Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40877 PHOENIX BIOTECH ACQUISITION CORP. (Exact name of registrant as specified in its charter) Delaware 87-1088814 ( ...

PART I [Item 1. Business](index=6&type=section&id=Item%201.%2E%20Business) Phoenix Biotech Acquisition Corp. is a SPAC targeting healthcare and life sciences, aiming for a business combination by January 8, 2023 - The company is a **blank check company (SPAC)** formed to effect a business combination, focusing on the **healthcare or healthcare-related industries**, particularly the **life sciences sector**, in the United States and Europe[18](index=18&type=chunk)[19](index=19&type=chunk) Initial Public Offering and Private Placement Details (as of December 31, 2021) | Metric | Value | | :----------------------------------- | :------------- | | IPO Units Sold | 17,500,000 Units | | IPO Gross Proceeds | $175,000,000 | | Private Placement Units Sold | 885,000 Units | | Private Placement Gross Proceeds | $8,850,000 | | Total Funds in Trust Account | $178,500,000 | | IPO Consummation Date | October 8, 2021 | - The management team, including Chairman Brian Atwood, CEO Chris Ehrlich, President Douglas Fisher, and CFO Daniel Geffken, possesses significant experience in the life sciences sector, venture capital, and business development, expected to aid in identifying and executing a **high-value business combination**[24](index=24&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The company identifies the healthcare industry as a **large and growing market** with constant innovation, high investment in technology, and an abundance of private life science companies seeking capital, making it an attractive sector for business combinations[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - The SPAC model offers advantages such as potentially reduced management time, improved access to diverse capital, better price discovery, and mitigation of IPO window closing risks for target biotechnology companies[47](index=47&type=chunk)[48](index=48&type=chunk) - The company's acquisition strategy involves leveraging its management team's wide network and deep industry expertise to proactively source unique opportunities in emerging growth healthcare companies, including biotechnology, medical technology, and digital health[50](index=50&type=chunk)[51](index=51&type=chunk) - Key acquisition criteria include target businesses with **differentiated products/technologies** addressing unmet needs, sufficient progress to reduce investment risk, unrecognized value, strong management, and the ability to benefit from public capital markets[53](index=53&type=chunk)[58](index=58&type=chunk) - The company must complete an initial business combination with an aggregate fair market value of at least **80% of the assets in the trust account** and acquire a controlling interest in the target business[55](index=55&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Public stockholders have redemption rights upon the consummation of a business combination, allowing them to redeem their Class A common stock at a per-share price based on the trust account balance, subject to a minimum net tangible asset requirement of **$5,000,001** post-redemption[92](index=92&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - If a business combination is not consummated by **January 8, 2023**, the company will liquidate and distribute the trust account proceeds to public stockholders, with warrants expiring worthless[111](index=111&type=chunk)[129](index=129&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks, including the potential inability to consummate a business combination by the January 8, 2023 deadline, which would result in liquidation and worthless warrants - The company may not be able to consummate a business combination by **January 8, 2023**, leading to liquidation and public stockholders receiving approximately **$10.20 per share**, while warrants would expire worthless[154](index=154&type=chunk)[163](index=163&type=chunk) - The **COVID-19 pandemic** could materially adversely affect the search for a business combination and the operations of any target business[155](index=155&type=chunk) - The sponsor, directors, and officers have agreed to vote in favor of a business combination, potentially influencing the outcome regardless of public stockholder sentiment, and their founder shares could result in significant dilution to public stockholders[145](index=145&type=chunk)[251](index=251&type=chunk)[253](index=253&type=chunk) - Conflicts of interest may arise due to officers' and directors' affiliations with other entities, including other blank check companies, potentially diverting business opportunities[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk) - The securities in the trust account could bear a **negative interest rate**, potentially reducing the per-share redemption amount below **$10.20**[256](index=256&type=chunk) - The company's status as an **'emerging growth company'** and **'smaller reporting company'** allows for certain exemptions from disclosure requirements, which might make its securities less attractive to some investors or complicate comparisons with other public companies[295](index=295&type=chunk)[298](index=298&type=chunk) - The increasing number of SPACs intensifies competition for attractive targets, potentially increasing acquisition costs and making it harder to find a suitable business combination[229](index=229&type=chunk)[230](index=230&type=chunk) [Item 1B. Unresolved Staff Comments](index=63&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[303](index=303&type=chunk) [Item 2. Properties](index=63&type=section&id=Item%202.%20Properties) The company does not own any real estate or physical properties, maintaining executive offices in Oakland, CA, for which it pays its sponsor $20,000 per month - The company does not own any real estate or other physical properties[304](index=304&type=chunk) - Executive offices are located at 2201 Broadway, Suite 705, Oakland, CA 94612, with a monthly payment of **$20,000** to the sponsor or its affiliate for office space and support services[304](index=304&type=chunk) [Item 3. Legal Proceedings](index=63&type=section&id=Item%203.%20Legal%20Proceedings) As of the report date, there is no material litigation, arbitration, or governmental proceeding pending against the company or its management team - No material litigation, arbitration, or governmental proceeding is currently pending against the company or its management team[305](index=305&type=chunk) [Item 4. Mine Safety Disclosure](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company - This item is not applicable[306](index=306&type=chunk) PART II [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=64&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's units, Class A common stock, and warrants commenced public trading on NASDAQ in October and November 2021, respectively, with no cash dividends paid or intended prior to a business combination - The company's units, Class A common stock, and warrants are listed on the NASDAQ Global Market under symbols PBAXU, PBAX, and PBAXW, respectively, with units commencing trading on **October 6, 2021**, and stock/warrants on **November 26, 2021**[308](index=308&type=chunk) Record Holders (as of March 24, 2022) | Security Type | Number of Record Holders | | :------------ | :----------------------- | | Class A Common Stock | 1 | | Units | 2 | | Warrants | 1 | - The company has not paid cash dividends and does not intend to prior to completing an initial business combination[310](index=310&type=chunk) IPO and Private Placement Financials | Metric | Amount ($) | | :----------------------------------- | :------------- | | IPO Gross Proceeds | 175,000,000 | | Private Placement Gross Proceeds | 8,850,000 | | Total Transaction Costs | 12,729,318 | | Underwriting Discounts and Commissions | 2,635,000 | | Deferred Underwriting Commissions | 9,150,000 | | Other Offering Costs | 944,318 | | Funds Placed in Trust Account | 178,500,000 | | Cash Held Outside Trust Account (as of Oct 8, 2021) | 2,013,672 | [Item 6. [RESERVED]](index=65&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved as the company is a smaller reporting company and not required to provide the information - As a smaller reporting company, the company is not required to provide the information for this item[318](index=318&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=65&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company is a blank check company with no operating revenues, reporting a net loss of $315,547 for the period from inception to December 31, 2021, and holding $1.098 million in cash outside the trust account and $178.5 million within it - The company is a **blank check company** with no operating revenues to date, focusing on organizational activities and the search for a prospective initial business combination[321](index=321&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) Financial Performance (June 8, 2021 - December 31, 2021) | Metric | Amount ($) | | :-------------------------- | :------------- | | Net Loss | (315,547) | | Operating Expenses | 251,706 | | Delaware Franchise Taxes | 80,324 | | Cash Used in Operating Activities | (697,109) | | Cash Used in Investing Activities | (178,500,000) | | Cash Provided by Financing Activities | 180,295,682 | Liquidity and Capital Resources (as of December 31, 2021) | Metric | Amount ($) | | :----------------------------------- | :------------- | | Cash Outside Trust Account | 1,098,573 | | Cash and Marketable Securities in Trust Account | 178,499,615 | | Working Capital | 1,263,001 | | Deferred Underwriting Fee Payable | 9,150,000 | | Monthly Administrative Services Fee | 20,000 | | Monthly CEO Spouse Consulting Fee | 15,000 | - The company has no off-balance sheet financing arrangements, long-term debt, capital lease obligations, or operating lease obligations[335](index=335&type=chunk)[336](index=336&type=chunk) - Key accounting policies include accounting for warrants as equity-classified instruments and common stock subject to possible redemption as temporary equity, with changes in redemption value recognized immediately[340](index=340&type=chunk)[341](index=341&type=chunk)[495](index=495&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the company is not required to provide information on quantitative and qualitative disclosures about market risk[344](index=344&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the company's audited financial statements and supplementary data, which are included elsewhere in the Annual Report following Item 15 - Audited financial statements and supplementary data are included following Item 15 of this Annual Report[345](index=345&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=70&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - There are no changes in or disagreements with accountants on accounting and financial disclosure[346](index=346&type=chunk) [Item 9A. Controls and Procedures](index=70&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2021, the company's disclosure controls and procedures were evaluated as effective, with no material changes in internal control over financial reporting during the most recent fiscal quarter - As of **December 31, 2021**, the company's disclosure controls and procedures were evaluated as effective[347](index=347&type=chunk) - The report does not include management's assessment or an attestation report from the registered public accounting firm on internal control over financial reporting, due to a transition period for newly public companies[349](index=349&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect the company's internal control over financial reporting during the most recent fiscal quarter[350](index=350&type=chunk) [Item 9B. Other Information](index=70&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - No other information is reported under this item[351](index=351&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=70&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) There are no disclosures regarding foreign jurisdictions that prevent inspections - No disclosures regarding foreign jurisdictions that prevent inspections[352](index=352&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=71&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's executive officers include Chris Ehrlich (CEO), Daniel Geffken (CFO), and Douglas Fisher (President), supported by a board of directors with extensive life sciences and financial expertise, an audit committee (chaired by Caroline Loewy, a financial expert), and a compensation committee (chaired by Kathleen LaPorte), all composed of independent directors, operating under an adopted code of conduct and ethics Directors and Executive Officers (as of March 24, 2022) | Name | Age (Years) | Title | | :---------------- | :-- | :-------------------------------- | | Chris Ehrlich | 52 | Chief Executive Officer and Director | | Daniel Geffken | 65 | Chief Financial Officer | | Douglas Fisher | 46 | President | | Brian G. Atwood | 69 | Director | | Kathleen LaPorte | 60 | Director | | Barbara Kosacz | 64 | Director | | Caroline Loewy | 56 | Director | - The board of directors is divided into **two classes** with staggered two-year terms[368](index=368&type=chunk) - The audit committee consists of Brian Atwood, Kathleen LaPorte, and Caroline Loewy, all independent directors, with Ms. Loewy serving as Chairman and qualifying as an **'audit committee financial expert'**[373](index=373&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk) - The compensation committee consists of Kathleen LaPorte and Barbara Kosacz, both independent directors, with Ms. LaPorte serving as Chairman[377](index=377&type=chunk) - A code of conduct and ethics applicable to directors, officers, and employees has been adopted[383](index=383&type=chunk) [Item 11. Executive Compensation](index=77&type=section&id=Item%2011.%20Executive%20Compensation) No executive officers or directors have received cash compensation for services rendered prior to or in connection with the consummation of an initial business combination, except for certain reimbursements and fees to affiliates for administrative and advisory services - No executive officers or directors have received cash compensation for services rendered prior to or in connection with the consummation of an initial business combination[384](index=384&type=chunk) - Compensation to the sponsor or its affiliates includes repayment of loans, monthly fees for office space and support services (**$20,000/month**), and advisory fees to CCM (**$465,000** at IPO closing, **$1,162,500** upon business combination closing)[384](index=384&type=chunk) - Post-business combination, directors or management team members who remain may receive director, consulting, or management fees, to be determined by the combined company's directors[385](index=385&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=78&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 24, 2022, the company had 18,385,000 shares of Class A common stock and 4,596,250 shares of Class B common stock outstanding, with the sponsor and CEO Chris Ehrlich beneficially owning 23.0% of the combined voting power Outstanding Common Stock (as of March 24, 2022) | Class | Shares Outstanding (Units) | | :---------------- | :----------------- | | Class A Common Stock | 18,385,000 | | Class B Common Stock | 4,596,250 | Beneficial Ownership (as of March 24, 2022) | Name | Class A Shares (Units) | % of Class A (%) | Class B Shares (Units) | % of Class B (%) | Combined Voting Power (Units) | % of Combined Voting Power (%) | | :-------------------------------- | :------------- | :----------- | :------------- | :----------- | :-------------------- | :------------------------- | | Chris Ehrlich (and Sponsor) | 699,996 | 3.8% | 4,596,250 | 100.0% | 5,296,246 | 23.0% | | Highbridge Capital Management, LLC | 1,037,794 | 5.6% | — | — | 1,037,794 | 4.5% | | Beryl Capital Management LLC | 1,230,264 | 6.7% | — | — | 1,230,264 | 5.4% | [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=80&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has a related party policy and its audit committee reviews and approves related party transactions to mitigate conflicts of interest, with key transactions including founder shares, a private placement, and administrative service fees paid to the sponsor - The company has a code of conduct and ethics requiring avoidance of conflicts of interest, and its audit committee reviews and approves related party transactions[397](index=397&type=chunk)[398](index=398&type=chunk) - The sponsor paid **$25,000** for **4,596,250 founder shares** (Class B common stock), which are subject to transfer restrictions until one year post-business combination or earlier under certain conditions[402](index=402&type=chunk)[403](index=403&type=chunk) - A private placement of **885,000 units** for **$8.85 million** was made to the sponsor, Cantor Fitzgerald, and CCM, with proceeds held in the trust account[405](index=405&type=chunk) - The company pays its sponsor or an affiliate **$20,000 per month** for office space and administrative support services[411](index=411&type=chunk) - Officers and directors have pre-existing fiduciary or contractual obligations to other entities, potentially creating conflicts of interest, but the company's amended and restated certificate of incorporation includes a waiver of the corporate opportunity doctrine[414](index=414&type=chunk)[415](index=415&type=chunk)[417](index=417&type=chunk) - Brian G. Atwood, Kathleen LaPorte, Caroline M. Loewy, and Barbara A. Kosacz are **independent directors** under NASDAQ rules and Rule 10A-3 of the Exchange Act[420](index=420&type=chunk) [Item 14. Principal Accountant Fees and Services](index=84&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Citrin Cooperman & Company, LLP served as the independent registered public accounting firm, with audit fees totaling $49,000 for the period from inception through December 31, 2021, and all services pre-approved by the audit committee - Citrin Cooperman & Company, LLP acted as the independent registered public accounting firm[421](index=421&type=chunk) Principal Accountant Fees (June 8, 2021 - December 31, 2021) | Fee Type | Amount ($) | | :---------------- | :------------- | | Audit Fees | 49,000 | | Audit-Related Fees | 0 | | Tax Fees | 0 | | All Other Fees | 0 | - The audit committee pre-approves all auditing services and permitted non-audit services[426](index=426&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the company's audited financial statements and supplementary data, including the Balance Sheet, Statement of Operations, Statement of Changes in Stockholders' Deficit, Statement of Cash Flows, and accompanying Notes to Financial Statements for the period from June 8, 2021 (inception) to December 31, 2021 - The section includes the Report of Independent Registered Public Accounting Firm, Balance Sheet, Statement of Operations, Statement of Changes in Stockholders' Deficit, Statement of Cash Flows, and Notes to Financial Statements[428](index=428&type=chunk)[430](index=430&type=chunk) - The financial statements were audited by Citrin Cooperman & Company, LLP and present fairly the financial position as of **December 31, 2021**, and results of operations and cash flows for the period from **June 8, 2021 (inception)** through **December 31, 2021**[433](index=433&type=chunk) Balance Sheet Highlights (as of December 31, 2021) | Asset/Liability | Amount ($) | | :----------------------------------- | :------------- | | Total Assets | 180,078,207 | | Investments held in Trust Account | 178,499,615 | | Cash | 1,098,573 | | Total Liabilities | 9,248,072 | | Deferred underwriting fee payable | 9,150,000 | | Class A Common Stock subject to possible redemption | 178,500,000 | | Total Stockholders' Deficit | (7,669,865) | Statement of Operations Highlights (June 8, 2021 - December 31, 2021) | Item | Amount ($) | | :----------------------------------- | :------------- | | Total Operating Expenses | 332,030 | | Unrealized loss on marketable securities in Trust Account | (385) | | Income tax expense (benefit) | (16,868) | | Net Loss | (315,547) | | Basic and diluted net income per share, Class A | 4.15 | | Basic and diluted net loss per share, Class B | (0.03) | Statement of Cash Flows Highlights (June 8, 2021 - December 31, 2021) | Activity | Amount ($) | | :----------------------------------- | :------------- | | Net cash flows used in operating activities | (697,109) | | Net cash flows used in investing activities | (178,500,000) | | Net cash flows provided by financing activities | 180,295,682 | | Net Change in Cash | 1,098,573 | | Cash, End of Period | 1,098,573 | - Notes to Financial Statements provide detailed information on the company's formation, IPO, private placement, related party transactions, commitments, contingencies, and accounting policies, including the treatment of warrants and redeemable common stock[447](index=447&type=chunk)[448](index=448&type=chunk)[470](index=470&type=chunk)[497](index=497&type=chunk)[498](index=498&type=chunk)[499](index=499&type=chunk)[506](index=506&type=chunk)[510](index=510&type=chunk)[525](index=525&type=chunk) [Item 16. Form 10-K Summary](index=107&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - This item is not applicable[534](index=534&type=chunk)

Washington, D.C. 20549 FORM 10-Q (Mark One) Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40877 PHOENIX BIOTECH ACQUISITION CORP. (Exact name of registrant as specified in its charter) Delaware 87-10888 ...