BioPlus Acquisition Corp. - Annual Report: 2021 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM

 

(Mark One)

For the fiscal year ended December 31, 2021

For the transition period from                 to                

Commission file number:

 

BioPlus Acquisition Corp.

(Exact name of registrant as specified in its charter)

 

Registrant’s telephone number, including area code: (212)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

 

S-T

non-accelerated

12b-2

As of March 9, 2022

TABLE OF CONTENTS

We are an early stage blank check company formed as a Cayman Islands exempted company incorporated for the purpose of effecting an initial business combination. Since our initial public offering (as described below), we have focused our search for an initial business combination on businesses within the life sciences industry. Our efforts to identify a prospective target business are not limited to a particular industry or geographic region, although we are focusing on targets in an industry where we believe our management team’s and founders’ expertise provide us with a competitive advantage, including the life sciences industry.

On December 7, 2021, we consummated our initial public offering of 23,000,000 public units. Each unit consists of one Class A Ordinary Share of the Company, par value $0.0001 per share, and redeemable warrant of the Company, with each warrant entitling the holder thereof to purchase one Class A Ordinary Share for $11.50 per whole share. The public units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $230,000,000.

Simultaneously with the closing of the initial public offering, we completed the private sale of an aggregate of 560,000 placement units (380,000 of which were sold to our sponsor and 180,000 of which were sold to Cantor), at a purchase price of $10.00 per placement unit, generating gross proceeds of $5,600,000.

A total of $234,600,000, comprised of $224,800,000 of the proceeds from the initial public offering and $5,600,000 of the proceeds of the sale of the placement units, was placed in the trust account maintained by Continental, acting as trustee.

It is the job of our sponsor and management team to complete our initial business combination. Our management team is led by Jonathan Rigby, our Chairman of the Board and Chief Business Officer, and Ross Haghighat, our Chief Executive Officer, Chief Financial Officer and Director, who have many years of experience in growing and operating life sciences companies and in acquiring and integrating companies. We must complete our initial business combination by June 7, 2023, 18 months from the closing of our initial public offering. If our initial business combination is not consummated by June 7, 2023, then our existence will terminate, and we will distribute all amounts in the trust account.

The intersection of technological innovation and the ability to harness that innovation within the healthcare industry is providing an opportunity for significant value creation in the public markets for companies seizing the moment. Our management team believes the healthcare industry, particularly the life sciences sector, represents an enormous and growing target market with a large number of potential companies that will benefit from our expertise and networks to accelerate the company’s trajectory through the public markets. We believe that, with the structural factors highlighted below and combined with the proper mentorship and guidance from our management team and board of directors’ collective experience, particularly within the life sciences sector, we will be able to identify and merge with an attractive biotechnology or life sciences company that will deliver long-term compounded returns for our investors.

Healthcare spending represents a massive market, driven by favorable demographics and accelerating innovation. The Centers for Medicare and Medicaid Services (“CMS”) estimates that U.S. national healthcare expenditures currently exceed $3.6 trillion, or 18% of the US GDP, and are expected to outpace growth of the broader U.S. economy at an average rate of 5—6% per year until 2028, when national healthcare expenditures are predicted to reach $6.2 trillion, or 20% of the US GDP. Global market dynamics are similar, with Deloitte projecting global healthcare spending to increase at an annual rate of 5.4% between 2018 and 2022, an acceleration from 2.9% between 2013 and 2017. We expect that this growth will continue to be supported by multi-decade global, secular trends, including population growth, improved life expectancy, increased prevalence of chronic diseases, and access to drugs in emerging markets brought about by growth of the middle classes.

 

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Global market dynamics for pharmaceutical spending mirror these trends. EvaluatePharma and IQVIA estimate that global prescription drug sales are expected to grow at a CAGR of over 7% from approximately $870 billion in 2019 to $1.4 trillion in 2026. We believe these budgetary pressures will support the demand for innovative biotechnology and life sciences companies that create more efficient and effective medical treatments.

Over recent years, there has been an explosion in private biotechnology company formation and growth as the pharmaceutical industry has increasingly shifted its research and development (“R&D”) strategy towards external innovation through transactions and strategic acquisitions. According to IQVIA estimates, in the period between 2014 and 2019, the 15 largest pharmaceutical companies increased annual R&D spending by approximately only 5% per year from $87 billion to $110 billion. According to data from Pitchbook, this R&D spending was dramatically outpaced by global life sciences venture capital deal volume which accelerated meaningfully to grow at over 28% per year between 2014 and 2020, reaching $53.4 billion in 2020, and helping to fund the proliferation of new companies.

We believe the role of early-stage biotechnology companies will only continue to grow due to the rapid pace of biomedical innovation, the favorable regulatory environment for promising drugs, the emergence of efficient patient selection strategies for clinical trials, the strong underlying demand for novel therapies, and an abundance of attractive exit opportunities. According to a 2019 report published by Silicon Valley Bank, nearly 42% of drugs which originated in the US came from venture capital-backed startups. According to Pitchbook estimates, out of the nearly 26,600 biotechnology and pharmaceuticals companies globally, only approximately 3,000 are currently publicly traded, indicating a high volume of private biotechnology companies that could potentially be a strong fit for a business combination with us.

Early-stage companies need capital and market reach to maximize their commercial potential. We believe that biotechnology and life sciences companies, at a certain stage in their development, see material benefits from going public, including greater access to capital, a liquid currency and increased market awareness.

In recent years, the process of going public has played an increasingly important role in the life cycle of early-stage biotechnology companies. According to data from FactSet, between 2014 and 2019, a total of more than 311 biotechnology companies completed an initial public offering (“IPO”) in the US, more than any other industry sector. Despite the equity market volatility resulting from the pandemic, based on FactSet estimates, 2020 was a record year for biotechnology companies completing IPOs in the US, with more than $14 billion of capital raised in 75 IPOs. At the same time, the Nasdaq Biotech Index (“NBI”) outperformed the general market in 2020, with a 27% return for the NBI versus a 15% return for the S&P 500. Despite strong investor appetite in the equity markets for biotechnology stocks, the increase in dollar volume of venture capital and private equity capital allocated to the sector between 2010 and 2020 far exceeded the increase in IPO dollar volume, indicating significant untapped potential for special purpose acquisition companies (“SPACs”) to fill the void as a valid exit mechanism to the public markets.

 

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SPACs focused on life science companies currently represent only a small portion of the SPAC market (less than 15%) relative to other sectors. According to data from SPACResearch, of the approximately $140.1 billion raised by SPACs in 2021 as of November 2nd, only 12.6%, or $17.7 billion, was focused on the healthcare sector. SPACs focused on life science companies are underrepresented compared to the number of privately held healthcare companies that eventually require access to the public capital markets. We believe there is a significant number of high-quality private life sciences companies seeking alternative routes to the public markets and life sciences investors willing to participate in SPACs and their business combinations.

There has been a significant acceleration of medical research in recent years, leading to a better understanding of the molecular origins of disease and the identification of new potential targets for therapeutic intervention. The biotechnology sector of the life sciences industry has also recently experienced an acceleration in discovery and validation of novel emerging treatment modalities such as targeted antibody, precision, and/ or genetic medicines, as well as DNA, RNA and/ or cell therapies, among others. Significant breakthroughs in medicine and science have generated attractive investment opportunities.

The significant pace of innovation is also reflected in the FDA’s recent drug approval rates, which have increased from 34 drugs per year between 2010 and 2015 to 46 per year between 2015 and 2020. In the last three years alone, the FDA has approved more drugs than the combined total of approvals in the five preceding years. This success is due in part to the increased use of special approval and development programs such as fast track designation, breakthrough therapy designation and accelerated approval, and it also reflects the FDA’s increasing willingness to use surrogate endpoints and single trials to accelerate approval timelines. Furthermore, small and firms account for a majority of new approvals, and many of these successful firms are acquired by the larger companies. A continuance of this trend would support drug development efforts and investments.

In addition to the multi-decade structural tailwinds building up to a “golden age of innovation” for the biotechnology sector, the pandemic has shown an unprecedented compression of the innovation cycle from drug development to regulatory approval to market, as is evident in the speed to market of multiple novel therapeutic methods and drugs aimed at controlling the pandemic. We believe that this experience could help further accelerate the innovation and life cycle of promising, innovative life science companies.

Our management team is comprised of industry experts, who are well positioned to identify and evaluate businesses within the biotechnology and life sciences sectors that would benefit from their experiences leading public companies. We believe our management team offers extensive experience in growing and operating companies, as well as a deep network of contacts in the biotechnology and life sciences sectors both within the United States and globally outside of the United States. Our management team is spearheaded by our Chairman and Chief Business Officer, Jonathan Rigby, and Chief Executive Officer and Chief Financial Officer, Ross Haghighat. Our management team will further be supported by our Vice Chairman Ronald Eastman, and our other independent board members, Shawn Cross, Louis G. Lange, M.D., Ph.D., Stephen Sherwin, M.D., and Glen Giovannetti, who collectively bring extensive operational experience and deep global networks within the venture capital, growth equity, and strategic ecosystem.

Past performance of our management team, directors and advisors is not a guarantee either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination we may consummate. You should not rely on the historical performance record of our management team or advisors as indicative of our future performance. Additionally, in the course of their respective careers, members of our management team have been involved in businesses and deals that were unsuccessful. Some of our officers, directors and advisors have not had experience with blank check companies or special purpose acquisition companies in the past. In addition, our executive officers, directors, and advisors may have conflicts of interest with other entities to which they owe fiduciary or contractual obligations with respect to initial business combination opportunities.

 

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Our sponsor has been formed as a collaboration between Ross Haghighat, our Chief Executive Officer, Chief Financial Officer, and one of our Directors, Alex Vieux, our Advisor, Steven Fletcher, our Advisor, and Explorer Acquisitions (“Explorer”).

Founded in 2018 by Alex Vieux and Steve Fletcher, Explorer is a sponsor of a series of SPACs in partnership with proven executives such as Messrs. Haghighat and Rigby. Explorer employs approximately 20 professionals focused on the SPAC lifecycle from initial public offering to diligence and initial business combination. Since its inception, Explorer has sponsored six SPACs to date, with collective proceeds of approximately $2.3 billion: ChaSerg Technology Acquisition Corporation (Nasdaq: CTAC), a blank check company which completed an initial business combination with Grid Dynamics International, Inc. (Nasdaq: GDYN) in March 2020; Apex Technology Acquisition Corporation (formerly Nasdaq: APXT), a blank check company which completed an initial business combination with AvePoint, Inc. (Nasdaq: AVPT) in July 2021; E.Merge Technology Acquisition Corp. (Nasdaq: ETAC), a blank check company searching for a target business in the software and internet technology industries; Carney Technology Acquisition Corp. II (Nasdaq: CTAQ), a blank check company searching for a target business in the technology industry; Epiphany Technology Acquisition Corp. (Nasdaq: EPHY), a blank check company searching for a target business in the technology industry; and Enterprise 4.0 Technology Acquisition Corp. (Nasdaq: ENTF), a blank check company searching for a target business in the technology industry.

We may draw upon Explorer’s infrastructure, personnel, network, and relationships to provide access to deal prospects, along with any necessary resources to aid in the identification and diligence of a business combination partner and subsequent execution of an initial business combination. Notwithstanding the foregoing, Explorer has no written advisory agreement with us and will have no fiduciary obligations to us. Accordingly, they may present business combination opportunities to other entities prior to presenting them to us.

Our management team’s goal is to leverage its deep and proprietary network to identify and complete a business combination with a high-growth technology company with an enterprise value of greater than $1 billion. We seek to bring synergistic benefits to the acquired company by leveraging our management’s domain expertise, proven track record in value creation for shareholders, and deep personal and professional networks to help the company grow organically or via M&A.

The benefits we offer to a target company encompass, but are not limited to the following:

 

 

 

 

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Our management team is proactively and aggressively searching for potential global life sciences business combination candidates using the relationships of our management team and board of directors with company executives, venture capitalists and growth equity firms. Our management and board have decades of operational and investment experience in both the private and public sectors of the life sciences industry and extensive networks with current industry investors and executives in the United States and globally outside the United States as a result. We believe that the direct sourcing opportunity this collective experience and network affords will allow us to competitively identify actionable business combination opportunities efficiently and effectively.

We have identified the following criteria that will serve as guidelines for evaluating acquisition opportunities, which we expect to apply during our search. All are indicators of compelling growth potential. The attributes we most strongly seek include the following:

 

 

 

 

 

 

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet certain of the above criteria and guidelines, we will disclose that the target business does not meet certain of the above criteria in our shareholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with the U.S. Securities and Exchange Commission. We may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination.

 

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We intend to acquire a company with an enterprise value significantly above the net proceeds of this offering, the sale of the placement units and the sponsor loan. Depending on the size of the transaction or the number of public shares we become obligated to redeem, we may potentially utilize several additional financing sources, including but not limited to the issuance of additional securities to the sellers of a target business, debt issued by banks or other lenders or the owners of the target, a private placement to raise additional funds, or a combination of the foregoing. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient to meet our obligations or our working capital needs, we may need to obtain additional financing.

Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.

We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking shareholder approval, as applicable.

In evaluating prospective business combinations, we conduct a thorough due diligence review process that encompasses, among other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable), assessment of the management talent, inspection of facilities and assets, discussion with customers and suppliers, assessment of the organization readiness for public company status, legal reviews and other reviews as we deem appropriate. We also seek to utilize the expertise of our management team in analyzing technology companies and evaluating operating projections, financial projections and determining the appropriate return expectations given the risk profile of the target business.

 

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non-binding

non-affiliates

non-convertible

S-K.

non-affiliates

th

non-affiliates

th

pre-existing

in-depth

10b-18

10b-18,

10b-5

10b-18

10b-5

per-share

per-share

Manner of Conducting Redemptions

non-votes

10b5-1

14e-5

14e-1(a)

Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Shareholder Approval

Tendering Stock Certificates in Connection with Redemption Rights

Redemption of Public Shares and Liquidation if no Initial Business Combination

per-share

18-month

pre-initial

per-share

We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,300,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes and expenses relating to the administration of the trust account, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

If we were to expend all of the net proceeds of our initial public offering and the sale of the placement units, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the redemption amount received by shareholders upon our dissolution would be approximately $10.20. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual redemption amount received by shareholders will not be substantially less than $10.20. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

Although we have sought and will continue to seek to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. Withum, our independent registered public accounting firm, and the underwriters of the offering, have not executed agreements with us waiving such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.

Upon redemption of our public shares, if we have not completed our initial business combination within the required time period, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.20 per public share and (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes and expenses relating to the administration of the trust account, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our

 

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indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the trust account are reduced below (i) $10.20 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the redemption price will not be less than $10.20 per public share.

If we file a bankruptcy petition or a petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may be included in our insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.20 per share to our public shareholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Our public shareholders are entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, and then only in connection with our Class A Ordinary Shares that such shareholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend any provisions of our Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or certain amendments to our charter prior thereto or to redeem 100% of our public shares if we do not complete our initial business combination by June 7, 2023 or (B) with respect to any other provision relating to shareholders’ rights or business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination by June 7, 2023, subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.

In identifying, evaluating and selecting a target business for our initial business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business

 

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combination of a target business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.

Each of our officers and directors presently has, and in the future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, if any of our officers or directors becomes aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that, we renounce, to the maximum extent permitted by law, any interest or expectancy in, or in being offered an opportunity to participate in any business combination opportunity: (i) which may be a corporate opportunity for both us and our sponsor or its affiliates and any companies in which our sponsor or its affiliates have invested about which any of our officers or directors acquires knowledge; or (ii) the presentation of which would breach an existing legal obligation of a director or officer to another entity, and we will waive any claim or cause of action we may have in respect thereof. In addition our amended and restated memorandum and articles of association will contain provisions to exculpate and indemnify, to the maximum extent permitted by law, such persons in respect of any liability, obligation or duty to our company that may arise as a consequence of such persons becoming aware of any business opportunity or failing to present such business opportunity. We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would materially undermine our ability to complete our business combination.

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.20 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe our sponsor’s only assets are securities of our company. We have not asked our sponsor to reserve for such obligations.

We currently maintain our executive offices at 260 Madison Avenue, Suite 800, New York, NY 10016. The cost for our use of this space is included in the $20,00 per month fee we pay to an affiliate of our sponsor for office space, administrative and shared personnel support services. We consider our current office space adequate for our current operations.

We currently have two officers. These individuals are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary, in the exercise of their respective business judgement, to our affairs until we have completed our initial business combination. The amount of time our officers devote in any time period varies based on the stage of the initial business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination. We do not have an employment agreement with any member of our management team.

 

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We have registered our public units, Class A Ordinary Shares and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public accountants.

We will provide shareholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.

We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2022 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.

We have filed a Registration Statement on Form with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

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

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

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following December 7, 2026, the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Ordinary Shares that are held by exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in debt during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

 

24

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our Ordinary Shares held by exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our Ordinary Shares held by nonaffiliates exceeds $700 million as of the end of that year’s second fiscal quarter.

As a smaller reporting company, we are not required to include risk factors in this Report. However, below is a partial list of material risks, uncertainties and other factors that could have a material effect on the Company and its operations:

 

 

 

 

 

 

 

 

 

 

 

 

For the complete list of risks relating to our operations, see the section titled “Risk Factors” contained in our Registration Statement.

Not applicable.

 

25

Item 2. Properties.

Item 3. Legal Proceedings.

Item 4. Mine Safety Disclosures.

PART II

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

(a) Market Information

(b) Holders

(c) Dividends

(d) Securities Authorized for Issuance Under Equity Compensation Plans.

(e) Recent Sales of Unregistered Securities

(f) Purchases of Equity Securities by the Issuer and Affiliated Purchasers

(g) Use of Proceeds from the Initial Public Offering

Item 6. Reserved.

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

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form

Overview

Results of Operations

Liquidity and Capital Resources

Off-Balance

Contractual Obligations

Critical Accounting Policies

Class A Ordinary Shares Subject to Possible Redemption

Net Income (Loss) Per Ordinary Share

Recent Accounting Standards

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Item 8. Financial Statements and Supplementary Data.

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

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Management’s Report on Internal Controls over Financial Reporting

Changes in Internal Control over Financial Reporting

Item 9B. Other Information.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

Jonathan Rigby

first-in-class,

Ross Haghighat

Ronald Eastman

Shawn Cross

Louis G. Lange, M.D., Ph.D

Stephen Sherwin, M.D

Glen Giovannetti

first-in-class,

Advisors

Alex Vieux

Steven Fletcher

Number and Terms of Office of Officers and Directors

Director Independence

Committees of the Board of Directors

10-A-3(b)(1)

Director Nominations

Code of Ethics

www.sec.gov

Item 11. Executive Compensation

Compensation Discussion and Analysis

out-of-pocket

out-of-pocket

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

one-for-one

Securities Authorized for Issuance under Equity Compensation Table

Changes in Control

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

out-of-pocket

out-of-pocket

Related Party Policy

out-of-pocket

Item 14

Principal Accountant Fees and Services.

Audit Fees

Audit-Related Fees

Tax Fees

All Other Fees

Pre-Approval

PART IV

Item 15

Exhibits, Financial Statement Schedules

10-K

 

 

F-1

To the Shareholders and the Board of Directors of

BioPlus Acquisition Corp.

We have audited the accompanying balance sheet of BioPlus Acquisition Corp. (the “Company”) as of December 31, 2021 the related statements of operations, changes in shareholders’ deficit and cash flows for the period from February 11, 2021 (inception) through December 31, 2021 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the period from February 11, 2021 (inception) through December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

 

F-2

 

The accompanying notes are an integral part of these financial statements.

 

F-4

 

The accompanying notes are an integral part of these financial statements.

 

F-5

 

The accompanying notes are an integral part of these financial statements.

 

F-6

non-operating

2a-7

per-share

pre-initial

per-share

per-share

Basis of Presentation

Emerging Growth Company

non-emerging

Use of Estimates

Cash and Cash Equivalents

Marketable Securities Held in Trust Account

Class A Ordinary Shares Subject to Possible Redemption

Offering Costs

Income Taxes

Net Income (Loss) Per Ordinary Share

Concentration of Credit Risk

Fair Value of Financial Instruments

Recent Accounting Standards

2020-06,

470-20)

815-40)”

2020-06”)

2020-06

2020-06

if-converted

2020-06

2020-06

2020-06

one-half

one-half

worthless

Founder Shares

sub-divisions,

30-trading

Sponsor Loan

470-20,

815-40,

Administrative Support Agreement

Promissory Note — Related Party

non-interest

Related Party Loans

Risks and Uncertainties

COVID-19

Registration Rights

Underwriting Agreement

The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2021, there were no preference shares issued or outstanding.

The Company is authorized to issue 500,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At December 31, 2021, there were 560,000 Class A ordinary shares issued and outstanding, excluding 23,000,000 Class A ordinary shares subject to redemption which are included in temporary equity.

The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At December 31, 2021, there were 5,750,000 Class B ordinary shares issued and outstanding.

Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a basis (subject to adjustment). In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an basis, 20% of the sum of the total number of all ordinary shares outstanding upon completion of this offering (excluding the Private Placement Units and underlying securities) plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company).

As of December 31, 2021, there are 11,500,000 Public Warrants issued and outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination. The Public Warrants will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective within a specified period following the completion of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.

 

F-15

Once the warrants become exercisable, the Company may redeem the warrants:

 

 

 

 

If and when the warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.

If the Company calls the Public Warrants for redemption, as described above, management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the completion of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company completes its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

As of December 31, 2021, there are 280,000 Placement Warrants issued and outstanding. The Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30

F-16

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

The Company classifies its U.S. Treasury and equivalent securities as in accordance with ASC Topic 320, “Investments—Debt and Equity Securities.” securities are those securities which the Company has the ability and intent to hold until maturity. treasury securities are recorded at amortized cost on the accompanying balance sheet and adjusted for the amortization or accretion of premiums or discounts.

855117,307,347not

 

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

22

 

BioPlus Acquisition Corp.
By:		/s/ Ross Haghighat
Name:		Ross Haghighat
Title:		Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.