IPO and Trust Account - The company completed its initial public offering on January 12, 2021, raising gross proceeds of $276 million from the sale of 27,600,000 units at $10.00 per unit[29]. - A total of $278.76 million was placed in a trust account, which includes net proceeds from the IPO and a private placement of 8,700,000 warrants[30]. - As of December 31, 2022, the company had approximately $30,312,244 held in the trust account and $40,801 available outside the trust account for a business combination[84]. - The amount in the trust account as of December 31, 2022, was approximately $10.20 per public share[106]. - Approximately $251.6 million was redeemed from the trust account, resulting in about $10.20 per share for stockholders[170]. - The trust account held $40,801 as of December 31, 2022, which may be used to pay potential claims but could also be spent on public company expenses[133]. - The company expects to use $40,801 held outside the trust account for costs associated with dissolution if no business combination is completed[126]. Business Combination Agreement - The Quality Gold Business Combination Agreement was entered into on October 20, 2022, involving multiple mergers with Quality Gold Companies[33]. - The total merger consideration includes up to $35 million in cash and 83.1 million newly issued shares of New Parent Common Stock[40]. - The Quality Gold Business Combination Agreement includes customary representations, warranties, and covenants from both parties[44]. - The consummation of the transactions is subject to customary conditions, including stockholder approval[45]. - The Quality Gold Business Combination is subject to stockholder approval and regulatory compliance, including the expiration of the waiting period under the HSR Act[46]. - The Effective Time for the Quality Gold Business Combination is set for April 20, 2023, with a possible extension to June 20, 2023, if necessary filings are not completed[49]. - Key Quality Gold Equityholders have agreed to vote in favor of the Quality Gold Business Combination and to repay any indebtedness owed to the Quality Gold Companies prior to the Effective Time[51]. - The Quality Gold Business Combination Agreement includes provisions for termination under specific conditions, including failure to obtain stockholder approval[49]. Financial Performance and Projections - For the year ended December 31, 2022, the company reported a net income of $7,097,636, primarily due to a gain in the change in fair value of warrant liabilities of $7,875,000 and interest income of $3,862,680[181]. - The company had net cash used in operating activities of $1,516,908 for the year ended December 31, 2022, primarily due to operational costs and taxes[185]. - The company generated net cash provided by investing activities of $252,370,754, resulting from cash withdrawn from the trust account for payments to redeeming stockholders[187]. - The company aims to complete its initial business combination with an expected enterprise value of approximately $400 million to $1 billion[75]. - The fair market value of the initial business combination must be at least 80% of the value of the assets held in the trust account[76]. Management and Acquisition Strategy - The management team has extensive experience in mergers and acquisitions, having completed over 100 transactions since 2010, which is expected to drive stockholder value[60]. - The acquisition strategy focuses on identifying growth-oriented companies with strong unit economics and significant growth prospects in the Target Sectors[61]. - The company aims to leverage its management team's networks and industry experience to source acquisition opportunities[62]. - The acquisition process includes thorough due diligence, including meetings with management and financial reviews[71]. - The company does not intend to purchase multiple businesses in unrelated industries in conjunction with its initial business combination[77]. Risks and Challenges - The company faces intense competition from other entities, including private investors and other blank check companies, which may limit its ability to acquire sizable target businesses[139]. - The company may not be able to acquire a target business if it cannot meet GAAP and PCAOB standards for financial statements[143]. - The company may face risks related to bankruptcy, which could affect the ability to return funds to stockholders and expose the board to claims of breach of fiduciary duty[137]. - Economic uncertainty and volatility in financial markets may adversely affect the ability to consummate an initial business combination[158]. - The company may face challenges in retaining or recruiting key personnel following the initial business combination[149]. Stockholder Rights and Redemption - Stockholder approval is required for mergers with the company, while asset purchases and stock purchases typically do not require approval[96]. - Public stockholders will have the opportunity to redeem shares at a price equal to the aggregate amount in the trust account, including interest earned[106]. - The company may conduct redemptions without stockholder votes under SEC tender offer rules, unless required by law or stock exchange rules[95]. - If stockholder approval is required, proxy materials will be distributed along with redemption rights for public stockholders[111]. - The company intends to redeem public shares promptly after the end of the acquisition period, which may expose stockholders to claims from creditors[136]. Internal Controls and Reporting - Management identified material weaknesses in internal control over financial reporting, particularly regarding complex financial instruments and accruals[218][222]. - Management assessed the effectiveness of internal control over financial reporting and concluded it was not effective as of December 31, 2022, due to identified material weaknesses[222]. - The Company does not expect that its disclosure controls and procedures will prevent all errors and instances of fraud, acknowledging inherent limitations[219]. - There have been no changes to internal control over financial reporting during the fiscal year ended December 31, 2022, that materially affected its effectiveness[223].
Priveterra Acquisition II(PMGM) - 2022 Q4 - Annual Report