F-4/A 1 nuvogroup_f4a.htm F-4/A

 

As filed with the Securities and Exchange Commission on December 8, 2023

 

Registration Statement No. 333-274803

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 

 

Form F-4/A
(Amendment No. 1)

 

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 

 

 

Holdco Nuvo Group D.G Ltd.

(Exact Name of Registrant as Specified in Its Charter)

 

State of Israel   3841   Not Applicable

(Jurisdiction of Incorporation
or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

94 Yigal Alon St.

Tel Aviv, Israel 6789155

734-717-2416

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

 

Nuvo Group USA, Inc.
c/o Kelly Londy

300 Witherspoon Street, Suite 201

Princeton, NJ 08542

734-717-2416

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Copies to:

 

Robert L. Grossman, Esq.

Adam Namoury, Esq.

Win Rutherfurd, Esq.

Greenberg Traurig, P.A.

333 S.E. 2nd Avenue, Suite 4400

Miami, FL 33131

(305) 579-0500

Yoav Sade

Ran Camchy

Meitar | Law Offices

16 Abba Hillel Silver Rd.

Ramat Gan 52506, Israel

Telephone: (+972) (3) 610-3100

Fax: (+972) (3) 610-3111

Ory Nacht
Michal Herzfeld
Herzog Fox & Neeman
Herzog Tower
6 Yitzhak Sadeh St.
Tel Aviv 6777506 Israel
Tel: (+972)-(3)-692-2020

Daniel E. Nussen
Matthew C. Barnett
White & Case LLP
555 South Flower Street,
Suite 2700
Los Angeles, CA 90071
(213) 620-7700

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and on completion of the business combination described in the enclosed proxy statement/prospectus.

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

 

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

 

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

 

Emerging growth company ☒

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 7(a)(2)(B) of the Securities Act. ☒

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

 

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

PRELIMINARY PROXY STATEMENT AND PROSPECTUS
SUBJECT TO COMPLETION, DATED DECEMBER 8, 2023

 

PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF
SHAREHOLDERS OF LAMF GLOBAL VENTURES CORP. I

 

PROSPECTUS FOR [●] ORDINARY SHARES,
[●] WARRANTS TO PURCHASE ORDINARY SHARES, AND
[●] ORDINARY SHARES UNDERLYING WARRANTS OF HOLDCO NUVO GROUP D.G LTD.

 

This proxy statement/prospectus relates to the transactions contemplated by the business combination agreement, dated as of August 17, 2023 (as the same may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among LAMF Global Ventures Corp. I, a Cayman Islands exempted company (“LAMF”), Nuvo Group Ltd., a limited liability company organized under the laws of the State of Israel (“Nuvo”), Holdco Nuvo Group D.G Ltd., a limited liability company organized under the laws of the State of Israel (“Holdco”), Nuvo Assetco Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Holdco (“Assetco”), and H.F.N Insight Merger Company Ltd., a limited liability company organized under the laws of the State of Israel and a wholly owned subsidiary of LAMF (“Merger Sub”). Nuvo is a women’s health and connected pregnancy care company, and has developed INVU by Nuvo™, an FDA-cleared, prescription-initiated, remote pregnancy monitoring platform that enables the delivery of remote non-stress tests and maternal and fetal heart rate monitoring, helping expectant mothers adhere to their prescribed care plan. The Business Combination Agreement contemplates that the business combination among LAMF, Nuvo, Holdco, Assetco and Merger Sub will be completed through the following series of transactions:

 

  One day prior to the closing of the business combination, LAMF will be merged with and into Assetco (the “SPAC Merger”) and Assetco will continue as the surviving corporation (Assetco, in its capacity as the surviving entity of the SPAC Merger, the “SPAC Surviving Company”).

 

Pursuant to the SPAC Merger, each Class A ordinary share of LAMF, par value $0.0001 per share (the “LAMF Class A Ordinary Shares”), issued and outstanding immediately prior to the effective time of the SPAC Merger will be automatically cancelled and converted into the right to receive outstanding ordinary shares of Holdco (“Holdco Ordinary Shares”).

 

On the date of the closing of the business combination (the “Closing”), Merger Sub will be merged with and into Nuvo (the “Acquisition Merger”) and Nuvo will continue as the surviving corporation (Nuvo, in its capacity as the surviving entity of the Acquisition Merger, the “Acquisition Surviving Sub”).

 

Pursuant to the Acquisition Merger, (i) each of the ordinary shares of Nuvo, par value NIS 0.01 per share (the “Nuvo Shares”), issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive a number of Holdco Ordinary Shares determined pursuant to an equity exchange ratio (the “Equity Exchange Ratio”), equal to the equity value per share (determined by dividing an aggregate equity value of approximately $300 million upon achieving a commercial milestone (the “Equity Value”), by the fully diluted share capital of Nuvo), divided by $10.20 per share, (ii) each of the preferred shares of Nuvo, par value NIS 0.01 per share (the “Nuvo Crossover Preferred Shares”), issuable in connection with the securities purchase agreements Nuvo and Holdco entered into with certain investors prior to the execution of the Business Combination Agreement (the “Interim Financing”) issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive a number of preferred shares of Holdco (the “Holdco Preferred Shares”) determined by the Equity Exchange Ratio, (iii) each warrant for the purchase of Nuvo Shares issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive one warrant to purchase a number of Holdco Ordinary Shares determined by the Equity Exchange Ratio, and (iv) each outstanding and unexercised option to purchase Nuvo Shares, whether or not then vested or fully exercisable, will be assumed by Holdco and converted into an option to purchase a number of Holdco Ordinary Shares as determined by the Equity Exchange Ratio, in each case subject to the adjustments described in the Business Combination Agreement.

 

After the SPAC Merger and the Acquisition Merger, the SPAC Surviving Company will distribute any amounts remaining in LAMF’s trust account (the “Trust Account”) to Holdco and will then be liquidated (the “Liquidation”).

 

 

 

 

The SPAC Merger, the Acquisition Merger, the Liquidation and the other transactions contemplated by the Business Combination Agreement are referred to as the “Business Combination”.

 

Prior to, upon and following the execution of the Business Combination Agreement, Nuvo and Holdco entered into securities purchase agreements (the “Interim Financing Agreements”) with certain investors (the “Interim Financing Investors”) pursuant to which (i) Nuvo has issued Nuvo Crossover Preferred Shares to the Interim Financing Investors and (ii) upon and subject to the Closing, Holdco will issue Holdco Ordinary Shares to the Interim Financing Investors, which provided Nuvo with an aggregate of approximately $13,000,000 of gross proceeds as a result of the Interim Financing. Certain of the Interim Financing Investors are affiliated with LAMF and the Sponsor and intend to invest an aggregate of $2,000,000 in the Interim Financing (such investors the “Sponsor Investors”). These affiliates are: (i) Jeffrey Soros, LAMF’s Chairman, who intends to invest $500,000, (ii) Tamim Mourad, a strategic investor of LAMF and an affiliate of a member of the Sponsor, who intends to invest $500,000 and (iii) Gaingels 10X Capital Diversity Fund I, LP, a Delaware limited partnership and an affiliate of a member of the Sponsor, that intends to invest $1,000,000. The Business Combination Agreement provides that the parties may seek to obtain subscriptions for equity financing in connection with the consummation of the Business Combination as may be mutually agreed by the parties (the “PIPE”).

 

If the Business Combination is consummated, shareholders and warrantholders of LAMF (including through units previously issued by LAMF) will become shareholders and warrantholders of Holdco, other than those holders of the LAMF Class A Ordinary Shares who elect to redeem their LAMF Class A Ordinary Shares. The other shareholders and equityholders of Holdco will include management of Nuvo and investors in Nuvo immediately before the Closing. This proxy statement/prospectus describes these matters and other important matters. This proxy statement/prospectus, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Holdco serves as:

 

A notice of meeting and proxy statement of LAMF under Section 14(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), for the extraordinary general meeting (the “EGM”) of shareholders of LAMF to be held on [●], 2023, where LAMF shareholders will consider and vote on proposals (the “Proposals”) relating to the Business Combination and also the possible adjournment of the EGM; and

 

A prospectus of Holdco under Section 5 of the Securities Act of 1933 (the “Securities Act”) relating to the securities of Holdco to be issued in the Business Combination.

 

The Proposals may be briefly summarized as follows:

 

(1) The “Business Combination Proposal” — a proposal to approve and adopt, by ordinary resolution under Cayman Islands law, the Business Combination Agreement, pursuant to which, among other things, the former shareholders and warrantholders of LAMF will become shareholders and warrantholders of Holdco, the new public company at the Closing.

 

(2) The “Merger Proposal” — a proposal to approve, by special resolution, the plan of merger relating to the SPAC Merger, a copy of which is attached to the accompanying proxy statement/prospectus as Annex F.

 

(3) The “Adjournment Proposal” — a proposal to adjourn the EGM to a later date or dates or indefinitely, if necessary or convenient, (i) to permit further solicitation and vote of proxies and if, based upon the tabulated vote at the time of the EGM, there are insufficient votes to approve the Business Combination Proposal and/or the Merger Proposal, (ii) to permit withdrawals by Public Shareholders of their elections to redeem their Public Shares or (iii) if the LAMF Board determines before the EGM that it is not necessary or no longer desirable to proceed with the Business Combination Proposal and/or the Merger Proposal.

 

This proxy statement/prospectus describes certain redemption rights that may be exercised by LAMF’s public shareholders of their LAMF Class A Ordinary Shares.

 

LAMF SPAC Holdings I LLC, a Cayman Islands company (the “Sponsor”), and certain officers and directors and advisors of LAMF (collectively, the “LAMF Insiders”) have agreed to vote all their LAMF Class A Ordinary Shares in favor of each of the Proposals. Because of the number of previous redemptions of LAMF Class A Ordinary Shares in connection with the extension of the period in which LAMF may complete a business combination and the number of LAMF Class A Ordinary Shares owned by the Sponsor and the LAMF Insiders, the Sponsor and the LAMF Insiders, acting alone, hold LAMF Class A Ordinary Shares with sufficient votes to approve each Proposal. As a result, each of the Proposals will receive sufficient votes for approval by reason of votes cast by the Sponsor and the LAMF Insiders.

 

 

 

 

The following table illustrates the varying levels of equity interest and voting power in Holdco immediately following the consummation of the Business Combination based on no redemption and maximum redemption scenarios of Public Shares by Public Shareholders and based on the additional assumptions described in the notes to the table below (without taking into account any additional dilution sources, such as the Public Warrants).

 

   

Voting Power in Holdco(i)

 
   

No

Redemption Scenario(ii)

   

Maximum Redemption Scenario(iii)

 
   

Percentage of Voting Rights of

Outstanding Holdco Ordinary Shares(3)

 
Public Shareholders     7.2 %     -  
Sponsor, LAMF Insiders and Sponsor Investors     23.1 %     24.9 %
Nuvo Shareholders     69.7 %     75.1 %
Total     100.0 %     100.0 %

 

 
i. As of immediately following the consummation of the Business Combination. Excludes Holdco Warrants and the effect of any other transactions that may be entered into after the date of this proxy statement/prospectus. For a more detailed description of share ownership upon consummation of the Business Combination, see “Beneficial Ownership of Securities.”
ii. The “No Redemption Scenario” assumes no redemptions of the currently outstanding 12,491,949 LAMF Class A Ordinary Shares in connection with the Business Combination.
iii. The “Maximum Redemption Scenario” assumes redemptions of 2,952,616 LAMF Class A Ordinary Shares in connection with the Business Combination that would be at approximately $10.54 per share based on Trust Account figures as of June 30, 2023.

 

LAMF is providing this proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the EGM and at any adjournments or postponements thereof. Whether or not you plan to attend the EGM, LAMF urges you to read this proxy statement/prospectus carefully.

 

Please pay particular attention to the section entitled “Risk Factors,” beginning on page 51.

 

The LAMF units, LAMF Class A Ordinary Shares and LAMF Warrants are currently listed on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “LGVCU,” “LGVC” and “LGVCW,” respectively. Although Holdco is not currently a public company, following the Closing, Holdco will become subject to the reporting requirements of the Exchange Act. Holdco will apply for listing, to be effective at the Closing, of Holdco Ordinary Shares and Holdco warrants on Nasdaq under the symbols “NUVO” and “NUVOW”. The Holdco Ordinary Shares and Holdco warrants will trade separately and not as units. It is a condition to Closing that reasonable best efforts are used by LAMF and Nuvo to effect the approval for listing of the Holdco Ordinary Shares on Nasdaq, but there is no assurance such condition will be satisfied or waived.

 

LAMF is, and Holdco will be, an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and are therefore eligible to take advantage of certain reduced reporting requirements applicable to other public companies.

 

Holdco will also be a “foreign private issuer” as defined in the Exchange Act and will be exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, Holdco’s officers, directors and principal shareholders will be exempt from the reporting and “short-swing” profit recovery provisions under Section 16 of the Exchange Act. Moreover, Holdco will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. Holdco will prepare its financial statements in accordance with U.S. GAAP.

 

This proxy statement/prospectus provides shareholders of LAMF with detailed information about the Business Combination and other matters to be considered at the EGM. LAMF encourages you to read this entire document, including the annexes and other documents referred to herein, carefully and in their entirety. It also contains or references information about LAMF, Nuvo and certain related matters. You are encouraged to read this proxy statement/prospectus carefully. In particular, when you consider the recommendation regarding these Proposals by the board of directors of LAMF, you should keep in mind that the Sponsor and LAMF’s directors and officers have interests in the Business Combination that are different from or in addition to, or may conflict with, your interests as a shareholder. For instance, the Sponsor and LAMF’s officers and directors will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition on terms less favorable to shareholders rather than liquidating LAMF. See the section of this proxy statement/prospectus entitled “The Business Combination — Interests of LAMF Insiders and the Sponsor in the Business Combination” for a further discussion of these considerations. You should also carefully consider the risk factors described under the heading “Risk Factors” beginning on page 51 of this proxy statement/prospectus.

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

This proxy statement/prospectus is dated [●], 2023 and is first being mailed to the shareholders of LAMF on or about that date.

 

 

 

 

LAMF GLOBAL VENTURES CORP. I
9255 Sunset Blvd., Suite 515
West Hollywood, California 90069
United States

 

NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON           , 2023

 

To the Shareholders of LAMF Global Ventures Corp. I:

 

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “EGM”) of shareholders of LAMF Global Ventures Corp. I, a Cayman Islands exempted company (“LAMF”, and, for purposes of this notice, “we” or “us”), will be held on [●], 2023, at [●] a.m., Eastern time. While as a matter of Cayman Islands law LAMF is required to have a physical location for the meeting, LAMF is pleased to utilize virtual shareholder meeting technology to provide ready access and cost savings for LAMF and LAMF shareholders. For the purposes of the amended and restated memorandum and articles of association of LAMF (the “Existing Governing Documents”), the physical place of the meeting will be 1221 Avenue of the Americas, New York, NY 10020. You will be able to attend, vote your shares, and submit questions during the EGM either in person or virtually via a live audio webcast. In order to attend the meeting virtually, you must pre-register at the following website: https://www.cstproxy.com/[●]. You are cordially invited to attend the EGM for the following purposes:

 

1. The Business Combination Proposal

 

To consider and vote upon a proposal to approve and adopt, by ordinary resolution under Cayman Islands law, the Business Combination Agreement, dated as of August 17, 2023 (as the same may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among LAMF, Nuvo Group Ltd., a limited liability company organized under the laws of the State of Israel (“Nuvo”), Holdco Nuvo Group D.G Ltd., a limited liability company organized under the laws of the State of Israel (“Holdco”), Nuvo Assetco Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Holdco (“Assetco”), and H.F.N Insight Merger Company Ltd., a limited liability company organized under the laws of the State of Israel and a wholly owned subsidiary of LAMF (“Merger Sub”). The Business Combination Agreement contemplates that the business combination of LAMF, Nuvo, Holdco, Assetco and Merger Sub will be completed through the following series of transactions:

 

LAMF will be merged with and into Assetco (the “SPAC Merger”) and Assetco will continue as the surviving corporation (Assetco, in its capacity as the surviving entity of the SPAC Merger, the “SPAC Surviving Company”).

 

Pursuant to the SPAC Merger, each Class A ordinary share of LAMF, par value $0.0001 per share (the “LAMF Class A Ordinary Shares”), issued and outstanding immediately prior to the effective time of the SPAC Merger will be automatically cancelled and converted into the right to receive outstanding ordinary shares of Holdco (“Holdco Ordinary Shares”).

 

On the date of the closing of the business combination (the “Closing”), Merger Sub will be merged with and into Nuvo (the “Acquisition Merger”) and Nuvo will continue as the surviving corporation (Nuvo, in its capacity as the surviving entity of the Acquisition Merger, the “Acquisition Surviving Sub”).

 

Pursuant to the Acquisition Merger, (i) each of the ordinary shares of Nuvo, par value NIS 0.01 per share (the “Nuvo Shares”), issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive a number of Holdco Ordinary Shares determined pursuant to an equity exchange ratio (the “Equity Exchange Ratio”), equal to the equity value per share (determined by dividing an aggregate equity value of approximately $300 million upon achieving a commercial milestone (the “Equity Value”), by the fully diluted share capital of Nuvo), divided by $10.20 per share, (ii) each of the preferred shares of Nuvo, par value NIS 0.01 per share (the “Nuvo Crossover Preferred Shares”), issuable in connection with the securities purchase agreements Nuvo and Holdco entered into with certain investors prior to the execution of the Business Combination Agreement (the “Interim Financing”) issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive a number of preferred shares of Holdco (the “Holdco Preferred Shares”) determined by the Equity Exchange Ratio, (iii) each warrant for the purchase of Nuvo Shares issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive one warrant to purchase a number of Holdco Ordinary Shares determined by the Equity Exchange Ratio, and (iv) each outstanding and unexercised option to purchase Nuvo Shares, whether or not then vested or fully exercisable, will be assumed by Holdco and converted into an option to purchase a number of Holdco Ordinary Shares as determined by the Equity Exchange Ratio, in each case subject to the adjustments described in the Business Combination Agreement.

 

After the SPAC Merger and the Acquisition Merger, the SPAC Surviving Company will distribute any amounts remaining in LAMF’s Trust Account (as defined below) to Holdco and will then be liquidated (the “Liquidation”).

 

 

 

 

2. The Merger Proposal

 

To consider and vote upon a proposal to approve, by special resolutions: (a) LAMF being authorized to merge with and into Assetco, so that LAMF be the merging company and all the undertaking, property and liabilities of the merging company vest in the surviving company by virtue of such merger pursuant to Part XVI of the Companies Act (As Revised); (b) the plan of merger relating to the SPAC Merger, a copy of which is attached to this proxy statement/prospectus as Annex F (the “Plan of Merger”), pursuant to which LAMF will merge with an into Assetco, with Assetco being the surviving entity; and (c) LAMF being authorized to enter into the Plan of Merger.

 

3. The Adjournment Proposal

 

To consider and vote upon, as an ordinary resolution, a proposal to adjourn the EGM to a later date or dates or indefinitely, if necessary or convenient, (i) to permit further solicitation and vote of proxies and if, based upon the tabulated vote at the time of the EGM, there are insufficient votes to approve the Business Combination Proposal and/or the Merger Proposal, (ii) to permit withdrawals by Public Shareholders of their elections to redeem their Public Shares or (iii) if the LAMF Board determines before the EGM that it is not necessary or no longer desirable to proceed with the Business Combination Proposal and/or the Merger Proposal (the “Adjournment Proposal”).

 

Only holders of record of the LAMF Class A Ordinary Shares at the close of business on [●], 2023 are entitled to notice of the EGM and to vote at the EGM and any adjournments or postponements of the EGM. A complete list of our shareholders of record entitled to vote at the EGM will be available for ten days before the EGM at our principal executive offices for inspection by shareholders during ordinary business hours for any purpose germane to the EGM.

 

Pursuant to LAMF’s amended and restated memorandum and articles of association and bylaws (the “Existing Governing Documents”), we will provide our public shareholders with the opportunity to redeem their LAMF Class A Ordinary Shares for cash equal to their pro rata share of the aggregate amount on deposit in the trust account, which holds the proceeds of our initial public offering (the “Trust Account”), as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes and for working capital purposes. For illustrative purposes, based on funds in the Trust Account of approximately $32.0 million on December 6, 2023, the estimated per share redemption price would have been approximately $10.84. Public shareholders may elect to redeem their LAMF Class A Ordinary Shares whether or not they vote their shares and, if they do vote their shares, whether they vote for or against the Business Combination Proposal and the other proposals (collectively, the “Proposals”) set forth herein. A public shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its shares with respect to more than an aggregate of 15% of the outstanding LAMF Class A Ordinary Shares, without LAMF’s prior consent. Holders of our outstanding warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. LAMF SPAC Holdings I LLC (the “Sponsor”) and certain officers and directors and advisors of LAMF (collectively, the “LAMF Insiders”) have agreed to waive their redemption rights with respect to the LAMF Class A Ordinary Shares they own and any LAMF Class A Ordinary Shares that they may have acquired during or after our initial public offering in connection with the completion of the Business Combination, and such LAMF Class A Ordinary Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. The Sponsor and the LAMF Insiders did not receive any consideration in exchange for such waiver of redemption rights.

 

Approval of each of the Business Combination Proposal and the Adjournment Proposal requires the affirmative vote of the holders of at least a majority of the LAMF Class A Ordinary Shares present in person, virtually or represented by proxy and entitled to vote at the EGM. Approval of the Merger Proposal requires the affirmative vote of two-thirds of the LAMF Class A Ordinary Shares present in person, virtually or represented by proxy and entitled to vote at the EGM.

 

The Closing of the Business Combination is conditioned on the approval of the Business Combination Proposal and the Merger Proposal at the EGM. The Adjournment Proposal is not conditioned on the approval of any other Proposal at the EGM.

 

As of the date of this proxy statement/prospectus, the Sponsor and the LAMF Insiders own 76.4% of the issued and outstanding LAMF Class A Ordinary Shares. As a result, the Sponsor and the LAMF Insiders own enough LAMF Class A Ordinary Shares to approve each of the Proposals without the vote of any other LAMF Class A Ordinary Shares. Therefore, it is assured that there will be enough votes to complete the Business Combination even if a substantial majority of LAMF’s public shareholders do not agree with the transaction and redeem their shares.

 

 

 

 

We have no specified maximum redemption threshold under the Existing Governing Documents.

 

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our Proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, Morrow Sodali LLC, at (800) 622-5200, banks and brokers may reach Morrow Sodali LLC at (203) 658-9400.

 

[●], 2023 By Order of the Board of Directors,
   
  Jeffrey Soros, Chairman of the Board

 

 

 

 

Table of Contents

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS   1
FREQUENTLY USED TERMS   2
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS   9
FINANCIAL STATEMENT PRESENTATION   11
MARKET AND OTHER INDUSTRY DATA   13
TRADEMARKS, TRADE NAMES AND SERVICE MARKS   14
PRESENTATION OF CERTAIN ASSUMPTIONS RELATING TO THE BUSINESS COMBINATION   15
QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION   16
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS   30
RISK FACTORS   51
COMPARATIVE PER SHARE DATA   123
THE EXTRAORDINARY GENERAL MEETING OF LAMF SHAREHOLDERS   124
PROPOSALS TO BE CONSIDERED BY LAMF SHAREHOLDERS   129
BUSINESS COMBINATION PROPOSAL   129
THE BUSINESS COMBINATION AGREEMENT   148
CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION   167
MERGER PROPOSAL   171
ADJOURNMENT PROPOSAL   172
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION   173
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS   186
MATERIAL ISRAELI TAX CONSIDERATIONS   198
INFORMATION RELATED TO HOLDCO   201
BUSINESS OF LAMF   203
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF LAMF   217
BUSINESS OF NUVO   223
EXECUTIVE COMPENSATION   287
MANAGEMENT OF NUVO   292
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF NUVO   294
CERTAIN LAMF RELATIONSHIPS AND RELATED PARTY TRANSACTIONS   313
CERTAIN NUVO RELATIONSHIPS AND RELATED PARTY TRANSACTIONS   315
HOLDCO MANAGEMENT FOLLOWING THE BUSINESS COMBINATION   318
DESCRIPTION OF HOLDCO SECURITIES   333
COMPARISON OF SHAREHOLDER RIGHTS   344
PRICE RANGE OF SECURITIES AND DIVIDENDS   350
SHARES ELIGIBLE FOR FUTURE SALE   351
BENEFICIAL OWNERSHIP OF SECURITIES   354
ADDITIONAL INFORMATION   357
WHERE YOU CAN FIND MORE INFORMATION   360
INDEX TO FINANCIAL STATEMENTS   F-1
     
ANNEX A: Business Combination Agreement   A-1
Annex B: Holdco A&R Articles   B-1
ANNEX C: Sponsor Support Agreement   C-1
ANNEX D: Shareholder Support Agreement   D-1
ANNEX E: Registration Rights Agreement   E-1
ANNEX F: Plan of Merger   F-1

 

i

 

 

ABOUT THIS PROXY STATEMENT/PROSPECTUS

 

This proxy statement/prospectus, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Holdco (File No. 333-        ), constitutes a prospectus of Holdco under Section 5 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), with respect to the Holdco Ordinary Shares and Holdco Warrants to be issued, if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the extraordinary general meeting of LAMF Shareholders at which LAMF Shareholders will be asked to, among other matters, consider and vote upon a proposal to approve the (1) Business Combination Agreement and approve the transactions contemplated thereby, including the Business Combination, (2) the Merger Proposal and (3) the Adjournment Proposal.

 

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FREQUENTLY USED TERMS

 

Unless otherwise stated or unless the context otherwise requires, the term “LAMF” refers to LAMF Global Ventures Corp. I, a Cayman Islands exempted company, and the term “Holdco” refers to Holdco Nuvo Group D.G Ltd., a company incorporated under the laws of the State of Israel. Unless otherwise stated or unless the context otherwise requires, the term “Nuvo” refers to Nuvo Group Ltd., an Israeli company, and, unless the context otherwise requires, includes its consolidated subsidiaries.

 

All references to “we,” “us” or “our” refer to LAMF, unless the context otherwise requires or as specified in certain sections or subsections of this proxy statement/prospectus, including, “Summary of the Proxy Statement/ Prospectus — The Parties to the Business Combination — Nuvo Overview,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nuvo,” as indicated therein, in which case, “we,” “us,” or “our” refer to Nuvo, prior to the consummation of the Business Combination, which will be the business of Holdco and its subsidiaries following the consummation of the Business Combination.

 

In this proxy statement/prospectus:

 

“2023 Plan” means the proposed equity incentive plan for employees, directors and service providers of Holdco and its subsidiaries to be in effect as of and contingent on the Closing.

 

“Acquisition Effective Time” means such time as the Acquisition Merger becomes effective.

 

“Acquisition Merger” means the merger of Merger Sub with and into Nuvo.

 

“Adjournment Proposal” means the proposal being presented to the LAMF Shareholders at the Extraordinary General Meeting to adjourn the Extraordinary General Meeting of the LAMF Shareholders to a later date or dates, if necessary or convenient, either (i) to permit further solicitation and vote of proxies and if, based upon the tabulated vote at the time of the EGM, there are insufficient votes to approve the Business Combination Proposal and/or the Merger Proposal, (ii) to permit withdrawals by Public Shareholders of their elections to redeem their Public Shares or (iii) if the LAMF Board determines before the EGM that it is not necessary or no longer desirable to proceed with the Business Combination Proposal and/or the Merger Proposal.

 

“Amended Articles” means the proposed amended and restated articles of association of Holdco to be effective immediately prior to the closing of the Business Combination, a copy of which is attached to this proxy statement/prospectus as Annex B.

 

“Assetco” means Nuvo Assetco Corp., a Cayman Islands exempted company and a wholly owned subsidiary of Holdco.

 

“Business Combination” means the Mergers and the other transactions contemplated by the Business Combination Agreement, collectively.

 

“Business Combination Agreement” means the Business Combination Agreement, dated as of August 17, 2023 by and among Nuvo, Holdco, Nuvo Assetco, LAMF, and Merger Sub, a copy of which is attached to this proxy statement/prospectus as Annex A.

 

“Business Combination Proposal” means the proposal being presented to the LAMF Shareholders at the Extraordinary General Meeting to approve, by ordinary resolution, the Business Combination Agreement, which proposal includes approval of the transactions contemplated by the Business Combination Agreement, and the other agreements entered into or to be entered into by LAMF in connection with the Business Combination, including those of which copies are attached to this proxy statement/prospectus as Annex A and Annex C to Annex E.

 

“Business Day” means any day other than a Friday, a Saturday, a Sunday or other day on which commercial banks in New York, New York, Israel or the Cayman Islands are authorized or required by Legal Requirements to close.

 

“Cayman Companies Act” or “Companies Act” means Companies Act (As Revised) of the Cayman Islands.

 

“Closing” means the consummation of the Business Combination.

 

“Closing Date” means the date on which the Business Combination is consummated.

 

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“Code” means the Internal Revenue Code of 1986, as amended.

 

“Companies Law” means the Israeli Companies Law, 5759-1999, as amended from time to time, including the regulations promulgated thereunder, or any other law that may come in its stead, including all amendments made thereto.

 

“Continental” refers to Continental Stock Transfer & Trust Company, LAMF’s transfer agent.

 

“Eligible Nuvo Equityholder” means a holder of a Nuvo Share or a Nuvo Preferred Share, in each case outstanding immediately prior to the Acquisition Effective Time.

 

“Equity Exchange Ratio” means the quotient obtained by dividing (a) the Equity Value Per Share by (b) the Reference Price.

 

“Equity Value” means an amount equal to $299,999,993.

 

“Equity Value Per Share” means an amount equal to (a) the Equity Value divided by (b) the number of Fully Diluted Nuvo Equity Securities.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Existing Governing Documents” means the existing amended and restated memorandum and articles of association of LAMF, as amended.

 

“Extension” or the “Extension Proposal” means the right of LAMF, as authorized by the LAMF Shareholders, to extend the period of time LAMF has to complete an initial business combination, initially to November 16, 2023 and then in one-month increments up to six additional times, or a total of up to twelve months total, up to May 16, 2024. On November 13, 2023, LAMF Board elected to extend the date by which LAMF has to consummate a business combination from November 16, 2023 to December 16, 2023.

 

“Extraordinary General Meeting” or “EGM” means the extraordinary general meeting of LAMF to be held at [●], Eastern Time, on [●], 2023, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.

 

“Founder Shares” means the LAMF Class B Ordinary Shares held by Sponsor, which were converted into LAMF Class A Ordinary Shares on May 11, 2023 as a result of the vote by LAMF Shareholders at the EGM, which also extended the date by which LAMF must consummate a business combination to November 16, 2023 (or up to May 16, 2024, pursuant to the Extension).

 

“Founder Share Conversion” means the conversion of the LAMF Class B Ordinary Shares held by Sponsor into LAMF Class A Ordinary Shares on May 11, 2023 as a result of the vote by LAMF Shareholders at the EGM.

 

“Fully Diluted Nuvo Equity Securities” means (a) the Nuvo Shares and Nuvo Preferred Shares, in each case outstanding immediately prior to the Acquisition Effective Time and (b) the Nuvo Shares that, immediately prior to the Acquisition Effective Time are issuable upon the exercise of Nuvo Warrants and Nuvo Options (whether or not vested or currently exercisable), provided, however, that Fully Diluted Nuvo Equity Securities shall not include any (i) Earnout Shares or (ii) Nuvo Shares issuable upon the conversion of then outstanding Nuvo Preferred Shares.

 

“Governmental Entity” means (a) any federal, provincial, state, local, municipal, foreign, national or international court, governmental commission, government or governmental authority, department, regulatory or administrative agency, board, bureau, agency or instrumentality, tribunal, arbitrator or arbitral body (public or private), or similar body; (b) any person having regulatory authorities under Legal Requirements, including medical centers and their ethics committees or institutional review boards; (c) any self-regulatory organization; or (d) any political subdivision of any of the foregoing; for the avoidance of doubt, including any of the foregoing having jurisdiction over the payment or reporting of any tax or charged with the enforcement or collection of any tax.

 

“Greenberg” means Greenberg Traurig, P.A.

 

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“Holdco” means Holdco Nuvo Group D.G Ltd., a limited liability company incorporated with limited liability under the laws of the State of Israel to serve as “Holdco” for all purposes under the Business Combination Agreement.

 

“Holdco Board” means the board of directors of Holdco.

 

“Holdco Ordinary Shares” means the ordinary shares of Holdco, no par value.

 

“Holdco Preferred Shares” means the preferred shares of Holdco, which shall be entitled to rights and preferences as is customary for the preferred stock of a company whose stock is traded on a national securities exchange, including those expressly set forth in the “Rights of Company Crossover Preferred Shares” attached as Exhibit E to the Business Combination Agreement and, upon conversion, they shall entitle the holder to receive Holdco Ordinary Shares.

 

“Holdco Securities” means collectively Holdco Ordinary Shares and Holdco Warrants.

 

“Holdco Shareholders” means the shareholders of Holdco.

 

“Holdco Warrant” means a warrant to purchase one Holdco Ordinary Share.

 

“IASB” means International Accounting Standards Board.

 

“Interim Financing” means the cross-over interim round of financing by Nuvo, whereby the Nuvo Crossover Preferred Shares were or shall be issued pursuant to the Interim Financing Agreements to the Interim Financing Investors and upon and subject to the Closing, Holdco will issue Holdco Ordinary Shares to the Interim Financing Investors, providing Nuvo with an aggregate of approximately $13,000,000 of gross proceeds.

 

“Interim Financing Agreements” means the securities purchase agreements entered into by and between Nuvo, Holdco and the Interim Financing Investors in connection with the Interim Financing.

 

“Interim Financing Investors” means those certain investors in the Interim Financing.

 

“Investment Company Act” means the Investment Company Act of 1940, as amended.

 

“IPO” means LAMF’s initial public offering of LAMF Units, which was consummated on November 16, 2021.

 

“IRS” means the U.S. Internal Revenue Service.

 

“JOBS Act” means Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, as amended.

 

“LAMF” means LAMF Global Ventures Corp. I, a Cayman Islands exempted company.

 

“LAMF Board” means the board of directors of LAMF.

 

“LAMF Class A Ordinary Shares” means LAMF’s Class A ordinary shares, par value $0.0001 per share.

 

“LAMF Class B Ordinary Shares” means LAMF’s Class B ordinary shares, par value $0.0001 per share.

 

“LAMF Exchange Ratio” means the exchange of LAMF Ordinary Shares for Holdco Ordinary Shares on a one-for-one basis.

 

“LAMF Insiders” mean the Sponsor and certain officers and directors and advisors of LAMF.

 

“LAMF Ordinary Shares” means, collectively, the LAMF Class A Ordinary Shares and the LAMF Class B Ordinary Shares.

 

4

 

 

“LAMF Securities” means, collectively, the LAMF Ordinary Shares, the LAMF Warrants and the LAMF Units.

 

“LAMF Shareholder Approval” means the approval by LAMF Shareholders of the Business Combination Proposal, the Merger Proposal and the Adjournment Proposal.

 

“LAMF Shareholders” means the holders of LAMF Ordinary Shares.

 

“LAMF Units” means the 25,300,000 LAMF units issued in connection with the IPO, each of which consists of one LAMF Class A Ordinary Share and one-half of one Public Warrant, outstanding as of the date of the registration statement to which this proxy statement/prospectus relates.

 

“LAMF Warrantholders” means holders of the LAMF Warrants.

 

“LAMF Warrants” means, collectively, the Public Warrants and the Private Placement Warrants.

 

“LAMF Warrant Agreement” means the Warrant Agreement, dated as of November 10, 2021, by and between LAMF and Continental Stock Transfer & Trust Company, as warrant agent.

 

“Legal Requirements” means any federal, state, local, municipal, foreign or other law, statute, constitution, treaty, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling, injunction, judgment, order, assessment, writ or other legal requirement, administrative policy or guidance or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.

 

“Merger Proposal” means a proposal being presented to the LAMF Shareholders at the EGM to approve, by special resolution, the SPAC Merger and the plan of merger relating to the SPAC Merger, a copy of which is attached to this proxy statement/prospectus as Annex F.

 

“Merger Sub” means H.F.N Insight Merger Company Ltd., a limited liability company organized under the laws of the State of Israel and a wholly owned subsidiary of LAMF.

 

“Mergers” means the Acquisition Merger and the SPAC Merger.

 

“Nasdaq” means the Nasdaq Global Market.

 

“Nuvo” means Nuvo Group Ltd., a limited liability company organized under the laws of the State of Israel.

 

“Nuvo 2015 Plan” means Nuvo’s 2015 Share Incentive Plan.

 

“Nuvo Crossover Preferred Shares” means the preferred shares of Nuvo, with par value NIS 0.01 per share, issuable in connection with the Interim Financing.

 

“Nuvo Convertible Loans” means the convertible loans made by certain investors pursuant to several loan agreements entered into from May 29, 2022 through June 30, 2023 (as amended in August 2023 in connection with the execution of the Business Combination Agreement), by and between Nuvo and each such investor, which loans represent an aggregate principal amount of approximately $7.9 million bear interest at a rate of 2% per month, mature on the later of (i) 24 months from the date of the applicable convertible loan agreement and (ii) the Closing Date, and if the Nuvo Convertible Loans mature on the Closing Date, the principal amount and accrued interest on such loans will be applied to the related Nuvo SAFEs issued to such investors in connection with provision of the Nuvo Convertible Loans.

 

“Nuvo Loan Amendment” means Nuvo’s obligation under the Business Combination Agreement to amend the Nuvo Convertible Loans to cause each Nuvo Convertible Loan to be automatically converted prior to the Acquisition Effective Time into Nuvo Shares pursuant to the terms of such Nuvo Convertible Loan and under the terms of the Nuvo SAFE Amendment.

 

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“Nuvo Options” means each outstanding and unexercised option to purchase Nuvo Shares, whether or not then vested or fully exercisable, granted prior to the Acquisition Effective Time to any current or former employee, officer, director or other service provider of Nuvo or its direct and indirect subsidiaries.

 

“Nuvo Optionholders” means the holders of the Nuvo Options.

 

“Nuvo Preferred Shares” means the Nuvo Crossover Preferred Shares.

 

“Nuvo SAFEs” means the Simple Agreements for Future Equity of the Company entered into by and between Nuvo and certain investors, service providers and lenders, from June 2020 through April 2023 (as amended in August 2023 pursuant to the Nuvo SAFE Amendment).

 

“Nuvo SAFE Amendment” means Nuvo’s obligation under the Business Combination Agreement to cause each Nuvo SAFE to be automatically converted prior to the Acquisition Effective Time into Nuvo Shares pursuant to the terms of such Nuvo SAFEs.

 

“Nuvo Shares” means the ordinary shares of Nuvo, with par value NIS 0.01 per share.

 

“Nuvo Shareholder Approval” means the affirmative vote of the holders of Nuvo Shares constituting the “Requisite Majority” approving the entrance into and performance of the Nuvo Shareholder Matters.

 

“Nuvo Shareholder Matters” mean the Acquisition Merger and the other Transactions to which Nuvo is a party and such other actions as contemplated by the Business Combination Agreement or that should be approved by the Nuvo Shareholders in the context of, or in connection with, the Transactions.

 

“Nuvo Shareholders” means the shareholders of Nuvo.

 

Nuvo Warrants” shall mean the warrants issued on May 20, 2015 by Nuvo, exercisable to purchase up to 45,428 Nuvo Shares at an exercise price per share of NIS 0.01.

 

“Original Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of November 10, 2021, by and among LAMF, Sponsor and certain other parties thereto.

 

“Person” means any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

 

“PFIC” means passive investment foreign company.

 

“PIPE” means private investment in public equity which, in the context of the Business Combination, means a private investment in Holdco Ordinary Shares.

 

“PIPE Investments” means the transactions pursuant to which any PIPE Investors may agree, pursuant to any PIPE Subscription Agreements to the extent entered into, to make one or more private investments to subscribe for and purchase Holdco Ordinary Shares, on the day of the SPAC Effective Time but immediately prior to the SPAC Effective Time.

 

“PIPE Investors” means one or more investors participating in any PIPE Investments, collectively.

 

“PIPE Subscription Agreements” mean any subscription agreements that may be entered into by Nuvo and/or LAMF and any PIPE Investors in connection with any PIPE Investments in accordance with the provisions of the Business Combination Agreement, in a form as mutually agreed by the Nuvo and LAMF.

 

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“Private Placement Units” means the 1,106,000 private placement units, purchased by the Sponsor at a price of $10.00 per Private Placement Unit in a private placement consummated concurrently with the closing of the IPO, each consisting of one LAMF Class A Ordinary Share and one-half of one Private Placement Warrant.

 

“Private Placement Warrants” means the warrants to purchase LAMF Class A Ordinary Shares purchased in a private placement in connection with the IPO, at an exercise price of $11.50 per share.

 

“Pro Rata Share” means, for each Eligible Nuvo Equityholder, a percentage determined by dividing (a) the sum of (i) the total number of Nuvo Shares issued and outstanding held by such Eligible Nuvo Equityholder immediately prior to the Acquisition Effective Time, plus (ii) the total number of Nuvo Preferred Shares issued and outstanding held by such Eligible Nuvo Equityholder immediately prior to the Acquisition Effective Time, by (b) the total number of Nuvo Shares and Nuvo Preferred Shares issued and outstanding as of immediately prior to the Acquisition Effective Time.

 

“Public Shareholders” means the holders of the Public Shares.

 

“Public Shares” means the LAMF Class A Ordinary Shares sold in the IPO (whether such shares were purchased in the IPO as part of the LAMF Units or thereafter in the open market).

 

“Public Warrants” means the warrants included in the LAMF Units sold in the IPO, each of which is exercisable for one LAMF Class A Ordinary Share, in accordance with its terms, at an exercise price of $11.50 per share.

 

“Record Date” means [●].

 

“Redemption Right” means the right to redeem LAMF Class A Ordinary Shares in connection with the approval of the Business Combination.

 

“Reference Price” means $10.20.

 

“Registrable Securities” has the meaning given in the Registration Rights Agreement.

 

“Registration Rights Agreement” means the registration rights agreement in the form attached to the Business Combination Agreement as Exhibit C to be entered into at Closing by Holdco, Nuvo, LAMF, Sponsor, certain affiliates and members of the Sponsor and certain Nuvo Shareholders, a copy of which is attached to this proxy statement/prospectus as Annex E.

 

“Requisite Majority” means the votes required to obtain the Nuvo Shareholder Approval pursuant to Nuvo’s articles of association, as in effect as of the relevant Nuvo Shareholder Approval date and/or any applicable law (including without limitation, the Companies Law).

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Shareholder Support Agreement” means the Shareholder Support Agreement, dated as of August 17, 2023 by and among LAMF, the Nuvo Shareholders, Nuvo and Holdco, a copy of which is attached to this proxy statement/prospectus as Annex D.

 

“SPAC Effective Time” means such time as the SPAC Merger becomes effective.

 

SPAC Exchange Ratio” means 1.00, provided, however, that if LAMF and Nuvo mutually agree, for Nasdaq or other applicable exchange listing purposes, then the SPAC Exchange Ratio may be some ratio other than 1.00, in which case any other ratios described in the Business Combination Agreement that would be impacted by such change shall be proportionately adjusted.

 

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“SPAC Merger” means the merger of LAMF with and into Assetco upon the terms and subject to the conditions set forth in the Business Combination Agreement, the plan of merger relating to the SPAC Merger and in accordance with the applicable provisions of the Companies Act, whereupon the separate corporate existence of LAMF will cease and Assetco will continue its existence under the Companies Act as the surviving company.

 

“Sponsor” means LAMF SPAC Holdings I LLC, a Cayman Islands limited liability company.

 

“Sponsor IPO Letter Agreement” means the agreement dated November 10, 2021, by and among LAMF, its executive officers, its directors and Sponsor.

 

“Sponsor Shares” means the LAMF Class A Ordinary Shares and LAMF Class B Ordinary Shares held by Sponsor.

 

“Sponsor Support Agreement” means the Sponsor Support Agreement, dated as of August 17, 2023 by and among LAMF, Nuvo, Holdco, Sponsor and the LAMF directors and executive officers signatories thereto, a copy of which is attached to this proxy statement/prospectus as Annex C.

 

“Trading Day” means any day on which Holdco Ordinary Shares are tradeable on Nasdaq (or the principal securities exchange or securities market on which Holdco Ordinary Shares are then traded).

 

“Transaction Documents” means, collectively, the Business Combination Agreement, the Sponsor Support Agreement, the Shareholder Support Agreement, Registration Rights Agreement, the Amended Articles, the PIPE Subscription Agreements (which may be entered into if any PIPE Investments are obtained, as permitted by the Business Combination Agreement), the Interim Financing Agreements, the Warrant Assignment, Assumption and Amendment Agreement and all the agreements, documents, instruments and certificates entered into in connection herewith or therewith and any and all exhibits and schedules thereto.

 

“Transaction Expenses” means to the extent not paid prior to Closing, all out-of-pocket fees, costs and expenses of counsel, accountants, investment bankers, experts and consultants to a party to the Business Combination Agreement incurred by such party or on its behalf in connection with the consummation of the Transactions or related to the authorization, preparation, negotiation, execution and performance of the Business Combination Agreement, including the preparation, printing and mailing of this proxy statement/prospectus.

 

“Transaction Proposals” means each of the Business Combination Proposal, the Merger Proposal and the Adjournment Proposal.

 

“Transactions” means, collectively, the Mergers and each of the other transactions contemplated by the Business Combination Agreement or any of the other Transaction Documents.

 

“Transfer Agent” means Continental, LAMF’s transfer agent.

 

“Trust Account” means the U.S.-based trust account at J.P. Morgan Chase Bank, N.A., with Continental acting as trustee, that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Placement Warrants.

 

“U.S.” means the United States.

 

“U.S. GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

“U.S. Holder” has the meaning set forth below under “Material U.S. Federal Income Tax Considerations to U.S. Holders.”

 

Warrant Assignment, Assumption and Amendment Agreement” means the warrant assignment, assumption and amendment agreement to be entered into by and among LAMF, Holdco and Continental at the SPAC Effective Time, pursuant to which as LAMF will, subject to the Closing, assign all its rights, title and interest in the LAMF Warrant Agreement to Holdco.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This proxy statement/prospectus contains a number of forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this proxy statement/prospectus, including statements regarding LAMF’s, Nuvo’s or Holdco’s future financial position, results of operations, business strategy and plans and objectives of their respective management teams for future operations, are forward-looking statements. Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are also forward-looking statements. In some cases, you can identify forward-looking statements by words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “strategy,” “future,” “opportunity,” “may,” “target,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” “preliminary,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters.

 

Forward-looking statements include, without limitation, LAMF’s or Nuvo’s or their respective management teams’ expectations concerning the outlook for their or Holdco’s business, productivity, plans and goals for future operational improvements and capital investments, operational performance, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, as well as any information concerning possible or assumed future results of operations of Holdco as set forth in the sections of this proxy statement/prospectus. Forward-looking statements also include statements regarding the expected benefits of the Business Combination.

 

The forward-looking statements are based on the current expectations of the respective management teams of LAMF and Nuvo, as applicable, and are inherently subject to uncertainties and changes in circumstance and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Risk Factors,” those discussed and identified in public filings made with the SEC by LAMF and the following important factors:

 

LAMF’s ability to complete the Business Combination, or, if LAMF does not consummate the Business Combination, any other initial business combination;

 

satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things:

 

approval of the Business Combination and the relevant agreements by the LAMF Shareholders;

 

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Business Combination Agreement;

 

the outcome of any legal proceedings that may be instituted against LAMF, Nuvo or others following the announcement of the Business Combination and any definitive agreements with respect thereto;

 

the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of Holdco to grow and manage growth profitability, maintain relationships with customers and suppliers and retain its management team and key employees;

 

costs related to the Business Combination;

 

the projected financial information, anticipated growth rate, and market opportunity for Nuvo, and estimates of expenses and profitability;

 

the ability to meet listing requirements and maintain the listing of Holdco Securities on Nasdaq following the Business Combination;

 

the potential liquidity and trading of public securities of Holdco;

 

the ability to raise financing in the future by Holdco;

 

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LAMF’s officers and directors allocating their time to other businesses and potentially having conflicts of interest with LAMF’s business or in approving the Business Combination;

 

the use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance;

 

the benefits of the Business Combination;

 

the future financial and operational performance of, and anticipated financial impact on, Holdco following the Business Combination;

 

Nuvo’s growth plans and opportunities;

 

the impact of natural disasters or health epidemics/pandemics, including a resurgence of the COVID-19 pandemic; and

 

geopolitical risk, including the impacts of the ongoing conflict between Russia and Ukraine.

 

As a result of a number of known and unknown risks and uncertainties, Nuvo’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

Nuvo’s ability to demonstrate the feasibility of its INVU platform for commercial applications;

 

Nuvo’s ability to generate revenue in accordance with its business model;

 

Nuvo’s ability to develop, market and sell its INVU platform;

 

Nuvo’s ability to develop its sales and marketing organization;

 

the success of Nuvo’s strategic partnerships and collaborations;

 

Nuvo’s ability to obtain additional financing to fund its future operations;

 

Nuvo’s ability to continue as a going concern;

 

regulatory developments in the United States and foreign countries;

 

Nuvo’s ability to retain and hire senior management and key personnel; and

 

the other risks described under “Risk Factors” in this prospectus/proxy statement.

 

These risks and uncertainties include, but are not limited to, those factors described herein under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions made by the management teams of LAMF and Nuvo prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

 

Before any LAMF Shareholder grants its proxy or instructs how its vote should be cast or vote on the proposals to be put to the EGM, such LAMF Shareholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect Nuvo and/or LAMF.

 

LAMF and Nuvo caution you against placing undue reliance on forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking statement is made. Forward-looking statements set forth herein speak only as of the date of this proxy statement/prospectus.

 

Neither LAMF nor Nuvo undertakes any obligation to revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs. In the event that any forward-looking statement is updated, no inference should be made that LAMF or Nuvo will make additional updates with respect to that statement, related matters, or any other forward-looking statements. Any corrections or revisions and other important assumptions and factors that could cause actual results to differ materially from forward-looking statements, including discussions of significant risk factors, may appear, up to the consummation of the Business Combination, in LAMF’s public filings with the SEC or, upon and following the consummation of the Business Combination, in Holdco’s public filings with the SEC, which are or will be (as appropriate) accessible at www.sec.gov, and which you are advised to consult.

 

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FINANCIAL STATEMENT PRESENTATION

 

LAMF

 

The historical audited financial statements of LAMF as of December 31, 2022 and 2021, and for the years ended December 31, 2022 and for the period from July 20, 2021 (inception) through December 31, 2021, and the unaudited financial statements of LAMF as of and for the three and nine month periods ended September 30, 2023 and 2022, were prepared in accordance with U.S. GAAP and are denominated in U.S. dollars.

 

Nuvo

 

The historical audited financial statements of Nuvo as of and for the years ended December 31, 2022 and December 31, 2021, and the unaudited financial statements of Nuvo as of and for the six month periods ended June 30, 2023 and 2022, included in this proxy statement/prospectus, were prepared in accordance with U.S. GAAP and are denominated in U.S. dollars.

 

Holdco

 

Holdco was incorporated on July 20, 2023, for the sole purpose of effectuating the transactions described herein. Holdco has no material assets and does not operate any businesses. Accordingly, no financial statements of Holdco have been included in this proxy statement/prospectus.

 

The Business Combination is made up of the series of transactions provided for in the Business Combination Agreement as described elsewhere within this proxy statement/prospectus. The Business Combination will be accounted for as a reverse recapitalization, with LAMF being treated as the “acquired” company for financial reporting purposes. For accounting purposes, the reverse recapitalization will be the equivalent of Nuvo issuing shares for the net assets of LAMF, accompanied by a recapitalization as Holdco. As a result of the Business Combination being an in-substance capital transaction, Holdco’s qualifying transaction costs will be treated as an equivalent to equity issuance costs, reflected as a reduction in additional paid-in capital, rather than as an expense, in unaudited pro forma condensed combined financial information. The net assets of both LAMF and Nuvo will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the reverse recapitalization will be those of Nuvo. See “Unaudited Pro Forma Condensed Combined Financial Information—Accounting for the Business Combination.”

 

Upon the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, Holdco will report under the Exchange Act as a non-U.S. company with foreign private issuer status and will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies. For example, Holdco will not be required to file annual reports and financial statements with the SEC as promptly as U.S. domestic companies whose securities are registered under the Exchange Act. For more information, please see “Information Related to Holdco.”

 

Holdco will prepare its financial statements in accordance with U.S. GAAP and its reporting currency will be U.S. dollars. Accordingly, the unaudited pro forma condensed combined financial information of Holdco as of and for the year ended December 31, 2022 and the comparative per share information included in this proxy statement/prospectus have been prepared in accordance with U.S. GAAP and in accordance with Article 11 of Regulation S-X under the Exchange Act and are presented in U.S. dollars.

 

Rounding and Negative Amounts

 

Certain numerical information and other amounts and percentages in this proxy statement/prospectus, including financial data, have been rounded. Accordingly, in certain instances, the sum of the numbers in a column or a row in tables may not conform exactly to the total figure given for that column or row or the sum of certain numbers presented as a percentage may not conform exactly to the total percentage given.

 

In preparing the audited financial statements of Nuvo for the fiscal years ended December 31, 2022 and 2021, and the unaudited financial statements as of and for the six month periods ended June 30, 2023 and 2022, most numerical figures are presented in thousands. For the convenience of the reader of this proxy statement/prospectus, certain numerical figures in this proxy statement/prospectus are rounded to the nearest thousand. As a result of this rounding, certain numerical figures presented herein may vary slightly from the corresponding numerical figures presented in our financial statements.

 

11

 

 

The percentages (as a percentage of revenues or costs and period-on-period percentage changes) presented in the textual financial disclosure in this proxy statement/prospectus are derived directly from the financial information contained in Nuvo’s financial statements. The percentages derived from Nuvo’s financial statements may be computed using the numerical figures expressed in thousands in its financial statements. Therefore, such percentages are not calculated on the basis of the financial information in the textual disclosure that has been subjected to rounding adjustments in this proxy statement/prospectus.

 

In tables, negative amounts are shown between parentheses. Otherwise, negative amounts may also be shown by “-” before the amount.

 

Currency Presentation

 

The financial statements of Nuvo are measured and presented using United States dollars.

 

The financial statements of LAMF are measured and presented using United States dollars.

 

References to “$,” “US$” and “U.S. dollar” each refer to the United States dollar.

 

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MARKET AND OTHER INDUSTRY DATA

 

Market, ranking and industry data used throughout this proxy statement/prospectus, including statements regarding market size, is based on the good faith estimates of Nuvo’s management team, which in turn are based upon Nuvo’s management’s review of internal surveys, independent industry surveys and publications and other third-party research and publicly available information. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While Nuvo is not aware of any misstatements regarding the industry data presented herein, its estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” of this proxy statement/prospectus.

 

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TRADEMARKS, TRADE NAMES AND SERVICE MARKS

 

The Nuvo logos, and other trademarks or service marks of Nuvo appearing in this proxy statement/prospectus are the property of Nuvo, important to its business and many of which are registered under the applicable intellectual property laws. Solely for convenience, the trademarks, service marks, logos and trade names referred to in this proxy statement/prospectus are presented without the ® and ™ symbols, but such references are not intended to indicate, in any way, that Nuvo will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus contains additional trademarks, service marks and trade names of other entities. All trademarks, service marks and trade names appearing in this proxy statement/prospectus are, to Nuvo’s knowledge, the property of their respective owners. None of Nuvo, Holdco or LAMF intend the use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of Nuvo, Holdco or LAMF by, any other companies.

 

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PRESENTATION OF CERTAIN ASSUMPTIONS RELATING TO THE BUSINESS COMBINATION

 

LAMF cannot predict the number of additional Public Shares that will be redeemed by Public Shareholders in connection with the Business Combination. Therefore, this proxy statement/prospectus presents two alternative redemption scenarios to illustrate the effects that differing levels of redemptions of Public Shares will have on the economic and voting interests of LAMF Shareholders, the Sponsor, the LAMF Insiders, the Sponsor Investors and the Nuvo Shareholders (including the Interim Financing Investors).

 

The two alternative redemption scenarios presented in this proxy statement/prospectus are based on the following assumptions (in addition to the additional assumptions described below):

 

the No Redemption Scenario assumes no redemptions of the currently outstanding 12,491,949 LAMF Class A Ordinary Shares in connection with the Business Combination; and

 

the Maximum Redemption Scenario assumes redemptions of 2,952,616 LAMF Class A Ordinary Shares in connection with the Business Combination that would be at approximately $10.54 per share based on Trust Account figures as of June 30, 2023, and excluding the 9,539,333 outstanding LAMF Class A Ordinary Shares that are not subject to redemption.

 

Unless otherwise noted in this proxy statement/prospectus, the redemption scenarios described above are performed based on the Trust Account figures as of June 30, 2023, which include $31.2 million of cash and accrued interest held in the Trust Account, and 25,300,000 outstanding LAMF Class A Ordinary Shares. This results in an implied redemption price per share of $10.54.

 

In addition, each alternative redemption scenario presented in this proxy statement/prospectus also assumes that:

 

No PIPE is consummated in connection with the Business Combination; and

 

There is no exercise of any warrants, the Holdco Preferred Shares or any of Nuvo’s equity awards assumed by Holdco; and

 

No additional equity securities, or securities convertible into equity, are issued by either Nuvo or LAMF.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

 

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the Proposals to be presented at the EGM, including with respect to the Business Combination. The following questions and answers do not include all the information that is important to LAMF Shareholders. LAMF urges its shareholders to read this proxy statement/prospectus, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the Business Combination and the voting procedures for the EGM, which will be held at [●] a.m., Eastern Time, on [●], at 1221 Avenue of Americas, New York, NY 10020, and virtually via live webcast. To participate in the EGM online, visit [●] and enter the 12-digit control number included on your proxy card. If you hold your shares through a bank, broker or other nominee, you will need to take additional steps to participate in the EGM, as described in this proxy statement/prospectus. Unless the context otherwise requires, all references in this subsection to LAMF,” “we,” “usor ourrefer to the business of LAMF Global Ventures Corp. I prior to the consummation of the Business Combination.

 

Questions and Answers About the EGM of LAMF Shareholders and the Related Transaction Proposals

 

Q. Why am I receiving this proxy statement/prospectus?

 

A. You are receiving this proxy statement/prospectus in connection with the EGM. LAMF is holding the EGM to consider and vote upon the Transaction Proposals described below, including a proposal to approve and adopt the Business Combination Agreement and approve the Business Combination.

 

The presence, in person or by proxy, of LAMF Shareholders representing a majority of the issued and outstanding LAMF Class A Ordinary Shares on [●], 2023, the Record Date, and entitled to vote on the Transaction Proposals to be considered at the EGM, will constitute a quorum for the EGM.

 

THE VOTE OF LAMF SHAREHOLDERS IS IMPORTANT. LAMF SHAREHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS, INCLUDING THE ANNEXES AND THE ACCOMPANYING FINANCIAL STATEMENTS OF LAMF AND NUVO, IN THEIR ENTIRETY.

 

Q. What matters will LAMF Shareholders consider at the EGM?

 

A. At the EGM, LAMF will ask its shareholders to vote in favor of the following Transaction Proposals:

 

The Business Combination Proposal — a proposal to approve, by ordinary resolution under Cayman Islands law, the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the Transactions contemplated therein, including the Business Combination.

 

The Merger Proposal — a proposal to approve, by special resolution under Cayman Islands law, the plan of merger relating to the SPAC Merger, a copy of which is attached to this proxy statement/prospectus as Annex F.

 

The Adjournment Proposal — a proposal, by ordinary resolution, to adjourn the EGM to a later date or dates or indefinitely, if necessary or convenient, (i) to permit further solicitation and vote of proxies and if, based upon the tabulated vote at the time of the EGM, there are insufficient votes to approve the Business Combination Proposal and/or the Merger Proposal, (ii) to permit withdrawals by Public Shareholders of their elections to redeem their Public Shares or (iii) if the LAMF Board determines before the EGM that it is not necessary or no longer desirable to proceed with the Business Combination Proposal and/or the Merger Proposal.

 

After careful consideration, the LAMF Board has determined that each of (a) the Business Combination Proposal, (b) the Merger Proposal and (c) the Adjournment Proposal, if presented, are in the best interests of LAMF and the LAMF Shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of the Transaction Proposals.

 

The existence of financial and personal interests of one or more members of the LAMF Board may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is in the best interests of LAMF Shareholders and what he, she or they may believe is best for himself, herself or themselves in determining to recommend that LAMF Shareholders vote for the Transaction Proposals. When you consider the recommendation of the LAMF Board in favor of approval of each of the Transaction Proposals to be presented at the EGM, you should keep in mind that the LAMF Insiders have interests in the Business Combination that are different from, or in addition to, your interests as a LAMF Shareholder. See the section entitled “The Business Combination — Interests of LAMF Insiders and the Sponsor in the Business Combination.”

 

Q. Are any of the Transaction Proposals conditioned on one another?

 

A. The Closing of the Business Combination is conditioned on the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal at the EGM. It is important to note that in the event that the Business Combination Proposal or the Merger Proposal is not approved, then LAMF will not consummate the Business Combination. If LAMF does not consummate the Business Combination and fails to complete an initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), LAMF will be required to dissolve and liquidate.

 

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Q. What vote is required to approve the Transaction Proposals?

 

A. The approval of each of the Business Combination Proposal and the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of the holders of a majority of the LAMF Class A Ordinary Shares issued and outstanding, together as a single class, represented in person or by proxy and entitled to vote thereon and who do so in person or by proxy at the EGM. The approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of two-thirds of the LAMF Class A Ordinary Shares issued and outstanding, together as a single class, represented in person or by proxy and entitled to vote thereon and who do so in person or by proxy at the EGM. Shares that are present virtually during the EGM constitute LAMF Class A Ordinary Shares represented “in person.”

 

Accordingly, if a LAMF Shareholder fails to attend virtually or in person at the EGM or fails to submit a valid proxy (or have its broker or other nominee submit one on its behalf), such LAMF Class A Ordinary Shares will not be counted for the purposes of establishing a quorum. If a LAMF Shareholder does not attend the EGM (virtually or in person) or appoint a proxy, such LAMF Class A Ordinary Shares will not be counted for the purposes of any vote. Abstentions, LAMF Class A Ordinary Shares represented at the EGM online or by proxy but not voted on one or more of the Transaction Proposals, or a broker non-vote, so long as the LAMF Shareholder has given the broker or other nominee voting instructions on at least one of the Transaction Proposals in this proxy statement/prospectus, will each count as present for the purposes of establishing a quorum. However, neither a LAMF Shareholder’s failure to vote online or by proxy, a broker non-vote nor an abstention will be considered a vote cast at the EGM and thus will have no effect on the outcome of any of the Transaction Proposals presented at the EGM. If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the Transaction Proposals presented at the EGM.

 

As of the Record Date, the Sponsor and the LAMF Insiders beneficially owned an aggregate of approximately 76.4% of the outstanding LAMF Class A Ordinary Shares. The Sponsor and the LAMF Insiders have agreed to vote all of their LAMF Class A Ordinary Shares in favor of the Business Combination Proposal. As a result, we would not need any additional LAMF Class A Ordinary Shares to be voted in favor of the Transaction Proposals to have the Transaction Proposals approved.

 

Q. What will happen upon the consummation of the Business Combination?

 

A. Following the SPAC Merger, non-redeeming shareholders of LAMF immediately prior to the consummation of the Business Combination will have the right to receive one Holdco Ordinary Share for each LAMF Class A Ordinary Share held immediately prior to the Business Combination. After the SPAC Merger, on the date of the Closing, Merger Sub will be merged with and into Nuvo and Nuvo will continue as the surviving corporation. Following the Acquisition Merger, each Nuvo Share issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive Holdco Ordinary Shares determined by the Equity Exchange Ratio (based upon an Equity Value of $300 million and a reference price of $10.20 per share), each Nuvo Crossover Preferred Share issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive a number of Holdco Preferred Shares determined by the Equity Exchange Ratio, each warrant for the purchase of Nuvo Shares issued and outstanding immediately prior to the effective time of the Acquisition Merger will be automatically cancelled and converted into the right to receive one warrant to purchase a number of Holdco Ordinary Shares (determined by the Equity Exchange Ratio), and each outstanding and unexercised option to purchase Nuvo Shares, whether or not then vested or fully exercisable, will be assumed by Holdco and converted into an option to purchase a number of Holdco Ordinary Shares (determined by the Equity Exchange Ratio). See “LAMF Shareholder Proposal No. 1 — The Business Combination Proposal” for further information on the consideration being paid in the Business Combination. Upon and subject to the consummation of the Business Combination and subject to the terms of the Nuvo SAFE Amendment, the Nuvo SAFEs will automatically convert into Nuvo Shares based on a price per share representing the lower of (1) a $150 million pre-money valuation cap, or (2) a 25% discount on the price per share imputed to the Nuvo Shares pursuant to the Business Combination Agreement (whichever results in the issuance to the Nuvo SAFE holder of a greater number of Nuvo Shares). Accordingly, as of and contingent upon the Closing, Nuvo expects to issue approximately 3.56 million Nuvo Shares in satisfaction and discharge of its obligations under the Nuvo SAFEs, in accordance with the provisions of the Nuvo SAFE Amendment. For additional information on the original terms of the Nuvo SAFEs see, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nuvo—Liquidity and Capital Resources—Sources of Liquidity”. Prior to the execution of the Business Combination Agreement, the Company entered into securities purchase agreements with the Interim Financing Investors, providing Nuvo with an aggregate of approximately $13,000,000 of gross proceeds, pursuant to which the Interim Financing Investors agreed to purchase the Nuvo Crossover Preferred Shares, at a price of $7.03 per share, and that, in addition to the Holdco Preferred Shares that the Interim Financing Investors will receive following exchange of their Nuvo Crossover Preferred Shares in connection with the Closing, the Interim Financing Investors will receive 3,823,530 Holdco Ordinary Shares for no additional costs. Following the Closing, the Holdco Ordinary Shares and Holdco Preferred Shares will have identical voting rights and each share will have one vote provided that certain actions and transactions will be subject to the consent of holders of a majority of the outstanding Holdco Preferred Shares, including with respect to: (i) amending, waiving or terminating any provision of the Amended Articles in a manner that adversely affects the rights, preferences of privileges of the Holdco Preferred Shares; (ii) liquidation, dissolution or winding-up or any Deemed Liquidation (as defined below) (other than certain qualifying transactions); (iii) repurchase or declaration or payment of dividends; (iv) increasing the number of authorized Holdco Preferred Shares or the creation of a class that ranks senior or in parity with the Holdco Preferred Shares; and (v) amending the provisions of the Article that sets forth the veto rights, as further detailed in “Description of Holdco Securities – Voting and Veto Rights”. Following the Closing, Holdco will be obligated to use its commercially reasonable efforts to file within 60 days with the SEC a registration statement to register for resale, pursuant to Rule 415 under the Securities Act, of certain Holdco Ordinary Shares and other equity securities of Holdco that are held by the parties thereto from time to time.

 

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Q. How has the announcement of the Business Combination affected the trading price of the LAMF Class A Ordinary Shares?

 

A. On August 17, 2023, the last trading date prior to the public announcement of the Business Combination, the LAMF Units, LAMF Class A Ordinary Shares and Public Warrants closed at $10.36, $10.58 and $0.04, respectively. As of December 6, 2023, the last practicable trading day immediately prior to the date of this proxy statement/prospectus, each of the LAMF Units, LAMF Class A Ordinary Shares and Public Warrants closed at $10.36, $10.75 and $0.06, respectively.

 

Q. Why is LAMF proposing the Business Combination Proposal?

 

A. LAMF was organized for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. LAMF is not limited to any particular industry or sector but decided to target opportunities that focus on media, entertainment and sports, as well as within e-commerce and technology, leveraging the expansive professional network and operating expertise of its management team. Since LAMF’s organization, the LAMF team has sought to identify suitable candidates in order to effect such a transaction. In its review of Nuvo, the LAMF Board considered a variety of factors weighing positively and negatively in connection with the Business Combination. After careful consideration, the LAMF Board has determined that the Business Combination is in the best interests of LAMF Shareholders. However, there can be no assurance that the anticipated benefits of the Business Combination will be achieved. Approval by LAMF Shareholders of the Business Combination is required by the Business Combination Agreement. See the section entitled “LAMF Shareholder Proposal No. 1 — The Business Combination Proposal — LAMF’s Board’s Reasons for the Approval of the Business Combination” and “Risk Factors — Risks Related to LAMF and the Business Combination” for more details.

 

Q. What is Nuvo?

 

A. Incorporated in Israel on June 28, 2006, Nuvo is a women’s health and connected pregnancy care company, and has developed INVU by Nuvo, an FDA-cleared, prescription-initiated, remote pregnancy monitoring platform that enables the delivery of remote non-stress tests and maternal and fetal heart rate monitoring, helping expectant mothers adhere to their prescribed care plan. For more information, see “Business of Nuvo.”

 

Q. What equity stake will current Public Shareholders, the Sponsor, LAMF Insiders and the Sponsor Investors and Nuvo Shareholders have in Holdco after the Closing and how will the level of redemptions by Public Shareholders affect my ownership in Holdco following the Closing?

 

A.

It is anticipated that, immediately following completion of the Business Combination, and assuming no redemptions, (i) Public Shareholders will own approximately 7.2% of the outstanding Holdco Ordinary Shares, (ii) the Sponsor, the LAMF Insiders and the Sponsor Investors will own approximately 23.1% of the outstanding Holdco Ordinary Shares and (iii) Nuvo Shareholders, including the Interim Financing Investors (other than the Sponsor Investors), will own approximately 69.7% of the outstanding Holdco Ordinary Shares. The expected number of Holdco Ordinary Shares to be issued by Holdco and the ownership percentages set forth above are calculated based on a number of additional assumptions, including that (i) none of the Public Shareholders exercise their Redemption Rights, (ii) no PIPE is consummated in connection with the Business Combination, (iii) no exercise of any outstanding Nuvo Options or any Nuvo Warrants to purchase Holdco Ordinary Shares prior to or in connection with the Business Combination has occurred and (iv) no additional equity securities of LAMF are issued, and are subject to adjustment in accordance with the terms of the Business Combination Agreement.

 

If the actual facts are different than these assumptions, the percentage ownership retained by the LAMF Shareholders will be different. For example, assuming that (i) all of the Public Shareholders exercise their Redemption Rights, (ii) no PIPE is consummated in connection with the Business Combination, (iii) no exercise of any outstanding Nuvo Options or any Nuvo Warrants to purchase Holdco Ordinary Shares prior to or in connection with the Business Combination has occurred and (iv) no additional equity securities of LAMF are issued, the Public Shareholders will not own any of the outstanding Holdco Ordinary Shares, the Sponsor, the LAMF Insiders and the Sponsor Investors will own approximately 27.8% of the outstanding Holdco Ordinary Shares and Nuvo Shareholders, including the Interim Financing Investors (other than the Sponsor Investors), will own approximately 72.2% of the outstanding Holdco Ordinary Shares, in each case upon completion of the Business Combination.

 

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The table below presents the relative ownership levels of holders of Holdco Ordinary Shares following the Business Combination assuming that (i) the Public Shareholders exercise their Redemption Rights with regard to their LAMF Class A Ordinary Shares (which, for the avoidance of doubt, does not include the 9,539,333 LAMF Class A Ordinary Shares held by the Sponsor and the LAMF Insiders, comprised of 8,433,333 LAMF Class A Ordinary Shares which were previously classified as Founder Shares and the 1,106,000 LAMF Class A Ordinary Shares initially sold as part of the Private Placement Units issued to the Sponsor in connection with the IPO) at each of the respective redemption percentages, (ii) no PIPE is consummated in connection with the Business Combination, (iii) no exercise of any outstanding Nuvo Options or any Nuvo Warrants to purchase Holdco Ordinary Shares prior to or in connection with the Business Combination has occurred and (iv) no additional equity securities of LAMF are issued.

 

    No Redemptions     Maximum Redemptions  
    Shares     Percentage     Shares     Percentage  
Public Shareholders     2,952,616       7.2 %     -       - %
Sponsor, LAMF Insiders and Sponsor Investors     9,539,333       23.1 %     9,539,333       24.9 %
Nuvo Shareholders     28,744,663       69.7 %     28,744,663       75.1 %
Total     41,236,612       100.0 %     38,283,996       100.0 %

 

The holders of Public Warrants, regardless of whether they redeem LAMF Class A Ordinary Shares, would retain 12,650,000 Public Warrants, which will become Holdco Warrants, with a market value of approximately $759,000 based on the closing price of $0.06 per Public Warrant on Nasdaq on December 6, 2023. Because the Public Warrants will remain outstanding and become Holdco Warrants regardless of the level of redemptions of LAMF Class A Ordinary Shares, as redemptions of LAMF Class A Ordinary Shares increase, the holders of Public Warrants who exercise such warrants will ultimately own a greater interest in Holdco because there would be fewer Holdco Ordinary Shares outstanding overall. 

 

Q. How will the level of redemptions by Public Shareholders affect the value of my shares if I elect not to redeem my shares?

 

A. The table below presents the Trust Account value per share to a LAMF Shareholder that elects not to redeem its shares across a range of varying redemption scenarios.

 

    As of
June 30,
2023
 
Trust Account Value   $ 31,232,249  
Total number of LAMF Class A Ordinary Shares(1)     2,952,616  
Trust Account Value per LAMF Class A Ordinary Share   $ 10.58  

 

    Assuming no
Redemptions
    Assuming
Maximum
Possible
Redemptions(2)
 
Redemptions ($)   $ 0          
Redemptions (Shares)     0       2,952,616  
Cash left in the Trust Account post redemptions   $            
LAMF Class A Ordinary Shares post redemptions                
Trust Value Per Share   $            

 

 
(1) Does not include the 9,539,333 LAMF Class A Ordinary Shares held by the Sponsor and the LAMF Insiders, comprised of 8,433,333 LAMF Class A Ordinary Shares which were previously classified as Founder Shares and the 1,106,000 LAMF Class A Ordinary Shares initially sold as part of the Private Placement Units issued to the Sponsor in connection with the IPO. The Sponsor and the LAMF Insiders have agreed not to redeem any LAMF Class A Ordinary Shares in connection with the Business Combination, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
(2) Assumes that 2,952,616 LAMF Class A Ordinary Shares, which represents approximately 23.1% of currently outstanding LAMF Class A Ordinary Shares, are redeemed.

 

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Furthermore, to the extent that holders of LAMF Class A Ordinary Shares redeem their shares in connection with the Business Combination, their Public Warrants will remain issued and outstanding notwithstanding the redemption of their LAMF Class A Ordinary Shares. The Sponsor owns 1,106,000 Private Placement Warrants. Following the consummation of the Business Combination, all of the LAMF Warrants will become Holdco Warrants.

 

Q. Who will be the directors of Holdco if the Business Combination is consummated?

 

A. The Business Combination Agreement provides that, immediately following the consummation of the Business Combination, the Holdco Board will be divided into three classes, with one class of directors being elected in each year, and will be comprised of six directors, including one director designated by the Sponsor. Additionally, the Sponsor Support Agreement provides that the Sponsor may designate one non-voting observer of the Holdco Board, so long as the Sponsor and the LAMF Insiders and certain other investors in the Interim Financing beneficially own at least 5% of the outstanding Holdco Ordinary Shares (after taking into account convertible securities beneficially owned by such parties).

 

Upon the Closing, the initial directors of Holdco are expected to be Laurence Klein, Oren Oz, Gerald Ostrov, Robert Powell, Christina Spade and [●].

 

Q. What conditions must be satisfied to complete the Business Combination?

 

A. There are a number of closing conditions in the Business Combination Agreement that must be satisfied or waived in order to complete the Business Combination, including, among others, that LAMF Shareholders and Nuvo Shareholders have approved and adopted the Business Combination Agreement and the Business Combination. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “The Business Combination Agreement.”

 

Q. Do Nuvo Shareholders need to approve the Business Combination?

 

A. Yes. It is a condition to Closing that Nuvo Shareholders approve the Business Combination and related Transactions.

 

Q. Do I have appraisal or dissenters’ rights if I object to the proposed Business Combination?

 

A. No appraisal or dissenters’ rights are available to holders of LAMF Class A Ordinary Shares or the LAMF Warrants in connection with the ordinary resolution to approve the Business Combination.

 

However, with respect to the SPAC Merger, under section 238 of the Companies Act, shareholders of a Cayman Islands company ordinarily have dissenters’ rights with respect to a statutory merger. The Companies Act prescribes when dissenters’ rights will be available and provides that shareholders are entitled to receive fair value for their shares if they exercise those rights in the manner prescribed by the Companies Act. Pursuant to section 239(1) of the Companies Act, dissenters’ rights are not available if an open market for the shares exists on a recognized stock exchange, such as Nasdaq, for a specified period after the merger is authorized (such period being the period in which dissenters’ rights would otherwise be exercisable). It is anticipated that, if the Business Combination is approved, it may be consummated prior to the expiry of such specified period and accordingly the exemption under section 239(1) of the Companies Act may not be available. For more information about appraisal or dissenters’ rights under Cayman Islands law, please see the section of this proxy statement/prospectus entitled “Business Combination Proposal – Appraisal or Dissenters’ Rights”.

 

Regardless of whether dissenters’ rights are or are not available, Public Shareholders can exercise their redemption rights as described herein. The LAMF Board has determined that the redemption proceeds payable to Public Shareholders who exercise their redemption rights represent the fair value of the Public Shares. See the section of this proxy statement/prospectus entitled “Business Combination Proposal – Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your Public Shares for cash.

 

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Q. May the Sponsor, the LAMF Insiders and/or their affiliates purchase shares in connection with the Business Combination?

 

A. The Sponsor, the LAMF Insiders and/or their affiliates may purchase Public Shares or Public Warrants in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination. In the event the Sponsor, LAMF or the LAMF Insiders and/or their affiliates were to purchase Public Shares in privately negotiated transactions from Public Shareholders, such purchases would be structured in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence to the following:

 

This proxy statement/prospectus discloses the possibility that the Sponsor, LAMF or the LAMF Insiders and/or their affiliates may purchase Public Shares from Public Shareholders outside the redemption process, along with the purpose of such purchases;

 

If the Sponsor, LAMF or the LAMF Insiders or their affiliates were to purchase Public Shares from Public Shareholders, they would do so at a price no higher than the price offered through LAMF’s redemption process;

 

This proxy statement/prospectus includes a representation that any Public Shares purchased by the Sponsor, LAMF or the LAMF Insiders or any of their affiliates would not be voted in favor of approving the Business Combination;

 

The Sponsor, or LAMF or its directors, executive officers, advisors or affiliates would not possess any Redemption Rights with respect to any Public Shares purchased or, if they do acquire and possess Redemption Rights, they would waive such rights in the event that the Business Combination is consummated; and

 

LAMF would disclose in a Current Report on Form 8-K, before the EGM, the following material items:

 

the amount of Public Shares purchased outside of the redemption offer by the Sponsor, LAMF, the LAMF Insiders or any of their affiliates, along with the purchase price;

 

the purpose of the purchases by the Sponsor, LAMF, the LAMF Insiders or their affiliates;

 

the impact, if any, of the purchases by the Sponsor, the LAMF Insiders or any of their affiliates on the likelihood that the Business Combination will be approved;

 

the identities of LAMF’s security holders who sold to the Sponsor, the LAMF Insiders or any of their affiliates (if not purchased on the open market) or the nature of LAMF’s security holders (e.g., 5% security holders) who sold to the Sponsor, the LAMF Insiders or any of their affiliates; and

 

the number of Public Shares for which LAMF has received redemption requests pursuant to the redemption offer.

 

There is no limit on the number of Public Shares that the Sponsor, the LAMF Insiders and their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase Public Shares or Public Warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. In the event that the Sponsor, the LAMF Insiders and/or their affiliates purchase Public Shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their Redemption Rights, such selling shareholders would be required to revoke their prior elections to redeem their Public Shares. LAMF does not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. The purpose of any such purchases of Public Shares could be, for example, to increase the amount of cash at the closing of the Business Combination. The purpose of any such purchases of Public Warrants could be to reduce the number of Public Warrants outstanding. Any such purchases of LAMF’s securities may result in the completion of its initial business combination that may not otherwise have been possible.

 

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Q. What is the Interim Financing?

 

A. In connection with the Business Combination, and as contemplated by the BCA, Nuvo and Holdco entered into securities purchase agreements (the “Interim Financing Agreements”), with certain investors (the “Interim Financing Investors”), to effect a cross-over interim round of financing, or the Interim Financing, which provided Nuvo with an aggregate of approximately $13,000,000 of gross proceeds. Pursuant to the Interim Financing Agreements, (i) beginning in August 2023 Nuvo sold to the Interim Financing Investors Nuvo Crossover Preferred Shares, at a price of $7.03 per share, and (ii) upon and subject to the Closing, Holdco will issue 3,823,530 Holdco Ordinary Shares to the Interim Financing Investors, such shares being referred to as the Interim Financing Incentive Shares. Certain of the Interim Financing Investors are affiliated with LAMF and the Sponsor and intend to invest an aggregate of $2,000,000 in the Interim Financing. These affiliates are: (i) Jeffrey Soros, LAMF’s Chairman, who intends to invest $500,000, (ii) Tamim Mourad, a strategic investor of LAMF and an affiliate of a member of the Sponsor, who intends to invest $500,000 and (iii) Gaingels 10X Capital Diversity Fund I, LP, a Delaware limited partnership and an affiliate of a member of the Sponsor, that intends to invest $1,000,000. See the section entitled “Background of the Business Combination.”

 

Q. How many votes do I have at the EGM?

 

A. LAMF Shareholders are entitled to one vote at the EGM for each LAMF Class A Ordinary Share held of record as of the Record Date. As of the close of business on the Record Date, there were 12,491,949 outstanding LAMF Class A Ordinary Shares.

 

Q. How will the Sponsor and the LAMF Insiders vote?

 

A. Concurrently with the execution of the Business Combination Agreement, the Sponsor and the LAMF Insiders entered into the Sponsor Support Agreement with LAMF, Nuvo and Holdco, pursuant to which the Sponsor and the LAMF Insiders agreed to, among other things, (i) vote in favor of the adoption and approval of the Business Combination; (ii) be bound by certain other covenants and agreements related to the Business Combination; (iii) be bound by certain transfer restrictions with respect to their LAMF securities during the pendency of the Business Combination; and (iv) not redeem any LAMF Class A Ordinary Shares in connection with the Business Combination, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement. The Sponsor and the LAMF Insiders own 76.4% of LAMF’s issued and outstanding LAMF Class A Ordinary Shares. Accordingly, the agreement by the Sponsor and the LAMF Insiders to vote in favor of the Business Combination ensures that LAMF will receive the requisite shareholder approval for the Business Combination.

 

Q. What interests do the LAMF Insiders have in the Business Combination?

 

A. The LAMF Insiders may have interests in the Business Combination that are different from, in addition to or in conflict with, yours. These interests include, among other things, the interests listed below:

 

  the Sponsor and the LAMF Insiders will lose their entire investment in LAMF if LAMF does not complete a business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension);

 

the beneficial ownership of the Sponsor and the LAMF Insiders of an aggregate of 9,539,333 LAMF Class A Ordinary Shares, comprised of 8,433,333 LAMF Class A Ordinary Shares which were previously classified as Founder Shares and 1,106,000 LAMF Class A Ordinary Shares initially sold as part of the Private Placement Units issued to the Sponsor in connection with the IPO. Such shares have an aggregate market value of approximately $[●] million based on the closing price of LAMF Class A Ordinary Shares of $[●] on Nasdaq on [●], 2023, the Record Date for the EGM of LAMF Shareholders;

 

the Sponsor paid an aggregate of approximately $25,000 for 7,666,667 Founder Shares, approximately $0.003 per share, some of which were subsequently transferred by the Sponsor to the LAMF Insiders. In connection with the extraordinary general meeting of shareholders held in connection with the Extension on May 11, 2023, LAMF and the Sponsor entered into agreements (the “Non-Redemption Agreements”) with respect to Public Shares held by certain unaffiliated third-party investors, pursuant to which such investors have in connection with the Extension, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to an aggregate of 2,888,000 Public Shares. Pursuant to the Non-Redemption Agreements, the Sponsor has agreed to transfer to such investors (i) for the Initial Extension, a number of Founder Shares equal to 21% of the number of non-redeemed shares, or 606,480 Founder Shares, and (ii) for each Additional Monthly Extension, a number of Founder Shares equal to 3.5% of the number of non-redeemed shares, or 101,080 Founder Shares for each Additional Monthly Extension, or up to an aggregate of 1,212,960 Founder Shares if all Additional Monthly Extensions are implemented. The market value of such shares as of the Record Date for the EGM of LAMF Shareholders was approximately $[●], and the value of such shares is expected to be greater than $25,000 at the time of the Business Combination. If LAMF does not complete an initial business combination, such shares will expire worthless;

 

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  in connection with the Business Combination, the Sponsor and the LAMF Insiders entered into the Sponsor Support Agreement with LAMF, Holdco and Nuvo, pursuant to which they agreed to waive their Redemption Rights with respect to the LAMF Class A Ordinary Shares held by them in connection with the completion of the Business Combination. The Sponsor and the LAMF Insiders did not receive any consideration in exchange for such waiver of redemption rights. Due to such waiver, the value of the LAMF Insiders’ investments in LAMF is dependent on the consummation of an initial business combination. In the event that LAMF does not complete an initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), the 9,539,333 LAMF Class A Ordinary Shares, for which the Sponsor and the LAMF Insiders have invested $11,085,000, and which have an approximate aggregate market value of $102,547,829 as of December 6, 2023, will expire worthless. As a result, the LAMF Insiders have an aggregate of up to $11,085,000 at risk that depends on the completion of an initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension). In contrast, LAMF Shareholders would receive approximately $[●] per share if the Trust Account is liquidated, calculated as of [●], 2023, the Record Date;

 

  the Sponsor or the LAMF Insiders may, but are not obligated to, make Working Capital Loans (as defined below) to LAMF, that may be repaid upon completion of the Business Combination, without interest, or at the lender’s discretion, converted upon completion of the Business Combination into up to 120,000 units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Placement Units. As of December 6, 2023, the outstanding amount of advances from the Sponsor to LAMF is $588,196;

 

the Sponsor, the LAMF Insiders and the Sponsor Investors are expected to hold an aggregate of approximately 23.1% of the outstanding Holdco Ordinary Shares upon the consummation of the Business Combination, assuming no redemptions by LAMF Shareholders;

 

the Sponsor Investors have invested an aggregate of $2,000,000 in the Interim Financing;

 

  Although there are no such unreimbursed out-of-pocket expenses as of December 6, 2023, unless a business combination is consummated, members of the LAMF Board will not receive reimbursement for any out-of-pocket expenses incurred by them on LAMF’s behalf incident to identifying, investigating, negotiating and completing a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account;

 

the potential continuation of certain member(s) of the LAMF Board as directors of Holdco;

 

the continued indemnification of LAMF Insiders and the continuation of directors’ and officers’ liability insurance after the Business Combination;

 

the Existing Governing Documents provide that LAMF renounces its 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 LAMF and such opportunity is one LAMF is legally and contractually permitted to undertake and would otherwise be reasonable for LAMF to pursue, and to the extent the director or officer is permitted to refer that opportunity to LAMF without violating another legal obligation. Notwithstanding such provision, LAMF believes that such provision did not impact LAMF’s search for a business combination target because the LAMF Insiders have confirmed to LAMF that there were no such corporate opportunities that were not presented to LAMF pursuant to such provision;
     
  the Sponsor and the LAMF Insiders can earn a positive rate of return on their investment, even if other LAMF Shareholders experience a negative rate of return in Holdco; and

 

at the Closing, LAMF, Nuvo, Holdco, the Sponsor, the executive officers and directors of LAMF prior to the Closing, the members of the Sponsor, certain shareholders of Nuvo, and the executive officers and directors of Nuvo prior to the Closing will enter into the Registration Rights Agreement, under which Holdco will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain Holdco Ordinary Shares and other equity securities of Holdco that are held by the parties thereto from time to time and the parties thereto will be provided with customary demand and piggyback registration rights.

 

As a result of the foregoing interests, the Sponsor and the LAMF Insiders will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms that would be less favorable to LAMF’s other securityholders.

 

The LAMF Board was aware of and considered these interests, among other matters, in approving the Business Combination Agreement and the Business Combination, and in determining to recommend that the LAMF Shareholders vote in favor of the Business Combination Agreement and the Business Combination.

 

Please read the section entitled “The Business Combination — Interests of LAMF Insiders and the Sponsor in the Business Combination.”

 

Q. What happens if the Business Combination Proposal is not approved?

 

A. If the Business Combination Proposal is not approved and LAMF does not consummate a business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), LAMF will be required to dissolve and liquidate the Trust Account.

 

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Q. Do I have Redemption Rights?

 

A. If you are a holder of LAMF Class A Ordinary Shares, you may redeem your LAMF Class A Ordinary Shares for cash equal to your pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the Business Combination, including interest earned on funds held in the Trust Account (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares. If LAMF is unable to complete its initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), LAMF will redeem 100% of the Public Shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, subject to applicable law and certain conditions as further described herein. The per-share amount LAMF will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions LAMF would have paid to the underwriters of the IPO if the Business Combination is consummated, as the underwriters waived any entitlement to their deferred underwriting commissions.

 

Holders of the outstanding Public Warrants issued in the IPO do not have Redemption Rights with respect to such Public Warrants in connection with the Business Combination. The Sponsor and the LAMF Insiders have agreed to waive their Redemption Rights with respect to their LAMF Class A Ordinary Shares. The Sponsor and the LAMF Insiders did not receive any consideration in exchange for such waiver of redemption rights. Additionally, LAMF Class A Ordinary Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise, holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), in connection with the liquidation of the Trust Account.

 

Q. How do I exercise my Redemption Rights?

 

A. In order to exercise your Redemption Rights, you must, prior to 5:00 p.m. Eastern time on [●], 2023 (two business prior to the scheduled date of the EGM), (i) submit a written request to LAMF’s Transfer Agent that LAMF redeem your LAMF Class A Ordinary Shares for cash (and first elect to separate your LAMF Units into the underlying Public Shares and Public Warrants, if applicable), and (ii) deliver your shares (and share certificates (if any) and other redemption forms) to LAMF’s Transfer Agent physically or electronically through the DTC. The address of LAMF’s Transfer Agent is listed under the question “Who can help answer my questions?” below. LAMF requests that any requests for redemption include the identity as to the beneficial owner making such request. Electronic delivery of your share certificates generally will be faster than delivery of physical share certificates.

 

A physical share certificate will not be needed if your share certificates are delivered to the Transfer Agent electronically. In order to obtain a physical share certificate, a shareholder’s broker and/or clearing broker, DTC and the Transfer Agent will need to act to facilitate the request. It is LAMF’s understanding that LAMF Shareholders should generally allot at least one week to obtain physical certificates from the Transfer Agent. However, because LAMF does not have any control over this process or over the brokers or DTC, it may take significantly longer than one week to obtain a physical share certificate. If it takes longer than anticipated to obtain a physical certificate, LAMF Shareholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their Redemption Rights and thus will be unable to redeem their shares.

 

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with LAMF’s consent, until the Closing. If you delivered your share certificates for redemption to the Transfer Agent and decide within the required timeframe not to exercise your Redemption Rights, you may request that the Transfer Agent return the share certificates (physically or electronically). Such requests may be made by contacting the Transfer Agent at the phone number or address listed under the question “Who can help answer my questions?

 

Holders of LAMF Class A Ordinary Shares will be entitled to request that their LAMF Class A Ordinary Shares be redeemed for the redemption price. For illustrative purposes, as of December 6, 2023, this would have amounted to approximately $10.84 per issued and outstanding LAMF Class A Ordinary Share. However, the proceeds deposited in the Trust Account could become subject to the claims of LAMF’s creditors, if any, which could have priority over the claims of Public Shareholders. Therefore, the per share distribution from the Trust Account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote, how you vote, on any Transaction Proposal, will have no impact on the amount you will receive upon exercise of your Redemption Rights. It is expected that the funds to be distributed to LAMF Shareholders electing to redeem their LAMF Class A Ordinary Shares will be distributed promptly after the consummation of the Business Combination.

 

Q. Is there a limit on the number of shares I may redeem?

 

A. A Public Shareholder, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking Redemption Rights with respect to more than an aggregate of 15% of the LAMF Class A Ordinary Shares, without LAMF’s consent. Accordingly, all shares in excess of 15% of the LAMF Class A Ordinary Shares owned by a holder or group of holders will not be redeemed. On the other hand, a Public Shareholder who holds less than an aggregate of 15% of the LAMF Class A Ordinary Shares may redeem all of the LAMF Class A Ordinary Shares held by him or her for cash.

 

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Q. Will how I vote affect my ability to exercise Redemption Rights?

 

A. No. You may exercise your Redemption Rights whether you vote your LAMF Class A Ordinary Shares for or against the Business Combination Proposal or any other Transaction Proposal described in this proxy statement/prospectus, or do not vote your shares. As a result, the Business Combination Proposal can be approved by LAMF Shareholders who will redeem their LAMF Class A Ordinary Shares and no longer remain shareholders, leaving shareholders who choose not to redeem their LAMF Class A Ordinary Shares holding shares in a company with a less liquid trading market, fewer shareholders, less cash and the potential inability to meet the continued listing standards of Nasdaq.

 

Q. What are the U.S. federal income tax consequences of exercising my Redemption Rights?

 

A. The U.S. federal income tax consequences of exercising your Redemption Rights depend on your particular facts and circumstances. See the section entitled “Material U.S. Federal Income Tax Considerations to U.S. Holders — Tax Consequences for U.S. Holders Exercising Redemption Rights.” If you are a U.S. Holder of LAMF Class A Ordinary Shares contemplating exercising your Redemption Rights, you are urged to consult your tax advisor to determine the tax consequences thereof.

 

Q. What are the U.S. federal income tax consequences of the SPAC Merger?

 

A. Subject to the limitations and qualifications described in “Material U.S. Federal Income Tax Considerations to U.S. Holders — Tax Consequences of the SPAC Merger to U.S. Holders” below, the SPAC Merger should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code. In general, if the SPAC Merger so qualifies, a U.S. Holder should not recognize any gain or loss for U.S. federal income tax purposes in connection therewith.

 

The tax consequences of the SPAC Merger are complex and will depend on your particular circumstances. For a more complete discussion of the U.S. federal income tax considerations of the SPAC Merger, see the section entitled “Material U.S. Federal Income Tax Considerations to U.S. Holders — Tax Consequences of the SPAC Merger to U.S. Holders.” If you are a U.S. Holder exchanging LAMF Class A Ordinary Shares or Public Warrants in the SPAC Merger, you are urged to consult your tax advisor to determine the tax consequences thereof.

 

Q. If I hold Public Warrants, can I exercise Redemption Rights with respect to my Public Warrants?

 

A. No. There are no Redemption Rights with respect to the Public Warrants.

 

Q.

How do the Public Warrants differ from the Private Placement Warrants and what are the related risks to any holders of the Public Warrants following the Business Combination?

   
A.

The Private Placement Warrants are identical to the Public Warrants in all material respects, except that the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination and they are not redeemable by Holdco. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis.

 

Following the Business Combination, Holdco may redeem the Holdco Warrants, other than the Private Placement Warrants, prior to their exercise at a time that is disadvantageous to the holder, thereby significantly impairing the value of such warrants. Holdco will have the ability to redeem outstanding Holdco Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the shares of Holdco Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which a notice of redemption is sent to the warrant holders. As of December 6, 2023, the trading price of the LAMF Class A Ordinary Shares has yet to equal or exceed the $18.00 threshold that would permit Holdco to redeem the Public Warrants. Holdco will not redeem the warrants as described above unless a registration statement under the Securities Act covering the Holdco Ordinary Shares issuable upon exercise of such warrants is effective and a current prospectus relating to those Holdco Ordinary Shares is available throughout the 30-day redemption period. If and when the Holdco Warrants become redeemable by Holdco, if Holdco has elected to require the exercise of Holdco Warrants on a cashless basis, Holdco will not redeem the warrants as described above if the issuance of Holdco Ordinary Shares upon exercise of Holdco Warrants is not exempt from registration or qualification under applicable state securities laws or Holdco is unable to effect such registration or qualification. Redemption of the outstanding Holdco Warrants could force you (i) to exercise your Holdco Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Holdco Warrants at the then-current market price when you might otherwise wish to hold your Holdco Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding Holdco Warrants are called for redemption, is likely to be substantially less than the market value of your Holdco Warrants.

 

Holdco may only call the Holdco Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each registered holder pursuant to the terms of the LAMF Warrant Agreement, provided that holders will be able to exercise their Holdco Warrants prior to the time of redemption and, at Holdco’s election, any such exercise may be required to be on a cashless basis.

 

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Q. What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A. If the Business Combination is consummated, the funds held in the Trust Account will be released to pay LAMF Shareholders who properly exercise their Redemption Rights. Any additional funds available for release from the Trust Account will be used for general corporate purposes of Holdco following the Business Combination. As of December 6, 2023, the amount of funds in the Trust Account was $32.0 million.

 

Q. What happens if the Business Combination is not consummated?

 

A. There are certain circumstances under which the Business Combination Agreement may be terminated. See the section entitled “The Business Combination Agreement” for information regarding the parties’ specific termination rights.

 

If LAMF has not completed its initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), LAMF will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish LAMF Shareholders’ rights as shareholders (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 LAMF’s remaining shareholders and the LAMF Board, liquidate and dissolve, subject in each case, to LAMF’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. See the section entitled “Risk Factors — Risks Related to LAMF and the Business Combination — LAMF may not be able to complete its initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), in which case LAMF would cease all operations except for the purpose of winding up and LAMF would redeem its Public Shares and liquidate.

 

In the event of liquidation, there will be no distribution with respect to outstanding Public Warrants. Accordingly, the Public Warrants will expire worthless.

 

Q. When is the Business Combination expected to be completed?

 

A. It is currently anticipated that the Business Combination will be consummated in the first quarter of 2024. The obligation of LAMF, Nuvo and Holdco to consummate the Business Combination is subject to certain closing conditions, including: (i) the approval of the LAMF Shareholders, (ii) the approval of Nuvo Shareholders, (iii) all applicable waiting periods under applicable antitrust laws having been expired, (iv) there being no provision of any applicable legal requirement prohibiting, enjoining, restricting or making illegal the consummation of the Business Combination in effect, and no temporary, preliminary or permanent restraining order enjoining, restricting or making illegal the consummation of the Business Combination being in effect or being threatened in writing by a Governmental Entity of competent jurisdiction, (v) the Holdco Ordinary Shares being approved for listing upon the Closing on Nasdaq, (vi) the registration statement of which this proxy statement/prospectus forms a part becoming effective, (vii) Nuvo and its Israeli advisors having prepared and filed with the Israel Tax Authority an application for Israeli tax rulings confirming certain qualifications under the Israeli Tax Ordinance, (viii) at least 50 days have elapsed after the filing of the Merger Proposal with the Israeli Registrar of Companies and at least 30 days have elapsed after Nuvo Shareholders have approved the Business Combination, and (ix) Holdco having received from the Israeli Securities Authority either an exemption under Section 15D of the Israeli Securities Law concerning the publication of an Israeli prospectus in connection with the issuance of Holdco Options as set forth in the Business Combination Agreement or confirmation that such issuance is exempt from or does not trigger prospectus requirements.

 

For a description of the conditions to the completion of the Business Combination, see the section entitled “The Business Combination Agreement.”

 

Q. What do I need to do now?

 

A. You are urged to carefully read and consider the information contained in this proxy statement/prospectus, including the financial statements and annexes attached hereto, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

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Q. What happens if I sell my LAMF Class A Ordinary Shares before the EGM?

 

A. The Record Date for the EGM is earlier than the date of the EGM and earlier than the date that the Business Combination is expected to be completed. If you transfer your LAMF Class A Ordinary Shares after the applicable Record Date, but before the EGM, unless you grant a proxy to the transferee, you will retain your right to vote at the EGM but the transferee, and not you, will have the ability to redeem such shares, so long as such transferee takes the required steps to elect to redeem such shares at least two business days prior to scheduled date of the EGM.

 

Q. How do I attend the EGM virtually?

 

A. You will be able to virtually attend, vote your shares and submit questions during the EGM via a live audio webcast by pre-registering at https://www.cstproxy.com/[●]. You will need your control number for access. If you do not have your control number, contact Continental Stock Transfer & Trust Company at the phone number or e-mail address below. However, if your shares are held in the name of your broker, bank or other nominee, you must get a legal proxy from the broker, bank or other nominee. That is the only way LAMF can be sure that the broker, bank or nominee has not already voted your shares. Once you have your legal proxy, contact Continental to have a control number generated. Continental’s contact information is as follows: 917-262-2373, or email proxy@continentalstock.com. Please allow up to 72 hours prior to the meeting for processing your control number.

 

Q. How do I vote?

 

A. If you were a holder of record of LAMF Class A Ordinary Shares on [●], 2023, the Record Date for the EGM, you may vote with respect to the applicable proposals virtually or in person at the EGM or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name”, which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the EGM and vote virtually or in person, obtain a proxy from your broker, bank or nominee.

 

Q. What will happen if I abstain from voting or fail to vote at the EGM?

 

A. Abstentions and shares represented at the EGM online or by proxy but not voted on one or more of the Transaction Proposals will count as present for the purposes of establishing a quorum. However, an abstention will not be considered a vote cast at the EGM and thus will have no effect on the outcome of the any of the Transaction Proposals presented at the EGM. If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the Transaction Proposals presented at the EGM.

 

Q. What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A. Signed and dated proxies received by LAMF without an indication of how the LAMF Shareholder intends to vote on a Transaction Proposal will be voted in favor of each Transaction Proposal presented to the LAMF Shareholders.

 

Q. Do I need to attend the EGM to vote my shares?

 

A. No. You are invited to attend the EGM either virtually or in person to vote on the Transaction Proposals described in this proxy statement/prospectus. However, you do not need to attend the EGM to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card in the pre-addressed postage-paid envelope. Your vote is important. LAMF encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

 

Q. If I am not going to attend the EGM virtually or in person, should I return my proxy card instead?

 

A. Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, as applicable, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

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Q. If my shares are held in “street name”, will my broker, bank or nominee automatically vote my shares for me?

 

A. No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the Transaction Proposals. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote”. Broker non-votes, so long as the LAMF Shareholder has given the broker or other nominee voting instructions on at least one of the Transaction Proposals in this proxy statement/prospectus, will each count as present for the purposes of establishing a quorum. However, a broker non-vote will not be considered a vote cast at the EGM and thus will have no effect on the outcome of any of the Transaction Proposals presented at the EGM. However, in no event will a broker non-vote also have the effect of exercising your Redemption Rights for a pro rata portion of the Trust Account.

 

Q. May I change my vote after I have mailed my signed proxy card?

 

A. Yes. You may change your vote by sending a later-dated, signed proxy card to Morrow Sodali LLC, at 333 Ludlow Street 5th Floor, South Tower, Stamford, CT 06902 prior to the vote at the EGM, or attend the EGM virtually or in person and vote either virtually or in person. You also may revoke your proxy by sending a notice of revocation to Morrow Sodali LLC, provided such revocation is received prior to the vote at the EGM. If your shares are held in street name by a broker or other nominee, you must contact the broker or nominee to change your vote.

 

Q. What should I do if I receive more than one set of voting materials?

 

A. You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q. What is the quorum requirement for the EGM?

 

A. A quorum of LAMF Shareholders is necessary to hold a valid meeting. A quorum will be present at the EGM if a majority of the LAMF Class A Ordinary Shares held by individuals are present in person, virtually or by proxy (or if held by a corporation or other non-natural person, by its duly authorized representative or proxy).

 

As of the Record Date for the EGM, 6,245,975 LAMF Class A Ordinary Shares would be required to achieve a quorum.

 

Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you attend virtually or in person at the EGM. If a LAMF Shareholder fails to attend virtually or in person at the EGM or fails to submit a valid proxy (or have its broker or other nominee submit one on its behalf), such shares will not be counted for the purposes of establishing a quorum. If a LAMF Shareholder does not attend the EGM or appoint a proxy, such shares will not be counted for the purposes of any vote. Abstentions, shares represented at the EGM online or by proxy but not voted on one or more of the Transaction Proposals, or a broker non-vote, so long as the LAMF Shareholder has given the broker or other nominee voting instructions on at least one of the Transaction Proposals in this proxy statement/prospectus, will each count as present for the purposes of establishing a quorum. However, neither a LAMF Shareholder’s failure to vote online or by proxy, a broker non-vote nor an abstention will be considered a vote cast at the EGM and thus will have no effect on the outcome of the any of the Transaction Proposals presented at the EGM.

 

Q. What happens to the Public Warrants I hold if I vote my LAMF Class A Ordinary Shares against approval of the Business Combination Proposal and the other Transaction Proposals presented at the EGM and validly exercise my Redemption Rights?

 

A. If the Business Combination is approved by LAMF Shareholders and the Business Combination is consummated, any Public Warrants you hold will be assumed by Holdco and will become Holdco Warrants following the Closing, regardless of how you vote your LAMF Class A Ordinary Shares or if you validly exercise your Redemption Rights with respect to your LAMF Class A Ordinary Shares. If the Business Combination is not completed, you will continue to hold your Public Warrants, and if LAMF does not otherwise consummate an initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), LAMF will be required to dissolve and liquidate, and your Public Warrants will expire worthless.

 

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Q. Who will solicit and pay the cost of soliciting proxies?

 

A. LAMF will pay the cost of soliciting proxies for the EGM. LAMF has engaged Morrow Sodali LLC to assist in the solicitation of proxies for the EGM. LAMF has agreed to pay Morrow Sodali LLC a fee of $15,000. LAMF will reimburse Morrow Sodali LLC for reasonable out-of-pocket expenses and will indemnify Morrow Sodali LLC and its affiliates against certain claims, liabilities, losses, damages and expenses. LAMF also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of LAMF Class A Ordinary Shares for their expenses in forwarding soliciting materials to beneficial owners of LAMF Class A Ordinary Shares and in obtaining voting instructions from those owners. LAMF’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or virtually. They will not be paid any additional amounts for soliciting proxies.

 

Q. Who can help answer my questions?

 

A. If you have questions about the Transaction Proposals, or if you need additional copies of this proxy statement/prospectus, or the proxy cards you should contact LAMF’s proxy solicitor:

 

Morrow Sodali LLC
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and brokers: (203) 658-9400
Email: LGVC.info@investor.morrowsodali.com

 

You may also contact LAMF at:

 

LAMF Global Ventures Corp. I
9255 Sunset Blvd., Suite 515
West Hollywood, California 90059
Telephone: (424) 343-8760

 

To obtain timely delivery, LAMF Shareholders must request the materials no later than five business days prior to the EGM.

 

You may also obtain additional information about LAMF by following the instructions in the section entitled “Where You Can Find More Information.”

 

If you intend to seek redemption of your LAMF Class A Ordinary Shares, you will need to send a letter demanding redemption and deliver your shares (and share certificates (if any) and other redemption forms (either physically or electronically)) to the Transfer Agent prior to 5:00 p.m., New York time, on the second business day prior to the EGM. If you have questions regarding the certification of your position or delivery of your share certificates, please contact:

 

Continental Stock Transfer & Trust Company
1 State Street —30th Floor
New York, New York 10004
Attention: SPAC Redemption Team
E-mail: spacredemptions@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

 

The following summary highlights material information from this proxy statement/prospectus. It does not contain all of the information that may be important to you. You are urged to read carefully this entire proxy statement/prospectus (including the financial statements and Annexes attached hereto) and other documents which are referred to in this proxy statement/prospectus in order to fully understand the Business Combination. See Where You Can Find More Informationon page 360. Most items in this summary include a page reference directing you to a more complete description of those items. Unless the context otherwise requires, all references in this subsection to LAMF,” “we,” “usor ourrefer to the business of LAMF Global Ventures Corp. I prior to the consummation of the Business Combination.

 

The Parties to the Business Combination

 

LAMF

 

LAMF is a blank check company incorporated on July 20, 2021, as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, or reorganization or similar business combination with one or more businesses or entities. While LAMF may pursue an acquisition opportunity in any business, industry or geographic location, LAMF has focused on opportunities in media, entertainment and sports, as well as within e-commerce and technology, leveraging the expansive professional network and operating expertise of its management team.

 

The Sponsor is LAMF SPAC Holdings I LLC, a Cayman Islands limited liability company. LAMF Units, LAMF Class A Ordinary Shares and LAMF Warrants trade on Nasdaq under the symbols “LGVCU”, “LGVC”, and “LGVCW”, respectively. The mailing address of LAMF’s principal executive office is 9255 Sunset Blvd., Suite 515, West Hollywood, California and its telephone number is (424) 343-8760.

 

Nuvo

 

Incorporated in Israel on June 28, 2006, Nuvo is a women’s health and connected pregnancy care company, and has developed INVU by Nuvo, an FDA-cleared, prescription-initiated, remote pregnancy monitoring platform that enables the delivery of remote non-stress tests and maternal and fetal heart rate monitoring, helping expectant mothers adhere to their prescribed care plan. In 2021, Nuvo pursued a traditional initial public offering, but elected to withdraw the related registration statement and remain a private company in December 2021 due to challenging market conditions for initial public offerings at that time. This summary highlights selected information about Nuvo appearing elsewhere in this proxy statement/prospectus. To better understand the Business Combination and proposals to be considered at the Extraordinary General Meeting, you should read this entire proxy statement/prospectus carefully, including the annexes and the information presented under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nuvo,” “Business of Nuvo” and Nuvo’s financial statements and notes thereto.

 

Nuvo is leading the transformation from a world where pregnancy care is limited by outdated technology and barriers to accessing care to a world where data-driven, clinically relevant, actionable insights can be accessed both at home and in the clinic, during the INVU monitoring period, by an expectant mother and her clinician. Current poor fetal and maternal health outcomes, limited accessibility to care, and soaring costs all indicate the need for a change in the way that pregnancies are monitored and managed, and Nuvo believes its innovative solution, which it refers to as its INVU platform, is the only solution that is positioned to address complete accessibility to care while looking significantly deeper into the pregnancy than standard of care solutions do today. Recognizing that the tools used today to monitor and manage pregnancies may not be the same tools used a decade from now, Nuvo believes its solution is well positioned to be at the forefront of this market shift. Strategically, Nuvo’s platform is currently being commercialized by tapping into a key part of the pregnancy journey, fetal non-stress tests (“NSTs”), by enabling these tests to be conducted remotely with clinical accuracy that has been demonstrated to be equivalent to the standard of care based off of Nuvo’s clinical studies and consumer-grade ease of use (see “Business of Nuvo — Clinical Studies”). NSTs are medically necessary pregnancy screening procedures that measure fetal heart rate and reaction to movement to assess fetal well-being. NSTs are most commonly conducted with cardiotocography (“CTG”) machines, which were designed for intrapartum monitoring in clinics by experienced healthcare professionals. Through a combination of advanced wearable technology, AI & machine learning, and compelling user experiences (for expectant mothers and clinicians), INVU by NuvoTM (“INVU”) enables increased access to care, deeper insights into maternal-fetal health, reduced clinical staff burden, and improved patient satisfaction.

 

INVU is composed of a hardware component (wearable), with digital signal processing and cloud analytics, and interfaces for every participant involved in the pregnancy care. The hardware component of our INVU platform is a proprietary self-administered wireless sensor band that clinicians prescribe to expectant mothers who wear the sensor band during virtual visits to capture real-time data on key maternal and fetal health metrics. The data is then digitized and sent wirelessly for analysis on Nuvo’s cloud-based servers by its sophisticated algorithms. Today, when obstetrics clinicians connect to the INVU platform, they have access to a digital dashboard that contains fetal and maternal heart rate and uterine activity tracings recorded during the session and data derived from these measurements for all expectant mothers and unborn babies in their care that use the INVU platform.

 

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Currently, Nuvo’s products are categorized as Class II devices and subject to the premarket notification requirements under section 510(k) of the Federal Food, Drug, and Cosmetic Act of 1938 (“FDCA”). Nuvo’s INVU platform received 510(k) clearance from the FDA in March 2020 to conduct a five-minute trace of maternal and fetal heart rate (“MHR” and “FHR”), for singleton pregnancies from the 32nd week of pregnancy until the beginning of labor. This five-minute trace is referred to as a fetal surveillance and to this time frame as the INVU monitoring period. Maternal uterine activity (“MUA”), more commonly known as contractions, and its intended use, in conjunction with MHR and FHR, for NSTs during the INVU monitoring period, received FDA clearance in May 2021, allowing Nuvo to perform fetal surveillance and measure MUA, and as a result, offer NSTs during the INVU monitoring period. Nuvo also received ISO 13485 certification in February 2020 for the development, manufacturing, marketing and sales of pregnancy monitoring devices. Additionally, in November 2020 Nuvo received certification from the Medical Device Division, or AMAR, of the Ministry of Health in Israel, which grants the ability to commercialize its INVU technology in Israel. This certification is valid through May 2024 and the approval and indications for use are in accordance with the FDA clearance mentioned above. Approval or clearance from the FDA, or comparable regulatory agency in other jurisdictions, to capture certain measurements and perform certain tests using our INVU platform, is not guaranteed and may take longer than planned. Also, regulatory approval in one jurisdiction does not mean that we will succeed in obtaining regulatory approval in other jurisdictions. Nuvo is commercializing its INVU platform with an initial focus on large healthcare systems and obstetrician-physician practice management groups as Nuvo believes these groups will be most effective at implementing its technology in clinical practice due to the continuous flow of expectant mothers that they care for and their desire for improved outcomes at reduced cost that Nuvo believes its INVU platform will ultimately enable. Nuvo believes its INVU platform is the first FDA-cleared device to measure FHR, MHR and MUA passively, remotely and with a self-administered wireless sensor band that utilizes direct physiological signals during the antepartum period for NSTs. Nuvo believes that the deep and rich data outputs acquired by its technology during each monitoring session, and other metrics based on its collected data will be critical to pregnancy management tests and procedures it plans to offer in the future.

 

Nuvo has over a dozen commercial agreements, including purchase orders, with health systems, large private practice groups and independent women’s health practices in the United States and Israel. If Nuvo demonstrates that our INVU platform increases monitoring compliance, improves quality of care and healthcare outcomes, as well as reduces payer costs, it expects to focus on seeking long-term contracts with payers that allow Nuvo to benefit from a percentage of any cost-savings that it achieves, which Nuvo believes will incentivize payers to encourage their obstetrician networks and expectant mothers to utilize its INVU platform. Nuvo aspires to develop an INVU-centered ecosystem for broader pregnancy-related and mother-centric services, and to provide every expectant mother an opportunity for access to clinical-quality care for herself and her unborn baby, independent of her geographic location.

 

As more expectant mothers have access to and use Nuvo’s INVU platform, Nuvo intends to use the increasing amount of data it captures and aggregates to identify patterns and trends that are associated with certain risks and outcomes that it expects will enable Nuvo to make highly useful and actionable predictive recommendations to benefit its user community and population health in general. Nuvo expects that its ability to develop biomarkers and predictive analytics will set Nuvo apart from other pregnancy management monitoring systems and make Nuvo more effective at enabling proactive pregnancy management to improve outcomes for expectant mothers and unborn babies.

 

Holdco and Assetco

 

Holdco was incorporated on July 20, 2023, for the sole purpose of effectuating the transactions described herein. Holdco has no material assets and does not operate any businesses.

 

Assetco was incorporated on May 30, 2023, for the sole purpose of effectuating the transactions described herein. Assetco has no material assets and does not operate any businesses.

 

The Business Combination

 

In accordance with the terms and subject to the conditions of the Business Combination Agreement, the parties have agreed that, on the terms and subject to the conditions set forth therein, (i) one (1) day prior to the Closing Date, LAMF shall be merged with and into Assetco, with Assetco as the surviving entity of such merger, and (ii) on the Closing Date, Merger Sub shall be merged with and into Nuvo, with Nuvo as the surviving entity of such merger. Pursuant to the Mergers, Nuvo shall become a wholly owned indirect subsidiary of Holdco, which shall be the new public company following the consummation of the Acquisition Merger.

 

Pursuant to the terms of the Business Combination Agreement, (i) Nuvo shall elect on IRS Form 8832 to be treated as an entity disregarded as separate from its owner under Treasury Regulations Section 301.7701-3, effective as of the day immediately after the Closing Date, and (ii) after the Mergers, the SPAC Surviving Company shall distribute any remaining cash in the Trust Account to Holdco and shall be liquidated (the “Liquidation”).

 

For more information about the Business Combination see the section entitled “The Business Combination Agreement.” A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A.

 

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Pre-Business Combination Structure

 

The following diagram depicts the simplified organizational structure of LAMF, Holdco and Nuvo immediately before the SPAC Merger.

 

 

The following diagram depicts the simplified organizational structure of LAMF, Holdco and Nuvo immediately before the Acquisition Merger.1

 

 

 
1 Pursuant to the Business Combination Agreement, at the SPAC Effective Time, the 1,000,000 Holdco Ordinary Shares held by Daniel Gilcher as the founder of Holdco shall be automatically forfeited.

 

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Post-Business Combination Structure

 

The following diagram depicts the simplified organizational structure of Holdco and its subsidiaries immediately after the consummation of the Business Combination.

 

 

Post-Liquidation Structure

 

The following diagram depicts the simplified organizational structure of Holdco and its subsidiaries immediately after the Liquidation.

 

 

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Consideration to be Received in the Business Combination

 

LAMF Shareholders Merger Consideration

 

Pursuant to the SPAC Merger, each LAMF Class A Ordinary Share issued and outstanding immediately prior to the effective time of the SPAC Merger will be automatically cancelled and converted into the right to receive one Holdco Ordinary Share.

 

Nuvo Shareholders Merger Consideration

 

At the Acquisition Effective Time, by virtue of the Acquisition Merger and without any action on the part of Nuvo, Merger Sub or any holders of Nuvo Shares or capital stock of Merger Sub, all Nuvo Shares and Nuvo Preferred Shares that are owned by Nuvo or any wholly owned subsidiary of Nuvo (collectively, “Nuvo Treasury Shares”) immediately prior to the Acquisition Effective Time, if any, shall be deemed to have been transferred to Assetco and no consideration shall be delivered or deliverable in exchange therefor.

 

For a discussion of the conversion of Nuvo Shares, conversion of Nuvo Crossover Preferred Shares, treatment of the Nuvo Warrants, conversion of the Merger Sub Shares and treatment of the Nuvo Options, see “The Business Combination Agreement – Nuvo Shareholders Merger Consideration.”

 

Conditions to Complete the Business Combination

 

The obligations of each party to effect the Mergers and the other Transactions shall be subject to the satisfaction or, to the extent waivable, waiver at or prior to the Closing of the following conditions:

 

At the EGM (including any adjournments thereof), the SPAC Merger and SPAC Plan of Merger (the “Required SPAC Shareholder Matter”), shall have been duly adopted by the LAMF shareholders in accordance with the Cayman Companies Act, the Existing Governing Documents and the Nasdaq rules and regulations, as applicable.

 

The Nuvo Shareholder Approval shall have been obtained in accordance with applicable law and the governing documents of Nuvo.

 

All applicable waiting periods (and any extensions thereof) under antitrust laws will have expired or otherwise been terminated.

 

No provision of any applicable Legal Requirement prohibiting, enjoining, restricting or making illegal the consummation of the Transactions shall be in effect, and no temporary, preliminary or permanent restraining order enjoining, restricting or making illegal the consummation of the Transactions will be in effect or shall be threatened in writing by a Governmental Entity of competent jurisdiction.

 

The Holdco Shareholders shall have voted to amend and restate the articles of association of Holdco in the form of public company articles of association mutually agreed by LAMF and Nuvo, as of immediately prior to the Acquisition Effective Time.

 

The shares of Holdco to be issued pursuant to the Business Combination Agreement shall be approved for listing upon the Closing on Nasdaq or such other national securities exchange that may be mutually agreed between the parties.

 

This Registration Statement shall have become effective in accordance with the provisions of the Securities Act, and shall not be subject to any stop order or proceeding (or threatened proceeding by the SEC) seeking a stop order with respect to this Registration Statement.

 

The Israeli Tax Rulings (as defined in the Business Combination Agreement) shall have been obtained from the Israel Tax Authority and be in effect.

 

At least 50 days shall have elapsed after the filing of the Merger Proposal with the Registrar of Companies of the State of Israel and at least 30 days shall have elapsed after Nuvo Shareholder Approval has been received.

 

The 15D Exemption (as defined in the Business Combination Agreement) shall have been obtained.

 

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The obligations of Nuvo, Holdco and Assetco to consummate and effect the Mergers and the other Transactions shall be subject to the satisfaction at or prior to the Closing, as applicable, of each of the following conditions, any of which may be waived, in writing, exclusively by Nuvo:

 

The Fundamental Representations of LAMF (as defined in the Business Combination Agreement) shall be true and correct in all material respects on and as of the date of the Business Combination Agreement and on and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date); certain representations and warranties of LAMF contained in the Business Combination Agreement shall be true and correct in all respects as of the date of execution of the Business Combination Agreement and as of the Closing Date; and all other representations and warranties of LAMF set forth in the Business Combination Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “LAMF Material Adverse Effect” or any similar limitation contained under the Business Combination Agreement) on and as of the date of the Business Combination Agreement and on as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where any failures of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a LAMF Material Adverse Effect.

 

LAMF shall have performed or complied with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it on or prior to the Closing Date, in each case in all material respects.

 

No LAMF Material Adverse Effect shall have occurred since the date of the Business Combination Agreement.

 

LAMF shall have delivered to Nuvo a certificate, signed by an authorized representative of LAMF and dated as of the Closing Date, certifying as to certain conditions to the closing of the Transactions set forth in the Business Combination Agreement.

 

LAMF and Merger Sub shall have delivered or shall stand ready to deliver all of the certificates, instruments, contracts and other documents specified to be delivered by it under the Business Combination Agreement, including the Registration Rights Agreement, duly executed by the Sponsor, and the Warrant Assumption Agreement, duly executed by LAMF.

 

The obligations of LAMF and Merger Sub to consummate and effect the Mergers and the other Transactions shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, exclusively by LAMF:

 

The Fundamental Representations of Nuvo (as defined in the Business Combination Agreement) shall be true and correct in all material respects on and as of the date of the Business Combination Agreement and on as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date); certain representations and warranties of Nuvo contained in the Business Combination Agreement shall be true and correct in all respects as of the date of execution of the Business Combination Agreement and as of the Closing Date; and all other representations and warranties of Nuvo set forth in the Business Combination Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Nuvo Material Adverse Effect” or any similar limitation contained in the Business Combination Agreement) on and as of the date of the Business Combination Agreement and on as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date), except where any failures of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Nuvo Material Adverse Effect.

 

Nuvo, Holdco and Assetco shall have performed or complied with all agreements and covenants required by the Business Combination Agreement to be performed or complied with by it at or prior to the Closing Date, in each case in all material respects.

 

No Nuvo Material Adverse Effect shall have occurred since the date of the Business Combination Agreement.

 

Nuvo shall have delivered to LAMF a certificate, signed by an authorized representative of Nuvo and dated as of the Closing Date, certifying as to certain conditions to the closing of the transactions set forth in the Business Combination Agreement.

 

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All of the Nuvo SAFEs shall have been converted into Nuvo Shares immediately prior to the Acquisition Effective Time.

 

All of the Nuvo Warrants shall have been, or shall be, converted into Converted Warrants at the Acquisition Effective Time.

 

All of the Nuvo Convertible Loans shall have been converted into Nuvo Shares immediately prior to the Acquisition Effective Time.

 

Nuvo, Holdco and Assetco shall have delivered, or caused to be delivered, or shall stand ready to deliver all of the certificates, instruments, contracts and other documents specified to be delivered by it under the Business Combination Agreement, including the Registration Rights Agreement, duly executed by Holdco and the parties thereof, and the Warrant Assumption Agreement, duly executed by Holdco.

 

Termination of the Business Combination Agreement

 

The Business Combination Agreement provides customary termination rights for parties. In the event of termination of the Business Combination Agreement, the Business Combination Agreement will become void and have no effect and the Transactions shall be abandoned, without any liability on the part of any party thereto, other than liability of any party thereto for any intentional breach of the Business Combination Agreement by such party prior to such termination or fraud; provided, that obligations under the Confidentiality Agreement (as defined in the Business Combination Agreement) and certain obligations related to the Trust Account and certain other provisions required under the Business Combination Agreement shall, in each case, survive any termination of the Business Combination Agreement. See “The Business Combination Agreement – Termination of the Business Combination Agreement.”

 

Certain Agreements Related to the Business Combination

 

Sponsor Support Agreement

 

Concurrently with the execution of the Business Combination Agreement, LAMF, Nuvo, Holdco, the Sponsor and the LAMF Insiders party thereto (the “Sponsor Parties”) entered into the Sponsor Support Agreement. Under the Sponsor Support Agreement, the Sponsor Parties agreed, among other things, to:

 

vote in favor of the adoption and approval of the Business Combination;

 

be bound by certain other covenants and agreements related to the Business Combination;

 

be bound by certain transfer restrictions with respect to LAMF securities during the pendency of the Business Combination; and

 

not redeem any LAMF Class A Ordinary Shares in connection with the Business Combination.

 

Pursuant to the Sponsor Support Agreement, the Sponsor Parties agreed to not transfer any LAMF Class A Ordinary Shares held by them for a period of six months following the Closing (the “Sponsor Parties Lock-up Period”), other than (i) the LAMF Class A Ordinary Shares to be transferred by the Sponsor to certain unaffiliated third parties who executed non-redemption agreements with LAMF and the Sponsor in May 2023, which will be free from contractual transfer restrictions following the Closing, or (ii) the Private Placement Warrants or LAMF Class A Ordinary Shares that were included as part of the units purchased by the Sponsor in a private placement that occurred simultaneously with the completion of the IPO, which will continue to be subject to transfer restrictions for 30 days following the Closing.

 

With respect to 2,450,980 LAMF Class A Ordinary Shares (the “Pooled Shares”), the Sponsor Parties Lock-up Period will expire on the later of (a) six months after the Closing Date and (b) the earliest of (i) Holdco or Nuvo having received, on or after the Closing, gross proceeds of at least $25,000,000 from an equity financing (excluding the Interim Financing) (a “Financing Transaction”), (ii) Holdco having closed its first marketed/underwritten follow-on offering (a “Follow-on Offering”) and (iii) Holdco having completed a change of control transaction.

 

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Pursuant to the Sponsor Support Agreement, (i) in the event Holdco consummates a Follow-on Offering during the Sponsor Parties Lock-up Period and the aggregate amount raised in any Financing Transaction and such Follow-on Offering is less than $2,000,000, the Sponsor has agreed to forfeit a pro rata portion of 500,000 Lock-Up Shares (as defined therein) representing the difference between $2,000,000 and such aggregate amount raised, and (ii) in the event Holdco consummates a Follow-on Offering during the Sponsor Parties Lock-up Period and the aggregate amount raised in any Financing Transaction and such Follow-on Offering is less than $25,000,000 (excluding amounts received in connection with the Interim Financing and any investment counted for purposes of (i)), the Sponsor has agreed to forfeit a pro rata portion of the Pooled Shares representing the difference between $25,000,000 and such aggregate amount raised. The Sponsor has also agreed to reasonably support any Follow-on Offering during the Sponsor Parties Lock-up Period.

 

The Sponsor Support Agreement provides the Sponsor the right to designate one observer on the Holdco Board so long as the Sponsor Parties and certain other investors in the Interim Financing beneficially own at least 5% of the outstanding Holdco Ordinary Shares (after taking into account convertible securities beneficially owned by such parties).

 

In connection with the Interim Financing, the Sponsor has agreed, pursuant to the Sponsor Support Agreement, to forfeit up to 1,000,000 LAMF Class A Ordinary Shares pro rata with respect to up to $10,000,000 raised in the Interim Financing (exclusive of $3,000,000 in commitments obtained prior to the date of the Sponsor Support Agreement). In addition, Nuvo has agreed to issue 3,823,530 Nuvo Shares in the Interim Financing, pro rata with respect to the approximately $13,000,000 raised in the Interim Financing.

 

Registration Rights Agreement

 

At the Closing, LAMF, Nuvo, Holdco, Sponsor, Simon Horsman, Jeffrey Soros, Morgan Earnest, Christina Spade, Adriana Machado, and Michael Brown, as executive officers and/or directors of LAMF prior to the Closing, Keith Harris, as advisor to LAMF prior to the Closing, LAMF SPAC I LLC, Nweis Investments LLC, Atoe LLC, 10X LAMF SPC SPV LLC, 10X LLC, ASCJ Global LLC – Series 16, and Cohen Sponsor LLC – A16 RS, as the members of the Sponsor, certain Nuvo Shareholders, and the executive officers and directors of Nuvo prior to the Closing, will enter into the Registration Rights Agreement, pursuant to which, among other things, Holdco will agree to agree to register for resale, pursuant to Rule 415 under the Securities Act, of certain Holdco securities (the “Registrable Securities”) that are held by the parties thereto from time to time. The parties will be granted certain customary demand and piggyback registration rights under the Registration Rights Agreement, which are subject to customary terms and conditions, including with respect to cooperation and reduction of underwritten shelf takedown provisions, with respect to the securities of Holdco

 

Shareholder Support Agreement and Lockup

 

Concurrently with the execution of the Business Combination Agreement, LAMF, Nuvo, Holdco and certain Nuvo Shareholders entered into the Shareholder Support Agreement, pursuant to which such Nuvo Shareholders agreed, among other things, to vote any Nuvo Shares held by them in favor of the Business Combination, the Acquisition Merger, and such other actions as contemplated in the Business Combination Agreement for which the approval of the Nuvo Shareholders is required.

 

Pursuant to the Shareholder Support Agreement, the Nuvo Shareholders party thereto have agreed to a lock-up (the “Nuvo Lock-up” and such shareholders, the “Nuvo Lockup Parties”), pursuant to which, the Nuvo Lockup Parties will be subject to certain transfer restrictions on the Holdco Ordinary Shares (or any instruments exercisable or exchangeable for, or convertible into, Holdco Ordinary Shares) held by each such Nuvo Lock-up Party as of the Closing Date for the six month period following the Closing Date, subject to certain customary exceptions. All Nuvo Shareholders will be subject to a six month restriction on transfers of Holdco Ordinary Shares and Holdco Preferred Shares effective as of the Closing pursuant to the Amended Articles, subject to exceptions as contained therein. The Holdco Board will, prior to the Closing, preemptively waive such lockup with respect to the Holdco Shares and Holdco Preferred Shares held by each Nuvo Shareholder that holds less than one percent of the Nuvo Shares immediately prior to the Closing (the “Nuvo Lockup Exempt Shareholders”). The Holdco securities held by the Nuvo Lockup Exempt Shareholders exempt from the foregoing lockup are expected to represent approximately 15.92% of the Holdco Ordinary Shares and 3.45% of the Holdco Preferred Shares to be outstanding immediately after the Closing.

 

PIPE Subscription Agreements

 

As of the date of this proxy statement/prospectus, no party to the Business Combination Agreement has entered into any private investment in public equity (“PIPE Investment”) transaction which, in the context of the Business Combination, means a private investment in Holdco Ordinary Shares, with any investor. The Business Combination Agreement includes a covenant providing that LAMF and Nuvo may enter into certain private placement financing transactions, as more fully described in “Certain Agreements Related to the Business Combination — PIPE Subscription Agreements and Additional Permitted Financings” in this proxy statement/prospectus.

 

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Interim Financing Agreements

 

In connection with the Business Combination, and as contemplated by the BCA, Nuvo and Holdco entered into Interim Financing Agreements, with Interim Financing Investors, to effect a cross-over interim round of financing, or the Interim Financing, which provided Nuvo with an aggregate of approximately $13,000,000 of gross proceeds. Pursuant to the Interim Financing Agreements, (i) beginning in August 2023 Nuvo sold to the Interim Financing Investors Nuvo Crossover Preferred Shares, at a price of $7.03 per share, and (ii) upon and subject to the Closing, Holdco will issue 3,823,530 Holdco Ordinary Shares to the Interim Financing Investors, such shares being referred to as the Interim Financing Incentive Shares. Certain of the Interim Financing Investors are affiliated with LAMF and the Sponsor and intend to invest an aggregate of $2,000,000 in the Interim Financing. These affiliates are: (i) Jeffrey Soros, LAMF’s Chairman, who intends to invest $500,000, (ii) Tamim Mourad, a strategic investor of LAMF and an affiliate of a member of the Sponsor, who intends to invest $500,000 and (iii) Gaingels 10X Capital Diversity Fund I, LP, a Delaware limited partnership and an affiliate of a member of the Sponsor, that intends to invest $1,000,000. The following summarizes a number of the key provisions in the Interim Financing Agreements:

 

Except for the Interim Financing Agreement with LAMF, Nuvo is precluded from creating, authorizing or issuing any shares with the same or more favorable rights as those associated with the shares purchased pursuant to the Interim Financing Agreements.

 

Nuvo committed to entering into a registration rights agreement with the Interim Financing Investors within 60 days from the consummation of the Interim Financing to register the resale, pursuant to Rule 415 under the Securities Act, of certain Holdco Ordinary Shares and other equity securities of Holdco that are held by such parties thereto from time to time.

 

Holdco committed to delivering (and Nuvo committed to causing Holdco to deliver) Interim Financing Incentive Shares immediately following the Closing.

 

Nuvo committed to various reporting and information rights for the Interim Financing Investors, including annual audited financial statements and quarterly financial statements.

 

The Interim Financing Agreements contain customary representations and warranties and an indemnity in favor of the Interim Financing Investors for breaches by Nuvo of its covenants, representations and warranties thereunder. The Interim Financing Agreement with LAMF includes several additional conditions precedent to LAMF’s participation in the Interim Financing, including without limitation, Nuvo’s execution of the Philips MPA (as defined below) as well as the Company and LAMF executing the BCA.

 

In connection with the Interim Financing Agreements, Nuvo obtained the requisite approvals and filed an amended & restated articles of association, which authorized the formation and issuance of the Nuvo Crossover Preferred Shares. Pursuant to Nuvo’s amended & restated articles of association, the Interim Financing Investors received a liquidation and dividend preference, ranking them ahead of all other classes of Nuvo shareholders, equal to the greater of (i)the sum of three times the original issuance price for the Nuvo Crossover Preferred Shares, or (ii) the amount such shareholders would actually receive if such Nuvo Crossover Preferred Shares had been converted into Nuvo Shares immediately prior to a distribution event; in each case, plus any dividends declared but unpaid on such share.

 

SAFE Amendment

 

From June 2020 through April 2023, Nuvo issued to certain investors three series of Simple Agreements for Future Equity (the “SAFEs” and the SAFEs issued in such series, the “Nuvo SAFEs”), pursuant to which such investors invested cash in Nuvo in the aggregate principal amount of $22.97 million. Pursuant to the original terms of the Nuvo SAFEs, the principal amounts under each of the Nuvo SAFEs was convertible into shares of Nuvo upon the earlier of Nuvo’s next financing round yielding to Nuvo at least $15 million or $20 million of proceeds, a liquidity event, change of control or an initial public offering. For additional information on the original terms of the Nuvo SAFEs see, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Nuvo—Liquidity and Capital Resources—Sources of Liquidity”.

 

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In August and September 2023, Nuvo obtained the necessary consents to amend the Nuvo SAFEs (the “Nuvo SAFE Amendment”) in order to equalize the economic conversion terms across the series of Nuvo SAFEs, such that: (a) upon the consummation of an applicable equity financing, the purchase amount under each Nuvo SAFE shall convert into Nuvo’s shares at a 25% discount over the price per share in such financing round, provided that the pre-money valuation upon which the principal amount will convert into Nuvo shares will not exceed $200 million; and (b) immediately prior to the consummation of the Business Combination (which shall not otherwise constitute a Liquidity Event pursuant to the Nuvo SAFE Amendment), the purchase amount under the Nuvo SAFEs will convert into Nuvo Shares based on (1) the price per share determined by dividing $150 million by the then issued and outstanding share capital of Nuvo (assuming exercise or conversion of all outstanding vested and unvested options and/or warrants, convertible debt instruments and similar instruments, but excluding any SAFEs and other convertible instruments that are outstanding as of immediately prior to the Closing) and including all shares reserved and available for future grant under any equity incentive or similar plan of Nuvo, in each case as of immediately prior to the Closing, or (2) the price per share imputed to the Nuvo Shares pursuant to the Business Combination Agreement multiplied by 75%, whichever results in the issuance to the Nuvo SAFE holder of a greater number of Nuvo Shares. Accordingly, upon and in connection with the Closing, Nuvo expects to issue approximately 3.56 million Nuvo Shares (based on calculations assuming the Closing takes place by December 31, 2023) in satisfaction and discharge of its obligations under the outstanding amended Nuvo SAFEs.

 

Nuvo Loan Amendment

 

During 2022 and 2023, Nuvo entered into certain loan agreements pursuant to which it borrowed from a number of lenders an aggregate principal amount of $7.9 million convertible loans (the “Nuvo Convertible Loans”), of which $6.83 million in principal remains outstanding and which principal amount carries a two percent (2%) monthly interest. Pursuant to the original Nuvo Convertible Loan terms, the principal amount and any accrued and unpaid interest was to be repaid within one year following the entering into the appliable agreement, provided that Nuvo had the option to extend such term by one year subject to paying an additional fee equal to twenty percent (20%) of the principal amount (the “Extension Fee”), applied to the “purchase amount” of the SAFE issued to each Nuvo Convertible Loan lender. As an incentive to provide the Nuvo Convertible Loans, each Nuvo Convertible Loan investor received a SAFE in connection with entry into the Nuvo Convertible Loan agreement, representing a “purchase amount” equal to 20% of such investor’s Nuvo Convertible Loan’s principal, which purchase amount may be increased by (i) any amount of the Nuvo Convertible Loan’s principal and/or any accrued and unpaid interest thereon at the investor’s option and (ii) the Extension Fee.

 

In August and September 2023, Nuvo obtained the necessary consents to amend the Nuvo Convertible Loans (the “Nuvo Loan Amendment”), such that, in exchange for the Extension Fee under the original loan terms, the maturity date of each loan was extended to the earlier of the second anniversary of the applicable loan or the Closing. In addition, pursuant to the Nuvo Loan Amendment, each lender has agreed to apply the principal amount of the Nuvo Convertible Loan, the accrued and unpaid interest thereon and the Extension Fee to the purchase amount of the related Nuvo SAFE. See “Certain Agreements Related to the Business Combination — Nuvo SAFE Amendment”. As such, in connection with the Closing, Nuvo’s obligations under the Nuvo Convertible Loans will convert to an aggregate SAFE purchase amount of approximately $11.97 million, which will then convert, pursuant to the terms of the amended Nuvo SAFEs and Nuvo SAFE Amendment, into approximately 1.86 million Nuvo Shares which will be exchanged for Holdco Shares pursuant to the terms of the Business Combination Agreement.

 

Warrant Assignment, Assumption and Amendment Agreement

 

At or prior to the SPAC Effective Time, LAMF, Holdco, and Continental will enter into a warrant assignment, assumption and amendment agreement. Subject to the Closing, such agreement will amend the LAMF Warrant Agreement, as LAMF will assign all its rights, title and interest in the LAMF Warrant Agreement to Holdco. Pursuant to the amendment, all LAMF Warrants will no longer be exercisable for shares of LAMF Class A Ordinary Shares, but instead will be exercisable for Holdco Ordinary Shares on substantially the same terms that were in effect prior to the SPAC Effective Time under the terms of the LAMF Warrant Agreement.

 

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Ownership of, and Voting Rights in, Holdco Upon Consummation of the Business Combination

 

As discussed further in the Amended Articles, each holder of Holdco Ordinary Shares will be entitled to one (1) vote for each Holdco Ordinary Share held of record by such holder on all matters subject to a vote of the Holdco Shareholders.

 

The following table illustrates the varying levels of equity interest and voting power in Holdco immediately following the consummation of the Business Combination based on the varying levels of redemptions of Public Shares by Public Shareholders and based on the additional assumptions described in the notes to the table below (without taking into account any additional dilution sources, such as the Public Warrants).

 

   

Voting Power in Holdco(i)

 
   

No

Redemption Scenario(ii)

   

Maximum Redemption Scenario(iii)

 
   

Percentage of Voting Rights of

Outstanding Holdco Ordinary Shares(3)

 
Public Shareholders     7.2 %     -  
Sponsor, LAMF Insiders and Sponsor Investors     23.1 %     24.9 %
Nuvo Shareholders     69.7 %     75.1 %
Total     100.0 %     100.0 %

 

 
i. As of immediately following the consummation of the Business Combination. Excludes Holdco Warrants and the effect of any other transactions that may be entered into after the date of this proxy statement/prospectus. For a more detailed description of share ownership upon consummation of the Business Combination, see “Beneficial Ownership of Securities.”
ii. The “No Redemption Scenario” assumes no redemptions of the currently outstanding 12,491,949 LAMF Class A Ordinary Shares in connection with the Business Combination.
iii. The “Maximum Redemption Scenario” assumes redemptions of 2,952,616 LAMF Class A Ordinary Shares in connection with the Business Combination that would be at approximately $10.54 per share based on Trust Account figures as of June 30, 2023.

 

The foregoing table is provided for illustrative purposes only. If the actual facts are different than the assumptions set forth above, the ownership and voting power percentages set forth above will be different. For more information about the consideration to be received in the Business Combination, the two alternative redemption scenarios and the underlying assumptions, see “Presentation of Certain Assumptions Relating to the Business Combination,” “Unaudited Pro Forma Condensed Combined Financial Information” and “The Business Combination Agreement - Consideration to be Received in the Business Combination.” In addition, the above share numbers do not take into account additional sources of dilution, including any awards that are issued under the 2023 Plan following the consummation of the Business Combination.

 

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Redemption Rights

 

If you are a Public Shareholder, you may redeem your LAMF Class A Ordinary Shares for cash equal to your pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to LAMF to pay its taxes. Holders of the Public Warrants do not have redemption rights with respect to such warrants in connection with the Business Combination. The Sponsor and the LAMF Insiders have agreed to waive their redemption rights with respect to any LAMF Class A Ordinary Shares they may have acquired during or after the IPO in connection with the completion of the Business Combination. The Sponsor and the LAMF Insiders did not receive any consideration in exchange for such waiver of redemption rights.

 

For illustrative purposes, based on the amount held in the Trust Account as of December 6, 2023 of $32.0 million, the estimated per share redemption price would have been approximately $10.84. Public Shareholders may elect to redeem their Public Shares even if they vote for the Business Combination Proposal and the other Transaction Proposals. The Existing Governing Documents provide that a Public Shareholder, acting together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a partnership, limited partnership, syndicate, or other group for purposes of acquiring, holding, or disposing of any LAMF Class A Ordinary Shares, will be restricted from exercising this Redemption Right in an amount of shares exceeding 15% of the Public Shares in the aggregate without our prior consent. There will be no Redemption Rights with respect to the warrants.

 

Each redemption of Public Shares by Public Shareholders will decrease the amount in the Trust Account, which held $32.0 million as of December 6, 2023. See the section below for the procedures to be followed if you wish to redeem your shares for cash.

 

LAMF will pay the redemption price to LAMF Shareholders who properly exercise their Redemption Rights promptly following the Closing. The Closing is subject to the satisfaction of a number of conditions. As a result, there may be a significant delay between the deadline for exercising redemption requests prior to the EGM and payment of the redemption price. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with LAMF’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to the Transfer Agent and decide within the required timeframe not to exercise your Redemption Rights, you may request that the Transfer Agent return the shares. You may make such request by contacting the Transfer Agent at the email or address listed above.

 

Description of Holdco Share Capital

 

Holdco is a company incorporated under the laws of the State of Israel. Its affairs are governed by the Amended Articles and the Companies Law.

 

Upon consummation of the Business Combination, the authorized share capital of Holdco will be [●], of which [●] shall be designated as Holdco Ordinary Shares and [●] shall be designated as Holdco Preferred Shares. As of the date of this proxy statement/prospectus, there were 1,000,000 Holdco Ordinary Shares issued and outstanding. See “Description of Holdco Securities.”

 

Holdco Management Following the Business Combination

 

The Business Combination Agreement provides that, immediately following the Closing, the Holdco Board will consist of six directors, initially composed of five directors nominated by Nuvo and one director designated by the Sponsor, at least four of which will be independent. As a result, the Holdco Board following the Closing is expected to be comprised of Laurence Klein, Oren Oz, Gerald Ostrov (Chairman), Robert Powell, Christina Spade and [●]. The Holdco Board will be divided into three classes, each serving staggered, three-year terms.

 

Holdco’s executive team following the Closing is expected to be comprised of Kelly Londy (Chief Executive Officer) and Amit Reches (Chief Technology Officer), each of whom serve at the discretion of the Holdco Board. See “Holdco Management Following the Business Combination.”

 

Accounting Treatment

 

The Business Combination will be accounted for as a reverse recapitalization, with LAMF being treated as the “acquired” company for financial reporting purposes. For accounting purposes, the reverse recapitalization will be the equivalent of Nuvo issuing shares for the net assets of LAMF, accompanied by a recapitalization as Holdco. As a result of the Business Combination being an in-substance capital transaction, Holdco’s qualifying transaction costs will be treated as an equivalent to equity issuance costs, reflected as a reduction in additional paid-in capital, rather than as an expense, in unaudited pro forma condensed combined financial information. The net assets of both LAMF and Nuvo will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the reverse recapitalization will be those of Nuvo. See “Unaudited Pro Forma Condensed Combined Financial Information—Accounting for the Business Combination.”

 

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Appraisal or Dissenters’ Rights

 

No appraisal or dissenters’ rights are available to holders of LAMF Class A Ordinary Shares or the LAMF Warrants in connection with the ordinary resolution to approve the Business Combination. However, in respect to the special resolution to approve the SPAC Merger, under section 238 of the Companies Act, shareholders of a Cayman Islands company ordinarily have dissenters’ rights with respect to a statutory merger.

 

The Companies Act prescribes when dissenters’ rights will be available and provides that shareholders are entitled to receive fair value for their shares if they exercise those rights in the manner prescribed by the Companies Act. Pursuant to section 239(1) of the Companies Act, dissenters’ rights are not available if an open market for the shares exists on a recognized stock exchange, such as Nasdaq, for a specified period after the merger is authorized (such period being the period in which dissenter’s rights would otherwise be exercisable). It is anticipated that, if the Business Combination is approved, it may be consummated prior to the expiry of such specified period and accordingly the exemption under section 239(1) of the Companies Act may not be available.

 

Regardless of whether dissenters’ rights are or are not available, Public Shareholders can exercise the rights of redemption described herein. The LAMF Board has determined that the redemption proceeds payable to LAMF Shareholders who exercise such Redemption Rights represent the fair value of those shares.

 

Extracts of certain relevant sections of the Companies Act follow:

 

(1) A member of a constituent company incorporated under this Act shall be entitled to payment of the fair value of that person’s shares upon dissenting from a merger or consolidation.

 

(1) No rights under section 238 shall be available in respect of the shares of any class for which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the expiry date of the period allowed for written notice of an election to dissent under section 238(5), but this section shall not apply if the holders thereof are required by the terms of a plan of merger or consolidation pursuant to section 233 or 237 to accept for such shares anything except - (a) shares of a surviving or consolidated company, or depository receipts in respect thereof; (b) shares of any other company, or depository receipts in respect thereof, which shares or depository receipts at the effective date of the merger or consolidation, are either listed on a national securities exchange or designated as a national market system security on a recognized interdealer quotation system or held of record by more than two thousand holders; (c) cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a) and (b); or (d) any combination of the shares, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in paragraphs (a), (b) and (c).

 

Status as Emerging Growth Company

 

LAMF is an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act.

 

Holdco will, immediately after the consummation of the Business Combination, be an “emerging growth company” as defined in the JOBS Act. Holdco will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the IPO, (b) in which Holdco has total annual gross revenue of at least $1.235 billion or (c) in which Holdco is deemed to be a large accelerated filer, which means the market value of Holdco Shares held by non-affiliates exceeds $700 million as of the last business day of Holdco’s prior second fiscal quarter, and (ii) the date on which Holdco has issued more than $1.0 billion in non-convertible debt during the prior three-year period. Holdco intends to take advantage of exemptions from various reporting requirements that are applicable to most other public companies, whether or not they are classified as “emerging growth companies,” including, but not limited to, an exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that Holdco’s independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting. If some investors find Holdco less attractive as a result, there may be a less active trading market for Holdco Securities and the prices of Holdco Securities may be more volatile.

 

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Foreign Private Issuer

 

In addition to being an “emerging growth company” under the JOBS Act and immediately after the consummation of the Business Combination, Holdco will also be a “foreign private issuer” as defined in the Exchange Act. As a “foreign private issuer,” and for as long as it retains such status, Holdco will be subject to different U.S. securities law than domestic U.S. issuers. The rules governing the information that Holdco must disclose differ from those governing U.S. companies pursuant to the Exchange Act. Holdco will be exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders. Those proxy statements are not expected to conform to Schedule 14A of the proxy rules promulgated under the Exchange Act. As a “foreign private issuer,” Holdco is permitted to follow certain home country corporate governance practices in lieu of the requirements of the Nasdaq Rules pursuant to Nasdaq Rule 5615(a)(3), which provides for such exemption from compliance with the Nasdaq Rule 5600 Series. Holdco intends to rely on this “foreign private issuer exemption” with respect to the quorum requirement for shareholder meetings and may in the future elect to follow home country practices with regard to other matters.

 

In addition, as a “foreign private issuer,” Holdco’s officers and directors and holders of more than 10% of the issued and outstanding Holdco Ordinary Shares, will be exempt from the rules under the Exchange Act requiring insiders to report purchases and sales of ordinary shares as well as from Section 16 short swing profit reporting and liability.

 

Interests of LAMF Insiders and the Sponsor in the Business Combination

 

When considering the LAMF Board’s recommendation that LAMF Shareholders vote in favor of the approval of the Business Combination, LAMF Shareholders should be aware that, aside from their interests as shareholders, the Sponsor and the LAMF Insiders have interests in the Business Combination that may conflict with the interests of other LAMF Shareholders generally. The LAMF Board was aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to LAMF Shareholders that they approve the Business Combination. LAMF Shareholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things, the interests listed below:

 

  the Sponsor and the LAMF Insiders will lose their entire investment in LAMF if LAMF does not complete a business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension);

 

the beneficial ownership of the Sponsor and the LAMF Insiders of an aggregate of 9,539,333 LAMF Class A Ordinary Shares, comprised of 8,433,333 LAMF Class A Ordinary Shares which were previously classified as Founder Shares and 1,106,000 LAMF Class A Ordinary Shares initially sold as part of the Private Placement Units issued to the Sponsor in connection with the IPO.

 

the Sponsor paid an aggregate of approximately $25,000 for 7,666,667 Founder Shares, approximately $0.003 per share, some of which were subsequently transferred by the Sponsor to the LAMF Insiders. In connection with the extraordinary general meeting of shareholders held in connection with the Extension on May 11, 2023, LAMF and the Sponsor entered into Non-Redemption Agreements with respect to Public Shares held by certain unaffiliated third-party investors, pursuant to which such investors have in connection with the Extension, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to an aggregate of 2,888,000 Public Shares. Pursuant to the Non-Redemption Agreements, the Sponsor has agreed to transfer to such investors (i) for the Initial Extension, a number of Founder Shares equal to 21% of the number of non-redeemed shares, or 606,480 Founder Shares, and (ii) for each Additional Monthly Extension, a number of Founder Shares equal to 3.5% of the number of non-redeemed shares, or 101,080 Founder Shares for each Additional Monthly Extension, or up to an aggregate of 1,212,960 Founder Shares if all Additional Monthly Extensions are implemented. The market value of such shares as of the Record Date for the EGM of LAMF Shareholders was approximately $[●], and the value of such shares is expected to be greater than $25,000 at the time of the Business Combination. If LAMF does not complete an initial business combination, such shares will expire worthless;

 

  in connection with the Business Combination, the Sponsor and the LAMF Insiders entered into the Sponsor Support Agreement with LAMF, Holdco and Nuvo, pursuant to which they agreed to waive their Redemption Rights with respect to the LAMF Class A Ordinary Shares held by them in connection with the completion of the Business Combination. The Sponsor and the LAMF Insiders did not receive any consideration in exchange for such waiver of redemption rights. Due to such waiver, the value of the LAMF Insiders’ investments in LAMF is dependent on the consummation of an initial business combination. In the event that LAMF does not complete an initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), the 9,539,333 LAMF Class A Ordinary Shares, for which the Sponsor and the LAMF Insiders have invested $11,085,000, and which have an approximate aggregate market value of $102,547,829 as of December 6, 2023, will expire worthless. As a result, the LAMF Insiders have an aggregate of up to $11,085,000 at risk that depends on the completion of an initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension). In contrast, LAMF Shareholders would receive approximately $[●] per share if the Trust Account is liquidated, calculated as of [●], 2023, the Record Date;

 

  the Sponsor or the LAMF Insiders may, but are not obligated to, make Working Capital Loans to LAMF, that may be repaid upon completion of the Business Combination, without interest, or at the lender’s discretion, converted upon completion of the Business Combination into up to 120,000 units of the post-business combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Placement Units. As of December 6, 2023, the outstanding amount of advances from the Sponsor to LAMF is $588,196;

 

  the Sponsor, the LAMF Insiders and the Sponsor Investors are expected to hold an aggregate of approximately 23.1% of the outstanding Holdco Ordinary Shares upon the consummation of the Business Combination, assuming no redemptions by LAMF Shareholders;

 

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  the Sponsor Investors have invested an aggregate of $2,000,000 in the Interim Financing;

 

  although there are no such unreimbursed out-of-pocket expenses as of December 6, 2023, unless a business combination is consummated, members of the LAMF Board will not receive reimbursement for any out-of-pocket expenses incurred by them on LAMF’s behalf incident to identifying, investigating, negotiating and completing a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account;

 

  the potential continuation of certain member(s) of the LAMF Board as directors of Holdco;

 

  the continued indemnification of LAMF Insiders and the continuation of directors’ and officers’ liability insurance after the Business Combination;

 

  the Existing Governing Documents provide that LAMF renounces its 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 LAMF and such opportunity is one LAMF is legally and contractually permitted to undertake and would otherwise be reasonable for LAMF to pursue, and to the extent the director or officer is permitted to refer that opportunity to LAMF without violating another legal obligation. Notwithstanding such provision, LAMF believes that such provision did not impact LAMF’s search for a business combination target because the LAMF Insiders have confirmed to LAMF that there were no such corporate opportunities that were not presented to LAMF pursuant to such provision;
     
 

the Sponsor and the LAMF Insiders can earn a positive rate of return on their investment, even if other LAMF Shareholders experience a negative rate of return in Holdco; and

 

at the Closing, LAMF, Nuvo, Holdco, the Sponsor, the executive officers and directors of LAMF prior to the Closing, the members of the Sponsor, certain shareholders of Nuvo, and the executive officers and directors of Nuvo prior to the Closing will enter into the Registration Rights Agreement, under which Holdco will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain Holdco Ordinary Shares and other equity securities of Holdco that are held by the parties thereto from time to time and the parties thereto will be provided with customary demand and piggyback registration rights.

 

As a result of the foregoing interests, the Sponsor and the LAMF Insiders will benefit from the completion of the Business Combination and may be incentivized to complete an acquisition of a less favorable target company or on terms that would be less favorable to LAMF’s other securityholders.

 

The LAMF Board was aware of and considered these interests, among other matters, in approving the Business Combination Agreement and the Business Combination, and in determining to recommend that the LAMF Shareholders vote in favor of the Business Combination Agreement and the Business Combination.

 

The LAMF Board’s Reasons for Approval of the Business Combination

 

As described above, the LAMF Board, in evaluating the Business Combination, consulted with LAMF’s management and advisors. In reaching its unanimous decision to approve the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement, the LAMF Board considered a range of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the LAMF Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The LAMF Board viewed its decision as being based on the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

 

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This explanation of LAMF’s reasons for the Business Combination and all other information presented in this section is forward-looking in nature and, therefore, should be read together with the factors discussed under the section titled “Cautionary Note Regarding Forward-Looking Statements.”

 

In connection with analyzing the Business Combination, LAMF’s management reviewed and compared, using publicly available information, certain current and historical financial information for Nuvo corresponding to current and historical financial information, ratios and public market multiples for certain companies believed by LAMF’s management and its advisors, based on their experience and judgment, to be comparable to Nuvo. None of such companies is identical to Nuvo.

 

Before reaching its decision, the LAMF Board reviewed the results of the due diligence conducted by its management, members of the Sponsor and LAMF’s advisors, which included:

 

  meetings and calls with the management team, board members, shareholders and advisors of Nuvo regarding, among other things, Nuvo’s technology, commercialization plans and market opportunity;

 

  review of Nuvo’s material contracts and other agreements;

 

  financial, tax, legal, insurance, accounting, operational, business and other due diligence;

 

  analysis of comparable companies;

 

  consultation with LAMF management and its legal counsel;

 

  review of historical financial performance of Nuvo (including audited and unaudited financial statements);

 

  review of Nuvo’s prospective financial information; and

 

  confirmatory financial due diligence, including comparing financial performance metrics, prospective financial information and valuation metrics of Nuvo with other companies in the healthcare and technology sectors.

 

In approving the Business Combination, the LAMF Board determined not to obtain a fairness opinion. The officers and directors of LAMF have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background, together with experience and sector expertise of LAMF’s capital markets advisor, enabled them to make the necessary analyses and determinations regarding the Business Combination. 

 

In the prospectus for its IPO, LAMF identified the following general criteria and guidelines that it believed would be important in evaluating prospective target businesses, although LAMF indicated it will use these criteria and guidelines in assessing potential acquisition opportunities, but may decide to enter into an initial business combination with a target that does not meet these criteria and guidelines:

 

  Valuation: Companies with a valuation of $750 million to $2 billion.

 

  Strong management teams, operational track records and corporate governance. Companies with high-performance management teams which should have a track record of adapting to dynamic market conditions, exploring new avenues of growth and monetization and an acute awareness of technological advances within their ecosystem with an appetite and skill set to exploit such advances.

 

  Supremely positioned to unlock long-term growth. Companies that are very well positioned to adopt new strategies, products and services which will unlock new avenues of growth, provide for first mover advantage and facilitate long-term investments.

 

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  Sustainable competitive advantages and formidable barriers to entry. Companies that have long-term competitive advantages with significant barriers to entry, including diversified consumer offerings, sizeable upfront investment costs, low risk of competitive disruption and unique brand equity / innovation or premium intellectual property.

 

  Financial history of strong and steady free-cash-flow. Companies that have an enduring track record of growth, profitability and sound fundamentals. For companies that were heavily impacted by the Covid-19 pandemic, those with early signals of recovery and fundamental strengths in the business to drive strong financial performance over time.

 

  Attractive value and valuation. Companies that are well-priced relative to their long-term value, which LAMF would seek to enhance, while offering an attractive risk-adjusted financial return for its shareholders.

 

  Will benefit from being a publicly traded company. Companies that are ready to access the public markets and will use those markets to pursue growth opportunities, fortify the balance sheet as well as recruit and retain exceptional management and key personnel.

 

These illustrative criteria were not intended to be exhaustive. LAMF stated in its IPO prospectus that any evaluation relating to the merits of a particular initial business combination would be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that LAMF decided to enter into a business combination with a target business that does not meet the above criteria and guidelines, LAMF indicated that it would disclose that the target business does not meet the above criteria in LAMF’s shareholder communications related to its initial business combination.

 

In considering the Business Combination, the LAMF Board concluded that Nuvo met nearly all the above criteria with the exception of Nuvo having a valuation lower than the range stated above and Nuvo not having a strong and steady free-cash-flow given its status as a pre-revenue company. In particular, the LAMF Board considered the following positive factors, although not weighted or in any order of significance:

 

  Competitive Strengths. The unique position of Nuvo’s INVU® solution in the maternal health space, supported by a partnership with Philips, a leading health technology company.

 

  Attractive Valuation. The LAMF Board’s determination that based on Nuvo’s commercial potential, underpinned by its commercial partnerships and intellectual property, LAMF Shareholders have acquired their shares in Nuvo at an attractive valuation.

 

  Due Diligence. The results of LAMF’s due diligence investigation of Nuvo conducted by LAMF’s management team, Sponsor group and its advisors.

 

  Negotiated Transaction. The financial and other terms of the Business Combination Agreement are reasonable, do not include a cash closing condition, and are the product of arm’s-length negotiations between the parties thereto.

 

The LAMF Board also considered a variety of uncertainties and risk and other potentially negative factors concerning the Business Combination including, but not limited to, the following:

 

  Benefits May Not Be Achieved. The risk that the potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe;

 

  Redemption Risk. The risk that a significant number of LAMF Shareholders may elect to redeem their shares prior to the consummation of the Business Combination pursuant to the Existing Governing Documents;

 

  LAMF Shareholders Receiving a Minority Position. The fact that LAMF Shareholders will hold a minority position in Holdco;

 

  Fees and Expenses. The significant fees and expenses associated with completing the Business Combination and the substantial time and effort of LAMF’s management required to complete the Business Combination;

 

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  No Third-Party Fairness Opinion. The risk that LAMF did not obtain a fairness opinion in determining whether to proceed with the Business Combination;

 

  Interests of the Sponsor and the LAMF Insiders. The interests of the Sponsor and the LAMF Insiders in the Business Combination (see “Business Combination Proposal – Interests of LAMF Insiders and the Sponsor in the Business Combination”);

 

  Readiness to be a Public Company. As Nuvo has not previously been a public company and the majority of its executives and employees are located outside the United States, Nuvo may not have all the different types of employees necessary for it to timely and accurately prepare reports for filing with the SEC. There is a risk that Nuvo will not be able to hire the right people to fill in these gaps by the time of the Closing or that additional issues could arise after the Closing due to its failure to have hired these people in advance of Closing; and

 

  Other Risk Factors. Various other risk factors associated with Nuvo’s business, as described in the section entitled “Risk Factors” appearing elsewhere in this document.

 

Although Nuvo has a valuation below the $750 million to $2 billion range LAMF sought in a merger partner, the LAMF Board determined the negotiated valuation between the parties to be attractive in light of the factors described above and in light of the reduced size of the Trust Account resulting from redemptions relating to the Extension.

 

LAMF also sought a strong management team with operational track records and corporate governance. Nuvo’s management team has demonstrated its ability to transition a research and development focused organization to one that obtained FDA clearance and commercial launch of its product in the U.S. market and signed a commercial partnership with a leading healthcare technology company. Nuvo’s management furthermore had previously prepared for a public listing via initial public offering and built supporting organizational infrastructure.

 

Nuvo also was deemed to meet LAMF’s criteria for a company positioned to unlock long-term growth, given the global market opportunity in the broader maternity care space and the core feature of its product which collects data that could lead to further product development and value creation over time.

 

LAMF also identified sources of competitive advantage and barriers to entry with Nuvo. As Nuvo obtained FDA clearance for its product and entered a strategic partnership with Philips, LAMF’s management believes Nuvo is competitively differentiated in its market.

 

While Nuvo does not have a history of strong and steady free-cash-flow as LAMF had originally intended to find in a merger partner, Nuvo has cleared key milestones on the product development side with FDA clearance, commercial launch and reimbursability by private and public plans, which could lead to strong financial performance over time.

 

As described above, the LAMF Board reached the determination that the negotiated valuation is attractive in light of the progress Nuvo has been able to achieve and its commercialization trajectory.

 

The LAMF Board also determined that Nuvo would benefit from being a publicly traded company. Access to the public markets could allow Nuvo to capitalize on its commercial opportunity.

 

After considering the foregoing, the LAMF Board concluded, in its business judgment, that the potential benefits to LAMF and the LAMF Shareholders relating to the Business Combination outweighed the potentially negative factors and risks relating to the Business Combination.

 

Date, Time and Place of the Extraordinary General Meeting

 

The EGM will be held at [●] a.m., Eastern time, on [●], 2023, for the purpose of considering and voting upon the proposals described herein. While as a matter of Cayman Islands law LAMF is required to have a physical location for the meeting, LAMF is pleased to utilize virtual shareholder meeting technology to provide ready access and cost savings for LAMF and LAMF Shareholders. For the purposes of the Existing Governing Documents, the physical place of the meeting will be 1221 Avenue of the Americas, New York, NY 10020. LAMF Shareholders will be able to attend, vote their shares, and submit questions during the EGM either in person or virtually via a live audio webcast. In order to attend the meeting virtually, you must pre-register at the following website: https://www.cstproxy.com/[●]. In order to pre-register, you will need the control number included on your proxy card or on the instructions that accompanied your proxy materials.

 

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Record Date and Voting

 

You will be entitled to vote or direct votes to be cast at the EGM if you owned LAMF Class A Ordinary Shares at the close of business on [●], 2023, which is the Record Date for the EGM. You are entitled to one vote for each LAMF Class A Ordinary Share that you owned as of the close of business on the Record Date. If a LAMF Shareholder’s LAMF Class A Ordinary Shares are held in “street name” or are in a margin or similar account, the LAMF Shareholder should contact its broker, bank or other nominee to ensure that votes related to the shares it beneficially owns are properly counted. At the close of business on the Record Date, there were 12,491,949 LAMF Class A Ordinary Shares outstanding, of which 9,539,333 LAMF Class A Ordinary Shares are held by the Sponsor and the LAMF Insiders, comprised of 8,433,333 LAMF Class A Ordinary Shares which were previously classified as Founder Shares and 1,106,000 LAMF Class A Ordinary Shares initially sold as part of the Private Placement Units issued to the Sponsor in connection with the IPO.

 

The Sponsor and the LAMF Insiders have agreed to vote all of the LAMF Class A Ordinary Shares acquired by them in favor of the Business Combination Proposal and the other proposals described in this proxy statement/prospectus. The LAMF Warrants do not have voting rights at the EGM.

 

Proxy Solicitation

 

Proxies may be solicited by mail. LAMF has engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a LAMF Shareholder grants a proxy, it may still vote its shares in person or virtually if it revokes its proxy before the EGM. A LAMF Shareholder may also change its vote by submitting a later-dated proxy as described in the section entitled “The Extraordinary General Meeting of LAMF Shareholders — Revocability of Proxies.”

 

Quorum and Required Vote for Proposals for the Extraordinary General Meeting

 

A quorum of LAMF Shareholders is necessary to hold a valid meeting. A quorum will be present at the EGM if a majority of the issued and outstanding LAMF Class A Ordinary Shares entitled to vote are represented in person, virtually or by proxy (or if held by a corporation or other non-natural person, by its duly authorized representative or proxy). As of the Record Date for the EGM, 6,245,975 LAMF Class A Ordinary Shares would be required to achieve a quorum.

 

Approval of each of the Business Combination Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the LAMF Shareholders who attend and vote at the EGM. Approval of the Merger Proposal requires affirmative vote of two-thirds of the LAMF Shareholders who attend and vote at the EGM.

 

The Closing of the Business Combination is conditioned on the approval of the Business Combination and the Merger Proposal at the EGM. The Adjournment Proposal is not conditioned on the approval of any other proposal at the EGM.

 

As of the Record Date, the Sponsor and the LAMF Insiders owned an aggregate of approximately 76.4% of the outstanding LAMF Class A Ordinary Shares. The Sponsor and the LAMF Insiders have agreed to vote the LAMF Class A Ordinary Shares acquired by them in favor of the Business Combination Proposal. As a result, we would not need any additional LAMF Class A Ordinary Shares to be voted in favor of the Transaction Proposals to have the Transaction Proposals, including the Business Combination Proposal, approved.

 

Recommendation of the LAMF Board

 

The LAMF Board believes that each of the Transaction Proposals to be presented at the EGM is in the best interests of LAMF and its shareholders and unanimously recommends that its shareholders vote “FOR” each of the Transaction Proposals.

 

When you consider the recommendation of the LAMF Board in favor of approval of each of the proposals to be presented at the EGM, you should keep in mind that certain of LAMF’s directors and officers have interests in the Business Combination that are different from, or in addition to, your interests as a LAMF Shareholder. See the section entitled “The Business Combination — Interests of LAMF Insiders and the Sponsor in the Business Combination” for a further discussion of these considerations.

 

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Sources and Uses of Funds for the Business Combination

 

The following tables summarize the sources and uses for funding the Business Combination. Where actual amounts are not known or knowable, the figures below represent LAMF’s good faith estimate of such amounts.

 

(In millions)   Assuming no
redemptions
    Assuming maximum redemptions  
Sources              
Cash from Trust Account after extension amendment   $ 31,232     $ 31,232  
Crossover Preferred   $ 13,000     $ 13,000  
Total Sources   $ 44,232     $ 44,232  
Uses            
Cash to balance sheet   $ 33,660     $ 2,527  
Transaction fees and expenses   $ 10,572     $ 10,572  
LAMF Shareholder Redemptions   $       $ 31,132  
Total Uses   $ 44,232     $ 44,232  

 

Summary Risk Factors

 

Nuvo’s business and an investment in Holdco Ordinary Shares are subject to numerous risks and uncertainties. In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the financial statements and Annexes attached hereto, and especially consider the factors discussed in the section entitled “Risk Factors.” Some of these risks include, but are not limited to:

 

Risks Related to Nuvo

 

Nuvo is a development-stage company with a limited operating history, and may never be able to effectuate its business plan, achieve meaningful revenue or attain profitability.

 

Nuvo is highly dependent on the successful development, marketing and sale of the INVU platform and the related products and services.

 

Nuvo will need to obtain additional financing to fund its future operations and continue as a going concern.

 

The manufacturing and supply of the INVU platform is subject to various factors outside Nuvo’s direct control, including those related to Nuvo’s dependence on third-party manufacturers and suppliers.

 

Nuvo’s medical device operations are subject to pervasive and continuing FDA regulatory requirements, and failure to comply with these requirements could harm its business, financial condition and results of operations.

 

Healthcare reform initiatives and other administrative and legislative proposals may harm Nuvo’s business.

 

The results of Nuvo’s clinical trials may not support the INVU platform claims or may result in the discovery of adverse side effects.

 

Conditions in Israel could materially and adversely affect Nuvo’s business.

 

Nuvo may be unable to obtain and maintain patent or other intellectual property protection for any product it develops or for its technology.

 

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Risks Related to Holdco

 

Holdco will incur increased costs as a result of operating as a public company.

 

A market for Holdco Ordinary Shares may not develop, which would adversely affect the liquidity and price of Holdco Ordinary Shares.

 

The price of Holdco Ordinary Shares may be volatile.

 

It is not expected that Holdco will pay dividends in the foreseeable future after the Business Combination.

 

Holdco may not be able to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act that will be applicable to it after the Business Combination is consummated.

 

As a foreign private issuer and a company treated as an emerging growth company for certain purposes, Holdco will have different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies.

 

Holdco may lose its foreign private issuer status, which would then require Holdco to comply with the Exchange Act’s domestic reporting regime and cause Holdco to incur significant legal, accounting and other expenses.

 

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about Holdco’s business, the price of Holdco Ordinary Shares and Holdco trading volume could decline.

 

Risks Related to LAMF and the Business Combination

 

The Sponsor and the LAMF Insiders have agreed to vote in favor of the Business Combination, regardless of how the Public Shareholders vote.

 

If the conditions to the Business Combination Agreement are not met, the Business Combination may not be completed.

 

  The requirement that LAMF completes its initial business combination by the date provided by the Existing Governing Documents (or up to May 16, 2024, pursuant to the Extension), may give Nuvo leverage over LAMF.

 

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

 

LAMF did not obtain a fairness opinion in connection with the Business Combination, and consequently, you do not have assurance from an independent source that the Nuvo shares being received by LAMF Shareholders in the Business Combination is fair to LAMF Shareholders from a financial point of view

 

The Sponsor and the LAMF Insiders control a substantial interest in LAMF and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.

 

The LAMF Insiders and their affiliates may have competitive pecuniary interests that conflict with LAMF’s interests.

 

LAMF is a blank check company with no operating history and no revenues, and you have no basis on which to evaluate its ability to achieve its business objective.

 

 

The Sponsor and the LAMF Insiders have invested $25,000 for the Founder Shares and $11,060,000 for the Private Placement Units, which means that the Sponsor and the LAMF Insiders, following the Business Combination, may experience a positive rate of return on their investment, even if other LAMF Shareholders experience a negative rate of return in Holdco.

 

  Wells Fargo Securities, LLC (“Wells Fargo”), the lead underwriter in the IPO, was to be compensated, in part, on a deferred basis for already-rendered underwriting services in connection with the IPO, yet Wells Fargo, without any consideration from LAMF or Nuvo, waived its entitlement to such compensation solely with respect to the Business Combination and disclaimed any responsibility for this proxy statement/prospectus, but Wells Fargo remains entitled to customary indemnification and contribution obligations of LAMF in connection with the IPO.

 

LAMF believes that it was a PFIC for its taxable year ending December 31, 2021 (its first taxable year) and for its taxable year ending December 31, 2022 and expects to be a PFIC for its taxable year ending December 31, 2023. Moreover, there is a significant risk that Holdco will be a PFIC for its taxable year that includes the date of the Business Combination and in the foreseeable future. Such PFIC status could result in adverse U.S. federal income tax consequences to U.S. Holders (including in connection with the exercise of Redemption Rights in connection with the Business Combination, the SPAC Merger, and the ownership and disposition of Holdco Ordinary Shares and Holdco Warrants after the Business Combination) and U.S. Holders may be subject to additional reporting requirements.

 

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RISK FACTORS

 

In addition to the other information contained in this proxy statement/prospectus, including the matters addressed under the heading “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus. The risk factors described below disclose both material and other risks, and are not intended to be exhaustive and are not the only risks facing us. Additional risks not currently known to us or that we currently deem to be immaterial, or which are not identified because they are generally common to businesses, also may materially adversely affect our business, financial condition, results of operations and cash flows in future periods.

 

Unless otherwise noted, all references in this subsection to “we,” “us” or “our” refer to the business of Nuvo prior to the consummation of the Business Combination, which will be the business of Holdco following the consummation of the Business Combination and, therefore, such references to “we,” “us” or “our” refer to the business of Holdco and its subsidiaries when describing events or circumstances that will or could occur following the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of Holdco, in which event the market price of Holdco Ordinary Shares could decline, and you could lose part or all of your investment.

 

Risks Related to Our Business and Our INVU Platform

 

We are a development-stage company with a limited operating history. We may never be able to effectuate our business plan, achieve meaningful revenue or attain profitability.

 

We are a development-stage company and are subject to all of the risks inherent in the establishment of a new business enterprise. We have a limited operating history and only a preliminary and unproven business plan upon which investors may evaluate our prospects. We have not yet scaled commercial adoption of our INVU platform. Additionally, our INVU platform is currently cleared by the FDA for only limited monitoring capabilities, and the future commercial interest in our INVU platform, if any, will require FDA and other regulatory clearances or approvals for additional capabilities, and we may never obtain such clearances or approvals. Our ability to generate revenue from our operations and, ultimately, achieve profitability will depend on, among others things, whether we can commercialize our INVU platform as currently planned, whether we can complete the development of other features of our INVU platform, whether we can utilize the data we capture to make predictive recommendations and monetize these capabilities, our obtaining additional regulatory clearances, commercial adoption of our INVU platform, whether we can manufacture INVU on a commercial scale in such amounts and at such costs as we anticipate would be required to begin to achieve commercial success, and whether we can achieve market acceptance of our INVU platform and business model. We may never generate meaningful revenue or operate on a profitable basis. Even if we achieve profitability, we may not be able to sustain it.

 

It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. If actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected.

 

We have a history of net losses, and we expect to continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it.

 

We have incurred losses since our inception, and we expect to continue to incur losses for the foreseeable future. For the years ended December 31, 2022 and 2021, we reported net losses of $19.912 million and $34.098 million, respectively. As a result of these losses, as of December 31, 2022 and 2021, we had an accumulated deficit of $108.938 million and $89.026 million, respectively. We expect to continue to incur significant sales and marketing expenses as we expand our sales and marketing efforts to increase adoption of our INVU platform, including through scaling our business in the United States and globally, expanding relationships with care providers, payer networks and strategic partners, and increasing awareness of our solutions among expectant mothers and their clinicians. In addition, we expect to continue to incur significant research and development and other expenses as we develop and utilize the measurements within our capabilities, expand our offerings by seeking clearance to provide some of these measurements to expectant mothers and clinicians, conduct additional clinical trials and studies on our INVU platform, and maintain and grow our intellectual property portfolio. In addition, we expect our general and administrative expenses to increase following the Business Combination due to the additional costs associated with being a public company. The net losses that we incur may fluctuate significantly from period to period. We will need to generate significant revenue and maintain or improve our gross margins to achieve and sustain profitability. Even if we achieve profitability, we may not remain profitable for any substantial period of time.

 

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Our business model contemplates, among other things, an expansion of the approved uses for our INVU platform, proof to payers of reduced cost of delivering quality healthcare to expectant mothers, and additional collaborations with partners willing to recommend and prescribe the use of our INVU platform, all of which are subject to numerous risks and uncertainties and could result in the failure of our business model.

 

We have not yet demonstrated the feasibility of our INVU platform for commercial applications, including its ability to provide clinical-quality remote pregnancy care on a commercial scale. Currently, our INVU platform is cleared by the FDA to measure FHR, MHR and MUA during the antepartum period and the provision of remote NSTs. In addition, the ability to deliver MHR and FHR data is not necessarily novel and therefore may not enable us to gain or sustain a competitive advantage. Our business plan contemplates that our INVU platform ultimately provides monitoring for additional data and metrics. We may not be able to develop and utilize such additional measurements and include such measurements in our offerings, and even if we are able to do so, such data may not be of medical quality or equivalent to the data obtained from current standard of care. The expansion of our INVU platform’s usable capabilities, or the modification of our existing FDA cleared platform in response to feedback from third parties, such as medical professionals, also requires additional FDA clearance, which we may never receive, and any delay in receiving such clearance could also have a material adverse effect on our business. Additionally, we intend to expand globally and our INVU platform may be subject to the regulatory regimes of other non-U.S. jurisdictions, such as in Europe where we filed for a CE mark in March 2023 to offer NSTs using our FHR, MHR and MUA capabilities. Approval or clearance from the FDA, or comparable regulatory agency in other jurisdictions, to capture certain measurements and perform certain tests using our INVU platform, is not guaranteed and may take longer than planned. Also, regulatory approval in one jurisdiction does not mean that we will succeed in obtaining regulatory approval in other jurisdictions.

 

The software component of our INVU platform uses a cloud computing environment that processes and analyzes data and, ultimately, transmits personalized reports on maternal and fetal health metrics to the expectant mother and her clinician through digital visualization tools. The development of this cloud computing environment requires a considerable investment of technical, financial, and legal resources, which may not be available to us. It may also require separate regulatory clearances or approvals. Furthermore, it may not be technically viable for care providers and our partners to integrate the cloud with their businesses or platforms. There may also be public concerns regarding privacy and compliance with restrictive laws or regulations, including those with respect to management of health data, as well as concerns regarding hardware and software security and reliability issues associated with third-party mobile devices such as smartphones that would be used to access our cloud services.

 

Further, our business model contemplates the collection of a significant amount of personalized health data to develop a database sufficient for us to develop algorithms that may allow for effective and accurate predictive tools. We have yet to develop such a database, and we are not yet cleared to provide any such analytics, nor have we yet applied for or sought such clearances. Furthermore, even if we are able to develop such a database, we may not successfully develop effectively predictive algorithms. As a result, we may never ultimately develop our planned capabilities, or, if we do, care providers, expectant mothers or payers may not find such capabilities useful or cost effective.

 

The success of our business model also depends on our ability to:

 

generate widespread awareness, acceptance and adoption of our INVU platform and future products or services;

 

prove out cost savings such that providers and payers clearly see value in the prescribing and use of our INVU platform;

 

develop enhanced or new technologies or features that improve the convenience, efficiency, safety or perceived safety, and productivity of our INVU platform and future products or services, including the receipt of all regulatory clearances and approvals necessary for such enhanced or new technologies and features;

 

significantly expand our commercial and strategic partnerships with enterprise-level entities in order to develop necessary product awareness and scale;

 

properly identify customer needs and deliver new products or services or product enhancements to address those needs;

 

obtain the regulatory approvals in a timely and cost-effective manner; attract and retain qualified personnel and collaborators;

 

maintain quality control as we continue to commercialize our INVU platform;

 

protect our inventions with patents or otherwise develop proprietary products and processes; and

 

secure sufficient capital resources to expand both our continued research and development, and sales and marketing efforts.

 

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Given the foregoing, our success depends significantly upon, among other things, our ability to obtain additional regulatory approvals for our INVU platform’s more advanced capabilities and further expand such capabilities, materially expand our strategic partnerships to drive brand awareness and product usage, and prove that INVU reduces the cost of delivering quality healthcare for expectant mothers in order to help convince payers that INVU should be regularly prescribed and used. Our failure to successfully accomplish the foregoing could have a material adverse effect on our business, prospects, results of operation and financial position.

 

Our operating results may fluctuate from quarter to quarter, which makes our future results difficult to predict.

 

Our operating results and financial condition may fluctuate from quarter-to-quarter and year-to-year and are likely to vary due to a number of factors, many of which will not be within our control. Our operating results in any given quarter can be influenced by numerous factors, many of which are unpredictable or outside of our control, including:

 

the degree of market acceptance of our INVU platform and future products;

 

our ability to compete with competitors and new entrants into our markets;

 

the timing of our sales and deliveries of our INVU platform and future products to customers;

 

changes in our pricing policies or those of our competitors, including our response to price competition;

 

the effectiveness of our securing new orders and fulfilling existing orders;

 

changes in the amount that we spend to develop and manufacture new products or technologies;

 

changes in the amounts that we spend to promote our solutions;

 

our ability to introduce new features and services and enhance our existing platform and our ability to generate significant revenue from new features and services and personalization to the products;

 

our ability to respond to competitive developments, including pricing changes and the introduction of new products and services by our competitors;

 

changes in the cost of satisfying our warranty obligations and servicing our products;

 

litigation related expenses and/or liabilities;

 

developments or disputes concerning our intellectual property or proprietary rights or our solutions, or third-party intellectual property or proprietary rights;

 

fluctuations in currency exchange rates;

 

general economic and political conditions and government regulations in the countries where we currently have significant numbers of systems, or where we currently operate or may expand in the future; and

 

natural disasters, such as earthquakes, hurricanes, wildfires, and threats to public health, such as a resurgence of the COVID-19 pandemic.

 

The impact of one or more of the foregoing and other factors may cause our operating results to vary significantly. As such, quarter-to-quarter comparisons of our operating results may not be meaningful and should not be relied upon as an indication of future performance. If we fail to meet or exceed the expectations of investors or securities analysts, the trading price of the Holdco Ordinary Shares could fall substantially, and we could face costly lawsuits, including securities class action suits.

 

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Our business model contemplates a revenue model that is yet to be proven viable and is subject to numerous risks and uncertainties.

 

Our ability to generate revenue will depend on securing commercial contracts on favorable economic terms. Currently, we have signed over a dozen commercial contracts with health systems, large private practice groups, and independent women’s health practices in the United States and Israel. We plan to focus on long-term enterprise level agreements with larger obstetrician-physician practice management groups and U.S. healthcare systems. We have entered into a strategic partnership with Philips primarily focused on providing a jointly integrated remote fetal monitoring solution targeted toward hospital networks in the U.S. However, we may not prove the benefits of our INVU platform, or such entities may not find our pricing to be attractive, either of which could cause our pricing model to fail. Ultimately, we aim to seek long-term contracts with payers, where we expect to receive revenue based, at least in part, on a percentage of cost-savings achieved by the applicable payers. We may not be able to develop a substantial body of data to prove to care providers and payers that the use of our INVU platform reduces medical care costs, and even if we are able to collect such data, we may not demonstrate cost savings, including as a result of the improvement of cost baseline in the long term, whether due to the success of our INVU platform or as other cost-effective offerings become available, or demonstrate improved quality of care and healthcare outcomes, in order to incentivize payers to encourage their obstetrician networks and expectant mothers to utilize our INVU platform. Our revenue model is also subject to many other factors, including the following:

 

payment models for remote healthcare solutions are still evolving, and the pricing arrangement we favor may not be accepted by care provider or payers;

 

we may not be able to find a sufficient number of implementers to stimulate market interest or reach the scale necessary to make our INVU platform a cost-effective solution, which is a key factor for acceptance by care providers and ultimately the payers;

 

even if we can demonstrate cost savings from use of our INVU platform, we may be unable to secure arrangements with payers that share any cost-saving with us, on favorable terms to us or at all;

 

we may not be able to secure meaningful up-front and ongoing payments;

 

contracted payment terms will likely vary among counterparties, making it difficult to predict revenues;

 

manufacturing or maintenance costs may be higher than expected and we may not be able to adjust our pricing model to accommodate for these increases, which will increase our operating expenses and reduce our margins; and

 

we may not be able to accumulate sufficient data of the type and quality we need to develop predictive tools, and even if we are able to do so, we may not be successful in generating revenue from these tools.

 

Manufacturers of medical devices have a history of price competition, and we may not be able to achieve or maintain satisfactory pricing for our INVU platform. If we are forced to lower the price we charge for our INVU platform, our gross margins will decrease, which will harm our ability to invest in and grow our business. If we are unable to maintain our prices, or if our costs increase and we are unable to offset such increase with an increase in our prices, our margins could erode. We may be subject to significant pricing pressure, which could harm our business and results of operations. Any of these risks and uncertainties could cause our revenue model to fail.

 

Our success depends in large part on our ability to develop, market and sell our INVU platform. If we are unable to successfully develop, market and sell this product, our business prospects will be significantly harmed and we may be unable to achieve revenue growth or profitability.

 

Our future financial success will depend substantially on our ability to further development, and effectively and profitably market and sell, our INVU platform. Our products may not gain market acceptance in the United States or internationally or otherwise attain and maintain any level of market share.

 

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The commercial success of our INVU platform and any of our planned or future products will depend on a number of factors, including, but not limited to, the following:

 

the actual and perceived effectiveness, safety and reliability, and clinical benefit, of our INVU platform, especially relative to the current standard of care obtained within healthcare facilities;

 

the degree to which expectant mothers, care providers, such as large healthcare systems obstetrician- physician practice management groups, and payer networks adopt and continue to use and prescribe our INVU platform;

 

the degree to which expectant mothers use our INVU platform correctly and consider it a valuable tool during their pregnancies;

 

the availability, relative cost and perceived advantages and disadvantages of alternative technologies for pregnancy monitoring;

 

the results of additional clinical and other studies relating to the health, safety, economic or other benefits of our INVU platform;

 

whether key thought leaders in the medical community adopt our INVU platform over alternatives and products offered by our competitors, and the extent to which we are successful in educating physicians and healthcare providers about the benefits of our INVU platform;

 

the success of our strategic partnerships and our current and future strategic partners;

 

our ability to successfully market, sell and distribute our INVU platform and any related platform products, including, without limitation, any of our planned cloud-based solutions derived from the data we expect to collect from expectant mothers, including our plan to identify patterns and trends associated with certain risks and outcomes from which we may derive predictive recommendations that could be useful to individual expectant mothers;

 

our reputation among care providers, such as obstetrician-physician management groups;

 

our ability to obtain, maintain, protect and enforce our intellectual property rights in and to our INVU platform;

 

our ability to maintain compliance with all regulatory requirements applicable to our INVU platform; and

 

our ability to continue to maintain quality control and real-time data processing ability as we continue to commercialize our INVU platform.

 

If we fail to successfully market and sell our products cost-effectively and develop, maintain and expand our market share, we will not be able to achieve profitability, which will harm our business, financial condition and results of operations. Our ability to grow our revenue in future periods will depend on our ability to successfully penetrate our target markets and increase sales of our product, which will, in turn, depend in part on our success in driving adoption and increased use of our products as well as the prices we can charge.

 

We are highly dependent on the successful development, marketing and sale of our INVU platform and the related products and services.

 

Our INVU platform comprises the basis of our business. As a result, the success of our business plan is highly dependent on our ability to develop, manufacture and commercialize our INVU platform and related products and services, and our failure to do so could cause our business to fail. Successful commercialization of medical devices, such as our INVU platform, is a complex and uncertain process, dependent on the efforts of management, manufacturers, medical professionals, third-party payers, our strategic partners, as well as general economic conditions, among other factors. Any factor that adversely impacts the development and commercialization of our INVU platform will have a negative impact on our business, financial condition, results of operations and prospects. Some potential factors include:

 

our ability to significantly scale our pregnancy care population, together with the necessary increase in manufacturing capacity that would be required to produce the hardware components of our INVU platform to serve a much larger population of expectant mothers;

 

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our ability to adapt our INVU platform to the extent necessary to work for a substantial majority of expectant mothers;

 

our ability to achieve sufficient market acceptance by expectant mothers, strategic partners, commercial customers, and other medical and clinical professionals, third-party payers and others in the medical community;

 

our ability to compete with existing pregnancy care solutions, such as currently standard in-person, non-remote, monitoring solutions and current or future competing remote solutions;

 

our ability to establish, maintain and expand our sales, marketing and distribution networks, such as the Philips distribution channel;

 

our ability to obtain or maintain necessary regulatory approvals, including with respect to any changes to our products based upon feedback from third parties such as medical professionals; and

 

our ability to effectively protect our intellectual property.

 

Our inability to successfully obtain clearance or approval for and subsequently commercialize our INVU platform or related products and services would have a material adverse effect on our business, financial condition, results of operations and prospects.

 

Our commercial success will depend upon attaining significant market acceptance of our INVU platform among expectant mothers, care providers, payers and others in the medical community. If we are unable to successfully achieve substantial market acceptance and adoption of our INVU platform, our business, financial condition and results of operations would be harmed.

 

Our commercial success will depend in large part on the acceptance of our INVU platform by expectant mothers, care providers, payers and others in the medical community as safe for both an expectant mother and her unborn baby, useful and cost-effective. We cannot predict how quickly, if at all, care providers, such as obstetrician-physician practice management groups, hospitals and healthcare systems, and payers will accept our INVU platform. These participants may not readily accept our INVU platform over current standard of care obtained within healthcare facilities or competing products or alternatives in the near term or at all. Additionally, expectant mothers may prefer the current standard of care, including in-office visits during which they have the in-person attention of a medical professional. Further, some expectant mothers may be unwilling to use our INVU platform given that it represents new technology without a significant history of use and results. Care providers, or value analysis committees at their hospitals, as well as third-party payers, may also perceive our products to be too costly, or may believe that the benefits of our INVU platform and results from clinical trials, such as relative ease of use, are not sufficiently greater than other alternatives to justify our INVU platform’s pricing. This perception may continue to be heightened due to any budgetary and financial constraints faced by care providers, including hospitals and other facilities. Moreover, the medical community may be unwilling to depart from the current standard of care for pregnancy monitoring and pregnancy care management. Medical professionals tend to be slow to change their medical diagnostic practices because of perceived liability risks arising from the use of new technology or products, and they may not recommend our INVU platform or other products integrated with our technology until there is long-term clinical evidence to convince them to alter or modify their existing pregnancy monitoring methods. The use of wearable technology, artificial intelligence, machine learning and other technology-based platforms to provide pregnancy monitoring and care management is a recent phenomenon, and therefore, our INVU platform may not become broadly accepted by physicians, patients, hospitals and others in the medical community, even if it is approved by the appropriate regulatory authorities for marketing and sale. Our efforts to educate expectant mothers, care providers, payers and others in the medical community on the benefits of our INVU platform require significant resources and may not be successful. Our efforts to educate the marketplace may require more resources than are required by conventional technologies marketed by our competitors. Moreover, in the event that our INVU platform or other products integrated with our technology are the subject of guidelines, clinical studies or scientific publications that are unfavorable or damaging, or otherwise call into question its benefits. Our ability to grow sales of our INVU platform and drive market acceptance will depend on successfully educating expectant mothers, care providers, such as obstetrician-physician practice management groups, payers and others in the medical community of the relative benefits of our INVU platform and its cost-effectiveness.

 

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The degree of market acceptance by both care providers and expectant mothers of our INVU platform will depend on a number of additional factors, including:

 

regulatory requirements regarding product labeling or product inserts;

 

limitations or warnings contained in the labeling cleared or approved by the FDA or other regulatory authorities;

 

the existence of current in-person monitoring for expectant mothers, including that certain expectant mothers may prefer in-person care by a medical professional;

 

coverage determinations and reimbursement levels of third party payers;

 

pricing and cost of our INVU platform in relation to alternative products and methods;

 

timing of market introduction of competing products and the sales and marketing initiatives of such products;

 

the access to, ease of use, stability of device performance and error rate of our INVU platform by both care providers and expectant mothers relative to alternative products and methods;

 

the willingness and ability of expectant mothers to adopt new technology, including its perceived safety and ease of use;
   
our ability to provide incremental clinical and economic data that show the safety, clinical efficacy and cost-effectiveness of, and benefits from, our INVU platform; and

 

the effectiveness of our sales and marketing efforts for our INVU platform.

 

If we are unable to successfully achieve substantial market acceptance and adoption of our INVU platform, our business, financial condition and results of operations would be harmed. Even if our INVU platform achieves market acceptance, it may not maintain that market acceptance over time if competing products or technologies, which are more cost effective or received more favorably, are introduced. Failure to achieve or maintain market acceptance or market share would limit our ability to generate revenue and would significantly harm our business, financial condition and results of operations.

 

We currently have a limited sales and marketing organization. If we are unable to develop our sales and marketing capability on our own or through collaborations with marketing partners, we will not be successful in commercializing our INVU platform.

 

Currently, our sales and marketing team consists of our VP Marketing, Product Specialist and our business development team in Israel and, as a result, we have no meaningful marketing and sales capabilities. We intend to sell our INVU platform primarily to and through our implementers in the near term, and ultimately through third-party payers. We also intend to utilize the data we capture to make predictive recommendations and monetize these capabilities. However, we may not be successful in doing so. To the extent that we enter into co-promotion or other licensing arrangements, our INVU platform revenue is likely to be lower than if we directly marketed or sold our INVU platform. In addition, any revenue we receive will depend in whole or in part upon the efforts of such third parties, which may not be successful and are generally not within our control. If we are unable to enter into such arrangements on acceptable terms or at all, we may not be able to successfully commercialize our INVU platform. If we are not successful in commercializing our INVU platform, either on our own or through collaborations with one or more third parties, our future revenue will suffer and we may incur significant additional losses.

 

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The success of our business may be dependent on our strategic partnerships and collaborations.

 

Strategic relationships with our implementers and validators are and will be important to the success of our business. See “Business of Nuvo—Sales and Marketing.” We anticipate deriving a significant portion of revenues in the near term from our implementers, which are provider partners with an installed base of clinicians that understand how to prescribe and use our INVU platform for the expectant mothers they care for. We currently have over a dozen enterprise-level agreements, and our future success depends on our ability to enter into such agreements with additional implementers. Our prospects also depend on our validators to build robust clinical evidence based on our already developed INVU platform, as well as research experts, mainly academic centers, to analyze our data signals and help determine predictive markers through such data. Our strategic partners may have the right to abandon the use of our INVU platform and terminate applicable agreements, including payment obligations, prior to or upon the expiration of the agreed-upon agreement terms. We may not be successful in establishing strategic partnerships or collaborative arrangements on acceptable terms or at all, our collaborative partners may terminate any such agreements prior to their stated terms, our collaborative arrangements may not result in successful product development, validation or commercialization and we may not derive any revenues from such arrangements. If we do not successfully develop and maintain strategic partnerships or collaborative arrangements, our business, financial condition and results of operations would be materially and adversely affected.

 

Any strategic partnerships or collaborative arrangements that we have established or may establish in the future may not be successful or we may otherwise not realize the anticipated benefits from these strategic partnerships or collaborations. We do not control third parties with whom we have or may have strategic partnerships or collaborative arrangements, and we will rely on them to achieve results which may be significant to us. In addition, any current or future strategic partnerships or collaborative arrangements may place the development and commercialization of our technology outside our control, may require us to relinquish important rights or may otherwise be on terms unfavorable to us.

 

We have entered into certain, and expect to enter into additional, strategic partnerships or collaborative arrangements with respect to the development, validation and commercialization of our INVU platform with different relevant industry participants, including our implementers and validators. Any future potential strategic partnerships or collaborative arrangements may require us to rely on external consultants, advisors and experts for assistance in several key functions, including research and development, manufacturing, regulatory, intellectual property, commercialization and distribution. We cannot and will not control these third parties, but we may rely on them to achieve results, which may be significant to us. Relying upon these strategic partnerships or collaborative arrangements subjects us to a number of risks, including:

 

we may not be able to control the amount and timing of resources that our partners or collaborators may devote to our technology;

 

should a partner or collaborator fail to comply with applicable laws, rules or regulations when performing services for us, we could be held liable for such violations;

 

we may be required to relinquish important rights, such as marketing and distribution rights, including the ability to distribute to hospital networks without Philips in accordance with the exclusivity terms set by the Philips MPA, pursuant to meeting certain sales targets;

 

business combinations or significant changes in a partner or collaborator’s business strategy may adversely affect such person’s willingness or ability to complete its obligations under any arrangement;

 

our partners or collaborators may default on their payments to us or fail to deliver standby letters of credit or financial guarantees, and it may be time consuming and difficult to enforce such payment obligations and obligations to provide standby letters of credit and financial guarantees in various jurisdictions, and we may be unsuccessful in enforcing such obligations;

 

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our current or future partners or collaborators may utilize our proprietary information in a way that could expose us to competitive harm;

 

our partners or collaborators could obtain ownership or other control over intellectual property that is material to our business, or we may be required to jointly own certain of our intellectual property with such third parties; and

 

strategic partnerships or collaborative arrangements are often terminated or allowed to expire or remain unformalized by a written agreement, which could delay the ability to commercialize our technology.

 

In addition, if disputes arise between us and any of our partners or collaborators, it could result in the delay or termination of the development, validation or commercialization of products containing our technology, lead to protracted and costly legal proceedings, or cause partners or collaborators to act in their own interest, which may not be in our interest. As a result, the strategic partnerships or collaborative arrangements that we have entered into or may enter into may not achieve their intended goals.

 

If any of these scenarios materialize, they could have a material adverse effect on our business, financial condition, results of operations and prospects.

 

The audited consolidated financial statements for the year ended December 31, 2022, include an explanatory paragraph in our independent registered public accounting firm’s audit report stating that there are conditions that raise substantial doubt about our ability to continue as a going concern, and we will need to obtain additional financing to fund our future operations and continue as a going concern. If we are unable to obtain such financing, we may be unable to complete the development and commercialization of our INVU platform.

 

Our operations have consumed substantial amounts of cash since inception. Our net losses were $20.679 and $34.512 million for the years ended December 31, 2022 and 2021, respectively. We anticipate that our future cash requirements will continue to be significant. As a result of the above, in connection with our assessment of going concern considerations performed in connection with the audit for the year ended December 31, 2022, management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date those audited consolidated financial statements are available to be issued. Additionally, the opinion of our independent registered accountants on our audited financial statements included in this proxy statement/prospectus contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our ability to continue operations as a going concern will depend on, among other things, our ability to obtain funding through equity and/or debt financing, potential partnership arrangements, sale of products, as well as our ability to manage our expenses. While we believe our strategies will generate funding that will be sufficient to continue as a going concern, if these strategies are unsuccessful, then we may need to realize assets and extinguish liabilities other than in the ordinary course of business and at amounts different to those disclosed in our financial statements. Our financial statements do not contain any adjustments to the amounts or classifications of recorded assets or liabilities that might be necessary if we do not continue as a going concern. The financial statements take no account of the consequences, if any, of the effects of unsuccessful product development or commercialization, nor of any inability of our company to obtain adequate funding in the future. We expect that we will need to obtain additional financing to implement our business plan as described in this proxy statement/prospectus. Such financing could include equity financing, which may be dilutive to shareholders, or debt financing, which would likely restrict our ability to borrow from other sources. In addition, such securities may contain rights, preferences or privileges senior to those of the rights of our current shareholders. Additional funds may not be available when we need them, on terms attractive to us, or at all. If adequate funds are not available on a timely basis, we may be required to curtail the development of our INVU platform and related products or services, or materially delay, curtail, reduce or terminate our research and development and commercialization activities. We could be forced to sell or dispose of our rights or assets. Any inability to raise adequate funds on commercially reasonable terms could have a material adverse effect on our business, financial condition, results of operation and prospects, including the possibility that a lack of funds could cause our business to fail and liquidate with little or no return to investors.

 

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The manufacturing and supply of our INVU platform is subject to various factors outside our direct control, including those related to our dependence on third-party manufacturers and suppliers, which could harm our business, financial condition and results of operations.

 

In 2019, we began a hybrid production process, involving both in-house assembly of our wearable wireless sensor band and the use of sub-contractors for the supply and production of the component elements. In 2021, we started to fully outsource our manufacturing operation for our first production batch to Flextronics Medical Sales and Marketing, Ltd., a company located in Israel, and we currently anticipate continuing to do so for all future production batches. Pursuant to our manufacturing plan, our printed circuit boards, or PCBs, are manufactured in China and Israel and fabricated in China, acoustic sensors are sourced from Japan, reusable ECG sensors are sourced from China and accessories are sourced from Israel and the United States. The products are then shipped to Israel where they are assembled into a complete sensor band. Accessories are added in the United States and the product is packaged and ready for delivery to the expectant mother. While the foregoing manufacturing and supplier relationships are adequate for our current operations, our successful growth will require that we either expand our existing manufacturing and supplier relationships or enter into new relationships, which we may not be able to do on a commercially reasonable basis or at all. We do not have significant experience with scalable manufacturing, and we expect to remain dependent for the foreseeable future on third parties. Given our dependence on third-party manufacturers and suppliers, we are subject to additional risks relating to these third parties, including: insufficient capacity or delays in meeting our demand (including due to any problems with our third-party manufacturers’ and suppliers’ respective supply chains); inadequate manufacturing yields, inferior quality and excessive costs; inability to manufacture products that meet the agreed upon specifications; inability to obtain an adequate supply of materials; inability to comply with the relevant regulatory requirements for the manufacturing process; limited warranties on products supplied to us; inability or failure to comply with our contractual obligations; potential increases in prices; and increased exposure to potential misappropriation of our intellectual property. Additionally, we currently do not have immediate contingency arrangements if one of our primary suppliers or manufacturers became unable to meet our product demand, including, without limitation, due to international shipping delays, whether due to trade embargo issues, weather-related delays or otherwise.

 

The manufacture and supply of our INVU platform, both in-house and by our third-party manufacturing and supply partners, in compliance with ISO standards and the FDA’s regulations requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. We and our third-party manufacturers and suppliers may encounter difficulties in production, including difficulties with production costs and yields, quality control, quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced FDA requirements, other federal and state regulatory requirements, as well as foreign regulations. If we fail to manufacture our INVU platform in compliance with ISO standards and the FDA’s regulations, or if the manufacturing facilities suffer disruptions, machine failures, slowdowns or disrepair, we may not be able to fulfill customer demand and our business would be harmed. Further, we do not expect to maintain excess product inventory on hand and intend to manufacture our INVU platform using near term demand forecasts and customer orders. As a result, deviations from our forecasts or large unexpected customer orders may result in delays in fulfilling customer orders, which would cause customer dissatisfaction and may harm our reputation. Finally, failure to comply with local laws, regulations and standards, in the countries in which our manufacturing facilities are located, which may be outside of our control, may subject us to legal and regulatory scrutiny, proceedings and penalties from such outside authorities.

 

Our business is subject to the risks associated with doing business in China.

 

As a result of our reliance on third-party suppliers located in China, our results of operations, financial condition, and prospects are subject to a certain degree to economic, political and legal developments in China, including government control over capital investments or changes in tax regulations that are applicable to us. China’s economy differs from the economies of most developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate and control of foreign exchange, and allocation of resources. Since we rely on certain suppliers located in China for certain parts, our business is subject to the risks associated with doing business in China, including:

 

trade protections measures, such as tariff increases, and import and export licensing and control requirements;

 

potentially negative consequences from changes in tax laws;

 

difficulties associated with the Chinese legal system, including increased costs and uncertainties associated with enforcing contractual obligations in China;

 

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historically lower protection of intellectual property rights;

 

changes and volatility in currency exchange rates; and

 

unexpected or unfavorable changes in regulatory requirements.

 

The United States and China historically had a complex relationship that has included actions that have impacted trade between the two countries and globally. If trade relations with the United States were to result in trade restrictions, if social or political unrest were to disrupt business in China, or if other events in China significantly reduced or disrupted business activities in China, that may materially and adversely harm our business.

 

If we fail to grow or optimize our sales and marketing capabilities and develop widespread brand awareness cost-effectively, our growth will be impeded and our business may suffer.

 

We intend to commercialize our INVU platform and grow brand awareness, commencing in the United States, by establishing a network of implementers and validators, and strategically working with distribution partners such as Philips. We may also expand our presence in international territories in the future, with the goal of becoming a global leader in pregnancy solutions from the first days of pregnancy onward. We plan to take a measured approach to expand and optimize our sales infrastructure to grow our customer base and our business. In developing a U.S. team, identifying and recruiting qualified personnel and training them on the use of our INVU platform, on applicable federal and state laws and regulations and on our internal policies and procedures, will require significant time, expense and attention. It may take significant time before our sales representatives are fully trained and productive. In particular, if we are unable to hire, develop and retain talented sales personnel or if new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, we may not be able to realize the expected benefits of this investment or increase our revenue. Our business may be harmed if our efforts to expand either fail to generate a corresponding increase in revenue or otherwise result in a decrease in our operating margin.

 

We plan to dedicate significant financial and other resources to our marketing programs, particularly as we grow our sales territories, which may require us to incur significant upfront costs, such as in connection with care provider training seminars and sessions and relevant content generation and promotion.

 

In addition, we believe that developing and maintaining awareness of our INVU platform and the impact it has on providers, patients, and payers in a cost-effective manner is critical to achieving broad acceptance of our INVU platform and attracting new provider groups and expectant mothers. Brand promotion activities, such as advertising, social media and other communication channels, may not generate awareness or increase revenue and, even if they do, any increase in revenue may not offset the costs and expenses we incur in building our brand. If we fail to successfully promote, maintain and protect our brand, we may fail to attract or retain the care providers and expectant mothers necessary to realize a sufficient return on our brand-building efforts, or to achieve the widespread brand awareness that is critical for broad customer adoption of our INVU platform.

 

We plan to do business globally, including in certain countries in which we may have limited resources and would be subject to additional regulatory burdens and other risks and uncertainties.

 

We expect to do business globally, currently including North America and certain countries in Europe. Commercialization of our INVU platform in foreign markets, either directly or through third parties, is subject to additional risks and uncertainties, including:

 

reimbursement and insurance coverage;

 

our inability to find strategic partners, dealers or distributors in specific countries or regions;

 

our inability to directly control commercial activities of third parties;

 

our limited resources to be deployed to a specific jurisdiction;

 

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the burden of complying with complex and changing regulatory, tax, accounting and legal requirements;

 

different clinical practice and customs in foreign countries affecting acceptance of our INVU platform in the marketplace;

 

import or export licensing and other requirements;

 

longer accounts receivable collection times;

 

longer lead times for shipping;

 

language barriers for technical training;

 

reduced protection of intellectual property rights in some foreign countries;

 

foreign currency exchange rate fluctuations; and

 

interpretations of contractual provisions governed by foreign laws in the event of a contract dispute.

 

Specifically, we are or may be subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act 2010, the Proceeds of Crime Act 2002, Chapter 9 (sub-chapter 5) of the Israeli Penal Law, 1977, the Israeli Prohibition on Money Laundering Law–2000 and possibly other anti-bribery and anti-money laundering laws in countries outside of the United States in which we conduct our activities. As we engage in business in certain countries, we and our agents and independent contractors may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. As we expand our international business, our risks under these laws may increase, including that we may become subject to government actions against, fines, penalties and resultant reputational harm, any of which could have a material adverse effect on our business, financial position and results of operations.

 

We are highly dependent on our senior management team and key personnel, as well as other employees, and our business could be harmed if we are unable to attract and retain personnel necessary for our success.

 

We are highly dependent on our senior management team and directors and key personnel (many of whom are seasoned medical device professionals with a wide array of experience, such as women’s health, medical technology and healthcare), as well as other employees. Our success will depend on our ability to retain senior management and to attract and retain qualified personnel in the future, including sales and marketing professionals, engineers and other highly skilled personnel and to integrate current and additional personnel in all departments. The loss of members of our senior management, sales and marketing professionals and engineers as well as contract employees at our manufacturing facilities could result in delays in product development and harm our business. If we are not successful in attracting and retaining highly qualified personnel, it would have a negative impact on our business, financial condition and results of operations.

 

Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms, or at all. Despite our efforts to retain valuable employees, members of our management and development teams may terminate their employment with us on short notice.

 

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Our industry is highly competitive and is subject to technological change, which may result in new products or solutions that are superior to our INVU platform or other future products we may bring to market from time to time. If we are unable to anticipate or keep pace with changes in the marketplace and the direction of technological innovation and customer demands, our technology may become less useful or obsolete and our operating results will suffer.

 

The pregnancy monitoring and management industry is rapidly evolving and subject to intense and increasing competition. To compete successfully and to be able to establish and maintain a competitive position in current and future technologies, we will need to demonstrate the advantages of our technology, specifically our INVU platform, over currently well-established alternative solutions, such as conventional in-person monitoring at an obstetrician’s office, in a hospital or at another healthcare facility. There are currently a number of existing monitoring devices that strive to provide rich and robust data, all of which are also limited to use within healthcare facilities. These include Monica Healthcare, now part of General Electric, Nemo Healthcare and Philips Avalon CL, and their respective competitive technologies and devices all have received regulatory approval for the intrapartum period for singleton pregnancies at healthcare facilities by medical professionals. There are also devices that seek to provide distributed care and generally work remotely, such as Sense4Baby, Pregnabit, Bloom, and Heramed. Furthermore, as the market expands, we expect the entry of additional competitors, such as cloud computing companies or leading IT companies, who may have longer operating histories, more extensive international operations, greater name recognition, and substantially greater technical, marketing and financial resources. If our technology is not, or our future products or services are not, competitive based on these or other factors, our business would be harmed.

 

Under applicable employment and anti-competition laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.

 

We generally enter into non-competition agreements with our employees. These agreements prohibit our employees from competing directly with us or working for our competitors or customers for a limited period after they cease working for us. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work and it may be difficult for us to restrict our competitors from benefiting from the expertise that our former employees or consultants developed while working for us. For example, in Israel, where most of our employees are based, Israeli labor courts have required employers seeking to enforce non-compete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer which have been recognized by the courts, such as the protection of a company’s trade secrets or other proprietary knowhow, and thus non-competition agreements with employees are generally unenforceable after termination of employment.

 

Environmental, social and corporate governance (“ESG”) issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

 

There is an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters. Additionally, public interest and legislative pressure related to public companies’ ESG practices continue to grow. If our ESG practices fail to meet regulatory requirements or investor, customer, consumer, employee or other shareholders’ evolving expectations and standards for responsible corporate citizenship in areas including environmental stewardship, support for local communities, board of directors and employee diversity, human capital management, employee health and safety practices, product quality, supply chain management, corporate governance and transparency, our reputation, brand and employee retention may be negatively impacted, and our customers and suppliers may be unwilling to continue to do business with us.

 

Customers, consumers, investors and other shareholders are increasingly focusing on environmental issues, including climate change, energy and water use, plastic waste and other sustainability concerns. Concern over climate change may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment. Changing customer and consumer preferences or increased regulatory requirements may result in increased demands or requirements regarding plastics and packaging materials, including single-use and non-recyclable plastic products and packaging, other components of our products and their environmental impact on sustainability, or increased customer and consumer concerns or perceptions (whether accurate or inaccurate) regarding the effects of substances present in certain of our products. Complying with these demands or requirements could cause us to incur additional manufacturing, operating or product development costs.

 

If we do not adapt to or comply with new regulations, including the SEC’s published proposed rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors, or fail to meet evolving investor, industry or stakeholder expectations and concerns regarding ESG issues, investors may reconsider their capital investment in our Company, we may become subject to penalties, and customers and consumers may choose to stop purchasing our products, if approved for commercialization, which could have a material adverse effect on our reputation, business or financial condition.

 

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Failure to maintain the security and functionality of our information systems, or to defend against or otherwise prevent a cybersecurity attack or data breach, could adversely affect our business, financial position, results of operations and liquidity.

 

We depend on our information technology systems for the efficient functioning of our business, including the manufacture, distribution and maintenance of our INVU platform, as well as for purchasing and inventory management. We also collect, store, use, retain, disclose, transfer and otherwise process a significant amount of confidential, sensitive and personal information from and about the expectant mothers that we care for and our employees, including tax information, health information and payroll data. In addition to internal resources, we rely on third party service providers in providing our services, including to provide continual maintenance and enhancements and security of any protected data. Such third-party service providers have access to confidential, sensitive and personal information about the expectant mothers we care for and employees, and some of these service providers in turn subcontract with other third-party service providers. Through contractual provisions and third-party risk management processes, we take steps to require that our service providers, and their subcontractors, protect our confidential, sensitive and personal information. However, due to the size and complexity of our technology platform and services, the amount of confidential, sensitive and personal information that we store and the number of expectant mothers, employees and third-party service providers with access to confidential, sensitive and personal information, we are vulnerable to a variety of intentional and inadvertent cybersecurity attacks and other security-related incidents and threats, which could result in legal risks, enforcement actions, fines, reputational damages and a material adverse effect on our business, financial position, results of operations and liquidity. Technological interruptions would disrupt our operations, including our ability to timely ship and track product orders, project inventory requirements, manage our supply chain and otherwise adequately service providers or expectant mothers or disrupt their ability to use our INVU platform.

 

Threats to our information technology systems and data security can take a variety of forms. Hackers may develop and deploy viruses, worms and other malicious software programs that attack our networks and data centers or those of our service providers. Additionally, unauthorized parties may attempt to gain access to our systems or facilities, or those of third parties with whom we do business, through fraud, trickery, or other forms of deceiving our employees or contractors, direct social engineering, phishing, credential stuffing, ransomware, denial or degradation of service attacks and similar types of attacks against any or all of us, the expectant mothers we care for and our service providers. Other threats include inadvertent security breaches or theft, misuse, unauthorized access or other improper actions by our employees, expectant mothers we care for, service providers and other business partners. Cybersecurity attacks and other security-related incidents are increasing in frequency and evolving in nature. Since the beginning of the war between Israel and Hamas which began on October 7, 2023, Israeli and Israeli associated companies have become more frequently the target of cyberattacks. As such, the risk of a cyberattack against our information technology systems and data security may become heightened.

 

We have implemented policy, procedural, technical, physical and administrative controls with the aim of protecting our networks, applications, bank accounts, and the confidential, sensitive and personal information entrusted to us from such threats. However, given the unpredictability of the timing, nature and scope of cybersecurity attacks and other security related incidents, our technology may fail to adequately secure the confidential health information and personally identifiable information we maintain in our databases and security procedures and controls that we or our service providers have implemented may not be sufficient to prevent such incidents from occurring. Furthermore, because the methods of attack and deception change frequently, are increasingly complex and sophisticated, and can originate from a wide variety of sources, including third parties such as service providers and even nation-state actors, it is possible that we may not be able to anticipate, detect, appropriately react and respond to, or implement effective preventative measures against, all cybersecurity attacks and other security-related incidents. As a result, our business, financial condition, results of operations and liquidity could be materially and adversely affected.

 

The occurrence of any actual or attempted cybersecurity attack or other security-related incident or a data breach, the reporting of such incidents, whether accurate or not, or our failure to make adequate or timely disclosures to the public or law enforcement agencies following any such event, whether due to delayed discovery or a failure to follow existing protocols, could result in liability to the expectant mothers we care for and/or regulators, which could result in significant fines, litigation penalties, orders, sanctions, adverse publicity, litigation or actions against us or our service providers by governmental bodies and other regulatory authorities, expectant mothers we care for or third parties, that could have a material adverse effect on our business, consolidated financial condition, results of operations, cash flows and liquidity. Any such proceeding or action, any related indemnification obligation, even if we are not held liable, and any resulting negative publicity, could harm our business, damage our reputation, force us to incur significant expenses in defense of these proceedings, increase the costs of conducting our business, distract the attention of management or result in the imposition of financial liability.

 

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We may be required to expend significant capital and other resources to protect against the threat of cybersecurity attacks and security breaches or to alleviate problems caused by breaches, including unauthorized access to data regarding expectant mothers and unborn babies and personally identifiable information stored in our information systems, the introduction of computer viruses or other malicious software programs to our systems, cybersecurity attacks, email phishing schemes, network disruption, denial of service attacks, malware and ransomware. A cybersecurity attack or other incident that bypasses our, the expectant mothers we care for or third-party service providers’ information system’s security could cause a security breach that may lead to a material disruption to our information systems infrastructure or business and may involve a significant loss of business or patient health information and other confidential, sensitive or personal information. If a cybersecurity attack or other unauthorized attempt to access our systems or facilities, or those of the expectant mothers we care for or third-party service providers, were to be successful, it could result in the theft, destruction, loss, misappropriation or release of confidential, sensitive or personal information or intellectual property, and could cause operational or business delays that may materially impact our ability to provide various services. Any successful cybersecurity attack or other unauthorized attempt to access our systems or facilities, or those of the expectant mothers we care for or third-party service providers, also could result in negative publicity which could damage our reputation or brand with the expectant mothers we care for, referral sources, payers or other third parties and could subject us to substantial sanctions, fines and damages and other additional civil and criminal penalties under the Health Insurance Portability and Accountability Act, or HIPAA, the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, the HIPAA Omnibus Rule, and other federal and state privacy laws, in addition to litigation with those affected.

 

We and our third-party service providers may become the victims of these types of threats, attacks and security breaches. No security measures, procedures, technology or amount of preparation can provide guaranteed protection from these threats, or ensure that we, the expectant mothers we care for and our third-party service providers will not be victims in the future. Cybersecurity attacks may disrupt, or result in unauthorized access to, our networks, applications and confidential, personal or sensitive data, and those of the expectant mothers we care for or service providers, and successful attacks may occur in the future.

 

Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance our existing systems. As we expand our business, we will need to continue to scale our information technology systems and personnel to support our growth, including the manufacture and supply chain management of our INVU platform. Difficulties with implementing new technology systems, delays in our timeline for planned improvements, significant system failures or our inability to successfully modify our information systems to respond to changes in our business needs may cause disruptions in our business operations and adversely affect our business, financial condition and results of operations. Failure to maintain the security and functionality of our information systems and related software, or to defend a cybersecurity attack or other attempt to gain unauthorized access to our systems, facilities or health information regarding expectant mothers and unborn babies could expose us to a number of adverse consequences, the vast majority of which are not insurable, including but not limited to disruptions in our operations, regulatory and other civil and criminal penalties, fines, investigations and enforcement actions (including, but not limited to, those arising from the SEC, Federal Trade Commission, the HHS Office of Inspector General, or OIG, or State Attorneys General), litigation with those affected by the data breach, loss of expectant mothers wanting to utilize our services, disputes with payers and increased operating expense, which either individually or in the aggregate could have a material adverse effect on our business, financial position, results of operations and liquidity.

 

Our collection, use, storage, disclosure, transfer and other processing of personal information, could give rise to significant costs, liabilities and other risks, including as a result of investigations, inquiries, litigation, fines, legislative and regulatory action and negative press about our privacy and data protection practices, which may harm our business, financial conditions, results of operations and prospects.

 

In the course of our operations, we collect, use, store, disclose, transfer and otherwise process an increasing volume of personal information, including from expectant mothers and their clinicians, customers, partners, candidates and employees, consultants, website visitors, leads and third parties with whom we conduct business. Additionally, our expansion plans for our INVU platform contemplate our collection, use and storage of an increasing amount of personal health data. The collection, use, storage, disclosure, transfer and other processing of personal information is increasingly subject to a wide array of federal, state and foreign laws and regulations regarding data privacy and security, including comprehensive laws of broad application, such as the EU General Data Protection Regulation (EU) 2016/679, or GDPR, which is applicable across all member states of the European Economic Area. The GDPR as transposed into the national laws of the UK (the “UK GDPR”), protects the privacy of personal information collected, used, stored, disclosed, transferred and otherwise processed in or from the governing jurisdiction. Our ability to collect, use, maintain or otherwise process personal data has been, and could be further, restricted by additional laws such as the California Consumer Privacy Act (the “CCPA”) and the Israeli Privacy Protection Law, 1981 and the regulations thereunder, or the Israeli Privacy Law. A current pending amendment to the Israeli Privacy Law, if passed into law, may enhance fines and sanctions for breaching the Israeli Privacy Law and to strengthen the enforcement capacity of the Israeli Privacy Protection Authority.

 

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These laws and regulations generally define personal data to include location data and online identifiers, which are commonly used and collected parameters in digital advertising and, among other things, impose stringent user consent requirements and permit data subjects to request we discontinue using certain data. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services.

 

Additionally, the uncertainty created by these laws and regulations can be compounded when services hosted in one jurisdiction are directed at users in another jurisdiction. The GDPR has a wide territorial scope and contains significant penalties for non-compliance. The GDPR, among other things, imposes requirements to provide detailed and transparent disclosures about how personal data is collected and processed, grants rights for data subjects to access, delete or object to the processing of their personal data, provides for mandatory breach notification to supervisory authorities (and in certain cases, affected individuals) of certain data breaches, sets limitations on the retention of personal data and outlines significant documentary requirements to demonstrate compliance through policies, procedures, training and audits. Additionally, supervisory authorities in the member states have some flexibility when implementing European directives and certain aspects of the GDPR, which can lead to diverging national rules. European supervisory authorities have been very active in terms of enforcing data protection rules, including with respect to cookie-related matters. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as means to identify and potentially target individuals, may lead to broader restrictions and impairments on our business and, specifically, online activities.

 

As we seek to expand our business, we are, and may increasingly become, subject to various laws, regulations and standards, as well as contractual obligations, relating to data privacy and security in the jurisdictions in which we operate. When conducting clinical trials, we face risks associated with collecting trial participants’ data, especially health data, in a manner consistent with applicable laws and regulations, such as GCP guidelines or FDA human subject protection regulations. The GDPR/UK GDPR would also increase our obligations with respect to any clinical trials conducted in the EEA/UK, requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators. In particular, the processing of ‘special category data’ (such as personal data relating to health and genetic information), which will be relevant to our operations in the context of our conduct of clinical trials, imposes heightened compliance burdens under European and UK data protection laws.

 

In many cases, these laws and regulations apply not only to third-party transactions, but also to transfers of information between or among us, any affiliates and other parties with whom we conduct business. These laws, regulations and standards may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may harm our business, financial condition and results of operations. The regulatory framework for data privacy and security worldwide is continuously evolving and developing and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.

 

We are subject to diverse laws and regulations relating to data privacy and security. The GDPR/UK GDPR is wide-ranging in scope and imposes numerous, significant and complex requirements on organizations that process personal data, including (without limitation) requirements relating to processing health and other sensitive data, establishing a legal basis for any processing of personal data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, limiting the collection and retention of personal data through ‘data minimization’ and ‘storage limitation’ principles, implementing safeguards to protect the security and confidentiality of personal data, honoring increased rights for data subjects, providing notification of data breaches in some instances and taking certain measures when engaging third-party processors.

 

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In the United States, various federal and state regulators have adopted, or are considering adopting, laws and regulations concerning personal information and data security, including HIPAA. This patchwork of legislation and regulation may give rise to conflicts or differing views of personal privacy rights. For example, certain state laws may be more stringent or broader in scope, or offer greater individual rights, with respect to personal information than federal, international or other state laws, and such laws may differ from each other, all of which may complicate compliance efforts. Additionally, new privacy rules are being enacted in the United States and globally, and existing ones are being updated and strengthened. For example, the CCPA, which increases privacy rights for California residents and imposes obligations on companies that process their personal information, came into effect on January 1, 2020. Among other things, the CCPA requires covered companies to provide new disclosures to California consumers and provide such consumers new data protection and privacy rights, including the ability to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation. The CCPA was amended in September 2018 and November 2019, and on November 3, 2020, California voters approved a new privacy law, the California Privacy Rights Act, or the CPRA, which significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain personal information and creating a new state agency to oversee implementation and enforcement efforts. Many of the CPRA’s provisions became effective on January 1, 2023. It is possible that further amendments will be enacted, but even in its current form it remains unclear how various provisions of the CCPA will be interpreted and enforced. State laws are changing rapidly and there is discussion in Congress of a new federal data protection and privacy law to which we would become subject if it is enacted. All of these evolving compliance and operational requirements impose significant costs that are likely to increase over time, may require us to modify our data processing practices and policies, divert resources from other initiatives and projects, and could restrict the way products and services involving data are offered, all of which may harm our business, financial condition and results of operations.

 

The GDPR/UK GDPR also imposes strict rules on the transfer of EEA/UK personal data to countries outside the EEA/UK. The GDPR/UK GDPR generally prohibits the transfer of EEA and UK personal data to third countries whose laws do not ensure an adequate level of protection, unless a valid data transfer mechanism has been implemented or an Article 49 GDPR/UK GDPR derogation applies. Recent legal developments in the EEA and UK have created complexity and uncertainty regarding transfers of personal data. On 16 July 2020, the Court of Justice of the European Union issued its judgement in Schrems II, which invalidated the EU-US Privacy Shield as a valid data transfer mechanism. The decision upheld the use of the European Commission Standard Contractual Clauses, or SCCs, as a valid data transfer mechanism, but required organizations to take supplementary measures when relying on the SCCs. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we operate our business and could harm our business, financial condition and results of operations. On June 4, 2021, the European Commission published a new set of modular SCCs. The new SCCs also apply only to the transfer of data outside of the EEA and not the UK. Although the European Commission adopted an adequacy decision for the UK on 28 June 2021, allowing the continued flow of personal data from the EEA to the UK, this decision will be regularly reviewed going forward and may be revoked if the UK diverges from its current adequate data protection laws following its exit from the European Union. In addition, the UK Information Commissioner’s Office, or ICO, has undergone a period of public consultation on its own specific international data transfer agreement. We are monitoring these developments, but we may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing data on our behalf or localize certain data. We may also experience reluctance or refusal by prospective European customers to use our solutions, and we may find it necessary or desirable to make further changes to our handling of personal data of EEA- and UK-based data subjects. In addition, transfers of personal data outside of the UK are subject to the UK GDPR which restricts and limits our ability to transfer personal data globally.

 

Effective as of July 17, 2023, the EU-U.S. Data Privacy Framework (EU-U.S. DPF), the UK Extension to the EU-U.S. Data Privacy Framework (UK Extension to the EU-U.S. DPF), and the Swiss-U.S. Data Privacy Framework (Swiss-U.S. DPF) were respectively developed in furtherance of transatlantic commerce by the U.S. Department of Commerce and the European Commission, the UK Government, and the Swiss Federal Administration to provide U.S. organizations with reliable mechanisms for personal data transfers to the United States from the European Union European Economic Area, the United Kingdom (and Gibraltar), and Switzerland.

 

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While the DPF meant to enable an easier path for transfers of personal data to the U.S., it includes numerous obligation and complexities and therefore creates liabilities, costs and legal exposure to a U.S. entity that chose to use it as transfer method. Traditionally and repeatedly mechanisms for transferring information to the U.S. have been rejected by the Court of Justice of the European Union and therefore uncertainty surrounds the issue, and it is unclear whether the DPF will last and for how long. This causes uncertainty and may lead to legal and technological expenses.

 

In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time. These and other industry standards may legally or contractually apply to us, or we may elect to comply with such standards. We expect that there will continue to be new proposed laws and regulations concerning data privacy and security, and we cannot yet determine the impact such future laws, regulations and standards may have on our business. New laws, amendments to or re-interpretations of existing laws, regulations, standards and other obligations may require us to incur additional costs and restrict our business operations. Because the interpretation and application of laws, regulations, standards and other obligations relating to data privacy and security are still uncertain, it is possible that these laws, regulations, standards and other obligations may be interpreted and applied in a manner that is inconsistent with our data processing practices and policies or the features of our INVU platform and services. If so, in addition to the possibility of fines, lawsuits, regulatory investigations, public censure, other claims and penalties, and significant costs for remediation and damage to our reputation, we could be materially and adversely affected if legislation or regulations are expanded to require changes in our data processing practices and policies or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively impact our business, financial condition and results of operations. We may be unable to make such changes and modifications in a commercially reasonable manner, or at all. In relation to enforcement under the GDPR/UK GDPR, European and UK data protection laws now also provide for greater penalties for non-compliance than previous data protection laws, including, for example, separate administrative fines ranging from €10 million/£8.7 million to €20 million/£17.5 million or 2% to 4% of global annual revenue of any non-compliant organization for the preceding financial year, whichever is higher. Any inability to adequately address data privacy or security-related concerns, even if unfounded, or to comply with applicable laws, regulations, standards and other obligations relating to data privacy and security, could result in additional cost and liability to us, harm our reputation and brand, damage our relationships with consumers and harm our business, financial condition and results of operations.

 

We make public statements about our use and disclosure of personal information through our privacy policies, information provided on our website and press statements. Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so. The publication of our privacy policies and other statements that provide promises and assurances about data privacy and security can subject us to potential government or legal action if they are found to be deceptive, unfair or misrepresentative of our actual practices. Furthermore, in the EEA/UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced in Europe by a regulation known as the ePrivacy Regulation, which will significantly increase fines for non-compliance, noting that the ePrivacy Regulation when it comes into effect will have no bearings on the UK in a post-Brexit world. Recent guidance and case law in the European Union and UK require opt-in, informed consent for the placement of a cookie or similar tracking technologies on a customer’s device and for direct electronic marketing. The GDPR/UK GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or tracking technology. While the text of the ePrivacy Regulation is still under development, recent European case law and regulators’ recent guidance are driving increased attention to cookies and tracking technologies. This could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand our customers. Any concerns about our data privacy and security practices, even if unfounded, could damage the reputation of our business and harm our business, financial condition and results of operations.

 

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Complying with these numerous, complex and often changing regulations is expensive and difficult. Any failure or perceived failure by us or our service providers to comply with our posted privacy policies or with any applicable federal, state or similar foreign laws, regulations, standards, certifications or orders relating to data privacy, security or consumer protection, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure or misappropriation of personal information or other user data, could result in significant fines or penalties, negative publicity or proceedings or litigation by governmental agencies or consumers, including class action privacy litigation in certain jurisdictions, which would subject us to significant awards, penalties or judgments, one or all of which could require us to change our business practices or increase our costs and could materially and adversely affect our business, financial condition and results of operations. In addition, if our practices are not consistent, or viewed as not consistent, with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations or applications of existing laws, regulations and standards, we may also become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, criminal or civil sanctions, all of which may harm our business, financial condition and results of operations.

 

Navigating the rapidly changing landscape of data protection and privacy regulations is both challenging and costly. Failure to comply with such regulations, whether in our practices or those of our service providers, can lead to substantial fines, legal action, and negative publicity. As the regulatory environment constantly evolves, especially with emerging technologies like artificial intelligence and machine learning, adhering to these laws can restrict our operations, expose us to legal risks, and take compliance costs. Additionally, inconsistencies with legal requirements may trigger audits, investigations, and sanctions, all of which could significantly impact our business, finances, and operations.

 

We could become subject to product liability claims, product recalls, and warranty claims that could be expensive, divert management’s attention and harm our business reputation and financial results.

 

Our business exposes us to potential liability risks that are inherent in the marketing and sale of products used in healthcare. We may be held liable if our INVU platform or if any other product that integrates our technology causes injury or death or is found otherwise unsafe or unsuitable during usage, including misuse by the user or by care providers, whether or not such use is consistent with our products’ instructions. Additionally, while our INVU platform is currently cleared to measure FHR, MHR and MUA during the antepartum period, and as a result, offer NSTs, we plan to significantly expand our INVU platform’s permitted uses; and the added complexity may expose us to additional potential liability, including if our INVU platform provides incorrect data that leads to missed complications, false positives or negatives or other reported results that are inconsistent with otherwise accurate readings. Our INVU platform incorporates sophisticated components and computer software. Complex software can contain errors, particularly when first introduced. In addition, new products or enhancements may contain undetected errors or performance problems that, despite testing, are discovered only after installation. Patients could allege or possibly prove defects of our INVU platform or other products that integrate our technology. Additionally, disruptions in access to or availability of the cloud-based services on which our INVU platform will rely, whether due to service interruptions, cyberattacks or other reasons, could result in product liability issues, including as a result of the failure of our INVU platform to timely provide results to healthcare professionals.

 

A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense costs and divert management’s attention. Regardless of merit or eventual outcome, liability claims may result in:

 

decreased demand for our INVU platform;

 

injury to our reputation;

 

costs of related litigation;

 

substantial monetary awards to patients and others;

 

loss of revenue; and

 

the inability to commercialize future products.

 

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Any of these outcomes may have an adverse effect on our business, financial condition and results of operations, and may increase the volatility of our share price.

 

The coverage limits of our insurance policies we may choose to purchase to cover related risks may not be sufficient to cover future claims. If sales of our INVU platform or other products integrating our technology increase or we suffer future product liability claims, we may be unable to maintain product liability insurance at satisfactory rates or with adequate amounts or at all. A product liability claim, any product recalls or excessive warranty claims, whether arising from defects in design or manufacture or otherwise, could negatively affect our sales or require a change in the design or manufacturing process, any of which could harm our relationship with our customers and partners, and have a material adverse impact on our reputation and business, financial condition, results of operations and prospects.

 

In addition, if our INVU platform or other products integrating our technology are defective, we, our future customers or partners may be required to notify regulatory authorities and/or to recall the products. Any recall would divert management’s attention and financial resources and harm our reputation with customers, patients, medical professionals and third-party payers. A recall involving our INVU platform would be particularly harmful to our business. The adverse publicity resulting from any of these actions could adversely affect the perception of our customers or partners. These investigations or recalls, especially if accompanied by unfavorable publicity, could result in our incurring substantial costs, losing revenues and damaging our reputation, each of which would harm our business, financial condition, results of operations and prospects.

 

Our INVU platform is not yet approved for third-party payer coverage or reimbursement. If in the future we are approved for and are otherwise able to commercialize it, but are unable to obtain adequate reimbursement or insurance coverage from third-party payers, we may not be able to generate significant revenue, in which case we may need to obtain additional financing.

 

Our INVU platform is not yet approved for third-party payer coverage or reimbursement. Coding and coverage determinations as well as reimbursement levels and conditions are important to the commercial success of our INVU platform. The future availability of insurance coverage and reimbursement for newly approved medical devices is highly uncertain, and our future business will be greatly impacted by the level of reimbursement provided by third-party payers. In the United States, third-party payers decide which products and services they will cover, how much they will pay and whether they will continue reimbursement. Third-party payers may not cover or provide adequate reimbursement for our INVU platform or the related services, assuming we are able to fully develop and obtain all regulatory approvals and clearances to market it in the United States or other geographies. Accordingly, unless government and other third-party payers provide coverage and reimbursement for our services, patients and healthcare providers may choose not to use them, which would cause investors to lose their entire investment. A primary trend in the United States healthcare industry and elsewhere is cost containment. Government authorities and other third-party payers have attempted to control costs by limiting coverage and the amount of reimbursement for particular products and services. Reimbursement may not be available, or continue to be available, for our INVU platform, other products or systems using our technology or any other products we may develop in the future, or even if reimbursement is available, such reimbursement may not be adequate. We also will be subject to foreign reimbursement policies in the international markets we expect to enter. Decisions by health insurers or other third-party payers in these markets not to cover, or to discontinue reimbursing, our INVU platform could materially and adversely affect our business. If such decisions are made, they could also have a negative impact on our ability to generate revenues, in which case we may need to obtain additional financing.

 

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Risks Related to Government Regulation and Our Industry

 

We conduct business in a heavily regulated industry, and changes in regulations or violations of regulations may, directly or indirectly, reduce our revenue, adversely affect our results of operations and financial condition and harm our business.

 

The health care industry is highly regulated, and the regulatory environment in which we operate may change significantly and adversely to us in the future. Areas of the regulatory environment that may affect our ability to conduct business include, without limitation:

 

federal and state laws applicable to medical device ordering, documentation of medical devices ordered, billing practices and claims payment and/or regulatory agencies enforcing those laws and regulations, including state licensing laws;

 

federal and state fraud and abuse laws;

 

federal and state laws applicable to pre-clinical and clinical human subject trials;

 

coverage and reimbursement levels by Medicare, Medicaid, other governmental payers and private insurers;

 

restrictions on coverage of, and reimbursement for, medical devices;

 

federal and state Occupational Safety and Health Administration rules and regulations; and

 

HIPAA, and similar state data privacy laws.

 

If we fail to comply with U.S. federal and state fraud and abuse and other healthcare laws and regulations, including those relating to kickbacks and false claims for reimbursement, we could face substantial penalties and our business operations and financial condition could be harmed.

 

Healthcare providers play a primary role in the distribution, recommendation, ordering and purchasing of any medical device for which we have or obtain marketing clearance or approval. Through our arrangements with healthcare professionals and customers, we are exposed to broadly applicable anti-fraud and abuse, anti-kickback, false claims and other healthcare laws and regulations that may constrain our business, our arrangements and relationships with customers, and how we market, sell and distribute our marketed medical device. We have a compliance program, code of conduct and associated policies and procedures, but it is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent noncompliance may not be effective in protecting us from governmental investigations for failure to comply with applicable fraud and abuse or other healthcare laws and regulations.

 

In the United States, we are subject to various state and federal anti-fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and federal False Claims Act, or the FCA. There are similar laws in other countries. Our relationships with physicians, other health care professionals and hospitals, and obstetrician physician practice management groups are subject to scrutiny under these laws.

 

The laws that may affect our ability to operate include, among others:

 

The federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willingly soliciting, offering, receiving or paying remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual, or the purchase, order or recommendation of, items or services for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the Anti-Kickback Statute without proving that a person or entity had actual knowledge of the law or a specific intent to violate. In addition, the government may assert that a claim, including items or services resulting from a violation of the Anti-Kickback Statute, constitutes a false or fraudulent claim for purposes of the FCA. There are a number of statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution under the Anti-Kickback Statute; however, those exceptions and safe harbors are drawn narrowly, and there may be limited or no exception or safe harbor for many common business activities. Certain common business activities including, certain reimbursement support programs, educational and research grants or charitable donations, and practices that involve remuneration to those who prescribe, purchase or recommend medical devices, including discounts, providing items or services for free or engaging such individuals as consultants, advisors or speakers, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor and would be subject to a facts and circumstances analysis to determine compliance with the Anti-Kickback Statute. Our business may not in all cases meet all of the criteria for statutory exception or regulatory safe harbor protection from anti-kickback liability;

 

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Federal, civil and criminal false claims laws, including the FCA, and civil monetary penalties laws, which prohibit, among other things, persons or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds and knowingly making, using or causing to be made or used, a false record or statement to get a false claim paid or to avoid, decrease or conceal an obligation to pay money to the federal government. A claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. Actions under the FCA may be brought by the government or as a qui tam action by a private individual in the name of the government. These individuals, sometimes known as “relators” or, more commonly, as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. Many medical device manufacturers have been investigated and have reached substantial financial settlements with the federal government under the FCA for a variety of alleged improper activities, including causing false claims to be submitted as a result of the marketing of their products for unapproved and thus non-reimbursable uses and interactions with prescribers and other customers, including those that may have affected their billing or coding practices and submission of claims to the federal government. FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory monetary penalties for each false or fraudulent claim or statement. Because of the potential for large monetary exposure, healthcare and medical device companies often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings;

 

HIPAA, which imposes criminal and civil liability for, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, or knowingly and willfully falsifying, concealing or covering up a material fact or making a materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services;

 

HIPAA, as amended by the HITECH Act, and their implementing regulations, also impose obligations, including mandatory contractual terms, on covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates and their covered subcontractors that perform certain services for them or on their behalf involving the use or disclosure of individually identifiable health information with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

 

The federal Physician Payments Sunshine Act, also known as Open Payments, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually, with certain exceptions to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other “transfers of value” made to physicians, defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members. Beginning in 2022, applicable manufacturers also will be required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified nurse anesthetists and certified nurse-midwives; and

 

Analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers; state laws that require medical device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state beneficiary inducement laws, which are state laws that require medical device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

 

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State and federal regulatory and enforcement agencies continue to actively investigate violations of healthcare laws and regulations, and the U.S. Congress continues to strengthen the arsenal of enforcement tools. Most recently, the Bipartisan Budget Act of 2018, or the BBA, increased the criminal and civil penalties that can be imposed for violating certain federal health care laws, including the Anti-Kickback Statute. Enforcement agencies also continue to pursue novel theories of liability under these laws. In particular, government agencies have increased regulatory scrutiny and enforcement activity with respect to manufacturer reimbursement support activities and patient support programs, including bringing criminal charges or civil enforcement actions under the Anti-Kickback Statute, federal FCA and HIPAA’s healthcare fraud and privacy provisions.

 

Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available under such laws, it is possible that some of our business activities, including certain sales and marketing practices of our INVU platform, and financial arrangements with physicians, other healthcare providers, and other customers, could be subject to challenge under one or more such laws. If an arrangement were deemed to violate the Anti-Kickback Statute, it may also subject us to violations under other fraud and abuse laws such as the federal FCA and civil monetary penalties laws. Moreover, such arrangements could be found to violate comparable state fraud and abuse laws.

 

Achieving and sustaining compliance with applicable federal and state anti-fraud and abuse laws may prove costly. If we, our employees or our contractors are found to have violated any of the above laws we may be subjected to substantial criminal, civil and administrative penalties, including imprisonment, exclusion from participation in federal healthcare programs, such as Medicare and Medicaid, and significant fines, monetary penalties, forfeiture, disgorgement and damages, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. Any action or investigation against us for the violation of these healthcare fraud and abuse laws, even if successfully defended, could result in significant legal expenses and could divert our management’s attention from the operation of our business. Companies settling federal FCA, Anti-Kickback Statute or civil monetary penalties law cases also may be required to enter into a Corporate Integrity Agreement with the OIG, in order to avoid exclusion from participation (such as loss of coverage for their products) in federal healthcare programs such as Medicare and Medicaid. Corporate Integrity Agreements typically impose substantial costs on companies to ensure compliance. Defending against any such actions can be costly, time-consuming and may require significant personnel resources, and may harm our business, financial condition and results of operations.

 

In addition, the medical device industry’s relationship with physicians is under increasing scrutiny by the OIG, the U.S. Department of Justice, or the DOJ, the state attorney generals and other foreign and domestic government agencies. Our failure to comply with requirements governing the industry’s relationships with physicians or an investigation into our compliance by the OIG, the DOJ, state attorney generals and other government agencies, could harm our business, financial condition and results of operations.

 

Our employees, independent contractors, consultants, commercial partners and suppliers may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could harm our business, financial condition and results of operations.

 

We are exposed to the risk that our employees, independent contractors, consultants, commercial partners, suppliers and distributors may engage in fraudulent or illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct or disclosure of unauthorized activities to us that violates: (i) the rules and regulations of the FDA and other similar foreign regulatory bodies, including those laws requiring the reporting of true, complete and accurate information to such regulators; (ii) manufacturing standards; (iii) healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or (iv) laws that require the true, complete and accurate reporting of financial information or data. These laws may impact, among other things, future sales, marketing and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

 

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We have adopted a code of conduct, but it is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, imprisonment, additional integrity reporting and oversight obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations. Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations, which could harm our business, financial condition and results of operations.

 

Regulatory compliance is expensive, complex and uncertain, and a failure to comply could lead to enforcement actions against us and other negative consequences for our business.

 

The FDA and similar agencies regulate our INVU platform as a medical device. Complying with these regulations is costly, time-consuming, complex and uncertain. For instance, before a new medical device, or a new intended use for, an existing device can be marketed in the United States, a company must first submit and receive either a 510(k) clearance, de novo authorization or approval of a PMA from the FDA, unless an exemption applies. FDA regulations and regulations of similar agencies are wide-ranging and include, among other things, oversight of:

 

product design, development, manufacturing (including suppliers) and testing;

 

laboratory, preclinical and clinical studies;

 

product safety and effectiveness;

 

product labeling;

 

product storage and shipping;

 

record keeping;

 

pre-market clearance or approval;

 

marketing, advertising and promotion;

 

product sales and distribution;

 

product changes;

 

product recalls; and

 

post-market surveillance and reporting of deaths or serious injuries and certain malfunctions.

 

Our INVU platform is subject to extensive regulation by the FDA and non-U.S. regulatory agencies. Further, improvements of our INVU platform and any potential new products will be subject to extensive regulation and will likely require permission from regulatory agencies and ethics boards to conduct clinical trials and clearance or approval from the FDA and non-U.S. regulatory agencies prior to commercial sale and distribution. Failure to comply with applicable U.S. requirements regarding, for example, promoting, manufacturing or labeling our INVU platform may subject us to a variety of administrative or judicial actions and sanctions, such as Form 483 observations, warning letters, untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution. Any enforcement action by the FDA and other comparable non-U.S. regulatory agencies could harm our business, financial condition and results of operations.

 

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Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or state agencies, which may include any of the following actions:

 

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

 

unanticipated expenditures to address or defend such actions;

 

customer notifications for repair, replacement or refunds;

 

recall, detention or seizure of our INVU platform;

 

operating restrictions or partial suspension or total shutdown or production;

 

refusing or delaying our requests for 510(k) clearance or PMA of new products or modified products;

 

operating restrictions;

 

withdrawing 510(k) clearances or PMAs that have already been granted;

 

refusal to grant export approval for our INVU platform; or

 

criminal prosecution.

 

If any of these events were to occur, it would have a negative impact on our business, financial condition and results of operations.

 

The FDA also regulates the advertising and promotion of our INVU platform to ensure that the claims we make are consistent with our regulatory clearances and approvals, that there are adequate and reasonable data to substantiate the claims and that our promotional labeling and advertising is neither false nor misleading in any respect. If the FDA determines that any of our advertising or promotional claims are misleading, not substantiated or not permissible, we may be subject to enforcement actions, including warning letters, and we may be required to revise our promotional claims and make other corrections or restitutions.

 

Our medical device operations are subject to pervasive and continuing FDA regulatory requirements, and failure to comply with these requirements could harm our business, financial condition and results of operations.

 

Medical devices regulated by the FDA are subject to “general controls” which include: registration with the FDA; listing commercially distributed products with the FDA; complying with GMPs under QSR; filing reports with the FDA of, and keeping records relative to certain types of adverse events associated with devices under the medical device reporting regulation; assuring that device labeling complies with device labeling requirements; reporting certain device field removals and corrections to the FDA; and obtaining pre-market notification 510(k) clearance for devices prior to marketing. Some devices known as “510(k)-exempt” devices can be marketed without prior marketing-clearance or approval from the FDA. The current indications for use and the passive nature of our platform and hardware classifies our product as a Class II product, although future services or tools may subject our product to different classifications or regulatory pathways.

 

The medical device industry is now experiencing greater scrutiny and regulation by federal, state and foreign governmental authorities. Companies in our industry are subject to more frequent and more intensive reviews and investigations, often involving the marketing, business practices and product quality management. Such reviews and investigations may result in civil and criminal proceedings; the imposition of substantial fines and penalties; the receipt of warning letters, untitled letters, demands for recalls or the seizure of our INVU platform; the requirement to enter into corporate integrity agreements, stipulated judgments or other administrative remedies; and result in our incurring substantial unanticipated costs and the diversion of key personnel and management’s attention from their regular duties, any of which may harm our business, financial condition and results of operations, and may result in greater and continuing governmental scrutiny of our business in the future.

 

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Additionally, federal, state and foreign governments and entities have enacted laws and issued regulations and other standards requiring increased visibility and transparency of our interactions with healthcare providers. For example, Open Payments requires us to annually report to CMS payments and other transfers of value to all U.S. physicians and U.S. teaching hospitals, with the reported information made publicly available on a searchable website. Failure to comply with these legal and regulatory requirements could impact our business, and we have had and will continue to spend substantial time and financial resources to develop and implement enhanced structures, policies, systems and processes to comply with these legal and regulatory requirements, which could harm our business, financial condition and results of operations.

 

Material modifications to our INVU platform may require new 510(k) clearances or pre-market approvals or may require us to recall or cease marketing our INVU platform until clearances or approvals are obtained, which could harm our business, financial condition and results of operations.

 

Modifications that could significantly affect the safety and effectiveness of our approved or cleared products, such as changes to the intended use or technological characteristics of our INVU platform, will require new 510(k) clearances or PMAs or require us to recall or cease marketing the modified device until these clearances or approvals are obtained. Based on FDA published guidelines, the FDA requires device manufacturers to initially make and document a determination of whether or not a modification requires a new approval, supplemental approval or clearance; however, the FDA can review a manufacturer’s decision. Any modification to an FDA-cleared device that could significantly affect its safety or efficacy or that would constitute a major change in its intended use may require a new 510(k) clearance or possibly a PMA. We may not be able to obtain additional 510(k) clearances or PMAs for new products or for modifications to, or additional indications for, our INVU platform in a timely fashion, or at all. Delays in obtaining required future clearances or approvals could adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth. For example, the FDA may request additional or new clinical studies to prove safety or efficacy. We may make additional modifications to our INVU platform in the future which could require additional clearances or approvals. If the FDA requires new clearances or approvals for these modifications, we may be required to recall and to stop selling or marketing such product as modified, which could harm our operating results and require us to redesign such product. In these circumstances, we may be subject to significant enforcement actions. The FDA may also change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may impact our ability to modify our currently approved or cleared products on a timely basis. Any of these actions could harm our business, financial condition and results of operations.

 

There is no guarantee that the FDA will approve a de novo classification application, grant 510(k) clearance or pre-market approval of any material modifications to our INVU platform or for future products and failure to obtain necessary clearances or approvals would adversely affect our ability to grow our business.

 

In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially equivalent” to a device legally on the market, known as a “predicate” device, in order to clear the proposed device for marketing. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data is sometimes required to support substantial equivalence. In the de novo classification process, the FDA may classify a novel medical device as Class I or Class II if no predicate device is legally on the market.

 

The FDA’s de novo classification process generally takes six months from submission, but may take longer. The FDA’s 510(k) clearance process usually takes between three to 12 months from submission, but may last longer. The process of obtaining PMA approval is much more rigorous, costly, lengthy and uncertain than the 510(k) clearance process. It generally takes one to three years, or even longer, from the time the PMA is submitted to the FDA until an approval is obtained. In the PMA approval process, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, pre-clinical, clinical trial, manufacturing and labeling data. Any delay or failure to obtain necessary regulatory approvals or clearances would have a material adverse effect on our business, financial condition and prospects.

 

The FDA can delay, limit or deny clearance or approval of a device for many reasons, including:

 

our inability to demonstrate to the satisfaction of the FDA that our INVU platform is safe or effective for its intended uses;

 

the FDA may request additional information following the receipt of a de novo classification application;

 

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the FDA may reject a de novo application upon identification of a legally marketed predicate device and require submission of a 510(k) clearance;

 

our inability to establish substantial equivalence with a predicate device;

 

the disagreement of the FDA with the design, conduct or implementation of our clinical trials or the analysis or interpretation of data from pre-clinical studies or clinical trials;

 

serious and unexpected adverse device effects experienced by participants in our clinical trials;

 

the data from our pre-clinical studies and clinical trials may be insufficient to support clearance or approval, where required;

 

our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

 

an advisory committee, if convened by the FDA, may recommend against approval of our PMA or other application or may recommend that the FDA require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions, or even if an advisory committee, if convened, makes a favorable recommendation, the FDA may still not approve the product;

 

the FDA may identify deficiencies in our marketing application, and in our manufacturing processes, facilities or analytical methods or those of our third-party contract manufacturers;

 

the potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data or regulatory filings insufficient for clearance or approval; and

 

the FDA or foreign regulatory authorities may audit our clinical trial data and conclude that the data is not sufficiently reliable to support a PMA application.

 

If we are unable to obtain approval for any medical device for which we plan to seek approval, our business may be harmed.

 

Although we have obtained regulatory clearance in the United States through MHR and FHR physiological measurements, as well as measuring MUA, and as a result, offering NSTs, and we have similarly obtained certification from the Medical Device Division, or AMAR, of the Ministry of Health in Israel, they will remain subject to extensive regulatory scrutiny. If regulatory sanctions are applied or if regulatory clearance or approval is withdrawn, it would harm our business, financial condition and results of operations.

 

Although we have obtained regulatory clearance in the United States through MHR and FHR physiological measurements, as well as measuring MUA, and as a result, offering NSTs, and we have similarly obtained certification from the AMAR in Israel, our INVU platform will be subject to ongoing regulatory requirements for manufacturing, distributing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies and submission of safety, effectiveness and other post-market information, including both federal and state requirements in the United States and requirements of comparable non-U.S. regulatory authorities.

 

Our manufacturing facilities are required to comply with extensive requirements imposed by the FDA and comparable foreign regulatory authorities, including ensuring that quality control and manufacturing procedures conform to the QSR or similar regulations set by foreign regulatory authorities. As such, we will be subject to continual review and inspections to assess compliance with the QSR and adherence to commitments made in any 510(k), de novo classification, or PMA application. Accordingly, we continue to spend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

 

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Any regulatory clearances or approvals that we have received for our INVU platform will be subject to limitations on the cleared or approved indicated uses for which the product may be marketed and promoted, will be subject to the conditions of approval, or will contain requirements for potentially costly post-marketing testing. We are required to report certain adverse events and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing product safety issues could result in increased costs to ensure compliance. The FDA and other agencies, including the DOJ, closely regulate and monitor the post-clearance or approval marketing and promotion of products to ensure that they are marketed and distributed only for the cleared or approved indications and in accordance with the provisions of the cleared or approved labeling. We have to comply with requirements concerning advertising and promotion for our INVU platform.

 

Promotional communications with respect to devices are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the products’ cleared or approved labeling. As such, we may not promote our products for indications or uses for which they do not have clearance or approval. For certain changes to a cleared or approved product, including certain changes to product labeling, the holder of a cleared 510(k), de novo classification or approved PMA application may be required to submit a new application and obtain clearance or approval. We train our marketing and sales force against promoting our products for uses outside of the cleared or approved indications for use, known as off-label uses. However, physicians or healthcare providers may use our products for off-label purposes and are allowed to do so when in the physician’s independent professional medical judgment he or she deems it appropriate. If the FDA determines that our promotional materials or training constitute promotion of an off-label or other improper use, or that our internal policies and procedures are inadequate to prevent such off-label uses, it could subject us to regulatory or enforcement actions as discussed below.

 

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with our facilities where the product is manufactured or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or on us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:

 

subject our facilities to an adverse inspectional finding or Form 483, or other compliance or enforcement notice, communication or correspondence;

 

issue warning or untitled letters that would result in adverse publicity or may require corrective advertising;

 

impose civil or criminal penalties;

 

suspend or withdraw regulatory clearances or approvals;

 

refuse to clear or approve pending applications or supplements to approved applications submitted by us;

 

impose restrictions on our operations, including closing our suppliers’ facilities;

 

seize or detain products; or

 

require a product recall.

 

In addition, violations of the Federal Food, Drug and Cosmetic Act, relating to the promotion of approved products may lead to investigations alleging violations of federal and state healthcare fraud and abuse and other laws, as well as state consumer protection laws.

 

Any government investigation of alleged violations of law could require us to expend significant time and resources in response, and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and negatively impact our ability to commercialize and generate revenue from our INVU platform. If regulatory sanctions are applied or if regulatory clearance or approval is withdrawn, it would harm our business, financial condition and results of operations.

 

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If we or our suppliers fail to comply with the FDA’s QSR, or any applicable state equivalent, our operations could be interrupted and our potential product sales and operating results could suffer.

 

Our manufacturing processes and those of our third-party suppliers are required to comply with the FDA’s QSR, which covers the design controls, document controls, purchasing controls, identification and traceability, production and process controls, acceptance activities, nonconforming product requirements, corrective and preventive action requirements, labeling and packaging controls, handling, storage, distribution and installation requirements, complaint handling, records requirements, servicing requirements and statistical techniques potentially applicable to the production of our medical device product. In addition, we must engage in extensive recordkeeping and reporting and must make available our manufacturing facilities and records for periodic announced or unannounced inspections by governmental agencies, including the FDA, state authorities and comparable agencies in other countries. If we experience an unsuccessful Quality System inspection, our operations could be disrupted and our manufacturing could be interrupted. Failure to take adequate corrective action in response to an adverse Quality System inspection could result in, among other things, a shut-down of our manufacturing operations, significant fines, suspension of marketing clearances and approvals, seizures or recalls of our device, operating restrictions and criminal prosecutions, any of which would cause our business to suffer. Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with applicable regulatory requirements, which may result in manufacturing delays for our INVU platform and cause our revenue to decline. We have registered with the FDA as a medical device manufacturer. We anticipate that we and certain of our third-party component suppliers will be subject to FDA and local regulatory inspections.

 

We or our suppliers may not be able to continue to remain in compliance with QSR. If any manufacturer’s facilities in the United States were found to be in noncompliance or fail to take satisfactory corrective action in response to adverse QSR inspectional findings, the FDA could take legal or regulatory enforcement actions against us and/or our products, including, but not limited to, the cessation of sales or the recall of our products, which could impair our ability to produce our products in a cost-effective and timely manner in order to meet our customers’ demands. We may also be required to bear other costs or take other actions that may have a negative impact on our future sales and our ability to generate profits. Taking corrective action may be expensive, time-consuming and a distraction for management, and if we experience a shutdown or delay at our manufacturing facilities, we may be unable to produce our products, which would harm our business.

 

Current regulations depend heavily on administrative interpretation. If the FDA does not believe that we are in compliance with applicable FDA regulations, the agency could take legal or regulatory enforcement actions against us and/or our products. We are also subject to periodic inspections and audits by the FDA and other governmental regulatory agencies, as well as certain third-party regulatory groups. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business. Future interpretations made by the FDA or other regulatory bodies made during the course of these inspections or audits may vary from current interpretations and may adversely affect our business and prospects. The FDA’s and other comparable non-U.S. regulatory agencies’ statutes, regulations, policies or interpretations may change, and additional government regulation or statutes may be enacted, which could increase post-approval regulatory requirements, or delay, suspend or prevent marketing of any cleared or approved products or necessitate the recall of distributed products. We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative or administrative action, either in the United States or abroad.

 

The medical device industry has been under heightened FDA scrutiny as the subject of government investigations and enforcement actions. If our operations and activities are found to be in violation of any FDA laws or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and other legal and/or agency enforcement actions. Any penalties, damages, fines or curtailment or restructuring of our operations or activities could harm our ability to operate our business and our financial results. The risk of us being found in violation of FDA law or regulations is increased by the fact that many of these laws and regulations are broad and their provisions are open to a variety of interpretations. Any action against us for violation of these laws, even if we successfully defend ourselves against that action and its underlying allegations, could cause us to incur significant legal expenses and divert management’s attention from the operation of our business. Where there is a dispute with a federal or state governmental agency that cannot be resolved to the mutual satisfaction of all relevant parties, we may determine that the costs, both real and contingent, are not justified by the commercial returns to us from maintaining the dispute or the product.

 

Various claims, design features or performance characteristics of our medical device that we may regard as permitted by the FDA without marketing clearance or approval may be challenged by the FDA or state or foreign regulators. The FDA or state or foreign regulatory authorities may find that certain claims, design features or performance characteristics, in order to be made or included in the product, may have to be supported by further studies and marketing clearances or approvals, which could be lengthy, costly and possibly unobtainable.

 

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Our INVU platform and wearable wireless sensor band may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations. The discovery of serious safety issues with our wearable wireless sensor band, or a recall of our wearable wireless sensor band either voluntarily or at the direction of the FDA or another governmental authority could have a negative impact on us.

 

We are subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA when we receive or become aware of information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury. The timing of our obligation to report is triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events of which we become aware within the prescribed timeframe. We may also fail to recognize that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply with our reporting obligations, the FDA could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device clearance or approval, seizure of our products or delay in clearance or approval of future products.

 

The FDA and foreign regulatory bodies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. The FDA’s authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily recall a product if any material deficiency is found. A government-mandated or voluntary recall by us could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies or failures to comply with applicable regulations. Product defects or other errors may occur in the future.

 

Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA may require, or we may decide, that we will need to obtain new clearances or approvals for the device before we may market or distribute the corrected device. Seeking such clearances or approvals may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions, administrative penalties or civil or criminal fines.

 

Companies are required to maintain certain records of recalls and corrections, even if they are not reportable to the FDA. We may initiate voluntary withdrawals or corrections for our products in the future that we determine do not require notification of the FDA. If the FDA disagrees with our determinations, it could require us to report those actions as recalls and we may be subject to enforcement action. A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, will distract management from operating our business and may harm our reputation and financial results.

 

Our products may in the future be subject to product recalls that could harm our reputation, business and financial results.

 

Medical devices can experience performance problems in the field that require review and possible corrective action. The occurrence of component failures, manufacturing errors, software errors, design defects or labeling inadequacies affecting a medical device could lead to a government-mandated or voluntary recall by the device manufacturer, in particular when such deficiencies may endanger health. The FDA requires that certain classifications of recalls be reported to the FDA within 10 working days after the recall is initiated. Companies are required to maintain certain records of recalls, even if they are not reportable to the FDA. We may initiate voluntary recalls in the f