase price of $25,000, or approximately $0.004 per share. On September 15, 2021, our sponsor transferred an aggregate of 25,000 founder shares to each of our independent directors and our special advisor (for a total of 125,000 founder shares) for their original purchase price. Subsequently, on September 30, 2021, our sponsor sold an aggregate of 1,872,159 founder shares to the anchor investors at their original purchase price.

Simultaneously with the consummation of our initial public offering, on September 30, 2021, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating total proceeds of $7,000,000. The private placement warrants are identical to the public warrants, except that, if held by our sponsor or its permitted transferees, they (i) may be exercised on a cashless basis and (ii) will not be redeemable under certain redemption scenarios. In addition, the private placement warrants (and the shares of Class A common stock issuable upon exercise of such private placement warrants) will, subject to certain limited exceptions, be subject to transfer restrictions until 30 days after the completion of our initial business combination.

On October 22, 2021, the underwriters of the initial public offering partially exercised their over-allotment option and purchased 2,510,000 additional units at $10.00 per unit, generating additional gross proceeds of $25,100,000. In addition, October 22, 2021, simultaneously with the partial exercise of the over-allotment option by the underwriters, the sponsor purchased an additional 502,000 private placement warrants at $1.00 per private placement warrant, generating additional gross proceeds of $502,000.

The foregoing issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor, as initial purchaser of the founder shares and the private placement warrants, is an accredited investor for purposes of Rule 501 of Regulation D. No underwriting discounts or commissions were paid with respect to the private placement warrants.

Use of Proceeds from our Initial Public Offering

On September 30, 2021, we consummated our initial public offering of 25,000,000 units, with each unit consisting of one share of Class A common stock and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment. Each whole warrant will become exercisable on the later of 30 days after the completion of our initial business combination and September 30, 2022 and will expire five years after the completion of our initial business combination, or earlier upon redemption or liquidation. The units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $250,000,000.

 

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BofA Securities, Inc. and Wells Fargo Securities, LLC acted as the representatives of the underwriters of our initial public offering. The securities sold in our initial public offering were registered under the Securities Act on a registration statement on Form S-1 (File No. 333-259470). The registration statements became effective on September 27, 2021.

On October 22, 2021, the underwriters partially exercised their over-allotment option and purchased 2,510,000 additional units at $10.00 per unit, generating additional gross proceeds of $25,100,000. In addition, October 22, 2021, simultaneously with the partial exercise of the over- allotment option by the underwriters, the sponsor purchased an additional 502,000 private placement warrants at $1.00 per private placement warrant, generating additional gross proceeds of $502,000.

We paid a total of $5,000,000 in underwriting discounts and commissions and $506,471 for other costs and expenses related to our initial public offering. In addition, BofA Securities, Inc. (“BoA”) and Wells Fargo Securities, LLC (“Wells Fargo”) agreed to defer $9,628,500 in underwriting commissions, which amount will be payable upon consummation of our initial business combination, if consummated. On November 27, 2023 and November 29, 2023, by formal notice in writing to us and at our request, BoA and Wells Fargo, respectively, constituting all of the underwriters of the IPO, gratuitously waived their rights to 100% of the $9,628,500 deferred fee payable in connection with our initial public offering.

After deducting the underwriting commissions (excluding the deferred portion of $9,628,500 in underwriting commissions) and the offering expenses, the total net proceeds from our initial public offering (including the partial exercise of the over-allotment option) and the private placement were $275,100,000, of which $275,100,000 (or $10.00 per unit sold in our initial public offering) was placed in the trust account. On September 30, 2021, we repaid our sponsor $176,000 in satisfaction of outstanding loans. There has been no material change in the planned use of proceeds from our initial public offering as described in our final prospectus filed with the SEC on September 29, 2021.

On March 30, 2023, we held the special meeting at which our stockholders approved the Charter Amendment and the Trust Amendment. The Charter Amendment and the Trust Amendment extend the date by which we must consummate our initial business combination from March 30, 2023 to September 30, 2023 or such earlier date as determined by our board of directors.

In connection with the stockholder vote to approve the First Extension, the holders of 24,899,629 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.18 per share, for an aggregate redemption amount of approximately $253.4 million, leaving approximately $26.6 million in the trust account, immediately following the redemptions. In connection with the Charter Amendment, we entered into a non-redemption agreement with our sponsor and one or more unaffiliated third party or parties, pursuant to which such third party or parties agreed to not redeem an aggregate 1,959,269 shares of Class A common stock in connection with the extension vote, in exchange for our sponsor’s commitment to transfer an aggregate of 489,819 founder shares to such third party or parties immediately following the closing of an initial business combination.

On September 27, 2023, we held the special meeting at which our stockholders approved the Second Extension to extend the date by which we must consummate our initial business combination from September 30, 2023 to September 30, 2024 or such earlier date as determined by our board of directors.

In connection with the stockholder vote to approve the Second Extension, the holders of 1,544,903 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.40 per share, for an aggregate redemption amount of approximately $16.1 million, leaving approximately $11.1 million in the trust account. In connection with the Second Extension, we entered into a non-redemption agreement with our sponsor and one or more unaffiliated third party or parties, pursuant to which such third party or parties agreed to not redeem an aggregate 655,715 shares of Class A common stock of the Company sold in its initial public offering in connection with the vote to approve the Second Extension.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A. Risk Factors” and elsewhere in this report.

 

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Overview

We are a blank check company incorporated on June 1, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to in this report as our initial business combination.

On September 27, 2021, the registration statement on Form S-1 (File No. 333-259470) relating to our initial public offering was declared effective by the SEC. On September 30, 2021, we consummated our initial public offering of 25,000,000 units, with each unit consisting of one share of Class A common stock and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment. The units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $250,000,000.

Simultaneously with the consummation of our initial public offering, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating total proceeds of $7,000,000.

On October 22, 2021, the underwriters partially exercised their over-allotment option and purchased 2,510,000 additional units at $10.00 per unit, generating additional gross proceeds of $25,100,000. In addition, October 22, 2021, simultaneously with the partial exercise of the over- allotment option by the underwriters, the sponsor purchased an additional 502,000 private placement warrants at $1.00 per private placement warrant, generating additional gross proceeds of $502,000.

A total of $275,100,000 (or $10.00 per unit sold in our initial public offering) of the net proceeds from our initial public offering (including the partial exercise of the underwriter’s over-allotment option) and the private placement was placed in the trust account, with Continental Stock Transfer & Trust Company acting as trustee, and has been invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.

 

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Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the funds held in the trust account will not be released from the trust account until the earliest of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2024 or (b) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we do not complete our initial business combination by September 30, 2024, subject to applicable law.

Our units began trading on September 28, 2021 on the NYSE under the symbol “BACA.U.” Commencing on November 18, 2021, the Class A common stock and warrants comprising the units began separate trading on the NYSE under the symbols “BACA” and “BACA WS,” respectively. On March 1, 2023, we received approval to transfer the listing of our Class A common stock from the NYSE to the NYSE American and on March 13, 2023, our Class A common stock began trading on the NYSE American under the symbol “BACA.” Following notice of delisting and suspension of trading of our warrants by the NYSE, effective February 3, 2023, our warrants are trading on the OTC Market under the symbol “BACA WS.” In addition, in connection with the transfer, effective March 13, 2023, any remaining units were mandatorily separated into its component parts and the units are no longer traded on the NYSE.

On March 21, 2023, we filed with the SEC a Current Report on Form 8-K relating to the entry into a non-redemption agreement (the “Non-Redemption Agreement”) with the sponsor, one or more unaffiliated third party or parties in exchange for such third party or third parties agreeing not to redeem an aggregate of 1,959,269 shares of our Class A common stock, sold in our initial public offering (the “Non-Redeemed Shares”) at the special meeting of stockholders discussed above. In exchange for the foregoing commitments not to redeem such shares, our sponsor has agreed to transfer to such third party or third parties an aggregate of 489,819 shares of our Class A common stock held by the sponsor immediately following consummation of an initial business combination if they continue to hold such Non-Redeemed Shares through the special meeting. The Non- Redemption Agreement was not expected to increase the likelihood that the proposal to amend the charter is approved by our stockholders but increased the amount of funds that remained in our trust account following the special meeting.

On March 30, 2023, we held the special meeting at which our stockholders approved the Charter Amendment and the Trust Amendment. The Charter Amendment and the Trust Amendment extend the date by which we must consummate our initial business combination from March 30, 2023 to September 30, 2023 or such earlier date as determined by our board of directors. On September 27, 2023, we held the special meeting at which our stockholders approved the Second Extension to extend the date by which we must consummate our initial business combination from September 30, 20203 to September 30, 2024 or such earlier date as determined by our board of directors. Accordingly, we have until September 30, 2024, or such earlier date as determined by our board of directors, to consummate an initial business combination.

On December 22, 2023, the Company entered the Business Combination Agreement with Custom Health and Merger Sub. If the Business Combination Agreement and the transactions contemplated thereby are adopted and approved by our stockholders, and the Business Combination is subsequently completed, Merger Sub will merge with and into Custom Health, with Custom Health continuing as the surviving company after the Merger, as a result of which Custom Health will become a wholly-owned subsidiary of the Company. The Proposed Transaction is subject to customary conditions of the respective parties, including the approval of the business combination by our stockholders.

On January 19, 2024, we received the Notice from the staff of NYSE Regulation of the NYSE Regulation indicating that we were not in compliance with Section 1003(b)(i)(B) of the Company Guide which requires us to maintain a minimum of 300 public stockholders on a continuous basis. On February 15, 2024, we submitted a business plan to regain compliance with the minimum public shareholders requirement by September 30, 2024. The plan is currently under review by the staff of NYSE Regulation. If NYSE Regulation accepts the plan, we will be notified in writing and will be subject to periodic reviews including quarterly monitoring for compliance with such plan. If NYSE Regulation does not accept the plan, we will be subject to delisting procedures.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from June 1, 2021 (inception) through December 31, 2023 were organizational activities and those necessary to prepare for our initial public offering, and since our initial public offering, our activity has been limited to identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on marketable securities held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a business combination.

For the year ended December 31, 2023, we had net loss of $(20,814,064), which consists of operating costs of $2,487,003, income tax expense of $766,116, forward purchase liabilities upon issuance of $22,763,000, offset by interest income of $3,749,902, forgiveness of deferred underwriting fee of $466,982, change in fair value of forward purchase liabilities of $847,000, and change in fair value of derivative warrant liabilities of $138,171.

For the year ended December 31, 2022, we had net income of $10,923,646, which consisted of operating costs of $1,622,628, income tax expense of $749,165 offset by interest income of $3,867,960 and change in fair value of derivative warrant liabilities of $9,427,479.

 

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Liquidity and Capital Resources

As of December 31, 2023 and 2022, we had cash of 115,435 and $250,453, respectively. Until the consummation of our initial public offering, our only source of liquidity was an initial purchase of founder shares by our sponsor and loans from our sponsor.

On September 30, 2021, we consummated our initial public offering of 25,000,000 units, at $10.00 per unit, generating gross proceeds of $250,000,000. Simultaneously with the closing of our initial public offering, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating gross proceeds of $7,000,000.

Following our initial public offering (including the partial exercise of the over-allotment option), and the sale of the private placement warrants, a total of $275,100,000 was placed in the trust account. We incurred $15,636,971 in transaction costs, including $5,502,000 of underwriting commissions, $9,628,500 of deferred underwriting commissions and $506,471 of other costs. On November 27, 2023 and November 29, 2023, by formal notice in writing to us and at our request, BoA and Wells Fargo, respectively, constituting all of the underwriters of the IPO, gratuitously waived their rights to 100% of the $9,628,500 deferred fee payable in connection with our initial public offering.

For the year ended from December 31, 2023, cash used in operating activities was $24,034,203. Net loss of $(20,814,064) was affected by interest earned on marketable securities held in the trust account of $3,742,685, change in fair value of derivative warrant liabilities of $138,171 forgiveness of deferred underwriting fee of $466,982 and changes in operating assets and liabilities, which provided $1,127,699 of cash from operating activities.

For the year ended December 31, 2022, cash used in operating activities was $608,729. Net income of $10,923,646 was offset by interest earned on marketable securities held in the Trust Account of $3,865,691, change in fair value of derivative warrant liabilities of $9,427,479 and changes in operating assets and liabilities used $1,760,795 of cash for operating activities.

 

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As of December 31, 2023 and 2022, respectively, we had cash and cash held in the trust account of $11,329,770 and $279,032,852. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less income taxes payable), to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of December 31, 2023, the Company had cash held outside the Trust Account of $115,435 and a working capital deficit of $4,004,819. The Company may need to raise additional capital in order to operate the Company’s business prior to its initial Business Combination through loans or additional investments. The Company’s officers, directors, Sponsor or affiliate of the Sponsor may, but are not obligated to loan the Company funds to meet working capital needs. Accordingly, the Company may not be able to obtain additional financing to meet its current obligations.

In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that because of the conditions described above, the Company may lack the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management continues to evaluate the past and ongoing impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of its operations and/or our ability to consummate an initial business combination, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our ability to consummate an initial business combination may also be dependent on raising additional equity and debt financing, which may be impacted by the COVID-19 pandemic and resulting market volatility. The impact of the COVID-19 pandemic on our results of operations, financial position and cash flows will depend on future developments, including the continued duration and spread of the pandemic and related advisories and restrictions, which are highly uncertain and cannot be predicted.

Contractual Obligations

We do not have any long-term debt obligations (except for the Note described above), capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay our sponsor a monthly fee of $10,000 for office space, secretarial and administrative support. We began incurring these fees on September 28, 2021 and will continue to incur these fees monthly until the earlier of the completion of our initial business combination and our liquidation.

The underwriters of our initial public offering are entitled to a deferred underwriting commission of $0.35 per unit, or $9,628,500 in the aggregate. Subject to the terms of the underwriting agreement, (i) the deferred underwriting commission was placed in the trust account and will be released to the underwriters only upon the completion of our initial business combination and (ii) the deferred underwriting commission will be waived by the underwriters in the event that we do not complete our initial business combination. On November 27, 2023 and November 29, 2023, by formal notice in writing to us and at our request, BoA and Wells Fargo, respectively, constituting all of the underwriters of the IPO, gratuitously waived their rights to 100% of the $9,628,500 deferred fee payable in connection with our initial public offering.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

 

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Common Stock Subject to Possible Redemption

We account for our shares of common stock subject to possible redemption in accordance with ASC Topic 480, “Distinguishing Liabilities from Equity.” In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within our control require common stock subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480.

All of our shares of Class A common stock sold as part of the units in our initial public offering contain a redemption feature which allows for the redemption of such public shares in connection with our liquidation if there is a stockholder vote or tender offer in connection with a business combination and in connection with certain amendments to our amended and restated certificate of incorporation. We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable shares of common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable shares of common stock are affected by charges against additional paid-in capital and accumulated deficit.

Net Income (Loss) per Share of Common Stock

We apply the two-class method in calculating net (loss) income per share of common stock. The contractual formula utilized to calculate the redemption amount approximates fair value. The class feature to redeem at fair value means that there is effectively only one class of stock. Changes in fair value are not considered a dividend for the purposes of the numerator in the earnings per share calculation. Net (loss) income per share of common stock is computed by dividing the pro rata net (loss) income between the shares of Class A common stock and the shares of Class B common stock by the weighted average number of shares common stock outstanding for each of the periods. The calculation of diluted (loss) income per share of common stock does not consider the effect of the warrants and rights issued in connection with our initial public offering since the exercise of the warrants and rights are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable for 21,257,000 shares of Class A common stock in the aggregate.

Public Warrants and Private Placement Warrants

We account for the public warrants and the private placement warrants in accordance with ASC Topic 815—40, Derivatives and Hedging, Contracts in Entity’s Own Equity, under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement”, with changes in fair value recognized in the statements of operations in the period of change. As of December 31, 2023, the estimated fair value of the public warrants was determined by their public trading price and the estimated fair value of the private placement warrants was determined using a modified Black-Scholes valuation model using Level 3 inputs such as exercise price, stock price, volatility, term, risk-free rate and dividend yield.

Forward Purchase Liabilities

We account for forward purchase liabilities in accordance with ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815-40. The Forward Purchase Liabilities were recorded and measured at fair value at inception and remeasured at each reporting date in accordance with ASC 820, “Fair Value Measurement,” with changes in fair value recognized in the accompanying statement of operations in the period of change. The estimated fair value of the forward purchase liabilities was determined using a probability weighted Black-Scholes and discounted cash flow valuation models using Level 3 inputs such as exercise price, stock price, volatility, term, risk-free rate and dividend yield.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Item 8. Financial Statements and Supplementary Data

This information appears following Item 15 of this report and is incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

 

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Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Evaluation of Disclosure Controls and Procedures

As of the fiscal year ended December 31, 2023, an evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) was carried out by our management, with the participation of our principal executive officer and principal financial and accounting officer. Based upon that evaluation, our principal executive officer and principal financial and accounting officer have concluded that as of the end of such fiscal year, our disclosure controls and procedures were not effective, due solely to the material weakness in our internal control over financial reporting surrounding our technical accounting for complex transactions. As a result, we performed additional analyses as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this report present fairly in all material respects our financial position, results of operations and cash flows for the years presented.

Management is in the process of implementing remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting process after the recently identified material weakness noted above. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Changes in Internal Control Over Financial Reporting

Other than as discussed above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2023. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Our system of internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023 based upon criteria in Internal Control – Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management determined that we did not maintain effective internal control over financial reporting as of December 31, 2023 due to the identified material weakness described above.

 

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B. Other Information

Not applicable.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

 

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Our current directors and executive officers are as follows:

 

Name

   Age     

Title

Jeffrey Berenson    73      Chairman of the Board of Directors
Mohammed Ansari               49      Chief Executive Officer and Director
Amir Hegazy    37      Chief Financial Officer
David Panton    52      Director
Carl Ferenbach    81      Independent Director
Kay Kapoor    60      Independent Director
Ronald Kasner    51      Independent Director
Gal Munda    40      Independent Director

Jeffrey Berenson, Chairman of the Board of Directors

Mr. Berenson has served as our Chairman since our inception in June 2021. Mr. Berenson co-founded Berenson Minella & Company in 1990, the predecessor firm to Berenson. Prior to founding Berenson, Mr. Berenson was, among other things, the head of Merrill Lynch’s M&A group and co-founder and co-head of its Merchant Banking Group. Mr. Berenson joined White Weld & Co. in 1972, moving to the M&A department of Merrill Lynch following its acquisition of White Weld in 1978.

Mr. Berenson served as a director of Epoch Investments (NASDAQ: EPHC) from 2004 until its sale to TD Bank Group in 2013, Noble Energy (NASDAQ: NBL) from 2005 until its sale to Chevron (NYSE: CVX) in 2020, Patina Oil and Gas Corp from 2002 until its sale to Noble Energy (NASDAQ: NBL) in 2005. Mr. Berenson graduated magna cum laude with a B.A. from Princeton University. We believe Mr. Berenson’s extensive investment and M&A experience and expertise and experience serving on the boards of directors of public companies qualify him to serve as the Chairman of our board of directors.

Mohammed Ansari, Chief Executive Officer and Director

Mr. Ansari has served as our Chief Executive Officer since our inception in June 2021 and as one of our directors since September 2021. Mr. Ansari is the President and Senior Managing Partner of Berenson. He leads Berenson’s principal investing business and has completed over 100 principal investments and investment banking transactions since joining Berenson. Mr. Ansari joined Berenson in 1997 from Salomon Brothers, where he worked in M&A advisory for major U.S. and Canadian corporations in the New York and Toronto offices.

Mr. Ansari currently serves on the board of directors of Skience LLC and BCP Light Holdings, LLC, and as a board observer for IntraPac International Corporation. Mr. Ansari received a Master of Philosophy Degree in Economics from Cambridge University and a B.S. in Economics and Business Finance from Brunel University, where he graduated with First Class Honors. We believe Mr. Ansari’s investment expertise and investment banking experience qualify him to serve as one of our directors.

Amir Hegazy, Chief Financial Officer

Mr. Hegazy has served as our Chief Financial Officer since our inception in June 2021. Mr. Hegazy is a Managing Director of Berenson focused on software and technology-enabled services. He has over 13 years of experience in investment banking, having worked on a variety of transactions, including buy side and sell side assignments, capital raises and restructurings, and private equity investing as a senior member of Berenson.

Mr. Hegazy serves on the board of directors of Skience LLC since December 2018. Mr. Hegazy graduated cum laude with a B.A. in finance and a minor in economics from Pace University.

David Panton, Director

Dr. Panton has served as one of our directors since our inception in June 2021. He currently serves as the Chairman of Panton Equity Partners, LLC, a private family office which he founded in June 2012. Since May 2020, Dr. Panton has been the managing partner of Navigation Capital Partners SPAC Opportunity Partners, LLC, an investment firm focused on building a diversified portfolio of investments in SPACs utilizing three strategies: providing sponsor capital, leading investments in SPAC initial public offerings, and investing in PIPEs for SPACs. Navigation Capital’s SPAC team recruits CEOs to lead SPACs through its SPAC-in-a-Box® operating system to streamline the SPAC IPO process. In February 2002, Dr. Panton co-founded Navigation Capital Partners LP, an Atlanta-based private equity firm that has made growth and buyout investments. In partnership with Goldman Sachs, its portfolio includes investments in many operating companies.

 

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Prior to his role at Navigation Partners, Dr. Panton served as Vice President at Mellon Ventures, a $1.4 billion private equity firm, before purchasing the portfolio in a partnership with Larry Mock and Goldman Sachs and founding Navigation Capital. Prior to this, Dr. Panton founded Caribbean Equity Partners, a private equity firm focused on investments in the Caribbean and Latin America. Since August 2011, Dr. Panton has been an adjunct professor of Finance at Emory University’s Goizueta Business School. He has served on private and public boards of directors, including Brand Bank (sold to Renasant Bank), Track Utilities (sold to CIVC Partners) D and Z Media Acquisition Corp (NYSE: DNZ), Exeter Finance (sold to Blackstone), SecureWorks (sold to Dell Technologies), and Ameritech Facility Services.

Dr. Panton received his Doctorate in Management Studies from Oxford University, his J.D. from Harvard Law School, and his A.B. from Princeton University. His robust investment and deal experience across various industries provide for unique insight when evaluating potential targets. We believe Dr. Panton’s extensive investment experience, operational experience and experience in dealing with strategic matters relating to special purpose acquisition companies qualify him to serve as one of our directors.

Carl Ferenbach, Independent Director

Mr. Ferenbach has served as one of our directors since the completion of our initial public offering in September 2021. Mr. Ferenbach is the Chairman and co-founder of High Meadows Foundation and co-founder and former Chairman of High Meadows Fund. He also serves on a number of boards of directors including the Environmental Defense Fund, Environmental Defense Fund Europe, the Advisory Board of High Meadows Environmental Institute at Princeton University, Nassau Hall Society at Princeton University, The Wilderness Society and Climate Central. He is a member of the Advisory Board of Private Capital Research Institute at Harvard Business School and a Trustee at Fforestfach Trust. Mr. Ferenbach served as Chairman of the Board of English, Welsh & Scottish Railway Ltd., U.S., Can Corporation and Crown Castle International Corp.

Mr. Ferenbach is a co-founder of Berkshire Partners LLC (“Berkshire”), a private equity investment firm based in Boston, MA, founded in 1986. Berkshire has managed ten private equity investment funds and the Stockbridge Fund representing over $21 billion of capital. He was a Managing Director at Berkshire and is now a Senior Advisor.

He also served as a director of other Berkshire portfolio companies. Mr. Ferenbach received an A.B. from Princeton University and an MBA from Harvard Business School and he served in the U.S. Marine Corps Reserve. We believe Mr. Ferenbach’s extensive experience in the private equity industry and serving on the boards of directors of a diverse range of organizations qualify him to serve as our director.

Kay Kapoor, Independent Director

Mrs. Kapoor has served as one of our directors since the completion of our initial public offering in September 2021. She is the founder and CEO of Arya Technologies, LLC, which she founded in December 2017. Arya Technologies, LLC is a company that provides consulting services to the technology industry, especially around cybersecurity, analytics, cloud, and mobility. Previously, from January 2013 to November 2017 Mrs. Kapoor led AT&T’s Global Public Sector organization, a $15 billion segment of AT&T that provides technology and communications solutions to government & education customers across federal, state, local, and international markets. Over the course of four years, she transformed the segment and delivered substantial growth, including capturing multibillion-dollar contracts such as the landmark FirstNet contract to build a nationwide public safety broadband network for first responders. Prior to that, Mrs. Kapoor served as chairman and CEO of Accenture Federal Services, a wholly-owned $1.3 billion subsidiary of Accenture LLC, leading 2,500 members of its U.S. federal business. Before that, she worked at Lockheed Martin Corporation for 20 years leading complex organization units and government/regulatory relations and served as vice president and COO of Lockheed Martin’s IS&GS—Civil unit. Mrs. Kapoor has 30 years of experience in government and commercial markets. She is the recipient of numerous industry awards.

In addition, she serves on the board of directors of ComSovereign Holding Co. (NASDAQ: COMS) since November 2020 and also is active on boards of philanthropy and academia. Mrs. Kapoor earned her bachelor’s degree in information systems from the University of Maryland and her Master of Science in information systems from Johns Hopkins University, complemented by executive programs at the Massachusetts Institute of Technology and Harvard University. We believe Mrs. Kapoor’s significant experience across the technology and telecommunications industries, including expertise in mergers and acquisitions and telecom technology qualifies her to serve as one of our directors.

Ronald Kasner, Independent Director

Mr. Kasner has served as one of our directors since the completion of our initial public offering in September 2021. Mr. Kasner serves as an operating executive with Berenson since January 2022. He has served as the Vice Chairman of online search and content intelligence platform, Conductor Founders, Inc. since January 2021 and on its board of directors since April 2020 and as an advisor with Exsecutus Advisors, LLC since October 2019. Since September 2021, he serves on the board of directors of AbsenceSoft, the leading absence management platform.

Previously, from March 2010 to May 2020, Mr. Kasner was an executive with cloud-based talent acquisition software company, iCIMS, Inc. During Mr. Kasner’s tenure, iCIMS grew annual recurring revenue from $20 million to over $250 million while being named one of the Best Places to Work nationally. From May 2020 to August 2021, Mr. Kasner served as an independent member of the board of Envisage Technologies, LLC. In addition, from August 2016 to August 2017, Mr. Kasner served on the board of directors of Macropoint, LLC. Mr. Kasner earned his bachelor’s degree in finance and accounting from the University of Virginia and his J.D. from Harvard Law School. We believe Mr. Kasner’s experience and expertise in the software and technology business qualify him to serve as one of our directors.

 

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Gal Munda, Independent Director

Mr. Munda has served as one of our directors since the completion of our initial public offering in September 2021. He has served as the co-head of technology research at Berenberg Capital Markets and as the lead analyst covering global design software from July 2020 to present. Previously, he served in several other positions at Berenberg including as associate director and vice president of equity research from January 2014 until October 2019 and led vertical software investing at Matrix Capital Management from October 2019 to July 2020.

Mr. Munda has over 10 years of finance and equity research experience, specifically within the software industry. Mr. Munda earned his bachelor’s degree in economics and business from the University of Maribor, Slovenia and his masters degree in finance and investment from Nottingham University Business School. We believe Mr. Munda’s experience in the technology industry, including finance and equity research, qualifies him to serve as one of our directors.

Special Advisor

In addition to our management team, we are supported by a special advisor. We currently expect our special advisor to (i) assist us in sourcing and negotiating with potential business combination targets, (ii) provide business insights when we assess potential business combination targets and (iii) upon our request, provide business insights as we work to create additional value in the business or businesses that we acquire. In this regard, our special advisor fulfils some of the same functions as our board members; however, he does not owe any fiduciary obligations to us nor does he perform board or committee functions or have any voting or decision-making capacity on our behalf. He also is not required to devote any specific amount of time to our efforts. Our special advisor does not have any employment, consulting fee or other similar compensation arrangements with us.

William W. Priest, Special Advisor

Mr. Priest is Executive Chairman and Co-Chief Investment Officer of Epoch Investment Partners, a wholly-owned subsidiary of Toronto Dominion Bank and an affiliate of TD Asset Management. He is a portfolio manager for Epoch’s global equity investment strategies and leads the Investment Policy Group, a forum for analyzing broader secular and cyclical trends that Epoch believes will influence investment opportunities. Prior to co-founding Epoch in 2004, Mr. Priest was a Co-Managing Partner and portfolio manager at Steinberg Priest & Sloane Capital Management, LLC for three years.

Before forming Steinberg Priest, he was a member of the Global Executive Committee of Credit Suisse Asset Management (CSAM), Chairman and Chief Executive Officer of Credit Suisse Asset Management Americas and CEO and portfolio manager of its predecessor firm BEA Associates, which he co-founded in 1972. During his 30-year tenure at BEA and CSAM, he helped to develop the firm into a well-recognized investment manager with over $100 billion under management. Mr. Priest is the co-author of several published articles and papers on investing and finance, including the books, The Financial Reality of Pension Funding Under ERISA, Free Cash Flow and Shareholder Yield: New Priorities for the Global Investor, and the more recent Winning at Active Management: The Essential Roles of Culture, Philosophy and Technology. He is a member of the Council on Foreign Relations.

Mr. Priest holds the Chartered Financial Analyst designation, is a former CPA and a graduate of Duke University and the University of Pennsylvania Wharton Graduate School of Business.

Number and Terms of Office of Officers and Directors

Our board of directors consists of seven members. The term of office of each of our directors will expire at the first annual meeting of stockholders. We may not hold an annual meeting of stockholders until after we consummate our initial business combination.

Prior to the completion of our initial business combination, any vacancy on our board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the completion of our initial business combination, only holders of a majority of our founder shares may remove a member of our board of directors.

Our officers are appointed by our board of directors and serve at the discretion of our board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, Secretary and such other offices as may be determined from time to time by the board of directors.

Committees of the Board of Directors

Our board of directors has three standing committees: an audit committee, a nominating and corporate governance committee, and a compensation committee. Each of our audit committee, our nominating and corporate governance committee, and our compensation committee is composed solely of independent directors. The charter of each committee is available on our website.

 

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Audit Committee

Our audit committee consists of Gal Munda (chair), Kay Kapoor and Carl Ferenbach, each of whom is an independent director under the rules of the NYSE American and under Rule 10-A-3(b)(1) of the Exchange Act. Under the NYSE American listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each member of the audit committee is financially literate and our board of directors has determined that Gal Munda qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise. The audit committee’s duties, which are specified in our audit committee charter, include, but are not limited to:

 

   

assisting board oversight of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications and independence and (iv) the performance of our internal audit function and the independent registered public accounting firm;

 

   

the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;

 

   

pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

 

   

reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;

 

   

setting clear hiring policies for employees or former employees of the independent registered public accounting firm;

 

   

setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

 

   

obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality- control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

 

   

reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

 

   

reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

Our audit committee charter is available on our corporate website. The information contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference into this report.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Carl Ferenbach (chair), Kay Kapoor and Ronald Kasner, each of whom is an independent director under the rules of the NYSE American. Under the NYSE American listing standards, we are required to have a nominating committee composed entirely of independent directors. The nominating and corporate governance committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating and corporate governance committee considers persons identified by its members, management, stockholders, investment bankers and others. The nominating and corporate governance committee’s duties, which are specified in our nominating and corporate governance committee charter, include, but are not limited to:

 

   

identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors;

 

   

developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;

 

   

coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the company; and

 

   

reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.

 

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The nominating and corporate governance committee charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directly responsible for approving the search firm’s fees and other retention terms.

Guidelines for Selecting Director Nominees

The guidelines for selecting nominees, which are specified in our Nominating and Corporate Governance Committee Charter, generally provide that persons to be nominated:

 

   

should have demonstrated notable or significant achievements in business, education or public service;

 

   

should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and

 

   

should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.

The nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating and corporate governance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating and corporate governance committee does not distinguish among nominees recommended by stockholders and other persons.

Our nominating and corporate governance committee charter is available on our corporate website. The information contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference into this report.

Compensation Committee

Our compensation committee consists of Kay Kapoor (chair), Gal Munda and Ronald Kasner, each of whom is an independent director under the rules of the NYSE American. Under the NYSE American listing standards, we are required to have a compensation committee composed entirely of independent directors. The compensation committee’s duties, which are specified in our compensation committee charter, include, but are not limited to:

 

   

reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

 

   

reviewing and making recommendations on an annual basis to our board of directors with respect to (or approving, if such authority is so delegated by our board of directors) the compensation, if any is paid by us, and any incentive-compensation and equity-based plans that are subject to board approval of our other officers;

 

   

reviewing our executive compensation policies and plans;

 

   

implementing and administering our incentive compensation equity-based remuneration plans;

 

   

assisting management in complying with our proxy statement and annual report disclosure requirements;

 

   

approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

 

   

producing a report on executive compensation to be included in our annual proxy statement; and

 

   

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

Notwithstanding the foregoing, other than the $10,000 per month administrative fee payable to our sponsor and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors, special advisor, or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of a business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.

Our Compensation Committee Charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other advisor and will be directly responsible for the appointment, compensation and oversight of the work of any such advisor. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other advisor, the compensation committee will consider the independence of each such advisor, including the factors required by the NYSE American and the SEC.

 

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Our compensation committee charter is available on our corporate website. The information contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference into this report.

Code of Business Conduct and Ethics, Corporate Governance Guidelines and Committee Charters

We have adopted a code of business conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal securities laws. A copy of our Code of Business Conduct and Ethics will be provided without charge upon request to us in writing at 667 Madison Avenue, 18th Floor, New York, New York 10065 or by telephone at (212) 935-7676. We intend to disclose any amendments to or waivers of certain provisions of our code of business conduct and ethics in a Current Report on Form 8-K.

Our board of directors has also adopted corporate governance guidelines in accordance with the corporate governance rules of the NYSE American that serve as a flexible framework within which our board of directors and its committees operate. These guidelines cover a number of areas including board membership criteria and director qualifications, director responsibilities, board agenda, roles of the chairman of the board, chief executive officer and presiding director, meetings of independent directors, committee responsibilities and assignments, board member access to management and independent advisors, director communications with third parties, director compensation, director orientation and continuing education, evaluation of senior management and management succession planning.

Copies of our corporate governance guidelines, our code of business conduct and ethics, our audit committee charter, our compensation committee charter and our nominating and corporate governance committee charter are available on our corporate website. The information contained on or accessible through our corporate website or any other website that we may maintain is not incorporated by reference into this report.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than ten percent of any publicly traded class of our equity securities to file reports of ownership and changes in ownership of our equity securities with the SEC. These reporting persons are also required to furnish us with copies of all Section 16(a) forms they file.

Based solely upon a review of such forms furnished to us during the most recent fiscal year, or written representations that no Forms 5 were required, we believe that that all such forms required to be filed pursuant to Section 16(a) of the Exchange Act were timely filed by the officers, directors, and security holders required to file the same during the fiscal year ended December 31, 2023.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors.

Item 11. Executive Compensation

None of our officers or directors has received any cash compensation for services rendered to us. Commencing on September 28, 2021, we are obligated to pay our sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers, directors, special advisor, or any of their respective affiliates, for services rendered prior to or in connection with the completion of our initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee reviews on a quarterly basis all payments that were made by us to our sponsor, officers, directors, special advisor or our or their affiliates.

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation will be known at the time of the proposed business combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.

We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.

Clawback Policy

On December 20, 2023, our board of directors adopted a clawback policy (the “Clawback Policy”) permitting the Company to seek the recovery of incentive compensation received by any of the Company’s current and former executive officers (as determined by the board in accordance with Section 10D of the Exchange Act and NYSE rules) and such other senior executives/employees who may from time to time be deemed subject to the Clawback Policy by the board (collectively, the “Covered Executives”). The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the board. If the board cannot determine the amount of excess incentive compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement. Refer to Exhibit 97.1 of this report for the Company’s Clawback Policy.

 

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information regarding the beneficial ownership of our common stock as of March 4, 2024, by:

 

   

each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

 

   

each of our executive officers and directors; and

 

   

all our executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of our warrants, including the private placement warrants, as such securities are not exercisable within 60 days of the date of this report.

We have based our calculation of the percentage of beneficial ownership on 7,942,968 shares of common stock outstanding on March 4, 2024, consisting of 4,045,468 shares of Class A common stock and 3,897,500 shares of Class B common stock.

 

     Class A Common Stock     Class B Common Stock     Approximate  

Name and Address of Beneficial Owner(1)

   Number of
Shares
Beneficially
Owned
     Approximate
Percentage
of
Class
    Number of
Shares
Beneficially
Owned
     Approximate
Percentage
of
Class
    Percentage of
Outstanding
Common
Stock
 

Berenson SPAC Holdings I, LLC/ Jeffrey Berenson(2)(3)

     2,980,000        73.7     1,900,341        48.8     61.4

David Panton(4)

     —         —        —         —        —   

Mohammed Ansari(4)

     —         —        —         —        —   

Amir Hegazy(4)

     —         —        —         —        —   

Carl Ferenbach(2)(4)

     —         —        25,000        *       *  

Kay Kapoor(2)

     —         —        25,000        *       *  

Ronald Kasner(2)

     —         —        25,000        *       *  

Gal Munda(2)

     —         —        25,000        *       *  

All directors and executive officers as a group
(eight individuals)

     2,980,000        73.7     2,000,341        51.3     62.7

RiverNorth Capital Management, LLC(5)

     285,715        7.1     —         —        3.6

Farallon Partners, L.L.C.(6)

     285,715        7.1     187,500        4.8     6.0

Sea Otter Advisors LLC(7)

     258,615        6.4     —         —        3.3

 

*

Less than 1%.

(1)

Unless otherwise noted, the business address of each of the following entities or individuals is 667 Madison Avenue, 18th Floor, New York, New York 10065.

(2)

Interests shown consist solely of founder shares, classified as shares of Class B common stock. Such shares will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment.

(3)

The securities are held directly by our sponsor. BAC Brigade Holdings, LLC, is the managing member of the sponsor and Jeffrey Berenson is the managing member of BAC Brigade Holdings, LLC. Consequently, each of BAC Brigade Holdings, LLC and Mr. Berenson may be deemed to share voting and dispositive control over the securities held by our sponsor, and may be deemed to have beneficial ownership of the securities held directly by our sponsor. Mr. Berenson disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein

(4)

Does not include certain shares indirectly owned by this individual as a result of his indirect membership interest in our sponsor.

(5)

Based on a Schedule 13G/A filed with the SEC on February 14, 2024 by RiverNorth Capital Management, LLC, a Delaware limited liability company. The business address of RiverNorth Capital Management, LLC is 360 S. Rosemary Avenue, Ste. 1420, West Palm Beach, Florida 33401

 

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(6)

Based on an Amendment No. 3 to Schedule 13G filed with the SEC on January 30, 2024 by Farallon Capital Partners, L.P. (“FCP”), Farallon Capital Institutional Partners, L.P. (“FCIP”), Farallon Capital Institutional Partners II, L.P. (“FCIP II”), Farallon Capital Institutional Partners III, L.P. (“FCIP III”), Four Crossings Institutional Partners V, L.P. (“FCIP V”), Farallon Capital Offshore Investors II, L.P. (“FCOI II”), Farallon Capital F5 Master I, L.P. (“F5MI”), Farallon Capital (AM) Investors, L.P. (“FCAMI”) (collectively, the “Farallon Funds”), with respect to the securities held directly by each respective fund. Farallon Partners, L.L.C. (the “Farallon GP”), as the general partner of each of FCP, FCIP, FCIP II, FCIP III, FCOI II and FCAMI, and as the sole member of the FCIP V General Partner, may be deemed to be a beneficial owner of the shares held by the Farallon Funds other than F5MI. Farallon Institutional (GP) V, L.L.C. (the “FCIP V General Partner”), as the general partner of FCIP V, may be deemed to be a beneficial owner of the shares held by FCIP V. Farallon F5 (GP), L.L.C. (the “F5MI General Partner”), as the general partner of F5MI, may be deemed to be a beneficial owner of the shares held by F5MI. Farallon Capital Management, L.L.C. (the “Management Copmany”), as the manager of the SPV, which is an investment vehicle managed by the Management Company, with respect to the Class A common stock acquirable by the SPV upon the conversion of the Class B common stock it holds. Each of Joshua J. Dapice, Philip D. Dreyfuss, Hannah E. Dunn, Richard B. Fried, Varun N. Gehani, Nicolas Giauque, David T. Kim, Michael G. Linn, Rajiv A. Patel, Thomas G. Roberts, Jr., Edric C. Saito, William Seybold, Daniel S. Short, Andrew J. M. Spokes, John R. Warren, and Mark C. Wehrly (collectively, the “Farallon Individual Reporting Persons”), as a managing member or senior managing member, as the case may be, of the Farallon GP, and as a manager or senior manager, as the case may be, of the FCIP V General Partner and the F5MI General Partner, in each case with the power to exercise investment discretion, may be deemed to be a beneficial owner of the shares held by the Farallon Funds and acquirable by the SPV. Each of the Farallon GP, the FCIP V General Partner, the F5MI General Partner and the Farallon Individual Reporting Persons hereby disclaims any beneficial ownership of any such shares. The business address of each of these reporting persons is c/o Farallon Capital Management, L.L.C., One Maritime Plaza, Suite 2100, San Francisco, California 94111.

(7)

Based on a Schedule 13G/A filed with the SEC on April 4, 2024 by Sea Otter Advisors LLC, a company incorporated in Delaware, which serves as the investment advisor to Sea Otter Trading LLC. The business address of Sea Otter Advisors LLC is 107 Grand St, 7th Floor, New York, New York 10013.

Item 13. Certain Relationships and Related Transactions, and Director Independence

On June 25, 2021, we issued 7,187,500 founder shares to our sponsor for an aggregate purchase price of $25,000, or approximately $0.004 per share. On September 15, 2021, our sponsor transferred an aggregate of 25,000 founder shares to each of our independent directors and our special advisor (for a total of 125,000 founder shares) for their original purchase price. Subsequently, on September 30, 2021, our sponsor sold an aggregate of 1,872,159 founder shares to the anchor investors at their original purchase price. Following the expiration of the underwriter’s over-allotment option, on November 12, 2021, our sponsor forfeited 310,000 founder shares, so that our initial stockholders currently own approximately 86.6% of our issued and outstanding shares of common stock. At December 31, 2023, there were 3,897,500 founder shares issued and outstanding.

With certain limited exceptions, the founder shares are not transferable, assignable or salable by our initial stockholders until the earlier of (i) one year after the completion of our initial business combination and (ii) subsequent to our initial business combination, (a) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (b) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property.

Simultaneously with the consummation of our initial public offering, on September 30, 2021, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating total proceeds of $7,000,000. The private placement warrants are identical to the public warrants, except that, if held by our sponsor or its permitted transferees, they (i) may be exercised on a cashless basis and (ii) will not be redeemable under certain redemption scenarios. In addition, the private placement warrants (and the shares of Class A common stock issuable upon exercise of such private placement warrants) will, subject to certain limited exceptions, be subject to transfer restrictions until 30 days after the completion of our initial business combination.

If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

Commencing on September 28, 2021, we are obligated to pay our sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

No compensation of any kind, including finder’s and consulting fees, will be paid to our sponsor, officers, directors, special advisor, or any of their respective affiliates, for services rendered prior to or in connection with the completion of an initial business combination. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors, special advisor or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

 

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Our sponsor had agreed to loan us up to $300,000, of which an aggregate of $176,000 was drawn, in connection with the expenses of our initial public offering, pursuant to the terms of an unsecured promissory note. We fully repaid the loans from our sponsor on September 30, 2021.

On September 26, 2023, the Company issued the Note in the principal amount of up to $750,000 to the sponsor, which may be drawn down from time to time prior to the Maturity Date upon request by the Company. The Note does not bear interest and the principal balance will be payable on the date on which the Company consummates its initial business combination. The Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the Note and all other sums payable with regard to the Note becoming immediately due and payable. As of December 31, 2023, $100,000 is outstanding under the Note.

On December 22, 2023, concurrently with the execution of the Business Combination Agreement, the sponsor, the Company and Custom Health entered into the Sponsor Support Agreement, pursuant to which, among other things, the sponsor agreed to (i) vote all of its shares of common stock of the Company (or execute and deliver an action by written consent) in favor of the Proposed Transaction, including the Merger; (ii) not redeem its shares of common stock of the Company, and waive its anti-dilution protection with respect to its shares of Class B common stock of the Company; and (iii) subject to forfeiture 1,719,375 of the Founder Earn-Out Shares held by our sponsor and by certain other stockholders of the Company who agree to participate in such earn-out.

In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors will loan us funds as may be required. If we complete our initial business combination, we expect to repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. As of December 31, 2023 there were no amounts outstanding under any working capital loans.

After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.

The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of Class A common stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the founder shares) are entitled to registration rights pursuant to a registration rights agreement entered into on September 27, 2021, requiring us to register such securities for resale (in the case of the founder shares, only after conversion to our Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up periods. We will bear the expenses incurred in connection with the filing of any such registration statements.

Related Party Policy

Our Code of Business Conduct and Ethics requires us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board of directors) or as disclosed in our public filings with the SEC. Under our Code of Business Conduct and Ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company.

In addition, our audit committee, pursuant to our audit committee charter, is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions. Our audit committee reviews on a quarterly basis all payments that were made by us to our sponsor, officers, directors, special advisor or our or their affiliates.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we, or a committee of independent and disinterested directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our company from a financial point of view. Furthermore, no finder’s fees, reimbursements or cash payments

 

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will be made to our sponsor, officers, directors, special advisor or our or their affiliates, by us for services rendered to us prior to or in connection with the completion of our initial business combination. However, the following payments have been or will be made to our sponsor, officers or directors, or our or their affiliates, none of which have been or will be made from the proceeds of our initial public offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:

 

   

repayment of up to an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;

 

   

payment to our sponsor of $10,000 per month, for up to 18 months, for office space, secretarial and administrative support;

 

   

reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

 

   

repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender.

Director Independence

The NYSE American listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that each of Carl Ferenbach, Kay Kapoor, Ronald Kasner and Gal Munda is an “independent director” as defined in the NYSE American listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.

Item 14. Principal Accountant Fees and Services

Grant Thornton LLP acts as our independent registered public accounting firm. The following is a summary of fees paid to Grant Thornton LLP for services rendered.

Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Grant Thornton LLP in connection with regulatory filings. The aggregate fees billed by Grant Thornton LLP for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC totaled $94,870 for the year ended December 31, 2023. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings, issuance of comfort letters, consents and related services in connection with our initial public offering.

Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Grant Thornton LLP for consultations concerning financial accounting and reporting for the year ended December 31, 2023.

Tax Fees. We did not pay Grant Thornton LLP for tax planning and tax advice for the year ended December 31, 2023.

All Other Fees. We did not pay Grant Thornton LLP for other services for the year ended December 31, 2023.

Pre-Approval Policy

Our audit committee was formed in connection with the effectiveness of our registration statement for our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all audit services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

 

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PART IV

Item 15. Exhibits and Financial Statement Schedules

The following documents are filed as part of this report:

 

  (1)

Financial Statements

 

     Page  

Report of Independent Registered Public Accounting Firm (PCAOB ID No. 248)

     F-2  

Financial Statements:

  

Balance Sheets as of December 31, 2023 and 2022

     F-3  

Statements of Operations for the years ended December 31, 2023 and 2022

     F-4  

Statements of Changes in Common and Preferred Stock and Stockholders’ Deficit for the years ended December 31, 2023 and 2022

     F-5  

Statements of Cash Flows for the years ended December 31, 2023 and 2022

     F-6  

Notes to Financial Statements

     F-7 to F-17  

 

  (2)

Financial Statement Schedules

None.

 

  (3)

Exhibits: Exhibits not incorporated by reference to a prior filing are designated by an asterisk (*); all exhibits not so designated are incorporated by reference to a prior SEC filing as indicated.

 

Exhibit
No.

 

Description

 2.1(11)   Business Combination Agreement, dated as of December 22, 2023, by and among Berenson Acquisition Corp. I, Custom Health, Inc. and Continental Merger Sub Inc.
 3.1(1)   Amended and Restated Certificate of Incorporation of the Company
 3.2(2)   Bylaws
 3.3(5)   Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Company dated March 28, 2023.
 3.4(7)   Certificate of Second Amendment to the Amended and Restated Certificate of Incorporation of the Company dated September 27, 2023.
 3.5(8)   Certificate of Designation of Series A Convertible Preferred Stock
 4.1(2)   Specimen Unit Certificate
 4.2(2)   Specimen Class A Common Stock Certificate
 4.3(2)   Specimen Warrant Certificate
 4.4(1)   Warrant Agreement, dated September 27, 2021, between the Company and Continental Stock Transfer & Trust Company
 4.5*   Description of Securities
10.1(2)   Promissory Note, dated June 21, 2021, issued to Berenson SPAC Holdings I, LLC
10.2(2)   Subscription Agreement for Founder Shares, dated June 25, 2021, between the Company and Berenson SPAC Holdings I, LLC
10.3(1)   Letter Agreement, dated September 27, 2021, by and among the Company, Berenson SPAC Holdings I, LLC, and each of the executive officers, directors and initial stockholders of the Company
10.4(1)   Investment Management Trust Agreement, dated September 27, 2021, between the Company and Continental Stock Transfer & Trust Company
10.5(1)   Registration Rights Agreement, dated September 27, 2021, among the Company, Berenson SPAC Holdings I, LLC and certain security holders
10.6(1)   Private Placement Warrants Subscription Agreement, dated September 27, 2021, between the Company and Berenson SPAC Holdings I, LLC
10.7(1)   Administrative Services Agreement, dated September 27, 2021, between the Company and Berenson SPAC Holdings I, LLC
10.8(2)   Form of Indemnity Agreement
10.9(1)   Underwriting Agreement, dated September 27, 2021, by and among the Company, BofA Securities, Inc. and Wells Fargo Securities, LLC
10.10(4)   Form of Non-Redemption Agreement, dated March 20, 2023, by and among the Company, Berenson SPAC Holdings I, LLC, and certain investors
10.11(5)   Amendment to the Investment Management Trust Agreement, dated March 28, 2023, by and between the Company and Continental Stock Transfer & Trust Company.
10.12(6)   Form of Non-Redemption Agreement, dated September 21, 2023, by and among the Company, Berenson SPAC Holdings I, LLC, and certain investors
10.13(7)   Promissory Note, dated September 26, 2023, issued by the Company to Berenson SPAC Holdings I, LLC.
10.14(8)   Share Purchase Agreement, dated December 21, 2023, by and between the Company and ACM ARRT N LLC.
10.15(8)   Confirmation Agreement, dated December 21, 2023, by and between the Company and ACM ARRT N LLC.
10.16(11)   Stockholder Support Agreement, dated December 22, 2023, by and among the Company, Custom Health, Inc., and certain of the stockholders of the Company
10.17(11)   Sponsor Support Agreement, dated December 22, 2023, by and among the Company, Custom Health, Inc., and Berenson SPAC Holdings I, LLC
10.18(11)   Form of Registration Rights and Lock-Up Agreement

 

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Exhibit
No.

 

Description

 24.1*   Power of Attorney (included on signature page)
 31.1*   Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 31.2*   Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 32.1**   Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
 99.1(3)   Press release, dated December 22, 2023
 99.2(9)   Investor Presentation
 99.3(10)   Press release, dated January 25, 2024
101.INS*   Inline XBRL Instance Document
101.SCH*   Inline XBRL Taxonomy Extension Schema Document
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*   Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document
104*   Cover Page Interactive Data File

 

*

Filed herewith.

**

Furnished herewith.

(1)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on October 1, 2021.

(2)

Incorporated by reference to an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-259470), filed with the SEC on September 10, 2021.

(3)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on December 22, 2023.

(4)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on March 21, 2023.

(5)

Incorporated 2023. by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on March 30, 2023.

(6)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on September 26, 2023.

(7)

Incorporated 2023. by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on September 29, 2023.

(8)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on December 28, 2023.

(9)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on January 8, 2024.

(10)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on January 25, 2024

(11)

Incorporated by reference to an exhibit to the Company’s Current Report on Form 8-K (File No. 001-40843), filed with the SEC on December 29, 2023

 

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Item 16. Form 10-K Summary

Not applicable.

 

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http://fasb.org/us-gaap/2023#RelatedPartyMemberhttp://fasb.org/us-gaap/2023#RelatedPartyMemberhttp://fasb.org/us-gaap/2023#FairValueAdjustmentOfWarrantshttp://fasb.org/us-gaap/2023#FairValueAdjustmentOfWarrants
BERENSON ACQUISITION CORP. I
INDEX TO FINANCIAL STATEMENTS
 
    
F-2
 
Financial Statements:
  
  
 
F-
3
 
  
 
F-
4
 
    
F-5
 
  
 
F-
6
 
  
 
F-
7
to F-
17
 
 
F-1

Table of Contents
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Board of Directors and Stockholders
Berenson Acquisition Corp. I
 
Opinion on the financial statements
 
We have audited the accompanying balance sheets of Berenson Acquisition Corp. I (a Delaware corporation) (the “Company”) as of December 31, 2023 and 2022, the related statements of operations, changes in common and preferred stock and stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
 
Going concern
 
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred a net loss of $20,814,064 during the year ended December 31, 2023, and as of that date has a net working capital deficiency of $4,004,819. These conditions, along with other matters set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
Basis for opinion
 
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
 
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
 
/s/ GRANT THORNTON LLP
 
We have served as the Company’s auditor since 2021.
 
New York, New York
May 31, 2024
 
F-2

Table of Contents
BERENSON ACQUISITION CORP. I
BALANCE SHEETS
December 31,
 

 
  
2023
 
 
2022
 
ASSETS
  
 
CURRENT ASSETS:
  
 
Cash
   $ 115,435     $ 250,453  
Franchise tax receivable
     47,350        
Prepaid expenses and other assets
     37,533       162,928  
  
 
 
   
 
 
 
Total current assets
     200,318       413,381  
Cash held in Trust Account
     11,214,335       278,782,399  
  
 
 
   
 
 
 
TOTAL ASSETS
   $ 11,414,653     $ 279,195,780  
  
 
 
   
 
 
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
 
 
 
 
 
 
 
 
CURRENT LIABILITIES:
    
Accounts payable
   $ 222,608     $ 82,872  
Accrued expenses
     1,903,253       531,228  
Income tax payable
     392,496       749,165  
Excise tax payable
     2,079,276        
Franchise tax payable
           105,438  
Forward purchase liabilities
     21,916,000        
  
 
 
   
 
 
 
Total current liabilities
     26,513,633       1,468,703  
Promissory note
-
related party
     100,000        
Derivative warrant liabilities
     712,730       850,901  
Deferred underwriting fee payable
           9,628,500  
  
 
 
   
 
 
 
TOTAL LIABILITIES
     27,326,363       11,948,104  
  
 
 
   
 
 
 
Commitments and Contingencies
    
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 1,065,468
at $10.53 
and 27,510,000
at

$10.13
redemption value issued and outstanding as of December 31, 2023 and 2022, respectively, subject to possible
redemption
     11,214,335       278,782,399  
  
 
 
   
 
 
 
Stockholders' deficit:
    
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 1,000,000 shares issued and outstanding
 at December
31, 2023. No shares were issued and outstanding as of December 31, 2022
     100        
Non-redeemable
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 2,980,000 shares issued
and outstanding at December 31, 2023. No shares were issued and outstanding as of December 31, 2022
     298        
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 3,897,500 and 6,877,500 shares issued and
outstanding as of December 31, 2023 and, 2022, respectively
     390       688  
Additional
paid-in
capital
     7,082,142        
Accumulated deficit
     (34,208,975 )
 
    (11,535,411 )
 
  
 
 
   
 
 
 
Total stockholders' deficit
     (27,126,045 )     (11,534,723 )
  
 
 
   
 
 
 
TOTAL LIABILITIES, COMMON STOCK AND STOCKHOLDERS' DEFICIT
   $ 11,414,653     $ 279,195,780  
  
 
 
   
 
 
 
The accompanying notes are an integral part of these financial statements.
 
F-
3

Table of Contents
BERENSON ACQUISITION CORP. I
STATEMENTS OF OPERATIONS
For the Years Ended December 31,
 
 
  
2023
 
 
2022
 
General and administrative expenses
   $ 2,373,753     $ 1,422,628  
Franchise tax expenses
     113,250       200,000  
  
 
 
   
 
 
 
Loss from operations
     2,487,003       1,622,628  
  
 
 
   
 
 
 
Other (expense) income
    
Interest income
     7,217       2,269  
Interest income on Trust Account
     3,742,685       3,865,691  
Forgiveness of deferred underwriting fee
     466,982        
Forward purchase liabilities upon issuance
     (22,763,000 )      
Change in fair value of forward purchase liabilities
     847,000        
Change in fair value of derivative warrant liabilities
     138,171       9,427,479  
  
 
 
   
 
 
 
Total other (expense) income
     (17,560,945 )     13,295,439  
    
 
 
   
 
 
 
Net (loss) income before income taxes
     (20,047,948 )     11,672,811  
Income tax expense
     (766,116 )     (749,165
    
 
 
   
 
 
 
Net (loss) income allocable to common stockholders
   $ (20,814,064 )   $ 10,923,646  
    
 
 
   
 
 
 
Weighted average shares outstanding, redeemable Class A common stock
     8,266,992       27,510,000  
    
 
 
   
 
 
 
Basic and diluted net (loss) income per share, redeemable Class A common stock
   $ (1.37 )
 
  $ 0.32  
    
 
 
   
 
 
 
Weighted average shares outstanding,
non-redeemable
common stock
     6,877,500       6,877,500  
    
 
 
   
 
 
 
Basic and diluted net (loss) income per share,
non-redeemable
common stock
   $ (1.37 )   $ 0.32  
  
 
 
   
 
 
 
The accompanying notes are an integral part of these financial statements.
 
F-
4

Table of Contents
BERENSON ACQUISITION CORP.
I
STATEMENTS OF CHANGES IN COMMON AND PREFERRED
STOCK
AND
STOCKHOLDERS
DEFICIT
 
    
FOR THE YEAR ENDED DECEMBER 31, 2023
 
                                            
Stockholders’ Deficit
 
    
Class A Common Stock
subject to possible redemption
   
Preferred Stock
    
Class A Common
Stock
    
Class B

Common Stock
   
Additional
Paid-In

Capital
   
Accumulated
Deficit
   
Total
Stockholders’
Deficit
 
    
Shares
   
Amount
   
Shares
    
Amount
    
Shares
    
Amount
    
Shares
   
Amount
 
Balance -January 1, 2023
     27,510,000     $ 278,782,399            $             $        6,877,500     $ 688     $     $ (11,535,411   $ (11,534,723
Class A shares redeemed
     (26,444,532     (269,427,564     —         —         —         —         —        ̵