|
Delaware
(State or other jurisdiction of
incorporation or organization) |
| |
6770
(Primary Standard Industrial
Classification Code Number) |
| |
88-2978216
(I.R.S. Employer
Identification No.) |
|
|
Giovanni Caruso
Loeb & Loeb LLP 345 Park Avenue New York, New York 10154 Tel: (212) 407-4000 Fax: (212) 407-4990 |
| |
Andrew M. Tucker
E. Peter Strand Nelson Mullins Riley & Scarborough LLP 101 Constitution Ave NW, Suite 900 Washington, DC 20001 Telephone: (202) 689-2800 |
|
| Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ | |
| Non-accelerated filer | | | ☒ | | | Smaller reporting company | | | ☒ | |
| | | | | | | Emerging Growth Company | | | ☒ | |
| | |
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| | | | F-1 | | | |
| | | | A-1 | | | |
| | | | B-1 | | | |
| | | | C-1 | | |
| | |
Assuming
No Redemptions |
| |
Assuming
20% Redemptions |
| |
Assuming
40% Redemptions |
| |
Assuming
60% Redemptions |
| |
Assuming
Maximum Redemptions(2) |
| |||||||||||||||
Book value per share of PubCo’s ordinary shares after business combination
|
| | | $ | 2.52 | | | | | $ | 2.09 | | | | | $ | 1.60 | | | | | $ | 1.05 | | | | | $ | 0.36 | | |
Numerator: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity(1)
|
| | | $ | 50,264,623 | | | | | $ | 39,330,623 | | | | | $ | 28,396,623 | | | | | $ | 17,462,623 | | | | | $ | 5,594,623 | | |
Denominator: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Public shares subject to redemption:
|
| | | | 5,467,000 | | | | | | 4,373,600 | | | | | | 3,280,200 | | | | | | 2,186,800 | | | | | | 1,000,000 | | |
Shares transferred from
Sponsor |
| | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | |
New shares issued to non-redeeming shareholders
|
| | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | |
Non-redeeming public shareholders
|
| | | | 6,287,050 | | | | | | 5,193,650 | | | | | | 4,100,250 | | | | | | 3,006,850 | | | | | | 1,820,050 | | |
Sponsor shares and private shares holders
|
| | | | 1,218,400 | | | | | | 1,218,400 | | | | | | 1,218,400 | | | | | | 1,218,400 | | | | | | 1,218,400 | | |
Former ProSomnus
shareholders |
| | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | |
Craig-Hallum Capital Group and Roth Capital Partners
|
| | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | |
Total number of shares
outstanding |
| | | | 19,944,460 | | | | | | 18,851,060 | | | | | | 17,757,660 | | | | | | 16,664,260 | | | | | | 15,477,460 | | |
| | |
Year Ended December 31,
|
| |
Three Months Ended March 31,
|
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2022
|
| |
2021
|
| ||||||||||||
Consolidated Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue
|
| | | $ | 14,074,649 | | | | | $ | 8,286,050 | | | | | $ | 3,743,143 | | | | | $ | 2,531,438 | | |
Cost of Revenue
|
| | | $ | 6,764,319 | | | | | $ | 4,165,659 | | | | | $ | 1,578,496 | | | | | $ | 1,121,616 | | |
Gross Profit
|
| | | $ | 7,310,330 | | | | | $ | 4,120,391 | | | | | $ | 2,164,647 | | | | | $ | 1,409,822 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing
|
| | | $ | 5,776,084 | | | | | $ | 3,515,976 | | | | | $ | 2,117,419 | | | | | $ | 1,156,083 | | |
Research and development
|
| | | $ | 1,889,208 | | | | | $ | 1,470,748 | | | | | $ | 557,633 | | | | | $ | 389,575 | | |
General and administrative
|
| | | $ | 4,459,924 | | | | | $ | 3,291,654 | | | | | $ | 1,348,055 | | | | | $ | 1,044,381 | | |
Total operating expenses
|
| | | $ | 12,125,216 | | | | | $ | 8,278,378 | | | | | $ | 4,023,107 | | | | | $ | 2,590,039 | | |
Loss from operations
|
| | | $ | (4,814,886) | | | | | $ | (4,157,987) | | | | | $ | (1,858,460) | | | | | $ | (1,180,217) | | |
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Expense
|
| | | $ | (3,245,220) | | | | | $ | (2,007,363) | | | | | $ | (1,095,837) | | | | | $ | (664,061) | | |
Forgiveness of PPP Loans
|
| | | $ | 2,281,262 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Other income and expense, net
|
| | | $ | (198,563) | | | | | $ | (7,665) | | | | | $ | (26,436) | | | | | $ | (48,134) | | |
Net loss
|
| | | $ | (5,977,407) | | | | | $ | (6,173,015) | | | | | $ | (2,980,733) | | | | | $ | (1,892,412) | | |
Basic and diluted loss per share
|
| | | $ | (0.24) | | | | | $ | (0.26) | | | | | $ | (0.12) | | | | | $ | (0.08) | | |
Weighted average shares of common stock outstanding – basic and diluted
|
| | | | 24,404,871 | | | | | | 23,970,536 | | | | | | 24,575,706 | | | | | | 24,194,236 | | |
| | |
December 31,
|
| | | | | | | |||||||||
| | |
2021
|
| |
2020
|
| |
March 31, 2022
|
| |||||||||
Consolidated Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 1,500,582 | | | | | $ | 1,555,554 | | | | | $ | 1,666,229 | | |
Total current assets
|
| | | $ | 4,126,540 | | | | | $ | 3,399,392 | | | | | $ | 4,325,794 | | |
Total assets
|
| | | $ | 7,637,932 | | | | | $ | 6,358,779 | | | | | $ | 9,143,214 | | |
Total liabilities
|
| | | $ | 22,224,244 | | | | | $ | 14,972,396 | | | | | $ | 26,710,259 | | |
Redeemable convertible preferred stock
|
| | | $ | 38,634,547 | | | | | $ | 38,634,547 | | | | | $ | 38,634,547 | | |
Additional paid-in capital
|
| | | $ | 150,425,960 | | | | | $ | 150,421,286 | | | | | $ | 150,425,953 | | |
Accumulated deficit
|
| | | $ | (203,649,275) | | | | | $ | (197,671,868) | | | | | $ | (206,630,008) | | |
Total stockholders’ deficit
|
| | | $ | (53,220,859) | | | | | $ | (47,248,164) | | | | | $ | (56,201,592) | | |
| | |
For The
Three Months Ended March 31, 2022 |
| |
For The
period from January 6, 2021 (Inception) to December 31, 2021 |
| ||||||
Formation, general and administrative expenses
|
| | | $ | 150,809 | | | | | $ | 301,591 | | |
Loss from operations
|
| | | | (150,809) | | | | | | (301,591) | | |
Other income | | | | | | | | | | | | | |
Interest income on marketable securities held in trust account
|
| | | | 5,505 | | | | | | 1,966 | | |
Net Loss
|
| | |
$
|
(145,304)
|
| | | | $ | (299,625) | | |
Basic and diluted weighted average shares outstanding | | | | | | | | | | | | | |
Redeemable ordinary shares – basic and diluted
|
| | | | 5,467,000 | | | | | | 3,020,358 | | |
Non-redeemable ordinary shares – basic and diluted
|
| | | | 1,628,425 | | | | | | 1,448,654 | | |
Basic and diluted net loss per share | | | | | | | | | | | | | |
Redeemable ordinary shares – basic and diluted
|
| | | $ | (0.02) | | | | | $ | 0.38 | | |
Non-redeemable ordinary shares – basic and diluted
|
| | | $ | (0.02) | | | | | $ | (1.01) | | |
Balance Sheet Data:
|
| |
As of
March 31, 2022 |
| |
As of
December 31, 2021 |
| ||||||
Trust Account
|
| | | $ | 54,677,471 | | | | | $ | 54,671,966 | | |
Total assets
|
| | | | 55,037,321 | | | | | | 55,174,587 | | |
Total liabilities
|
| | | | 33,038 | | | | | | 25,000 | | |
Ordinary shares subject to possible redemption
|
| | | | 54,670,000 | | | | | | 54,670,000 | | |
Stockholders’ equity
|
| | | | 334,283 | | | | | | 479,587 | | |
| | |
Pro Forma Combined
|
| |||||||||||||||||||||
| | |
Assuming No
Redemptions |
| |
Assuming Maximum
Redemptions |
| ||||||||||||||||||
| | |
Number of Shares
|
| |
%
|
| |
Number of Shares
|
| |
%
|
| ||||||||||||
Non-redeeming public shareholders and new equity investors
|
| | | | 6,287,050 | | | | | | 31.5% | | | | | | 1,820,050 | | | | | | 11.8% | | |
Sponsor shares and private placement shareholders
|
| | | | 1,218,400 | | | | | | 6.1% | | | | | | 1,218,400 | | | | | | 7.9% | | |
Former ProSomnus shareholders or lenders
|
| | | | 11,300,000 | | | | | | 56.7% | | | | | | 11,300,000 | | | | | | 73.0% | | |
Craig-Hallum Capital Group and Roth Capital
Partners |
| | | | 719,010 | | | | | | 3.6% | | | | | | 719,010 | | | | | | 4.6% | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 0.6% | | | | | | 120,000 | | | | | | 0.8% | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 0.3% | | | | | | 50,000 | | | | | | 0.3% | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 1.3% | | | | | | 250,000 | | | | | | 1.6% | | |
Total shares outstanding
|
| | | | 19,944,460 | | | | | | 100.0% | | | | | | 15,477,460 | | | | | | 100.0% | | |
| | |
Assuming No
Redemptions |
| |
Assuming Maximum
Redemptions |
| ||||||
Selected Unaudited Pro Forma Condensed Combined Statement of Financial Position as of March 31, 2022 | | ||||||||||||
Total assets
|
| | | $ | 79,469,242 | | | | | $ | 34,799,242 | | |
Total liabilities
|
| | | $ | 29,204,619 | | | | | $ | 29,204,619 | | |
Total stockholders’ equity
|
| | | $ | 50,264,623 | | | | | $ | 5,594,623 | | |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations – Three Months Ended March 31, 2022
|
| ||||||||||||
Total revenue
|
| | | $ | 3,743,143 | | | | | $ | 3,743,143 | | |
Cost of revenue
|
| | | $ | 1,578,496 | | | | | $ | 1,578,496 | | |
Total expenses
|
| | | $ | 4,173,916 | | | | | $ | 4,173,916 | | |
Operating loss
|
| | | $ | (2,009,269) | | | | | $ | (2,009,269) | | |
Net loss
|
| | | $ | (3,845,575) | | | | | $ | (3,845,575) | | |
Net loss per share – basic and diluted
|
| | | $ | (0.19) | | | | | $ | (0.25) | | |
Weighted average shares outstanding – basic and diluted
|
| | | | 20,141,335 | | | | | | 15,674,335 | | |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations – Year Ended December 31, 2021
|
| ||||||||||||
Total revenue
|
| | | $ | 14,074,649 | | | | | $ | 14,074,649 | | |
Cost of revenue
|
| | | $ | 6,764,319 | | | | | $ | 6,764,319 | | |
Total expenses
|
| | | $ | 14,066,907 | | | | | $ | 14,066,907 | | |
Operating loss
|
| | | $ | (6,756,577) | | | | | $ | (6,756,577) | | |
Net loss
|
| | | $ | (11,837,455) | | | | | $ | (11,837,455) | | |
Net loss per share – basic and diluted
|
| | | $ | (0.60) | | | | | $ | (0.77) | | |
Weighted average shares outstanding – basic and diluted
|
| | | | 19,852,189 | | | | | | 15,385,189 | | |
| | |
Three Months Ended March 31, 2022
|
| |||||||||||||||||||||
| | |
ProSomnus
(Historical) |
| |
Lakeshore
(Historical) |
| |
Assuming No
Redemptions Pro Forma Combined(1) |
| |
Assuming Maximum
Redemptions Pro Forma Combined(1) |
| ||||||||||||
Net loss
|
| | | $ | (2,980,733) | | | | | $ | (145,304) | | | | | $ | (3,845,575) | | | | | $ | (3,845,575) | | |
Stockholders’ equity (deficit)
|
| | | $ | (56,201,592) | | | | | $ | 334,283 | | | | | $ | 50,264,623 | | | | | $ | 5,594,623 | | |
Ending shares outstanding
|
| | | | 24,640,110 | | | | | | 1,628,425 | | | | | | 20,163,210 | | | | | | 15,696,210 | | |
Weighted average shares outstanding – basic and diluted
|
| | | | 24,575,706 | | | | | | — | | | | | | 20,141,335 | | | | | | 15,674,335 | | |
Weighted average shares outstanding, redeemable ordinary shares – basic and diluted
|
| | | | — | | | | | | 5,467,000 | | | | | | — | | | | | | — | | |
Weighted average shares outstanding,
non-redeemable ordinary shares – basic and diluted |
| | | | — | | | | | | 1,628,425 | | | | | | — | | | | | | — | | |
Book value per share
|
| | | $ | (2.28) | | | | | $ | 0.21 | | | | | $ | 2.49 | | | | | $ | 0.36 | | |
Basic and diluted net loss per share
|
| | | $ | (0.12) | | | | | | — | | | | | $ | (0.19) | | | | | $ | (0.25) | | |
Basic and diluted net loss per share, redeemable
ordinary shares |
| | | | — | | | | | $ | (0.02) | | | | | | — | | | | |||||
Basic and diluted net loss per share, non-redeembale ordinary shares
|
| | | | — | | | | | $ | (0.02) | | | | | | — | | | | | | — | | |
Cash dividends per share
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Pro forma PubCo equivalent per share data(2) | | | | | | | | | | | | | | | | | | | | | | | | | |
Book value per share
|
| | | | | | | | | | | | | | | $ | 0.42 | | | | | $ | 0.06 | | |
Basic and diluted net loss per share
|
| | | | | | | | | | | | | | | $ | (0.03) | | | | | $ | (0.04) | | |
Cash dividends per share
|
| | | | | | | | | | | | | | | $ | — | | | | | $ | — | | |
| | |
Year Ended December 31, 2021
|
| |||||||||||||||||||||
| | |
ProSomnus
(Historical) |
| |
Lakeshore
(Historical) |
| |
Assuming No
Redemptions Pro Forma Combined(1) |
| |
Assuming Maximum
Redemptions Pro Forma Combined(1) |
| ||||||||||||
Net loss
|
| | | $ | (5,977,407) | | | | | $ | (299,625) | | | | | $ | (11,837,455) | | | | | $ | (11,837,455) | | |
Ending shares outstanding
|
| | | | 24,566,386 | | | | | | 1,628,425 | | | | | | 20,119,460 | | | | | | 15,652,460 | | |
Weighted average shares outstanding – basic and diluted
|
| | | | 24,404,871 | | | | | | — | | | | | | 19,852,189 | | | | | | 15,385,189 | | |
Weighted average shares outstanding, redeemable ordinary shares – basic and diluted
|
| | | | — | | | | | | 3,020,358 | | | | | | — | | | | | | — | | |
Weighted average shares outstanding, non-redeemable ordinary shares- basic and diluted
|
| | | | — | | | | | | 1,448,654 | | | | | | — | | | | | | — | | |
Basic and diluted net loss per share
|
| | | $ | (0.24) | | | | | | — | | | | | $ | (0.60) | | | | | $ | (0.77) | | |
Basic and diluted net loss per share, redeemable
ordinary shares |
| | | | — | | | | | $ | 0.38 | | | | | | — | | | | | | | | |
Basic and diluted net loss per share, non-redeembale ordinary shares
|
| | | | — | | | | | $ | (1.01) | | | | | | — | | | | | | — | | |
Cash dividends per share
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Pro forma PubCo equivalent per share data(2) | | | | | | ||||||||||||||||||||
Basic and diluted net loss per share
|
| | | | | | | | | | | | | | | $ | (0.10) | | | | | $ | (0.13) | | |
Cash dividends per share
|
| | | | | | | | | | | | | | | $ | — | | | | | $ | — | | |
| | |
Assuming
No Redemptions |
| |
Assuming
20% Redemptions |
| |
Assuming
40% Redemptions |
| |
Assuming
60% Redemptions |
| |
Assuming
Maximum Redemptions |
| |||||||||||||||
% of PubCo’s shares held by non-redeeming shareholders considering all sources of
dilutions |
| | | | 20% | | | | | | 17% | | | | | | 14% | | | | | | 10% | | | | | | 7% | | |
Numerator: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares held by Non-redeeming public
shareholders |
| | | | 6,287,050 | | | | | | 5,193,650 | | | | | | 4,100,250 | | | | | | 3,006,850 | | | | | | 1,820,050 | | |
Denominator: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shares outstanding immediately after
business combination |
| | | | 19,944,460 | | | | | | 18,851,060 | | | | | | 17,757,660 | | | | | | 16,664,260 | | | | | | 15,477,460 | | |
Shares issued assuming full exercise of Lakeshore’s public warrants
|
| | | | 4,100,250 | | | | | | 4,100,250 | | | | | | 4,100,250 | | | | | | 4,100,250 | | | | | | 4,100,250 | | |
Shares issued assuming full exercise of Lakeshore’s private warrants
|
| | | | 196,256 | | | | | | 196,256 | | | | | | 196,256 | | | | | | 196,256 | | | | | | 196,256 | | |
Shares issued assuming full conversion of senior convertible notes at $13.00 per share
|
| | | | 1,318,681 | | | | | | 1,318,681 | | | | | | 1,318,681 | | | | | | 1,318,681 | | | | | | 1,318,681 | | |
Shares issued assuming full conversion of Junior convertible notes at 11.50 per share
|
| | | | 1,449,275 | | | | | | 1,449,275 | | | | | | 1,449,275 | | | | | | 1,449,275 | | | | | | 1,449,275 | | |
Shares issued assuming full exercise of warrants under senior convertible notes
|
| | | | 171,428 | | | | | | 171,428 | | | | | | 171,428 | | | | | | 171,428 | | | | | | 171,428 | | |
Shares issued assuming full exercise of warrants under Junior convertible notes
|
| | | | 1,666,667 | | | | | | 1,666,667 | | | | | | 1,666,667 | | | | | | 1,666,667 | | | | | | 1,666,667 | | |
Shares issued assuming full exercise of new warrants to initial shareholders
|
| | | | 136,675 | | | | | | 136,675 | | | | | | 136,675 | | | | | | 136,675 | | | | | | 136,675 | | |
Earn-out shares
|
| | | | 3,000,000 | | | | | | 3,000,000 | | | | | | 3,000,000 | | | | | | 3,000,000 | | | | | | 3,000,000 | | |
Total number of shares outstanding considering all dilution sources
|
| | | | 31,983,692 | | | | | | 30,890,292 | | | | | | 29,796,892 | | | | | | 28,703,492 | | | | | | 27,516,692 | | |
| | |
Assuming
No Redemptions |
| |
Assuming
20% Redemptions |
| |
Assuming
40% Redemptions |
| |
Assuming
60% Redemptions |
| |
Assuming
Maximum Redemptions |
| |||||||||||||||
Shares outstanding immediately after
business combination: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Public shares subject to redemption:
|
| | | | 5,467,000 | | | | | | 4,373,600 | | | | | | 3,280,200 | | | | | | 2,186,800 | | | | | | 1,000,000 | | |
Shares transferred from
Sponsor |
| | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | |
New shares issued to non-redeeming shareholders
|
| | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | | | | | 410,025 | | |
Non-redeeming public shareholders (Subtotal)
|
| | | | 6,287,050 | | | | | | 5,193,650 | | | | | | 4,100,250 | | | | | | 3,006,850 | | | | | | 1,820,050 | | |
Sponsor shares and private shares holders
|
| | | | 1,218,400 | | | | | | 1,218,400 | | | | | | 1,218,400 | | | | | | 1,218,400 | | | | | | 1,218,400 | | |
Former ProSomnus
shareholders |
| | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | |
Craig-Hallum Capital Group and Roth Capital Partners
|
| | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | |
Total number of shares
outstanding |
| | | | 19,944,460 | | | | | | 18,851,060 | | | | | | 17,757,660 | | | | | | 16,664,260 | | | | | | 15,477,460 | | |
|
Change
|
| |
Existing Charter
|
| |
Charter Proposal
|
|
Corporate Name
(Proposal 2A)
|
| | The name of Lakeshore under the existing charter is “Lakeshore Acquisition I Corp.” | | | PubCo’s proposed charter provides that the name of PubCo will be “ProSomnus, Inc.” | |
Required Vote to Amend the Charter
(Proposals 2B1-2B2)
|
| |
The existing charter may be amended by Ordinary Resolution to make alteration to its share capital, including: (a) increase its share capital; (b) consolidate and divide all or any of its share capital; (c) subdivide its existing shares; and (d) cancel any shares that have not been taken.
Subject to the provisions of the Companies Law (2021 Revision) and the provisions of the articles as regards the matters to be dealt with by Ordinary Resolution, the existing charter may be amended by Special Resolution to: (a) change its name; (b) alter or amend the articles; and (c) alter or amend the memorandum.
“Ordinary Resolution” means a resolution passed by a simple majority of the shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution.
“Special Resolution” has the same meaning as in the Companies Law, being a resolution passed by at least two-thirds of the shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution.
|
| |
(Proposal 2B1)Article 10 of PubCo’s proposed charter requires an affirmative vote of at least 75% of the total voting power of the then-outstanding shares of stock of PubCo entitled to vote generally in the election of directors, voting together as a single class, in order to amend, alter, repeal or rescind certain provisions of PubCo’s proposed charter, including provisions relating to staggering the board of directors, appointing directors, removing directors, amending PubCo’s proposed amended and restated bylaws (the “proposed bylaws”), eliminating written consents of stockholders, calling meetings of the stockholders, limiting liability of directors and indemnifying directors and officers, and selecting the forum for certain actions involving the company.
(Proposal 2B2)Except as provided in Article 10 regarding the vote required to amend the proposed charter or as provided by the DGCL, PubCo’s proposed charter may be amended by the affirmative vote of the holders of at least a majority of the total voting power of all the then-outstanding shares of stock of PubCo entitled to vote generally in the election of directors, voting together as a single class.
|
|
Change
|
| |
Existing Charter
|
| |
Charter Proposal
|
|
Required Vote to Amend the Bylaws
(Proposal 2C)
|
| |
See above “Required Vote to Amend the Charter.”
|
| | PubCo’s proposed charter permits the bylaws of PubCo to be altered, amended, repealed or rescinded, in whole or in part, either by the affirmative vote of a majority of the board of directors or by the affirmative vote of at least 75% of the total voting power of all the then-outstanding shares of stock of PubCo entitled to vote generally in the election of directors, voting together as a single class. | |
Classified Board
(Proposal 2D)
|
| | The existing charter provides that the Lakeshore board of directors shall be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term. The number of directors in each class shall be as nearly equal as possible. | | | PubCo’s proposed charter provides that, subject to the rights of any series of preferred stock outstanding, the PubCo board of directors shall be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term. | |
Director Election and Director Vacancies
(Proposal 2E)
|
| |
The existing charter provides that the directors may be appointed by Ordinary Resolution.
The directors may appoint any person to be a director, either to fill a vacancy or as an additional director, provided that such appointment does not cause the number of directors to exceed any number fixed by or in accordance with the articles.
|
| |
Pursuant to Section 216 of the DGCL, directors shall be elected by the affirmative vote of at least a plurality of the total voting power of all the then-outstanding shares of stock of PubCo entitled to vote generally in the election of directors (other than those directors elected by the holders of any series of preferred stock, who shall be elected pursuant to the terms of such preferred stock).
PubCo’s proposed charter provides that newly created directorships (including those created by the board) or any vacancy on the board of directors may be filled by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director.
|
|
Change
|
| |
Existing Charter
|
| |
Charter Proposal
|
|
Director Removal
(Proposal 2F)
|
| | A director may be removed from office (a) by Ordinary Resolution or (b) by all of the other directors (being not less than two in number) either by a resolution passed by all of the other directors at a meeting duly convened and held in accordance with the articles or by a resolution in writing signed by all of the other directors. | | | PubCo’s proposed charter provides for the removal of directors but only with cause and by the affirmative vote of at least 75% of the total voting power of all the then-outstanding shares of stock of PubCo entitled to vote generally in the election of directors, voting together as a single class (other than those directors elected by the holders of any series of preferred stock, who shall be removed pursuant to the terms of such preferred stock). | |
Special Meetings
(Proposal 2G)
|
| | The existing charter provides that any director may call a meeting of members, subject to the notice requirements specified in the existing charter. | | | PubCo’s proposed charter provides that special meetings of the stockholders of PubCo may be called only by or at the direction of the board of directors of PubCo. | |
Stockholder Actions by Written Consent
(Proposal 2H)
|
| | Any Ordinary or Special Resolution of shareholders and any other action that may be taken by the shareholders at a meeting may also be taken by a resolution consented to in writing, without the need for any notice, by all shareholders who would have been entitled to attend and vote at a meeting called for the purpose of passing such a resolution or taking any other action. | | | Actions of stockholders must be taken at a duly called annual or special meeting of stockholders and may not be effected by written consent. | |
Forum Selection
(Proposal 2I)
|
| | The existing charter does not contain any provisions adopting an exclusive forum for certain shareholder litigation. | | | PubCo’s proposed charter provides that the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware, shall be the exclusive forum for certain actions and claims. For certain claims made under federal securities law, the claim must be brought in federal district court. | |
Removal of Blank Check Company Provisions
(Proposal 2J)
|
| | The existing charter contains various provisions applicable only to blank check companies. | | | The proposed charter does not include provisions applicable only to blank check companies. | |
| | |
Share Ownership in the Post-Combination Company(1)
|
| |||||||||||||||||||||
| | |
No Redemption Scenario(2)
|
| |
Maximum Redemption Scenario(3)
|
| ||||||||||||||||||
| | |
Shares
|
| |
(%)
|
| |
Shares
|
| |
(%)
|
| ||||||||||||
Senior Debt(4)
|
| | | | 1,318,681 | | | | | | 6.6 | | | | | | 1,349,528 | | | | | | 8.7 | | |
Junior Debt(4)
|
| | | | 1,449,275 | | | | | | 7.3 | | | | | | 1,482,213 | | | | | | 9.6 | | |
Senior Debt Warrants
|
| | | | 171,429 | | | | | | 0.9 | | | | | | 175,439 | | | | | | 1.1 | | |
Junior Debt Warrants
|
| | | | 1,666,667 | | | | | | 8.4 | | | | | | 1,704,545 | | | | | | 11.0 | | |
Placement Agent Shares (Junior Debt)
|
| | | | 90,000 | | | | | | 0.5 | | | | | | 90,000 | | | | | | 0.6 | | |
Cohanzick Commitment Fee
|
| | | | 50,000 | | | | | | 0.3 | | | | | | 50,000 | | | | | | 0.3 | | |
Bonus Shares
|
| | | | 250,000 | | | | | | 1.3 | | | | | | 250,000 | | | | | | 1.6 | | |
| | |
Actuals
|
| |
Projections
|
| ||||||||||||||||||||||||||||||
In US$ millions
|
| |
2018
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| ||||||||||||||||||
Revenue
|
| | | $ | 7 | | | | | $ | 9 | | | | | $ | 8 | | | | | $ | 15 | | | | | $ | 32 | | | | | $ | 69 | | |
Gross margin
|
| | | | 44% | | | | | | 46% | | | | | | 50% | | | | | | 62% | | | | | | 74% | | | | | | 77% | | |
EBITDA
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | $ | (4) | | | | | $ | (6) | | | | | $ | 10 | | |
EBITDA margin
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/M | | | | | | N/M | | | | | | 14% | | |
| | |
Actual
|
| |
Projections
|
| ||||||||||||||||||
In US$ millions
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| ||||||||||||
Revenue
|
| | | $ | 8 | | | | | $ | 14 | | | | | $ | 22 | | | | | $ | 44 | | |
Gross margin
|
| | | | 50% | | | | | | 52% | | | | | | 62% | | | | | | 65% | | |
| |
Actual
|
| |
Projected
|
| |||||||||||||||||||||||||||||||
In US$ millions
|
| |
2018
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| ||||||||||||||||||
Year-end global sales representatives headcount
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | 8 | | | | | | 16 – 21 | | | | | | 30 – 35 | | |
Average global sales representative productivity
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | $ | 1.8 | | | | | $ | 1.6 | | | | | $ | 1.4 | | |
Net Revenue
|
| | | $ | 7 | | | | | $ | 9 | | | | | $ | 8 | | | | | $ | 14 | | | | | $ | 20 – 21 | | | | | $ | 38 – 40 | | |
| |
In US$ millions
|
| ||||||||||||||||||||||||||||||||||
| | |
Actual
|
| |
Projected
|
| ||||||||||||||||||||||||||||||
| | |
2018
|
| |
2019
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| ||||||||||||||||||
Gross margin . . . . .
|
| | | | 44% | | | | | | 46% | | | | | | 50% | | | | | | 52% | | | | | | 59% | | | | | | 65% | | |
Adjusted EBITDA margin
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | (25)% | | | | | | (15)% | | | | | | (5)% | | |
Unlevered free cash flow
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | (3) | | | | | | (6) | | | | | | (6) | | |
In US$ millions
|
| |
FY 2021A
|
| |||
Net income / loss
|
| | | $ | (6) | | |
( + ) Forgiveness of PPP loans
|
| | | $ | (2) | | |
( + ) Other expenses (income)
|
| | | $ | 0 | | |
( + ) Interest expense
|
| | | $ | 3 | | |
( + ) Provision for income tax expense
|
| | | $ | 0 | | |
( + ) Depreciation and Amortization
|
| | | $ | 1 | | |
( + ) DeSPAC Costs and Selected Severance
|
| | | $ | 0 | | |
Adjusted EBITDA
|
| | | $ | (4) | | |
Adjusted EBITDA margin
|
| | | | (25)% | | |
| | |
Actual
|
| |
Projected
|
| ||||||||||||||||||
In US$ millions
|
| |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| ||||||||||||
EVO
|
| | | | 0.0 | | | | | | 6.3 | | | | | | 13.3 | | | | | | 31.6 | | |
RPM
|
| | | | — | | | | | | — | | | | | | — | | | | | | 0.5 | | |
Legacy
|
| | | | 8.3 | | | | | | 7.8 | | | | | | 7.2 | | | | | | 7.4 | | |
Total
|
| | | | 8.3 | | | | | | 14.1 | | | | | | 20.5 | | | | | | 39.5 | | |
| | |
Actual
|
| |
Projected
|
| ||||||||||||||||||
| | |
2020
|
| |
2021
|
| |
2022
|
| |
2023
|
| ||||||||||||
Total Sales Volumes (in thousands)
|
| | | | 20.5 | | | | | | 30.5 | | | | | | 42.3 | | | | | | 77.8 | | |
Average per unit sales price (Gross)
|
| | | $ | 511.35 | | | | | $ | 566.36 | | | | | $ | 581.45 | | | | | $ | 597.25 | | |
| | |
‘21~’23E
Revenue CAGR |
| |
EV/’23
Revenue Multiple |
| |
Growth
Adjusted Revenue multiple |
| |||||||||
Inspire Medical Systems Inc. (INSP)
|
| | | | 39% | | | | | | 10.2x | | | | | | 0.26x | | |
ResMed Inc (RMD)
|
| | | | 10% | | | | | | 7.2x | | | | | | 0.74x | | |
Disruptive Consumer Devices (Median)
|
| | | | 20% | | | | | | 4.2x | | | | | | 0.23x | | |
Disruptive Med Tech (Median)
|
| | | | 34% | | | | | | 6.5x | | | | | | 0.17x | | |
ProSomnus
|
| | | | 67% | | | | | | 4.3x | | | | | | 0.06x | | |
| | | |
NOTUS4
Trial |
| |
Syracuse
Registry |
| |
Detroit
Registry |
| |
Multi-center
Retrospective Study |
|
|
# of ProSomnus Therapy Patients
|
| |
58
|
| |
115
|
| |
50
|
| |
55
|
|
|
Baseline AHI or ODA
|
| |
32.2
|
| |
24.1
|
| |
24.4
|
| |
26.4
|
|
|
Success Criteria
|
| |
ODI < 10
|
| |
AHI < 10
|
| |
AHI < 10
|
| |
AHI < 10
|
|
|
% Treatment Success, Mild to Moderate OSA
|
| |
94%
|
| |
91%
|
| |
97%
|
| |
98%
|
|
| | |
# of Patients
|
| |
Baseline AHI
|
| |
Compliance Rate
|
| |
Mean Nightly Usage
|
|
EFFECTS Study
|
| |
28
|
| |
21.8
|
| |
93.6%
|
| |
7.2 +/- 0.9 hours
|
|
Alaska Study
|
| |
8
|
| |
37.2
|
| |
87.9%
|
| |
7.4 +/- 1.4 hours
|
|
| | | |
OUP Study
|
| |
India Study
|
|
|
# of ProSomnus Therapy Patients
|
| |
18
|
| |
10
|
|
|
Mean Follow Up Duration
|
| |
2.3 years
|
| |
2.0 years
|
|
|
Tooth Position Changes
– Statistically Significant? |
| |
No
|
| |
No
|
|
|
Bite Changes
– Statistically Significant? |
| |
No
|
| |
No
|
|
Family
|
| |
Product coverage
|
| |
Type of Protection
|
| |
Jurisdictions
|
| |
Expiration
|
|
002 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | | Compositions (products of manufacture), methods of using, methods of making (manufacturing) | | |
United States,
Europe, Canada |
| |
December 24, 2034
|
|
004 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | | Products of manufacture (kits) and methods of manufacturing | | |
United States
|
| | July 17, 2034 | |
005 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | | Compositions (products of manufacture), methods of using, methods of making (manufacturing) | | |
United States,
Europe, Canada |
| | July 17, 2037 | |
007 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | |
Products of manufacture
|
| |
United States
|
| | April 26, 2039 | |
008 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | | Compositions (products of manufacture), methods of using, methods of making (manufacturing) | | |
Pending PCT
|
| |
September 24, 2041
|
|
Family
|
| |
Product coverage
|
| |
Type of Protection
|
| |
Jurisdictions
|
| |
Expiration
|
|
009 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | | Design | | |
United States
|
| | October 5, 2036 | |
011 | | | MicrO2 Sleep and Snore Device, IA Sleep and Snore Device, CA Sleep and Snore Device, PH Sleep and Snore Device, EVO Sleep and Snore Device and future devices | | | Compositions (products of manufacture) | | |
United States,
Australia, Canada, China, Europe, Japan, Korea |
| |
December 11, 2020
|
|
| | | | | | | | | | | | | | |
Indications for Use
|
| |||||||||
Device Name
|
| |
FDA 510(k) #
|
| |
Decision Date
|
| |
OSA
|
| |
Snoring
|
| ||||||||||||
MicrO2 OSA Device
|
| | | | K133683 | | | | | | 7/24/14 | | | | | | Yes | | | | | | Yes | | |
MicrO2 OSA Device with Micro-Recorder
|
| | | | K161624 | | | | | | 11/7/16 | | | | | | Yes | | | | | | Yes | | |
ProSomnus CA Sleep and Snore Device; ProSomnus CA Sleep and Snore Device with Micro-Recorder
|
| | | | K172859 | | | | | | 11/22/17 | | | | | | Yes | | | | | | Yes | | |
ProSomnus EVO Sleep and Snore Device; ProSomnus EVO Sleep and Snore Device with Patient Monitoring
|
| | | | K202529 | | | | | | 11/20/20 | | | | | | Yes | | | | | | Yes | | |
| | |
Three Months Ended March 31,
|
| |
Change
|
| |
Year Ended December 31,
|
| |
Change
|
| ||||||||||||||||||||||||||||||||||||
| | |
2022
|
| |
2021
|
| |
$
|
| |
%
|
| |
2021
|
| |
2020
|
| |
$
|
| |
%
|
| ||||||||||||||||||||||||
Revenue, net
|
| | | $ | 3,743,143 | | | | | $ | 2,531,438 | | | | | $ | 1,211,705 | | | | | | 47.9% | | | | | $ | 14,074,649 | | | | | $ | 8,286,050 | | | | | $ | 5,788,599 | | | | | | 69.9% | | |
Cost of Revenue
|
| | | | 1,578,496 | | | | | | 1,121,616 | | | | | | 456,880 | | | | | | 40.7% | | | | | | 6,764,319 | | | | | | 4,165,659 | | | | | | 2,598,660 | | | | | | 62.4% | | |
Gross profit
|
| | | | 2,164,647 | | | | | | 1,409,822 | | | | | | 754,825 | | | | | | 53.5% | | | | | | 7,310,330 | | | | | | 4,120,391 | | | | | | 3,189,939 | | | | | | 77.4% | | |
Gross profit %
|
| | | | 57.8% | | | | | | 55.7% | | | | | | | | | | | | | | | | | | 51.9% | | | | | | 49.7% | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 557,633 | | | | | | 389,575 | | | | | | 168,058 | | | | | | 43.1% | | | | | | 1,889,208 | | | | | | 1,470,748 | | | | | | 418,460 | | | | | | 28.5% | | |
Sales and marketing
|
| | | | 2,117,419 | | | | | | 1,156,083 | | | | | | 961,336 | | | | | | 83.2% | | | | | | 5,776,084 | | | | | | 3,515,976 | | | | | | 2,260,108 | | | | | | 64.3% | | |
General and administrative
|
| | | | 1,348,055 | | | | | | 1,044,381 | | | | | | 303,674 | | | | | | 29.1% | | | | | | 4,459,924 | | | | | | 3,291,654 | | | | | | 1,168,270 | | | | | | 35.5% | | |
Total operating expenses
|
| | | | 4,023,107 | | | | | | 2,590,039 | | | | | | 1,433,068 | | | | | | 55.3% | | | | | | 12,125,216 | | | | | | 8,278,378 | | | | | | 3,846,838 | | | | | | 46.5% | | |
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (1,095,837) | | | | | | (664,061) | | | | | | (431,776) | | | | | | 65.0% | | | | | | (3,245,220) | | | | | | (2,007,363) | | | | | | (1,237,857) | | | | | | 61.7% | | |
Forgiveness of PPP loans
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/m | | | | | | 2,281,262 | | | | | | — | | | | | | 2,281,262 | | | | | | n/m | | |
Change in fair value of warrant liability
|
| | | | (20,756) | | | | | | (44,334) | | | | | | 23,578 | | | | | | (53.2)% | | | | | | (190,911) | | | | | | — | | | | | | (190,911) | | | | | | n/m | | |
Other income
|
| | | | — | | | | | | — | | | | | | — | | | | | | n/m | | | | | | — | | | | | | 10,000 | | | | | | (10,000) | | | | | | n/m | | |
Total other expense
|
| | | | (1,116,593) | | | | | | (708,395) | | | | | | (408,198) | | | | | | 57.6% | | | | | | (1,154,869) | | | | | | (1,997,363) | | | | | | 842,494 | | | | | | (42.2)% | | |
Net loss before income taxes
|
| | | | (2,975,053) | | | | | | (1,888,612) | | | | | | (1,086,441) | | | | | | 57.5% | | | | | | (5,969,755) | | | | | | (6,155,350) | | | | | | 185,595 | | | | | | (3.0)% | | |
Provision for income taxes
|
| | | | (5,680) | | | | | | (3,800) | | | | | | (1,880) | | | | | | 49.5% | | | | | | (7,652) | | | | | | (17,665) | | | | | | 10,013 | | | | | | (56.7)% | | |
Net loss
|
| | | $ | (2,980,733) | | | | | $ | (1,892,412) | | | | | $ | (1,088,321) | | | | | | 57.5% | | | | | $ | (5,977,407) | | | | | $ | (6,173,015) | | | | | $ | 195,608 | | | | | | (3.2)% | | |
(in millions)
|
| |
Q4 2022
|
| |
Q1 2023
|
| |
Q2 2023
|
| |
Q3 2023
|
| |
12-Months
|
| |||||||||||||||
Sales & Marketing Expansion
|
| | | $ | (0.3) | | | | | $ | (0.9) | | | | | $ | (1.2) | | | | | $ | (1.5) | | | | | $ | (3.9) | | |
Public Company Costs
|
| | | $ | (0.4) | | | | | $ | (0.6) | | | | | $ | (0.6) | | | | | $ | (0.6) | | | | | $ | (2.3) | | |
Working Capital
|
| | | $ | 0.1 | | | | | $ | 0.1 | | | | | $ | (0.6) | | | | | $ | 0.0 | | | | | $ | (0.3) | | |
Net Capex
|
| | | $ | (0.8) | | | | | $ | (0.8) | | | | | $ | (1.1) | | | | | $ | (0.9) | | | | | $ | (3.6) | | |
Other Cash Flow
|
| | | $ | 0.3 | | | | | $ | (1.0) | | | | | $ | 1.7 | | | | | $ | 1.9 | | | | | $ | 2.9 | | |
Total
|
| | | $ | (1.0) | | | | | $ | (3.2) | | | | | $ | (1.9) | | | | | $ | (1.1) | | | | | $ | (7.2) | | |
| | |
Three Months Ended March 31,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||
| | |
2022
|
| |
2021
|
| |
2021
|
| |
2020
|
| ||||||||||||
Net cash provided by (used in): | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating activities
|
| | | $ | (1,462,835) | | | | | $ | (1,301,423) | | | | | $ | (4,634,934) | | | | | $ | (3,784,691) | | |
Investing activities
|
| | | | (129,409) | | | | | | (21,693) | | | | | | (301,302) | | | | | | (85,443) | | |
Financing activities
|
| | | | 1,757,891 | | | | | | 805,892 | | | | | | 4,881,264 | | | | | | 4,457,282 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | $ | 165,647 | | | | | $ | (517,224) | | | | | $ | (54,972) | | | | | $ | 587,148 | | |
| | |
As of March 31, 2022
|
| |||||||||||||||
| | |
Total
|
| |
Within 12
months |
| |
After 12 months
|
| |||||||||
Recorded contractual obligations: | | | | | | | | | | | | | | | | | | | |
Subordinated loan and security agreement
|
| | | $ | 4,717,401 | | | | | $ | 1,272,377 | | | | | $ | 3,445,024 | | |
Other(1) | | | | | 2,815,769 | | | | | | 1,442,572 | | | | | | 1,373,197 | | |
Subordinated notes
|
| | | | 7,635,800 | | | | | | — | | | | | | 7,635,800 | | |
Unsecured subordinated promissory notes
|
| | | | 2,500,000 | | | | | | — | | | | | | 2,500,000 | | |
Total
|
| | | $ | 17,668,970 | | | | | $ | 2,714,949 | | | | | $ | 14,954,021 | | |
| | |
Pro Forma Combined
|
| |||||||||||||||||||||
| | |
Assuming No
Redemptions |
| |
Assuming Maximum
Redemptions |
| ||||||||||||||||||
| | |
Number of Shares
|
| |
%
|
| |
Number of Shares
|
| |
%
|
| ||||||||||||
Non-redeeming public shareholders and new equity investors
|
| | | | 6,287,050 | | | | | | 31.5% | | | | | | 1,820,050 | | | | | | 11.8% | | |
Sponsor shares and private placement shareholders
|
| | | | 1,218,400 | | | | | | 6.1% | | | | | | 1,218,400 | | | | | | 7.9% | | |
Former ProSomnus shareholders or lenders
|
| | | | 11,300,000 | | | | | | 56.7% | | | | | | 11,300,000 | | | | | | 73.0% | | |
Craig-Hallum Capital Group and Roth Capital Partners
|
| | | | 719,010 | | | | | | 3.6% | | | | | | 719,010 | | | | | | 4.6% | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 0.6% | | | | | | 120,000 | | | | | | 0.8% | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 0.3% | | | | | | 50,000 | | | | | | 0.3% | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 1.3% | | | | | | 250,000 | | | | | | 1.6% | | |
Pro forma Combined Company common stock outstanding at Closing
|
| | | | 19,944,460 | | | | | | 100.0% | | | | | | 15,477,460 | | | | | | 100.0% | | |
| | | | | | | | | | | | | | |
Assuming No
Redemptions Scenario |
| |
Assuming Maximum
Redemptions Scenario |
| ||||||||||||||||||||||||
| | |
ProSomnus
(Historical) |
| |
Lakeshore
(Historical) |
| |
Transaction
Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| |
Additional
Transaction Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| ||||||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,666,229 | | | | | $ | 334,367 | | | | | $ | 54,677,471 | | | |
A
|
| | | $ | 71,966,774 | | | | | $ | (44,670,000) | | | |
C
|
| | | $ | 27,296,774 | | |
| | | | | — | | | | | | — | | | | | | 30,000,000 | | | |
D
|
| | | | — | | | | | | — | | | | | | | | | | | |
| | | | | — | | | | | | — | | | | | | (6,123,700) | | | |
E
|
| | | | — | | | | | | — | | | | | | | | | | | |
| | | | | — | | | | | | — | | | | | | (4,717,401) | | | |
F
|
| | | | — | | | | | | — | | | | | | | | | | | |
| | | | | — | | | | | | — | | | | | | (284,768) | | | |
G
|
| | | | — | | | | | | — | | | | | | | | | | | |
| | | | | — | | | | | | — | | | | | | (3,585,424) | | | |
H
|
| | | | — | | | | | | — | | | | | | | | | | | |
| | | | | — | | | | | | — | | | | | | | | | | | | | | | — | | | | | | — | | | | | | | | | | | |
Accounts receivable
|
| | | | 1,703,195 | | | | | | — | | | | | | — | | | | | | | | | 1,703,195 | | | | | | — | | | | | | | | | 1,703,195 | | |
Inventory
|
| | | | 690,868 | | | | | | — | | | | | | — | | | | | | | | | 690,868 | | | | | | — | | | | | | | | | 690,868 | | |
Prepaid expenses and other current assets
|
| | | | 265,502 | | | | | | 25,483 | | | | | | — | | | | | | | | | 290,985 | | | | | | — | | | | | | | | | 290,985 | | |
Marketable securities held in Trust Account
|
| | | | — | | | | | | 54,677,471 | | | | | | (54,677,471) | | | |
A
|
| | | | — | | | | | | — | | | | | | | | | | | |
Total current assets
|
| | | | 4,325,794 | | | | | | 55,037,321 | | | | | | 15,288,707 | | | | | | | | | 74,651,822 | | | | | | (44,670,000) | | | | | | | | | 29,981,822 | | |
Property and equipment, net
|
| | | | 1,047,980 | | | | | | — | | | | | | — | | | | | | | | | 1,047,980 | | | | | | — | | | | | | | | | 1,047,980 | | |
Right-of-use assets
|
| | | | 2,849,211 | | | | | | — | | | | | | — | | | | | | | | | 2,849,211 | | | | | | — | | | | | | | | | 2,849,211 | | |
Other assets
|
| | | | 920,229 | | | | | | — | | | | | | — | | | | | | | | | 920,229 | | | | | | — | | | | | | | | | 920,229 | | |
Total assets
|
| | | $ | 9,143,214 | | | | | $ | 55,037,321 | | | | | $ | 15,288,707 | | | | | | | | $ | 79,469,242 | | | | | $ | (44,670,000) | | | | | | | | $ | 34,799,242 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current portion of subordinated loan and security agreement
|
| | | $ | 1,272,377 | | | | | $ | — | | | | | $ | (1,272,377) | | | |
F
|
| | | $ | — | | | | | $ | — | | | | | | | | $ | — | | |
Current portion of equipment financing obligation
|
| | | | 56,849 | | | | | | — | | | | | | — | | | | | | | | | 56,849 | | | | | | — | | | | | | | | | 56,849 | | |
Current portion of finance lease obligation
|
| | | | 859,928 | | | | | | — | | | | | | — | | | | | | | | | 859,928 | | | | | | — | | | | | | | | | 859,928 | | |
Current portion of operating lease liabilities
|
| | | | 241,027 | | | | | | — | | | | | | — | | | | | | | | | 241,027 | | | | | | — | | | | | | | | | 241,027 | | |
Commission settlement
|
| | | | 284,768 | | | | | | — | | | | | | (284,768) | | | |
G
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Accounts payable
|
| | | | 1,779,681 | | | | | | — | | | | | | — | | | | | | | | | 1,779,681 | | | | | | — | | | | | | | | | 1,779,681 | | |
Accrued compensation
|
| | | | 1,798,952 | | | | | | — | | | | | | — | | | | | | | | | 1,798,952 | | | | | | — | | | | | | | | | 1,798,952 | | |
Other accrued expenses
|
| | | | 1,294,232 | | | | | | 33,038 | | | | | | — | | | | | | | | | 1,327,270 | | | | | | — | | | | | | | | | 1,327,270 | | |
Total current liabilities
|
| | | | 7,587,814 | | | | | | 33,038 | | | | | | (1,557,145) | | | | | | | | | 6,063,707 | | | | | | — | | | | | | | | | 6,063,707 | | |
Senior-Junior Convertible notes
|
| | | | — | | | | | | — | | | | | | 30,000,000 | | | |
D
|
| | | | 21,767,715 | | | | | | — | | | | | | | | | 21,767,715 | | |
| | | | | | | | | | | | | | | | | (1,800,000) | | | |
P
|
| | | | | | | | | | — | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (2,500,000) | | | |
Q
|
| | | | | | | | | | — | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (500,000) | | | |
R
|
| | | | | | | | | | — | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (3,432,285) | | | |
S
|
| | | | | | | | | | — | | | | | | | | | | | |
Subordinated loan and security agreement, net of current portion
|
| | | | 3,445,024 | | | | | | — | | | | | | (3,445,024) | | | |
F
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Equipment financing obligation, net of current portion
|
| | | | 229,823 | | | | | | — | | | | | | — | | | | | | | | | 229,823 | | | | | | — | | | | | | | | | 229,823 | | |
Finance lease liabilities, net of current portion
|
| | | | 974,364 | | | | | | — | | | | | | — | | | | | | | | | 974,364 | | | | | | — | | | | | | | | | 974,364 | | |
Operating lease liabilities, net of current portion
|
| | | | 169,010 | | | | | | — | | | | | | — | | | | | | | | | 169,010 | | | | | | — | | | | | | | | | 169,010 | | |
Subordinated notes
|
| | | | 7,635,800 | | | | | | — | | | | | | (7,635,800) | | | |
L
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Unsecured subordinated promissory notes
|
| | | | 2,500,000 | | | | | | — | | | | | | (2,500,000) | | | |
K
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Accrued interest
|
| | | | 3,585,424 | | | | | | — | | | | | | (3,585,424) | | | |
H
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Warrant liability
|
| | | | 583,000 | | | | | | — | | | | | | (583,000) | | | |
I
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Total liabilities
|
| | | | 26,710,259 | | | | | | 33,038 | | | | | | 2,461,322 | | | | | | | | | 29,204,619 | | | | | | — | | | | | | | | | 29,204,619 | | |
Commitments and contingencies | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred stock
|
| | | | 38,634,547 | | | | | | — | | | | | | (38,634,547) | | | |
J
|
| | | | — | | | | | | | | | | | | | | | — | | |
Common stock subject to possible redemption
|
| | | | — | | | | | | 54,670,000 | | | | | | (54,670,000) | | | |
B
|
| | | | — | | | | | | | | | | | | | | | — | | |
| | | | | | | | | | | | | | |
Assuming No
Redemptions Scenario |
| |
Assuming Maximum
Redemptions Scenario |
| ||||||||||||||||||||||||
| | |
ProSomnus
(Historical) |
| |
Lakeshore
(Historical) |
| |
Transaction
Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| |
Additional
Transaction Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| ||||||||||||||||||
Stockholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ordinary shares, $0.0001 par value
|
| | | | — | | | | | | 163 | | | | | | — | | | | | | | | | 163 | | | | | | — | | | | | | | | | 163 | | |
New issuance of ordinary shares, $0.0001 par value
|
| | | | — | | | | | | — | | | | | | 547 | | | |
B
|
| | | | 1,832 | | | | | | (447) | | | |
C
|
| | | | 1,385 | | |
| | | | | | | | | | | | | | | | | 6 | | | |
I
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 609 | | | |
J
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 25 | | | |
K
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 76 | | | |
L
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 414 | | | |
M
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 16 | | | |
N
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 38 | | | |
O
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 18 | | | |
P
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 25 | | | |
Q
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5 | | | |
R
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 12 | | | |
T
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 41 | | | |
U
|
| | | | | | | | | | | | | | | | | | | | | |
ProSomnus common stock, $0.0001 par value
|
| | | | 2,463 | | | | | | — | | | | | | (2,463) | | | |
M
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Additional paid-in capital
|
| | | | 150,425,953 | | | | | | 779,049 | | | | | | 54,669,453 | | | |
B
|
| | | | 258,532,736 | | | | | | (44,669,553) | | | |
C
|
| | | | 213,863,183 | | |
| | | | | | | | | | | | | | | | | (6,123,700) | | | |
E
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 582,994 | | | |
I
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 38,633,938 | | | |
J
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,499,975 | | | |
K
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,635,724 | | | |
L
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,049 | | | |
M
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,640,084 | | | |
N
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,749,962 | | | |
O
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (3,750,000) | | | |
O
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,799,982 | | | |
P
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,499,975 | | | |
Q
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 499,995 | | | |
R
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,432,285 | | | |
S
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,199,988 | | | |
T
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (1,200,000) | | | |
T
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,100,209 | | | |
U
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (4,100,250) | | | |
U
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 247,382 | | | |
V
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (247,382) | | | |
V
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (444,929) | | | |
W
|
| | | | | | | | | | | | | | | | | | | | | |
Accumulated deficit
|
| | | | (206,630,008) | | | | | | (444,929) | | | | | | 444,929 | | | |
W
|
| | | | (208,270,108) | | | | | | — | | | | | | | | | (208,270,108) | | |
| | | | | | | | | | | | | | | | | (1,640,100) | | | |
N
|
| | | | | | | | | | | | | | | | | |||||
Total stockholders’ equity (deficit)
|
| | | | (56,201,592) | | | | | | 334,283 | | | | | | 106,131,932 | | | | | | | | | 50,264,623 | | | | | | (44,670,000) | | | | | | | | | 5,594,623 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 9,143,214 | | | | | $ | 55,037,321 | | | | | $ | 15,288,707 | | | | | | | | $ | 79,469,242 | | | | | $ | (44,670,000) | | | | | | | |
$
|
34,799,242
|
| |
| | | | | | | | | | | | | | |
Assuming No
Redemptions Scenario |
| |
Assuming Maximum
Redemptions Scenario |
| ||||||||||||||||||||||||
| | |
ProSomnus
(Historical) |
| |
Lakeshore
(Historical) |
| |
Transaction
Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| |
Additional
Transaction Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| ||||||||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue, net
|
| | | $ | 3,743,143 | | | | | $ | — | | | | | $ | — | | | | | | | | $ | 3,743,143 | | | | | $ | — | | | | | | | | $ | 3,743,143 | | |
Cost of Revenue
|
| | | | 1,578,496 | | | | | | — | | | | | | — | | | | | | | | | 1,578,496 | | | | | | — | | | | | | | | | 1,578,496 | | |
Gross Profit
|
| | | | 2,164,647 | | | | | | — | | | | | | — | | | | | | | | | 2,164,647 | | | | | | — | | | | | | | | | 2,164,647 | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 557,633 | | | | | | — | | | | | | — | | | | | | | | | 557,633 | | | | | | — | | | | | | | | | 557,633 | | |
Sales and marketing
|
| | | | 2,117,419 | | | | | | — | | | | | | — | | | | | | | | | 2,117,419 | | | | | | — | | | | | | | | | 2,117,419 | | |
General and administrative
|
| | | | 1,348,055 | | | | | | 150,809 | | | | | | — | | | | | | | | | 1,498,864 | | | | | | — | | | | | | | | | 1,498,864 | | |
Total expenses
|
| | | | 4,023,107 | | | | | | 150,809 | | | | | | — | | | | | | | | | 4,173,916 | | | | | | — | | | | | | | | | 4,173,916 | | |
Operating loss
|
| | | | (1,858,460) | | | | | | (150,809) | | | | | | — | | | | | | | | | (2,009,269) | | | | | | — | | | | | | | | | (2,009,269) | | |
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense/income
|
| | | | (1,095,837) | | | | | | 5,505 | | | | | | 1,020,104 | | | |
AA
|
| | | | (1,830,626) | | | | | | — | | | | | | | | | (1,830,626) | | |
| | | | | | | | | | | | | | | | | (5,505) | | | |
CC
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (385,714) | | | |
DD
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (437,500) | | | |
EE
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (931,679) | | | |
FF
|
| | | | | | | | | | | | | | | | | | | | | |
Change in fair value of warrant liability
|
| | | | (20,756) | | | | | | — | | | | | | 20,756 | | | |
BB
|
| | | | — | | | | | | | | | | | | | | | | | |
Total other income (expense)
|
| | | | (1,116,593) | | | | | | 5,505 | | | | | | (719,538) | | | | | | | | | (1,830,626) | | | | | | — | | | | | | | | | (1,830,626) | | |
Loss before income taxes
|
| | | | (2,975,053) | | | | | | (145,304) | | | | | | (719,538) | | | | | | | | | (3,839,895) | | | | | | — | | | | | | | | | (3,839,895) | | |
Provision for income taxes
|
| | | | (5,680) | | | | | | — | | | | | | — | | | | | | | | | (5,680) | | | | | | — | | | | | | | | | (5,680) | | |
Net loss
|
| | | $ | (2,980,733) | | | | | $ | (145,304) | | | | | $ | (719,538) | | | | | | | | $ | (3,845,575) | | | | | $ | — | | | | | | | | $ | (3,845,575) | | |
Net loss per share, basic and diluted
|
| | | $ | (0.12) | | | | | | | | | | | | | | | | | | | | $ | (0.19) | | | | | | | | | | | | | | $ | (0.25) | | |
Weighted average shares outstanding, basic and diluted
|
| | | | 24,575,706 | | | | | | | | | | | | 18,316,035 | | | |
GG
|
| | | | 20,141,335 | | | | | | (4,467,000) | | | |
HH
|
| | | | 15,674,335 | | |
| | | | | | | | | | | | | | | | | 196,875 | | | |
EE
|
| | | | | | | | | | | | | | | | | | | | | |
Net loss per share, redeemable ordinary shares, basic
and diluted |
| | | | | | | | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding, redeemable ordinary shares basic and diluted
|
| | | | | | | | | | 5,467,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share, non-redeemable ordinary shares, basic and diluted
|
| | | | | | | | | $ | (0.02) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding, non-redeemable ordinary shares-basic and diluted
|
| | | | | | | | | | 1,628,425 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Assuming No
Redemptions Scenario |
| |
Assuming Maximum
Redemptions Scenario |
| ||||||||||||||||||||||||
| | |
ProSomnus
(Historical) |
| |
Lakeshore
(Historical) |
| |
Transaction
Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| |
Transaction
Accounting Adjustments (Note 2) |
| | | | |
Pro Forma
Combined |
| ||||||||||||||||||
Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue, net
|
| | | $ | 14,074,649 | | | | | $ | — | | | | | $ | — | | | | | | | | $ | 14,074,649 | | | | | $ | — | | | | | | | | $ | 14,074,649 | | |
Cost of Revenue
|
| | | | 6,764,319 | | | | | | — | | | | | | — | | | | | | | | | 6,764,319 | | | | | | — | | | | | | | | | 6,764,319 | | |
Gross Profit
|
| | | | 7,310,330 | | | | | | — | | | | | | — | | | | | | | | | 7,310,330 | | | | | | — | | | | | | | | | 7,310,330 | | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Research and development
|
| | | | 1,889,208 | | | | | | — | | | | | | — | | | | | | | | | 1,889,208 | | | | | | — | | | | | | | | | 1,889,208 | | |
Sales and marketing
|
| | | | 5,776,084 | | | | | | — | | | | | | — | | | | | | | | | 5,776,084 | | | | | | — | | | | | | | | | 5,776,084 | | |
General and administrative
|
| | | | 4,459,924 | | | | | | 301,591 | | | | | | 1,640,100 | | | |
II
|
| | | | 6,401,615 | | | | | | — | | | | | | | | | 6,401,615 | | |
Total expenses
|
| | | | 12,125,216 | | | | | | 301,591 | | | | | | 1,640,100 | | | | | | | | | 14,066,907 | | | | | | — | | | | | | | | | 14,066,907 | | |
Operating loss
|
| | | | (4,814,886) | | | | | | (301,591) | | | | | | 1,640,100 | | | | | | | | | (6,756,577) | | | | | | — | | | | | | | | | (6,756,577) | | |
Other income (expense) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense/income
|
| | | | (3,245,220) | | | | | | 1,966 | | | | | | 2,910,303 | | | |
AA
|
| | | | (7,354,488) | | | | | | — | | | | | | | | | (7,354,488) | | |
| | | | | | | | | | | | | | | | | (1,966) | | | |
CC
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (1,542,857) | | | |
DD
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (1,750,000) | | | |
EE
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | (3,726,714) | | | |
FF
|
| | | | | | | | | | | | | | | | | | | | | |
Forgiveness of PPP loans
|
| | | | 2,281,262 | | | | | | — | | | | | | — | | | | | | | | | 2,281,262 | | | | | | — | | | | | | | | | 2,281,262 | | |
Change in fair value of warrant liability
|
| | | | (190,911) | | | | | | | | | | | | 190,911 | | | |
BB
|
| | | | — | | | | | | — | | | | | | | | | — | | |
Total other income (expense)
|
| | | | (1,154,869) | | | | | | 1,966 | | | | | | (3,920,323) | | | | | | | | | (5,073,226) | | | | | | — | | | | | | | | | (5,073,226) | | |
Loss before income taxes
|
| | | | (5,969,755) | | | | | | (299,625) | | | | | | (5,560,423) | | | | | | | | | (11,829,803) | | | | | | — | | | | | | | | | (11,829,803) | | |
Provision for income taxes
|
| | | | (7,652) | | | | | | — | | | | | | — | | | | | | | | | (7,652) | | | | | | — | | | | | | | | | (7,652) | | |
Net loss
|
| | | $ | (5,977,407) | | | | | $ | (299,625) | | | | | $ | (5,560,423) | | | | | | | | $ | (11,837,455) | | | | | $ | — | | | | | | | | $ | (11,837,455) | | |
Net loss per share, basic and diluted
|
| | |
$
|
(0.24)
|
| | | | | | | | | | | | | | | | | | | $ | (0.60) | | | | | | | | | | | | | | $ | (0.77) | | |
Weighted average shares outstanding, basic and diluted
|
| | | | 24,404,871 | | | | | | | | | | | | 18,316,035 | | | |
GG
|
| | | | 19,852,189 | | | | | | (4,467,000) | | | |
HH
|
| | | | 15,385,189 | | |
| | | | | | | | | | | | | | | | | 87,500 | | | |
EE
|
| | | | | | | | | | | | | | | | | | | | | |
Net loss per share, redeemable ordinary shares, basic and diluted
|
| | | | | | | | |
$
|
0.38
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding, redeemable ordinary shares basic and diluted
|
| | | | | | | | | | 3,020,358 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss per share, non-redeemable ordinary shares,
basic and diluted |
| | | | | | | | |
$
|
(1.01)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average shares outstanding, non-redeemable ordinary shares-basic and diluted
|
| | | | | | | | | | 1,448,654 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Increase of ordinary shares
|
| |
Assuming No
Redemptions No. of shares |
| |
Assuming Maximum
Redemptions No. of shares |
| ||||||
Non-redeeming public shareholders and new equity investors
|
| | | | 5,877,025 | | | | | | 1,410,025 | | |
Former ProSomnus shareholders or lenders
|
| | | | 11,300,000 | | | | | | 11,300,000 | | |
Craig-Hallum Capital Group and Roth Capital Partners
|
| | | | 719,010 | | | | | | 719,010 | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 120,000 | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 50,000 | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 250,000 | | |
Total | | | | | 18,316,035 | | | | | | 13,849,035 | | |
Increase of ordinary shares
|
| |
Assuming No
Redemptions No. of shares |
| |
Assuming Maximum
Redemptions No. of shares |
| ||||||
Non-redeeming public shareholders and new equity investors
|
| | | | 5,877,025 | | | | | | 1,410,025 | | |
Former ProSomnus shareholders or lenders
|
| | | | 11,300,000 | | | | | | 11,300,000 | | |
Craig-Hallum Capital Group and Roth Capital Partners
|
| | | | 719,010 | | | | | | 719,010 | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 120,000 | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 50,000 | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 250,000 | | |
Total | | | | | 18,316,035 | | | | | | 13,849,035 | | |
| | |
Assuming No
Redemptions Scenario |
| |
Assuming Maximum
Redemptions Scenario |
| ||||||||||||||||||
| | |
Year Ended
December 31, 2021 |
| |
Three months Ended
March 31, 2022 |
| |
Year Ended
December 31, 2021 |
| |
Three months Ended
March 31, 2022 |
| ||||||||||||
Pro forma net loss
|
| | | $ | (11,837,455) | | | | | $ | (3,845,575) | | | | | $ | (11,837,455) | | | | | $ | (3,845,575) | | |
Weighted average shares outstanding – basic and
diluted |
| | | | 19,852,189 | | | | | | 20,141,335 | | | | | | 15,385,189 | | | | | | 15,674,335 | | |
Net loss per share – basic and diluted
|
| | | $ | (0.60) | | | | | $ | (0.19) | | | | | $ | (0.77) | | | | | $ | (0.25) | | |
Weighted average shares outstanding – basic and diluted
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Non-redeeming public shareholders and new equity investors
|
| | | | 6,287,050 | | | | | | 6,287,050 | | | | | | 1,820,050 | | | | | | 1,820,050 | | |
Sponsor shares and private placement shareholders
|
| | | | 1,038,629 | | | | | | 1,218,400 | | | | | | 1,038,629 | | | | | | 1,218,400 | | |
Former ProSomnus shareholders or lenders
|
| | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | | | | | 11,300,000 | | |
Craig-Hallum Capital Group and Roth Capital Partners
|
| | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | | | | | 719,010 | | |
Gordon Pointe Capital
|
| | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | | | | | 120,000 | | |
Cohanzick Management, LLC
|
| | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | | | | | 50,000 | | |
Bonus shares for Junior Notes buyers
|
| | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | | | | | 250,000 | | |
New shares for Junior Notes’ interests
|
| | | | 87,500 | | | | | | 196,875 | | | | | | 87,500 | | | | | | 196,875 | | |
Total | | | | | 19,852,189 | | | | | | 20,141,335 | | | | | | 15,385,189 | | | | | | 15,674,335 | | |
Name
|
| |
Age
|
| |
Position
|
|
Leonard Liptak | | |
48
|
| | Chief Executive Officer and Director | |
Laing Rikkers | | |
52
|
| | Executive Chairman | |
Sung Kim | | |
41
|
| | Chief Technical Officer | |
Melinda Hungerman | | |
58
|
| | Chief Financial Officer | |
Leonard Hedge | | |
52
|
| | Director | |
William Johnson | | |
65
|
| | Director | |
Jason Orchard | | |
46
|
| | Director | |
Steven Pacelli | | |
51
|
| | Director | |
Heather Rider | | |
63
|
| | Director | |
Name
|
| |
Age
|
| |
Position
|
|
Bill Chen | | |
56
|
| | Chief Executive Officer and Chairman | |
Laura Li | | |
44
|
| | Chief Financial Officer and Director | |
H. David Sherman | | |
73
|
| | Independent Director | |
Jianzhong Lu | | |
67
|
| | Independent Director | |
Yan Zhu | | |
58
|
| | Independent Director | |
Name and Position
|
| |
Year
|
| |
Salary ($)
|
| |
Executive
Performance Plan Compensation ($)(1) |
| |
Commission
Plan ($)(2) |
| |
Total ($)
|
| |||||||||||||||
Leonard Liptak
Chief Executive Officer |
| | | | 2021 | | | | | | 325,000 | | | | | | 144,097 | | | | | | | | | | | | 469,097 | | |
Jerry Vogel
Vice President, Sales, North America |
| | | | 2021 | | | | | | 225,000 | | | | | | 10,201 | | | | | | 136,000 | | | | | | 371,656 | | |
Sung Kim
Chief Technology Officer |
| | | | 2021 | | | | | | 200,000 | | | | | | 87,425 | | | | | | | | | | | | 287,425 | | |
Melinda Hungerman
Chief Financial Officer |
| | | | 2021 | | | | | | 165,000 | | | | | | 84,379 | | | | | | | | | | | | 249,379 | | |
| | |
Before the Business Combination(1)
|
| |
After the Business Combination(2)
|
| |||||||||||||||
Name and Address of Beneficial Owner
|
| |
Amount and
Nature of Beneficial Ownership |
| |
Approximate
Percentage of Outstanding Shares |
| |
Amount and
Nature of Beneficial Ownership |
| |
Approximate
percentage of Outstanding Shares |
| |||||||||
Directors and Executive Officers Pre-Business Combination(3)
|
| | | | | | | | | | | | | | | | | | | | | |
Bill Chen(4)
|
| | | | | | | | | | % | | | | | | | | | % | | |
Laura Li
|
| | | | | | | | | | | | | | | | | | | | | |
H. David Sherman
|
| | | | | | | | | | | | | | | | | | | | | |
Jianzhong Lu
|
| | | | | | | | | | | | | | | | | | | | | |
Yan Zhu
|
| | | | | | | | | | | | | | | | | | | | | |
All directors and executive officers (5 individuals) and the sponsor as a group
|
| | | | | | | | | | % | | | | | | | | | % | | |
Directors and Executive Officers Post-Business Combination(5)
|
| | | | | | | | | | | | | | | | | | | | | |
Leonard Liptak
|
| | | | — | | | | | | — | | | | | | | | | % | | |
Laing Rikkers
|
| | | | — | | | | | | — | | | | | | | | | % | | |
Sung Kim
|
| | | | — | | | | | | — | | | | | | | | | | | |
William Johnson
|
| | | | — | | | | | | — | | | | | | | | | | | |
Leonard Hedge
|
| | | | — | | | | | | — | | | | | | | | | | | |
Jason Orchard
|
| | | | — | | | | | | — | | | | | | | | | | | |
Steven Pacelli
|
| | | | — | | | | | | — | | | | | | | | | | | |
Heather Rider
|
| | | | — | | | | | | — | | | | | | | | | | | |
Melinda Hungerman
|
| | | | — | | | | | | — | | | | | | | | | | | |
All directors and executive officers (9 individuals)
|
| | | | — | | | | | | — | | | | | | | | | % | | |
5% Beneficial Holders | | | | | | | | | | | | | | | | | | | | | | |
RedOne Investment Limited(4)
|
| | | | | | | | | | % | | | | | | | | | % | | |
[ ]
|
| | | | | | | | | | % | | | | | | | | | % | | |
[ ]
|
| | | | | | | | | | % | | | | | | | | | % | | |
[ ]
|
| | | | | | | | | | | | | | | | | | | % | | |
[ ]
|
| | | | | | | | | | | | | | | | | | | % | | |
| | |
Page
|
| | |||||
PROSOMNUS HOLDINGS INC. AND SUBSIDIARY | | | | | | | | | ||
| | | | F-2 | | | | |||
| | | | F-3 | | | | |||
| | | | F-4 | | | | |||
| | | | F-5 | | | | |||
| | | | F-6 | | | | |||
| | | | F-35 | | | | |||
| | | | F-36 | | | | |||
| | | | F-37 | | | | |||
| | | | F-38 | | | | |||
| | | | F-39 | | | | |||
| | | | F-40 | | | | |||
LAKESHORE ACQUISITION I CORP. | | | | |||||||
| | | | F-61 | | | | |||
| | | | F-62 | | | | |||
| | | | F-63 | | | | |||
| | | | F-64 | | | | |||
| | | | F-65 | | | | | | |
| | | | F-76 | | | | |||
| | | | F-77 | | | | |||
| | | | F-78 | | | | |||
| | | | F-79 | | | | |||
| | | | F-80 | | | | |||
| | | | F-81 | | | |
| | |
March 31,
2022 |
| |
December 31,
2021 |
| ||||||
| | |
(Unaudited)
|
| | | | | | | |||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,666,229 | | | | | $ | 1,500,582 | | |
Accounts receivable, net of allowance for doubtful accounts of $110,000 and $100,000 at March 31, 2022 and December 31, 2021, respectively
|
| | | | 1,703,195 | | | | | | 2,098,982 | | |
Inventory
|
| | | | 690,868 | | | | | | 378,769 | | |
Prepaid expenses and other current assets
|
| | | | 265,502 | | | | | | 148,207 | | |
Total current assets
|
| | | | 4,325,794 | | | | | | 4,126,540 | | |
Property and equipment, net
|
| | | | 1,047,980 | | | | | | 3,356,595 | | |
Right-of-use assets
|
| | | | 2,849,211 | | | | | | — | | |
Other assets
|
| | | | 920,229 | | | | | | 154,797 | | |
Total assets
|
| | | $ | 9,143,214 | | | | | $ | 7,637,932 | | |
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 1,779,681 | | | | | $ | 955,648 | | |
Accrued compensation
|
| | | | 1,798,952 | | | | | | 1,642,474 | | |
Other accrued expenses
|
| | | | 1,294,232 | | | | | | 1,161,781 | | |
Revolving line of credit
|
| | | | — | | | | | | 587,816 | | |
Current portion of subordinated loan and security agreement
|
| | | | 1,272,377 | | | | | | 968,493 | | |
Current portion of equipment financing obligation
|
| | | | 56,849 | | | | | | 55,333 | | |
Current portion of finance lease liabilities
|
| | | | 859,928 | | | | | | 926,104 | | |
Current portion of operating lease liabilities
|
| | | | 241,027 | | | | | | — | | |
Commission settlement
|
| | | | 284,768 | | | | | | 274,323 | | |
Total current liabilities
|
| | | | 7,587,814 | | | | | | 6,571,972 | | |
Subordinated loan and security agreement, net of current portion
|
| | | | 3,445,024 | | | | | | 3,908,003 | | |
Equipment financing obligation, net of current portion
|
| | | | 229,823 | | | | | | 244,617 | | |
Finance lease liabilities, net of current portion
|
| | | | 974,364 | | | | | | 866,853 | | |
Operating lease liabilities, net of current portion
|
| | | | 169,010 | | | | | | — | | |
Subordinated notes
|
| | | | 7,635,800 | | | | | | 6,620,811 | | |
Unsecured subordinated promissory notes
|
| | | | 2,500,000 | | | | | | — | | |
Accrued interest
|
| | | | 3,585,424 | | | | | | 3,392,003 | | |
Warrant liability
|
| | | | 583,000 | | | | | | 562,244 | | |
Deferred rent
|
| | | | — | | | | | | 57,741 | | |
Total liabilities
|
| | | | 26,710,259 | | | | | | 22,224,244 | | |
Commitments and contingencies (Note 9) | | | | | | | | | | | | | |
Series B redeemable convertible preferred stock, $0.0001 par value, 7,610,700 shares authorized; 7,288,333 shares issued and outstanding; liquidation preference of $26,237,999
|
| | | | 12,389,547 | | | | | | 12,389,547 | | |
Series A redeemable convertible preferred stock, $0.0001 par value, 26,250 shares authorized; 26,245 shares issued and outstanding; liquidation preference of $26,245,000
|
| | | | 26,245,000 | | | | | | 26,245,000 | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 36,038,535 shares authorized; 24,640,110 and 24,566,386 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively
|
| | | | 2,463 | | | | | | 2,456 | | |
Additional paid-in capital
|
| | | | 150,425,953 | | | | | | 150,425,960 | | |
Accumulated deficit
|
| | | | (206,630,008) | | | | | | (203,649,275) | | |
Total stockholders’ deficit
|
| | | | (56,201,592) | | | | | | (53,220,859) | | |
Total liabilities, redeemable convertible preferred stock, and stockholders’
deficit |
| | | $ | 9,143,214 | | | | | $ | 7,637,932 | | |
| | |
Three Months Ended March 31,
|
| | | | |||||||||
| | |
2022
|
| |
2021
|
| | ||||||||
Revenue, net
|
| | | $ | 3,743,143 | | | | | $ | 2,531,438 | | | | ||
Cost of Revenue
|
| | | | 1,578,496 | | | | | | 1,121,616 | | | | ||
Gross Profit
|
| | | | 2,164,647 | | | | | | 1,409,822 | | | | ||
Operating expenses | | | | | | | | | | | | | | | ||
Research and development
|
| | | | 557,633 | | | | | | 389,575 | | | | ||
Sales and marketing
|
| | | | 2,117,419 | | | | | | 1,156,083 | | | | ||
General and administrative
|
| | | | 1,348,055 | | | | | | 1,044,381 | | | | ||
Total operating expenses
|
| | | | 4,023,107 | | | | | | 2,590,039 | | | | ||
Other income (expense) | | | | | | | | | | | | | | | ||
Interest expense
|
| | | | (1,095,837) | | | | | | (664,061) | | | | ||
Change in fair value of warrant liability
|
| | | | (20,756) | | | | | | (44,334) | | | | ||
Total other expense
|
| | | | (1,116,593) | | | | | | (708,395) | | | | ||
Net loss before income taxes
|
| | | | (2,975,053) | | | | | | (1,888,612) | | | | ||
Provision for income taxes
|
| | | | (5,680) | | | | | | (3,800) | | | | ||
Net loss
|
| | | $ | (2,980,733) | | | | | $ | (1,892,412) | | | | ||
Net loss per share attributable to common stockholders, basic and diluted
|
| | | $ | (0.12) | | | | | $ | (0.08) | | | | ||
Weighted average shares attributable to common stockholders, basic and diluted
|
| | | | 24,575,706 | | | | | | 24,194,236 | | | |
| | |
Redeemable Convertible Preferred Stock
|
| | | | | |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| | |||||||||||||||||||||||||||||||||||||||||
| | |
Series B
|
| |
Series A
|
| | |
Common Stock
|
| | |||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| | ||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2022
|
| | | | 7,288,333 | | | | | $ | 12,389,547 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 24,566,386 | | | | | $ | 2,456 | | | | | $ | 150,425,960 | | | | | $ | (203,649,275) | | | | | $ | (53,220,859) | | | | ||
Vesting of restricted stock awards
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 73,724 | | | | | | 7 | | | | | | (7) | | | | | | — | | | | | | — | | | | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,980,733) | | | | | | (2,980,733) | | | | ||
Balance as of March 31, 2022
|
| | | | 7,288,333 | | | | | $ | 12,389,547 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 24,640,110 | | | | | $ | 2,463 | | | | | $ | 150,425,953 | | | | | $ | (206,630,008) | | | | | $ | (56,201,592) | | | |
| | |
Redeemable Convertible Preferred Stock
|
| | | | | |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| | |||||||||||||||||||||||||||||||||||||||||
| | |
Series B
|
| |
Series A
|
| | |
Common Stock
|
| | |||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| | ||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2021
|
| | | | 7,288,333 | | | | | $ | 12,389,547 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 24,184,697 | | | | | $ | 2,418 | | | | | $ | 150,421,286 | | | | | $ | (197,671,868) | | | | | $ | (47,248,164) | | | | ||
Vesting of restricted stock awards
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 71,611 | | | | | | 7 | | | | | | (7) | | | | | | — | | | | | | — | | | | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 1,000 | | | | | | — | | | | | | 1,000 | | | | ||
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,892,412) | | | | | | (1,892,412) | | | | ||
Balance as of March 31, 2021
|
| | | | 7,288,333 | | | | | $ | 12,389,547 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 24,256,308 | | | | | $ | 2,425 | | | | | $ | 150,422,279 | | | | | $ | (199,564,280) | | | | | $ | (49,139,576) | | | |
| | |
2022
|
| |
2021
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (2,980,733) | | | | | $ | (1,892,412) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation
|
| | | | 83,404 | | | | | | 193,252 | | |
Amortization of right-of-use asset
|
| | | | 153,546 | | | | | | — | | |
Operating lease costs
|
| | | | (6,084) | | | | | | — | | |
Noncash interest
|
| | | | 903,864 | | | | | | 184,020 | | |
Amortization of debt discount
|
| | | | 36,500 | | | | | | 18,098 | | |
Bad debt expense
|
| | | | 12,510 | | | | | | 22,000 | | |
Stock-based compensation
|
| | | | — | | | | | | 1,000 | | |
Change in fair value of warrant liability
|
| | | | 20,756 | | | | | | 44,334 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | 383,277 | | | | | | (108,101) | | |
Inventory
|
| | | | (312,099) | | | | | | (106,306) | | |
Prepaid expenses and other current assets
|
| | | | (117,295) | | | | | | (9,836) | | |
Other assets
|
| | | | (764,157) | | | | | | (615) | | |
Accounts payable
|
| | | | 824,033 | | | | | | (72,551) | | |
Accrued compensation
|
| | | | 156,478 | | | | | | 170,919 | | |
Other accrued expenses
|
| | | | 132,720 | | | | | | 235,337 | | |
Commission settlement
|
| | | | 10,445 | | | | | | 19,438 | | |
Net cash used in operating activities
|
| | | | (1,462,835) | | | | | | (1,301,423) | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (129,409) | | | | | | (21,693) | | |
Net cash used in investing activities
|
| | | | (129,409) | | | | | | (21,693) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Proceeds from line of credit
|
| | | | 7,000,000 | | | | | | 2,723,396 | | |
Repayment of line of credit
|
| | | | (7,587,816) | | | | | | (2,723,396) | | |
Proceeds from issuance of subordinated notes
|
| | | | 300,000 | | | | | | 50,000 | | |
Proceeds from unsecured subordinated promissory notes
|
| | | | 3,000,000 | | | | | | — | | |
Principal payments on capital lease obligations
|
| | | | — | | | | | | (189,121) | | |
Principal payments on finance lease obligations
|
| | | | (255,924) | | | | | | | | |
Principal payments on equipment financing obligation
|
| | | | (7,320) | | | | | | — | | |
Proceeds from Paycheck Protection Program loans
|
| | | | — | | | | | | 1,003,112 | | |
Repayments of subordinated loan and security agreement
|
| | | | (191,049) | | | | | | (58,099) | | |
Repayments of unsecured subordinated promissory notes
|
| | | | (500,000) | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 1,757,891 | | | | | | 805,892 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 165,647 | | | | | | (517,224) | | |
Cash and cash equivalents at beginning of period
|
| | | | 1,500,582 | | | | | | 1,555,554 | | |
Cash and cash equivalents at end of period
|
| | | $ | 1,666,229 | | | | | $ | 1,038,330 | | |
Supplemental disclosure of cash flow information | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 145,654 | | | | | $ | 122,042 | | |
Cash paid for income taxes
|
| | | $ | 4,085 | | | | | $ | — | | |
Supplemental disclosure of noncash investing and financing activities: | | | | | | | | | | | | | |
Acquisition of property and equipment through capital leases
|
| | | $ | — | | | | | $ | 84,793 | | |
Acquisition of property and equipment through finance leases
|
| | | $ | 291,031 | | | | | $ | — | | |
| | |
March 31, 2022
|
| |||||||||||||||||||||
| | |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
Warrant liability
|
| | | $ | 583,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 583,000 | | |
| | |
December 31, 2021
|
| |||||||||||||||||||||
| | |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
Warrant liability
|
| | | $ | 562,244 | | | | | $ | — | | | | | $ | — | | | | | $ | 562,244 | | |
|
Manufacturing equipment
|
| | 3 to 7 years | |
|
Computers and software
|
| | 3 years | |
|
Furniture
|
| | 7 years | |
|
Leasehold Improvements
|
| |
Shorter of remaining lease term
or estimate useful life |
|
| | |
March 31, 2022
|
| |
December 31, 2021
|
| ||||||
Manufacturing equipment
|
| | | $ | 1,918,965 | | | | | $ | 4,420,281 | | |
Computers and software
|
| | | | 560,158 | | | | | | 1,547,549 | | |
Furniture
|
| | | | 27,587 | | | | | | 27,587 | | |
Leasehold Improvements
|
| | | | 394,007 | | | | | | 295,471 | | |
| | | | | 2,900,717 | | | | | | 6,290,888 | | |
Less: accumulated depreciation
|
| | | | (1,852,737) | | | | | | (2,934,293) | | |
Total property and equipment, net
|
| | | $ | 1,047,980 | | | | | $ | 3,356,595 | | |
| | |
March 31, 2022
|
| |
December 31, 2021
|
| ||||||
Raw Materials
|
| | | $ | 600,918 | | | | | $ | 323,989 | | |
Work in progress
|
| | | | 89,950 | | | | | | 54,780 | | |
| | | | $ | 690,868 | | | | | $ | 378,769 | | |
| | |
March 31, 2022
|
| |
December 31, 2021
|
| ||||||
Bonus
|
| | | $ | 799,003 | | | | | $ | 831,601 | | |
Wages
|
| | | | 257,744 | | | | | | 140,962 | | |
Vacation
|
| | | | 612,026 | | | | | | 569,777 | | |
401k matching contributions
|
| | | | 130,179 | | | | | | 100,134 | | |
| | | | $ | 1,798,952 | | | | | $ | 1,642,474 | | |
| | |
March 31, 2022
|
| |
December 31, 2021
|
| ||||||
Rebates
|
| | | $ | 355,111 | | | | | $ | 499,219 | | |
Professional fees
|
| | | | 306,148 | | | | | | 72,611 | | |
Warranty
|
| | | | 253,676 | | | | | | 217,244 | | |
Other
|
| | | | 156,544 | | | | | | 235,737 | | |
Marketing expenses
|
| | | | 144,502 | | | | | | 45,000 | | |
Interest
|
| | | | 28,125 | | | | | | 28,750 | | |
Credit card fees
|
| | | | 24,424 | | | | | | 34,424 | | |
Freight
|
| | | | 16,000 | | | | | | 22,000 | | |
Commissions
|
| | | | 5,710 | | | | | | 2,830 | | |
Sales Tax
|
| | | | 3,992 | | | | | | 3,966 | | |
| | | | $ | 1,294,232 | | | | | $ | 1,161,781 | | |
| | |
For the three
months ended March 31, 2022 |
| |||
Lease Cost: | | | | | | | |
Operating lease cost
|
| | | $ | 62,624 | | |
Finance lease cost: | | | | | | | |
Amortization of assets obtained under finance leases
|
| | | $ | 153,546 | | |
Interest on lease liabilities
|
| | | $ | 45,019 | | |
| | |
For the three
months ended March 31, 2022 |
|
Lease term and discount rate: | | | | |
Weighted average remaining lease term (in years): | | | | |
Operating leases
|
| |
1.8 years
|
|
Finance leases
|
| |
2.6 years
|
|
Weighted average discount rate: | | | | |
Operating leases
|
| |
20.0%
|
|
Finance leases
|
| |
9.82%
|
|
| | |
For the three
months ended March 31, 2022 |
| |||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
Operating cash flows from operating leases
|
| | | $ | 48,170 | | |
Operating cash flows from finance leases
|
| | | $ | 153,546 | | |
Financing cash flows from finance leases
|
| | | $ | (255,924) | | |
Right-of-use assets obtained in exchange for lease liabilities: | | | | | | | |
Finance leases
|
| | | $ | 291,031 | | |
| | |
March 31, 2022
|
| |||
Manufacturing equipment
|
| | | $ | 2,810,056 | | |
Computers and software
|
| | | | 999,280 | | |
| | | | | 3,809,336 | | |
Less: accumulated amortization
|
| | | | (1,318,506) | | |
Right-of-use assets for finance leases
|
| | | | 2,490,830 | | |
Right-of-use assets for operating leases
|
| | | | 358,381 | | |
Total right-of-use assets
|
| | | $ | 2,849,211 | | |
Years ending December 31
|
| |
Total
|
| |||
Remainder of 2022
|
| | | $ | 853,163 | | |
2023
|
| | | | 499,463 | | |
2024
|
| | | | 321,771 | | |
2025
|
| | | | 267,362 | | |
2026 and thereafter
|
| | | | 167,272 | | |
Total minimum lease payments
|
| | | | 2,109,031 | | |
Less amount representing interest
|
| | | | (274,739) | | |
Present value of minimum lease payments
|
| | | | 1,834,292 | | |
Less current portion
|
| | | | (859,928) | | |
Finance lease liabilities, less current portion
|
| | | $ | 974,364 | | |
Years ending December 31
|
| |
Total
|
| |||
Remainder of 2022
|
| | | $ | 206,127 | | |
2023
|
| | | | 283,895 | | |
Total minimum lease payments
|
| | | | 490,002 | | |
Less amount representing interest
|
| | | | (79,985) | | |
Present value of minimum lease payments
|
| | | | 410,037 | | |
Less current portion
|
| | | | (241,027) | | |
Finance lease liabilities, less current portion
|
| | | $ | 169,010 | | |
Years ending December 31
|
| |
Total
|
| |||
Remainder of 2022
|
| | | $ | 42,055 | | |
2023
|
| | | | 58,973 | | |
2024
|
| | | | 56,995 | | |
2025
|
| | | | 63,698 | | |
2026
|
| | | | 64,951 | | |
Total principal maturities
|
| | | | 286,672 | | |
Less current portion
|
| | | | (56,849) | | |
Equipment financing obligation, net of current portion
|
| | | $ | 229,823 | | |
|
Less than one (1) year from the funding date
|
| | | | 3% | | |
|
One (1) year to less than two (2) years from the funding date
|
| | | | 2% | | |
|
Two (2) years to less than three (3) years from the funding date
|
| | | | 1% | | |
|
A change in control event
|
| | | | 5% | | |
Years ending December 31
|
| |
Total
|
| |||
Remainder of 2022
|
| | | $ | 957,742 | | |
2023
|
| | | | 1,607,586 | | |
2024
|
| | | | 10,041,043 | | |
Total estimated future revenue share payments
|
| | | $ | 12,606,371 | | |
Warrant Issuance
|
| |
Warrant
liability, January 1, 2022 |
| |
Fair
value of warrants granted |
| |
Fair
value of warrants exercised |
| |
Change in
fair value of warrants |
| |
Warrant
liability, March 31, 2022 |
| |||||||||||||||
2020 preferred Series B warrants and 2021
preferred Series B warrants |
| | | $ | 562,244 | | | | | $ | — | | | | | $ | — | | | | | $ | 20,756 | | | | | $ | 583,000 | | |
Warrant Issuance
|
| |
Warrant
liability, January 1, 2021 |
| |
Fair
value of warrants granted |
| |
Fair
value of warrants exercised |
| |
Change in
fair value of warrants |
| |
Warrant
liability, March 31, 2021 |
| |||||||||||||||
2020 preferred Series B warrants
|
| | | $ | 228,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 44,334 | | | | | $ | 272,334 | | |
| | |
Fair Value
of Series B Redeemable Convertible Preferred Stock |
| |
Black-Scholes Fair Value Assumptions
|
| |||||||||||||||||||||
Warrant Issuance
|
| |
Dividend
Yield |
| |
Expected
Volatility |
| |
Risk-Free
Interest Rate |
| |
Expected
Life |
| |||||||||||||||
2021 preferred Series B warrants
|
| | | $ | 3.60 | | | | | | 0% | | | | | | 41% | | | | | | 1.06% | | | |
0.5 years
|
|
2020 preferred Series B warrants
|
| | | $ | 3.60 | | | | | | 0% | | | | | | 41% | | | | | | 1.06% | | | |
0.5 years
|
|
| | |
Fair Value
of Series B Redeemable Convertible Preferred Stock |
| |
Black-Scholes Fair Value Assumptions
|
| |||||||||||||||||||||
Warrant Issuance
|
| |
Dividend
Yield |
| |
Expected
Volatility |
| |
Risk-Free
Interest Rate |
| |
Expected
Life |
| |||||||||||||||
2021 preferred Series B warrants
|
| | | $ | 2.89 | | | | | | 0% | | | | | | 20% | | | | | | 1.52% | | | |
9.26 years
|
|
2020 preferred Series B warrants
|
| | | $ | 2.89 | | | | | | 0% | | | | | | 20% | | | | | | 1.52% | | | |
8.10 years
|
|
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
Amount |
| | | | |||||||||
Series A
|
| | | | 30,415,100 | | | | | | 20,179,645 | | | | | $ | 5,355,678 | | | | ||
Series B
|
| | | | 1,675,600 | | | | | | 1,673,092 | | | | | | 977,755 | | | | ||
Series C
|
| | | | 3,947,835 | | | | | | 2,787,373* | | | | | | 1,224,772 | | | | ||
Total
|
| | | | 36,038,535 | | | | | | 24,640,110 | | | | | $ | 7,558,205 | | | |
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
Amount |
| | | | |||||||||
Series A
|
| | | | 30,415,100 | | | | | | 20,179,645 | | | | | $ | 5,355,678 | | | | ||
Series B
|
| | | | 1,675,600 | | | | | | 1,673,092 | | | | | | 977,755 | | | | ||
Series C
|
| | | | 3,947,835 | | | | | | 2,713,649* | | | | | | 1,192,377 | | | | ||
Total
|
| | | | 36,038,535 | | | | | | 24,566,386 | | | | | $ | 7,525,810 | | | |
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
amount |
| |||||||||
Series B Redeemable Convertible Preferred Stock
|
| | | | 7,610,700 | | | | | | 7,288,333 | | | | | $ | 26,237,999 | | |
Series A Redeemable Convertible Preferred Stock
|
| | | | 26,250 | | | | | | 26,245 | | | | | | 26,245,000 | | |
Total
|
| | | | 7,636,950 | | | | | | 7,314,578 | | | | | $ | 52,482,999 | | |
|
Series A and B Redeemable Convertible Preferred Stock upon conversion
|
| | | | 11,824,978 | | |
|
Unvested restricted common C stock
|
| | | | 832,093 | | |
|
Total
|
| | | | 12,657,071 | | |
| | |
Shares
|
| |
Weighted-Average
Grant Date Fair Value per Share |
| | ||||||||
Non-vested restricted common C shares as of January 1, 2022
|
| | | | 912,692 | | | | | $ | 0.01 | | | | ||
Granted
|
| | | | — | | | | | | — | | | | ||
Vested
|
| | | | (73,724) | | | | | $ | 0.01 | | | | ||
Forfeited
|
| | | | (6,875) | | | | | $ | 0.02 | | | | ||
Non-vested restricted common C shares as of March 31, 2022(1)
|
| | | | 832,093 | | | | | $ | 0.02 | | | | | |
| | |
Shares
|
| |
Weighted-Average
Grant Date Fair Value per Share |
| ||||||
Non-vested restricted common C shares as of January 1, 2021
|
| | | | 1,370,391 | | | | | $ | 0.01 | | |
Granted
|
| | | | — | | | | | | — | | |
Vested
|
| | | | (71,611) | | | | | $ | 0.01 | | |
Forfeited
|
| | | | — | | | | | | — | | |
Non-vested restricted common C shares as of March 31, 2021(2)
|
| | | | 1,298,780 | | | | | $ | 0.01 | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Numerator: | | | | | | | | | | | | | |
Net loss attributable to common stockholders
|
| | | $ | (2,980,733) | | | | | $ | (1,892,412) | | |
Denominator: | | | | | | | | | | | | | |
Weighted-average common shares outstanding
|
| | | | 24,575,706 | | | | | | 24,194,236 | | |
Net loss per share attributable to common stockholders, basic and diluted
|
| | | $ | (0.12) | | | | | $ | (0.08) | | |
| | |
Three Months Ended March 31,
|
| |||||||||
| | |
2022
|
| |
2021
|
| ||||||
Series A common stock upon conversion of redeemable convertible preferred stock A
|
| | | | 4,214,422 | | | | | | 4,214,422 | | |
Series A common stock upon conversion of redeemable convertible preferred stock B
|
| | | | 7,288,333 | | | | | | 7,288,333 | | |
Non-vested shares of Series C common stock
|
| | | | 832,093 | | | | | | 1,298,780 | | |
Shares subject to warrants to purchase common stock
|
| | | | 322,223 | | | | | | 211,112 | | |
Total
|
| | | | 12,657,071 | | | | | | 13,012,647 | | |
| | |
2021
|
| |
2020
(As Restated) |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,500,582 | | | | | $ | 1,555,554 | | |
Accounts receivable, net of allowance for doubtful accounts of $100,000 and $40,925 as of December 31, 2021 and 2020, respectively
|
| | | | 2,098,982 | | | | | | 1,458,523 | | |
Inventory
|
| | | | 378,769 | | | | | | 210,933 | | |
Prepaid expenses and other current assets
|
| | | | 148,207 | | | | | | 174,382 | | |
Total current assets
|
| | | | 4,126,540 | | | | | | 3,399,392 | | |
Property and equipment, net
|
| | | | 3,356,595 | | | | | | 2,897,004 | | |
Other assets
|
| | | | 154,797 | | | | | | 62,383 | | |
Total assets
|
| | | $ | 7,637,932 | | | | | $ | 6,358,779 | | |
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
|
| | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Revolving line of credit
|
| | | $ | 587,816 | | | | | $ | — | | |
Current portion of equipment financing obligation
|
| | | | 55,333 | | | | | | 49,662 | | |
Current portion of capital lease obligation
|
| | | | 926,104 | | | | | | 666,004 | | |
Current portion of commission settlement
|
| | | | 274,323 | | | | | | 300,000 | | |
Current portion of subordinated loan and security agreement
|
| | | | 968,493 | | | | | | 498,155 | | |
Current portion of Paycheck Protection Program Loan
|
| | | | — | | | | | | 698,170 | | |
Accounts payable
|
| | | | 955,648 | | | | | | 774,993 | | |
Accrued compensation
|
| | | | 1,642,474 | | | | | | 1,099,271 | | |
Other accrued expenses
|
| | | | 1,161,781 | | | | | | 747,616 | | |
Total current liabilities
|
| | | | 6,571,972 | | | | | | 4,833,871 | | |
Noncurrent liabilities: | | | | | | | | | | | | | |
Subordinated notes
|
| | | | 6,620,811 | | | | | | 3,450,148 | | |
Equipment financing obligation, net of current portion
|
| | | | 244,617 | | | | | | 299,950 | | |
Capital lease obligation, net of current portion
|
| | | | 866,853 | | | | | | 918,528 | | |
Commission settlement, net of current portion
|
| | | | — | | | | | | 210,562 | | |
Subordinated loan and security agreement, net of current portion
|
| | | | 3,908,003 | | | | | | 3,050,033 | | |
Paycheck Protection Program loan
|
| | | | — | | | | | | 579,980 | | |
Accrued interest
|
| | | | 3,392,003 | | | | | | 1,328,304 | | |
Warrant liability
|
| | | | 562,244 | | | | | | 228,000 | | |
Deferred rent
|
| | | | 57,741 | | | | | | 73,020 | | |
Total noncurrent liabilities
|
| | | | 15,652,272 | | | | | | 10,138,525 | | |
Total liabilities
|
| | | | 22,224,244 | | | | | | 14,972,396 | | |
Commitments and contingencies (Note 9) | | | | | | | | | | | | | |
Series B redeemable convertible preferred stock, $0.0001 par value, 7,610,700 and 7,600,000 shares authorized; 7,288,333 shares issued and outstanding at December 31, 2021 and 2020; liquidation preference of $26,237,999 at December 31, 2021 and 2020
|
| | | | 12,389,547 | | | | | | 12,389,547 | | |
Series A redeemable convertible preferred stock, $0.0001 par value, 26,250 shares authorized; 26,245 shares issued and outstanding at December 31, 2021 and 2020; liquidation preference of $26,245,000 at December 31, 2021 and 2020
|
| | | | 26,245,000 | | | | | | 26,245,000 | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Common stock, $0.0001 par value, 36,038,535 shares authorized at December 31, 2021 and 2020; 24,566,386 and 24,184,697 shares issued and outstanding at December 31, 2021 and 2020
|
| | | | 2,456 | | | | | | 2,418 | | |
Additional paid-in capital
|
| | | | 150,425,960 | | | | | | 150,421,286 | | |
Accumulated deficit
|
| | | | (203,649,275) | | | | | | (197,671,868) | | |
Total stockholders’ deficit
|
| | | | (53,220,859) | | | | | | (47,248,164) | | |
Total liabilities, redeemable convertible preferred stock, and stockholders’
deficit |
| | | $ | 7,637,932 | | | | | $ | 6,358,779 | | |
| | |
2021
|
| |
2020
|
| ||||||
Revenue, net
|
| | | $ | 14,074,649 | | | | | $ | 8,286,050 | | |
Cost of Revenue
|
| | | | 6,764,319 | | | | | | 4,165,659 | | |
Gross Profit
|
| | | | 7,310,330 | | | | | | 4,120,391 | | |
Operating expenses | | | | | | | | | | | | | |
Research and development
|
| | | | 1,889,208 | | | | | | 1,470,748 | | |
Sales and marketing
|
| | | | 5,776,084 | | | | | | 3,515,976 | | |
General and administrative
|
| | | | 4,459,924 | | | | | | 3,291,654 | | |
Total operating expenses
|
| | | | 12,125,216 | | | | | | 8,278,378 | | |
Other income (expense) | | | | | | | | | | | | | |
Interest expense
|
| | | | (3,245,220) | | | | | | (2,007,363) | | |
Forgiveness of PPP loans
|
| | | | 2,281,262 | | | | | | — | | |
Change in fair value of warrant liability
|
| | | | (190,911) | | | | | | — | | |
Other income
|
| | | | — | | | | | | 10,000 | | |
Total other expense
|
| | | | (1,154,869) | | | | | | (1,997,363) | | |
Net loss before income taxes
|
| | | | (5,969,755) | | | | | | (6,155,350) | | |
Provision for income taxes
|
| | | | (7,652) | | | | | | (17,665) | | |
Net loss
|
| | | $ | (5,977,407) | | | | | $ | (6,173,015) | | |
Net loss per share attributable to common stockholders, basic and diluted
|
| | | $ | (0.24) | | | | | $ | (0.26) | | |
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
| | | | 24,404,871 | | | | | | 23,970,536 | | |
| | |
Redeemable Convertible Preferred Stock
|
| | | | | |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||||||||||||||
| | |
Series B
|
| |
Series A
|
| | |
Common Stock
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 (As Restated)
|
| | | | 7,263,889 | | | | | $ | 12,345,548 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 23,379,018 | | | | | $ | 2,337 | | | | | $ | 150,416,075 | | | | | $ | (191,498,853) | | | | | $ | (41,080,441) | | |
Issuance of Series B redeemable convertible preferred stock, net of issuance costs of $0
|
| | | | 24,444 | | | | | | 43,999 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Vesting of restricted stock awards
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 805,679 | | | | | | 81 | | | | | | (81) | | | | | | — | | | | | | — | | |
Stock-based compensation
expense |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 5,292 | | | | | | — | | | | | | 5,292 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,173,015) | | | | | | (6,173,015) | | |
Balance as of December 31, 2020 (As Restated)
|
| | | | 7,288,333 | | | | | $ | 12,389,547 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 24,184,697 | | | | | $ | 2,418 | | | | | $ | 150,421,286 | | | | | $ | (197,671,868) | | | | | $ | (47,248,164) | | |
Vesting of restricted stock awards
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 381,689 | | | | | | 38 | | | | | | (38) | | | | | | — | | | | | | — | | |
Stock-based compensation
expense |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 4,712 | | | | | | — | | | | | | 4,712 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (5,977,407) | | | | | | (5,977,407) | | |
Balance as of December 31, 2021
|
| | | | 7,288,333 | | | | | $ | 12,389,547 | | | | | | 26,245 | | | | | $ | 26,245,000 | | | | | | | 24,566,386 | | | | | $ | 2,456 | | | | | $ | 150,425,960 | | | | | $ | (203,649,275) | | | | | $ | (53,220,859) | | |
| | |
2021
|
| |
2020
|
| ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (5,977,407) | | | | | $ | (6,173,015) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Forgiveness of PPP loans
|
| | | | (2,281,262) | | | | | | — | | |
Depreciation
|
| | | | 827,568 | | | | | | 573,269 | | |
Noncash interest
|
| | | | 710,444 | | | | | | 92,228 | | |
Noncash expense
|
| | | | — | | | | | | 43,999 | | |
Amortization of debt discount
|
| | | | 140,544 | | | | | | 59,001 | | |
Bad debt expense
|
| | | | 105,256 | | | | | | — | | |
Stock-based compensation
|
| | | | 4,712 | | | | | | 5,292 | | |
Change in fair value of warrant liability
|
| | | | 190,911 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (745,714) | | | | | | 191,871 | | |
Inventory
|
| | | | (167,836) | | | | | | (25,104) | | |
Prepaid expenses and other current assets
|
| | | | 26,174 | | | | | | 367,485 | | |
Other assets
|
| | | | (92,414) | | | | | | 39,308 | | |
Accounts payable
|
| | | | 180,655 | | | | | | 21,758 | | |
Accrued compensation
|
| | | | 543,203 | | | | | | 6,944 | | |
Other accrued expenses
|
| | | | 2,136,471 | | | | | | 1,215,714 | | |
Commission settlement
|
| | | | (236,239) | | | | | | (203,441) | | |
Net cash used in operating activities
|
| | | | (4,634,934) | | | | | | (3,784,691) | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (301,302) | | | | | | (85,443) | | |
Net cash used in investing activities
|
| | | | (301,302) | | | | | | (85,443) | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Proceeds from line of credit
|
| | | | 17,543,950 | | | | | | 9,593,155 | | |
Repayment of line of credit
|
| | | | (16,956,135) | | | | | | (10,424,804) | | |
Proceeds from issuance of subordinated notes
|
| | | | 2,765,000 | | | | | | 1,126,456 | | |
Principal payments on capital lease obligations
|
| | | | (777,431) | | | | | | (740,051) | | |
Principal payments on equipment financing obligation
|
| | | | (49,662) | | | | | | (133,196) | | |
Proceeds from Paycheck Protection Program loans
|
| | | | 1,003,112 | | | | | | 1,278,150 | | |
Proceeds from subordinated loan and security agreement
|
| | | | 1,955,067 | | | | | | 3,757,572 | | |
Repayments of subordinated loan and security agreement
|
| | | | (602,637) | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 4,881,264 | | | | | | 4,457,282 | | |
Net (decrease) increase in cash and cash equivalents
|
| | | | (54,972) | | | | | | 587,148 | | |
Cash and cash equivalents at beginning of year
|
| | | | 1,555,554 | | | | | | 968,406 | | |
Cash and cash equivalents at end of year
|
| | | $ | 1,500,582 | | | | | $ | 1,555,554 | | |
Supplemental disclosure of cash flow information | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 648,322 | | | | | $ | 597,315 | | |
Cash paid for income taxes
|
| | | $ | 7,652 | | | | | $ | 7,389 | | |
Supplemental disclosure of noncash investing and financing activities: | | | | | | | | | | | | | |
Acquisition of property and equipment through capital leases
|
| | | $ | 985,857 | | | | | $ | 740,051 | | |
Acquisition of property and equipment through equipment financing
|
| | | $ | — | | | | | $ | 178,358 | | |
Issuance of redeemable convertible preferred stock warrant in connection
with subordinated loan and security agreement |
| | | $ | 143,333 | | | | | $ | 228,000 | | |
Issuance of redeemable convertible preferred stock in exchange of intellectual property
|
| | | $ | — | | | | | $ | 43,999 | | |
| | |
December 31, 2021
|
| |||||||||||||||||||||
| | |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
Warrant liability
|
| | | $ | 562,244 | | | | | $ | — | | | | | $ | — | | | | | $ | 562,244 | | |
| | |
December 31, 2020
|
| |||||||||||||||||||||
| | |
Fair Value
|
| |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| ||||||||||||
Warrant liability
|
| | | $ | 228,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 228,000 | | |
| | |
2O21
|
| |
2O2O
|
| ||||||
Manufacturing equipment
|
| | | $ | 4,420,281 | | | | | $ | 3,622,637 | | |
Computers and software
|
| | | | 1,547,549 | | | | | | 1,076,906 | | |
Furniture
|
| | | | 27,587 | | | | | | 27,587 | | |
Leasehold Improvements
|
| | | | 295,471 | | | | | | 276,599 | | |
| | | | | 6,290,888 | | | | | | 5,003,729 | | |
Less: accumulated depreciation
|
| | | | (2,934,293) | | | | | | (2,106,725) | | |
Total property and equipment, net
|
| | | $ | 3,356,595 | | | | | $ | 2,897,004 | | |
| | |
2O21
|
| |
2O2O
|
| ||||||
Raw Materials
|
| | | $ | 323,989 | | | | | $ | 171,248 | | |
Work in progress
|
| | | | 54,780 | | | | | | 39,685 | | |
| | | | $ | 378,769 | | | | | $ | 210,933 | | |
| | |
2021
|
| |
2020
|
| ||||||
Bonus
|
| | | $ | 831,601 | | | | | $ | 584,848 | | |
Wages
|
| | | | 140,962 | | | | | | 85,412 | | |
Vacation
|
| | | | 569,777 | | | | | | 429,011 | | |
401k matching contributions
|
| | | | 100,134 | | | | | | — | | |
| | | | $ | 1,642,474 | | | | | $ | 1,099,271 | | |
| | |
2021
|
| |
2020
|
| ||||||
Other
|
| | | $ | 409,772 | | | | | $ | 258,652 | | |
Interest
|
| | | | 28,750 | | | | | | 28,750 | | |
Rebates
|
| | | | 499,219 | | | | | | 306,702 | | |
Commissions
|
| | | | 2,830 | | | | | | 3,177 | | |
Warranty
|
| | | | 217,244 | | | | | | 146,395 | | |
Sales Tax
|
| | | | 3,966 | | | | | | 3,940 | | |
| | | | $ | 1,161,781 | | | | | $ | 747,616 | | |
Years ending
|
| |
Total
|
| |||
2022
|
| | | $ | 1,081,876 | | |
2023
|
| | | | 429,797 | | |
2024
|
| | | | 252,105 | | |
2025
|
| | | | 197,696 | | |
2026
|
| | | | 92,905 | | |
Total minimum lease payments
|
| | | | 2,054,379 | | |
Less amount representing interest
|
| | | | (261,422) | | |
Present value of minimum lease payments
|
| | | | 1,792,957 | | |
Less current portion
|
| | | | (926,104) | | |
Capital lease obligations, less current portion
|
| | | $ | 866,853 | | |
Years ending
|
| |
Total
|
| |||
2022
|
| | | $ | 55,333 | | |
2023
|
| | | | 58,973 | | |
2024
|
| | | | 56,995 | | |
2025
|
| | | | 63,698 | | |
2026
|
| | | | 64,951 | | |
Total principal maturities
|
| | | | 299,950 | | |
Less current portion
|
| | | | (55,333) | | |
Equipment financing obligation, net of current portion
|
| | | $ | 244,617 | | |
|
Less than one (1) year from the funding date
|
| | | | 3% | | |
|
One (1) year to less than two (2) years from the funding date
|
| | | | 2% | | |
|
Two (2) years to less than three (3) years from the funding date
|
| | | | 1% | | |
|
A change in control event
|
| | | | 5% | | |
Years ending
|
| |
Total
|
| |||
2022
|
| | | | 968,493 | | |
2023
|
| | | | 1,306,267 | | |
2024
|
| | | | 10,525,402 | | |
Total estimated future revenue share payments
|
| | | $ | 12,800,162 | | |
Warrant Issuance
|
| |
Warrant
liability, December 31, 2020 |
| |
Fair value of
warrants granted |
| |
Fair value of
warrants exercised |
| |
Change in
fair value of warrants |
| |
Warrant
liability, December 31, 2021 |
| |||||||||||||||
2020 preferred Series B warrants and 2021
preferred Series B warrants |
| | | $ | 228,000 | | | | | $ | 143,333 | | | | | $ | — | | | | | $ | 190,911 | | | | | $ | 562,244 | | |
Warrant Issuance
|
| |
Warrant
liability, December 31, 2019 |
| |
Fair value of
warrants granted |
| |
Fair value of
warrants exercised |
| |
Change in
fair value of warrants |
| |
Warrant
liability, December 31, 2020 |
| |||||||||||||||
2020 preferred Series B warrants
|
| | | $ | — | | | | | $ | 228,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 228,000 | | |
Warrant Issuance
|
| |
Fair Value of
Series B Redeemable Convertible Preferred Stock |
| |
Black-Scholes Fair Value Assumptions
|
| |||||||||||||||||||||
|
Dividend Yield
|
| |
Expected Volatility
|
| |
Risk-Free Interest
Rate |
| |
Expected Life
|
| |||||||||||||||||
2021 preferred Series B warrants
|
| | | $ | 2.89 | | | | | | 0% | | | | | | 20% | | | | | | 1.52% | | | |
9.26 years
|
|
2020 preferred Series B warrants
|
| | | $ | 2.89 | | | | | | 0% | | | | | | 20% | | | | | | 1.52% | | | |
8.10 years
|
|
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
Amount |
| |||||||||
Series A
|
| | | | 30,415,100 | | | | | | 20,179,645 | | | | | $ | 5,355,678 | | |
Series B
|
| | | | 1,675,600 | | | | | | 1,673,092 | | | | | | 977,755 | | |
Series C
|
| | | | 3,947,835 | | | | | | 2,713,649* | | | | | | 1,192,377 | | |
Total
|
| | | | 36,038,535 | | | | | | 24,566,386 | | | | | $ | 7,525,810 | | |
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
Amount |
| |||||||||
Series A
|
| | | | 30,415,100 | | | | | | 20,179,645 | | | | | $ | 5,355,678 | | |
Series B
|
| | | | 1,675,600 | | | | | | 1,673,092 | | | | | | 977,755 | | |
Series C
|
| | | | 3,947,835 | | | | | | 2,331,960* | | | | | | 1,024,663 | | |
Total
|
| | | | 36,038,535 | | | | | | 24,184,697 | | | | | $ | 7,358,096 | | |
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
amount |
| |||||||||
Series B Redeemable Convertible Preferred Stock
|
| | | | 7,610,700 | | | | | | 7,288,333 | | | | | $ | 26,237,999 | | |
Series A Redeemable Convertible Preferred Stock
|
| | | | 26,250 | | | | | | 26,245 | | | | | | 26,245,000 | | |
Total
|
| | | | 7,636,950 | | | | | | 7,314,578 | | | | | $ | 52,482,999 | | |
| | |
Shares
Authorized |
| |
Shares issued
and outstanding |
| |
Liquidation
amount |
| |||||||||
Series B Redeemable Convertible Preferred Stock
|
| | | | 7,600,000 | | | | | | 7,288,333 | | | | | $ | 26,237,999 | | |
Series A Redeemable Convertible Preferred Stock
|
| | | | 26,250 | | | | | | 26,245 | | | | | | 26,245,000 | | |
Total
|
| | | | 7,626,250 | | | | | | 7,314,578 | | | | | $ | 52,482,999 | | |
|
Series A and B Redeemable Convertible Preferred Stock upon conversion
|
| | | | 11,824,978 | | |
|
Unvested restricted stock
|
| | | | 912,692 | | |
|
Total
|
| | | | 12,737,670 | | |
| | |
Shares
|
| |
Weighted-Average
Grant Date Fair Value per Share |
| ||||||
Non-vested restricted common C shares as of December 31, 2020
|
| | | | 1,370,391 | | | | | $ | 0.01 | | |
Granted
|
| | | | 65,000 | | | | | $ | 0.08 | | |
Vested
|
| | | | (381,689) | | | | | $ | 0.01 | | |
Forfeited
|
| | | | (141,010) | | | | | $ | 0.02 | | |
Non-vested restricted common C shares as of December 31, 2021(1)
|
| | | | 912,692 | | | | | $ | 0.01 | | |
| | |
Shares
|
| |
Weighted-Average
Grant Date Fair Value per Share |
| ||||||
Non-vested restricted common C shares as of December 31, 2019
|
| | | | 1,923,637 | | | | | $ | 0.01 | | |
Granted
|
| | | | 259,933 | | | | | $ | 0.02 | | |
Vested
|
| | | | (805,679) | | | | | $ | 0.00 | | |
Forfeited
|
| | | | (7,500) | | | | | $ | 0.01 | | |
Non-vested restricted common C shares as of December 31, 2020(2)
|
| | | | 1,370,391 | | | | | $ | 0.01 | | |
Years ending
|
| |
Total
|
| |||
2022
|
| | | | 274,835 | | |
2023
|
| | | | 283,895 | | |
| | | | $ | 558,730 | | |
| | |
2021
|
| |
2020
|
| ||||||
Statutory federal income tax rate
|
| | | | 21.0% | | | | | | 21.0% | | |
State taxes, net of federal tax benefit
|
| | | | 7.9% | | | | | | 5.6% | | |
PPP loan forgiveness
|
| | | | 8.0% | | | | | | 0.0% | | |
Permanent difference
|
| | | | (0.5)% | | | | | | (3.3)% | | |
Change in valuation allowance
|
| | | | (36.5)% | | | | | | (23.6)% | | |
Income tax provision
|
| | | | (0.1)% | | | | | | (0.3)% | | |
| | |
2021
|
| |
2020
|
| ||||||
Deferred tax assets | | | | | | | | | | | | | |
Net operating losses
|
| | | $ | 13,497,030 | | | | | $ | 11,328,908 | | |
Reserve and accruals
|
| | | | 554,632 | | | | | | 482,572 | | |
Other
|
| | | | 1,792 | | | | | | 890 | | |
Total deferred tax assets
|
| | | | 14,053,454 | | | | | | 11,812,370 | | |
Deferred tax liabilities | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | (200,998) | | | | | | (144,545) | | |
Total deferred tax liabilities
|
| | | | (200,998) | | | | | | (144,545) | | |
Net deferred tax assets
|
| | | | 13,852,456 | | | | | | 11,667,825 | | |
Valuation Allowance
|
| | | | (13,852,456) | | | | | | (11,667,825) | | |
Net deferred tax asset
|
| | | $ | — | | | | | $ | — | | |
| | |
2021
|
| |
2020
|
| ||||||
Numerator: | | | | | | | | | | | | | |
Net loss attributable to common stockholders
|
| | | $ | (5,977,407) | | | | | $ | (6,173,015) | | |
Denominator: | | | | | | | | | | | | | |
Weighted-average common shares outstanding
|
| | | | 24,404,871 | | | | | | 23,970,536 | | |
Net loss per share attributable to common stockholders, basic and diluted
|
| | | $ | (0.24) | | | | | $ | (0.26) | | |
| | |
2021
|
| |
2020
|
| ||||||
Series A common stock upon conversion of redeemable convertible preferred stock A
|
| | | | 4,214,422 | | | | | | 4,214,422 | | |
Series A common stock upon conversion of redeemable convertible preferred stock B
|
| | | | 7,288,333 | | | | | | 7,288,333 | | |
Non-vested shares of Series C common stock
|
| | | | 912,692 | | | | | | 1,370,391 | | |
Shares subject to warrants to purchase common stock
|
| | | | 322,223 | | | | | | 211,112 | | |
Total
|
| | | | 12,737,670 | | | | | | 13,084,258 | | |
| | |
As of December 31, 2020
|
| |||||||||||||||
| | |
As Previously
Reported |
| |
Adjustment
|
| |
As Restated
|
| |||||||||
CONSOLIDATED BALANCE SHEET | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | $ | — | | | | | | 228,000 | | | | | $ | 228,000 | | |
Total liabilities
|
| | | | 14,744,396 | | | | | | 228,000 | | | | | | 14,972,396 | | |
Series B redeemable convertible preferred stock
|
| | | | — | | | | | | 12,389,547 | | | | | | 12,389,547 | | |
Series A redeemable convertible preferred stock
|
| | | | — | | | | | | 26,245,000 | | | | | | 26,245,000 | | |
Convertible preferred stock
|
| | | | 38,449,551 | | | | | | (38,449,551) | | | | | | — | | |
Common stock
|
| | | | 2,185 | | | | | | 233 | | | | | | 2,418 | | |
Additional paid-in capital
|
| | | | 150,834,515 | | | | | | (413,229) | | | | | | 150,421,286 | | |
Total stockholders’ deficit
|
| | | | (8,385,617) | | | | | | (38,862,547) | | | | | | (47,248,164) | | |
| | |
As of December 31, 2020
|
| |||||||||||||||
| | |
As Previously
Reported |
| |
Adjustment
|
| |
As Restated
|
| |||||||||
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
|
| | | | | | | | | | | | | | | | | | |
Series B redeemable convertible preferred stock
|
| | | $ | — | | | | | | 12,389,547 | | | | | $ | 12,389,547 | | |
Series A redeemable convertible preferred stock
|
| | | | — | | | | | | 26,245,000 | | | | | | 26,245,000 | | |
Convertible preferred stock
|
| | | | 38,449,551 | | | | | | (38,449,551) | | | | | | — | | |
Common stock
|
| | | | 2,185 | | | | | | 233 | | | | | | 2,418 | | |
Additional paid-in capital
|
| | | | 150,834,515 | | | | | | (413,229) | | | | | | 150,421,286 | | |
Total stockholders’ deficit
|
| | | | (8,385,617) | | | | | | (38,862,547) | | | | | | (47,248,164) | | |
| | |
March 31,
2022 Unaudited |
| |
December 31,
2021 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | |
Cash
|
| | | $ | 334,367 | | | | | $ | 438,913 | | |
Prepaid expenses
|
| | | | 25,483 | | | | | | 63,708 | | |
Marketable securities held in trust account
|
| | | | 54,677,471 | | | | | | 54,671,966 | | |
Total Current Assets
|
| | | | 55,037,321 | | | | | | 55,174,587 | | |
Total Assets
|
| | | $ | 55,037,321 | | | | | $ | 55,174,587 | | |
LIABILITIES AND SHAREHOLDER’S EQUITY | | | | | | | | | | | | | |
Accrued expense and other current liabilities
|
| | | $ | 33,038 | | | | | $ | 25,000 | | |
Total Current Liabilities
|
| | | | 33,038 | | | | | | 25,000 | | |
Total Liabilities
|
| | | | 33,038 | | | | | | 25,000 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Redeemable Ordinary Shares | | | | | | | | | | | | | |
Ordinary shares subject to possible redemption: 5,467,000 shares (at redemption value of $10.00 per share)
|
| | | | 54,670,000 | | | | | | 54,670,000 | | |
Shareholders’ Equity | | | | | | | | | | | | | |
Ordinary share, $0.0001 par value; 500,000,000 shares authorized; 1,628,425 shares issued and outstanding
|
| | | | 163 | | | | | | 163 | | |
Additional paid-in capital
|
| | | | 779,049 | | | | | | 779,049 | | |
Accumulated deficit
|
| | | | (444,929) | | | | | | (299,625) | | |
Total Shareholders’ Equity
|
| | | | 334,283 | | | | | | 479,587 | | |
Total Liabilities and Shareholders’ Equity
|
| | | $ | 55,037,321 | | | | | $ | 55,174,587 | | |
| | |
For The
Three Months Ended March 31, 2022 |
| |
For The
Period From January 6, 2021 (Inception) To March 31, 2021 |
| ||||||
Formation, general and administrative expenses
|
| | | $ | 150,809 | | | | | $ | 4,013 | | |
Loss from operations
|
| | | | (150,809) | | | | | | (4,013) | | |
Other income | | | | | | | | | | | | | |
Interest income on marketable securities held in trust account
|
| | | | 5,505 | | | | | | — | | |
Net Loss
|
| | | $ | (145,304) | | | | | $ | (4,013) | | |
Basic and diluted weighted average shares outstanding | | | | | | | | | | | | | |
Redeemable ordinary shares – basic and diluted
|
| | | | 5,467,000 | | | | | | — | | |
Non-redeemable ordinary shares – basic and diluted(1)
|
| | | | 1,628,425 | | | | | | 1,250,000 | | |
Basic and diluted net loss per share | | | | | | | | | | | | | |
Redeemable ordinary shares – basic and diluted
|
| | | $ | (0.02) | | | | | $ | N/A | | |
Non-redeemable ordinary shares – basic and diluted
|
| | | $ | (0.02) | | | | | $ | — | | |
| | |
Ordinary Shares
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Shareholders’ Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balances, January 6, 2021 (Inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of ordinary shares to the sponsor
|
| | | | 1,437,500 | | | | | | 144 | | | | | | 24,856 | | | | | | — | | | | | | 25,000 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (4,013) | | | | | | (4,013) | | |
Balances, March 31, 2021(1)
|
| | | | 1,437,500 | | | | | $ | 144 | | | | | $ | 24,856 | | | | | $ | (4,013) | | | | | $ | 20,987 | | |
| | |
Ordinary Shares
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Shareholders’ Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balances, December 31, 2021
|
| | | | 1,628,425 | | | | | $ | 163 | | | | | $ | 779,049 | | | | | $ | (299,625) | | | | | $ | 479,587 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (145,304) | | | | | | (145,304) | | |
Balances, March 31, 2022
|
| | | | 1,628,425 | | | | | $ | 163 | | | | | $ | 779,049 | | | | | $ | (444,929) | | | | | $ | 334,283 | | |
| | |
For the
Three Months Ended March 31, 2022 |
| |
For the
Period From January 6, 2021 (Inception) To March 31, 2021 |
| ||||||
Cash flow from operating activities
|
| | | | | | | | | | | | |
Net loss
|
| | | $ | (145,304) | | | | | $ | (4,013) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Interest income earned in trust account
|
| | | | (5,505) | | | | | | — | | |
Change in operating assets and liabilities:
|
| | | | | | | | | | | | |
Change in prepaid expenses
|
| | | | 38,225 | | | | | | — | | |
Change in accrued expense and other current liabilities
|
| | | | 8,038 | | | | | | 4,033 | | |
Net cash provided – (used) by operating activities
|
| | |
|
(104,546)
|
| | | |
|
20
|
| |
Cash flow from financing activities
|
| | | | | | | | | | | | |
Proceeds from note payable to a related party
|
| | | | — | | | | | | 450,000 | | |
Proceeds from advance for private units to be issued
|
| | | | — | | | | | | 100,000 | | |
Proceeds from issuance of ordinary shares
|
| | | | — | | | | | | 25,000 | | |
Payment of offering costs
|
| | | | — | | | | | | (25,375) | | |
Net cash provided by financing activities
|
| | | | — | | | | | | 549,625 | | |
Net change in cash
|
| | | | (104,546) | | | | | | 549,645 | | |
Cash at beginning of period
|
| | | | 438,913 | | | | | | — | | |
Cash at end of period
|
| | | $ | 334,367 | | | | | $ | 549,645 | | |
Non-cash investing and financing activities
|
| | | | | | | | | | | | |
Deferred offering costs in accrued offering costs
|
| | | $ | — | | | | | $ | 58,000 | | |
| | | | | | | | | | | | | |
| | |
For The Three Months
Ended March 31, 2022 |
| |
For The Period From
January 6, 2021 (Inception) To March 31, 2021 |
| ||||||
Net loss less interest income in trust account
|
| | | $ | (150,809) | | | | | $ | (4,013) | | |
| | |
For The Three Months
Ended March 31, 2022 |
| |
For The Period From
January 6, 2021 (Inception) To March 31, 2021 |
| ||||||||||||||||||
| | |
Redeemable
shares |
| |
Non-redeemable
shares |
| |
Redeemable
shares |
| |
Non-redeemable
shares |
| ||||||||||||
Basic and diluted net income/(loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Numerators: | | | | | | | | | | | | | | | | | | | | | | | | | |
Allocation of net income/(loss)
|
| | | $ | (116,198) | | | | | $ | (34,611) | | | | | $ | — | | | | | $ | (4,013) | | |
Denominators: | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted-average shares outstanding
|
| | | | 5,467,000 | | | | | | 1,628,425 | | | | | | — | | | | | | 1,250,000 | | |
Basic and diluted net income/(loss) per share
|
| | | $ | (0.02) | | | | | $ | (0.02) | | | | | $ | — | | | | | $ | — | | |
| | |
As of
March 31, 2022 |
| |||
Gross proceeds
|
| | | $ | 54,670,000 | | |
Less: | | | | | | | |
Proceeds allocated to public warrants
|
| | | | (2,418,328) | | |
Offering costs of public shares
|
| | | | (1,780,148) | | |
Plus: | | | | | | | |
Accretion of carrying value to redemption value
|
| | | | 4,198,476 | | |
Ordinary shares subject to possible redemption
|
| | | $ | 54,670,000 | | |
Description
|
| |
Level
|
| |
March 31, 2022
|
| ||||||
Assets: | | | | | | | | | | | | | |
Marketable securities held in Trust Account
|
| | | | 1 | | | | | $ | 54,677,471 | | |
| ASSETS | | | | | | | |
| Current assets | | | | | | | |
|
Cash
|
| | | $ | 438,913 | | |
|
Prepaid expenses
|
| | | | 63,708 | | |
|
Marketable securities held in trust account
|
| | | | 54,671,966 | | |
|
Total Current Assets
|
| | | | 55,174,587 | | |
|
Total Assets
|
| | | $ | 55,174,587 | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | |
|
Accrued expense
|
| | | $ | 25,000 | | |
|
Total Current Liabilities
|
| | | | 25,000 | | |
|
Total Liabilities
|
| | | $ | 25,000 | | |
| Commitments and contingencies | | | | | | | |
| Redeemable Ordinary Shares | | | | | | | |
|
Ordinary share subject to possible redemption: 5,467,000 shares (at redemption value of $10.00 per share)
|
| | | $ | 54,670,000 | | |
| Shareholders’ Equity | | | | | | | |
|
Ordinary share, $0.0001 par value; 500,000,000 shares authorized; 1,628,425 shares issued and outstanding
|
| | | | 163 | | |
|
Additional paid-in capital
|
| | | | 779,049 | | |
|
Accumulated deficit
|
| | | | (299,625) | | |
|
Total Shareholders’ Equity
|
| | | | 479,587 | | |
|
Total Liabilities and Shareholders’ Equity
|
| | | $ | 55,174,587 | | |
|
Formation, general and administrative expenses
|
| | | $ | 301,591 | | |
|
Loss from operations
|
| | | | (301,591) | | |
| Other income | | | | | | | |
|
Interest income on marketable securities held in trust account
|
| | | | 1,966 | | |
|
Net Loss
|
| | | | (299,625) | | |
| Basic and diluted weighted average shares outstanding | | | | | | | |
|
Redeemable ordinary shares – basic and diluted
|
| | | | 3,020,358 | | |
|
Ordinary shares – basic and diluted
|
| | | | 1,448,654 | | |
| Basic and diluted net loss per share | | | | | | | |
|
Redeemable ordinary shares – basic and diluted
|
| | | $ | 0.38 | | |
|
Ordinary shares – basic and diluted
|
| | | $ | (1.01) | | |
| | |
Ordinary Shares
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Shareholders’ Equity |
| ||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||
Balances, January 6, 2021 (Inception)
|
| | | | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Issuance of ordinary shares to the sponsor
|
| | | | 1,437,500 | | | | | | 144 | | | | | | 24,856 | | | | | | — | | | | | | 25,000 | | |
Issuance of public units
|
| | | | 5,467,000 | | | | | | 547 | | | | | | 54,669,453 | | | | | | — | | | | | | 54,670,000 | | |
Issuance of private units
|
| | | | 261,675 | | | | | | 26 | | | | | | 2,616,724 | | | | | | — | | | | | | 2,616,750 | | |
Underwriters’ discount
|
| | | | — | | | | | | — | | | | | | (1,366,750) | | | | | | — | | | | | | (1,366,750) | | |
Deduction of other offering costs
|
| | | | — | | | | | | — | | | | | | (495,788) | | | | | | — | | | | | | (495,788) | | |
Forfeiture of shares
|
| | | | (70,750) | | | | | | (7) | | | | | | 7 | | | | | | — | | | | | | — | | |
Change in value of ordinary shares subject to
redemption |
| | | | (5,467,000) | | | | | | (547) | | | | | | (52,251,125) | | | | | | — | | | | | | (52,251,672) | | |
Allocation of offering costs to ordinary shares subject to redemption
|
| | | | — | | | | | | — | | | | | | 1,780,148 | | | | | | — | | | | | | 1,780,148 | | |
Deduction for increases of carrying value of redeemable shares
|
| | | | — | | | | | | — | | | | | | (4,198,476) | | | | | | — | | | | | | (4,198,476) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | (299,625) | | | | | | (299,625) | | |
Balances, December 31, 2021
|
| | | | 1,628,425 | | | | | $ | 163 | | | | | $ | 779,049 | | | | | $ | (299,625) | | | | | $ | 479,587 | | |
| Cash flow from operating activities | | | | | | | |
|
Net loss
|
| | | $ | (299,625) | | |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | |
|
Interest income earned in trust account
|
| | | | (1,966) | | |
| Change in operating assets and liabilities: | | | | | | | |
|
Change in prepaid expenses
|
| | | | (63,708) | | |
|
Change in accrued expenses
|
| | | | 25,000 | | |
|
Net cash provided by operating activities
|
| | | | (340,299) | | |
| Cash flow from investing activities | | | | | | | |
|
Cash deposited in trust account
|
| | | | (54,670,000) | | |
|
Net cash used in investing activities
|
| | | | (54,670,000) | | |
| Cash flow from financing activities | | | | | | | |
|
Proceeds from note payable to a related party
|
| | | | 450,000 | | |
|
Proceeds from advance for private units to be issued
|
| | | | 70,750 | | |
|
Proceeds from issuance of ordinary shares
|
| | | | 57,311,750 | | |
|
Repayment of note payable to a related party
|
| | | | (450,000) | | |
|
Repayment of advance from private units purchasers
|
| | | | (70,750) | | |
|
Payment of underwriters’ discount
|
| | | | (1,366,750) | | |
|
Payment of offering costs
|
| | | | (495,788) | | |
|
Net cash provided by financing activities
|
| | | | 55,449,212 | | |
|
Net change in cash
|
| | | | 438,913 | | |
|
Cash at beginning of period
|
| | | | — | | |
|
Cash at end of period
|
| | | $ | 438,913 | | |
| Non-cash investing and financing activities: | | | | | | | |
|
Initial classification of or ordinary shares subject to redemption
|
| | | | 50,471,524 | | |
|
Subsequent measurement of ordinary shares subject to redemption
|
| | | | 4,198,476 | | |
| | |
For The Period From
January 6, 2021 (Inception) To December 31, 2021 |
| |||
Net loss
|
| | | $ | (299,625) | | |
Accretion of temporary equity to redemption value
|
| | | | (4,198,476) | | |
Net loss including accretion of temporary equity to redemption value
|
| | | $ | (4,498,101) | | |
| | |
For The Period From
January 6, 2021 (Inception) To December 31, 2021 |
| |||||||||
| | |
Redeemable
shares |
| |
Non-redeemable
shares |
| ||||||
Basic and diluted net income/(loss) per share: | | | | | | | | | | | | | |
Numerators: | | | | | | | | | | | | | |
Allocation of net loss including accretion of temporary equity
|
| | | $ | (3,040,019) | | | | | $ | (1,458,082) | | |
Accretion of temporary equity to redemption value
|
| | | | 4,198,476 | | | | | | — | | |
Allocation of net income/(loss)
|
| | | $ | 1,158,457 | | | | | $ | (1,458,082) | | |
Denominators: | | | | | | | | | | | | | |
Weighted-average shares outstanding
|
| | | | 3,020,358 | | | | | | 1,448,654 | | |
Basic and diluted net income/(loss) per share
|
| | | $ | 0.38 | | | | | $ | (1.01) | | |
| | |
As of December 31, 2021
|
| |||
Gross proceeds
|
| | | $ | 54,670,000 | | |
Less: | | | | | | | |
Proceeds allocated to public warrants
|
| | | | (2,418,328) | | |
Offering costs of public shares
|
| | | $ | (1,780,148) | | |
Plus: | | | | | | | |
Accretion of carrying value to redemption value
|
| | | $ | 4,198,476 | | |
Ordinary share subject to possible redemption
|
| | | $ | 54,670,000 | | |
Description
|
| |
Level
|
| |
December 31, 2021
|
| ||||||
Assets: | | | | | | | | | | | | | |
Marketable securities held in Trust Account
|
| | | | 1 | | | | | $ | 54,671,966 | | |
As of June 15, 2021
|
| |
As
Reported |
| |
Adjustment
|
| |
As
Restated |
| |||||||||
Restated Balance Sheet | | | | | | | | | | | | | | | | | | | |
Ordinary share subject to possible redemption
|
| | | $ | 45,780,150 | | | | | $ | 4,219,850 | | | | | $ | 50,000,000 | | |
Shareholders’ Equity | | | | | | | | | | | | | | | | | | | |
Ordinary share
|
| | | | 211 | | | | | | (42) | | | | | | 169 | | |
Additional paid in capital
|
| | | | 5,011,721 | | | | | | (4,219,808) | | | | | | 791,913 | | |
Total shareholders’ equity
|
| | | $ | 5,000,004 | | | | | $ | (4,219,850) | | | | | $ | 780,154 | | |
| | |
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| Exhibit | | | Description | |
| Exhibit A | | | Form of Voting and Support Agreement | |
| Exhibit B | | | Form of Purchaser Support Agreement | |
| Exhibit C | | | Form of Lock-Up Agreement | |
| Exhibit D | | | Form of Non-Competition Agreement | |
| Exhibit E | | | Form of Amended Organizational Documents | |
| Exhibit F | | | Form of Equity Incentive Plan | |
| If to the Purchaser or Merger Sub at or prior to the Closing, to: | | | with a copy (which will not constitute notice) to: | |
|
Lakeshore Acquisition I Corp.
667 Madison Avenue New York, NY 10065 Attn: Bill Chen Telephone No.: (917) 327-9933 E-mail: bchen65@126.com |
| |
Loeb & Loeb LLP
345 Park Avenue New York, NY 10154 Attn: Giovanni Caruso Facsimile No.: Telephone No.: (212) 407-4866 E-mail: gcaruso@loeb.com |
|
| If to the Purchaser Representative, to: | | | with a copy (which will not constitute notice) to: | |
|
RedOne Investment Limited
555 Shihui Road, Ste A-2F Sonjiang District, Shangai 201100 Attn: Bill Chen Telephone No.: (917) 327-9933 E-mail: bchen65@126.com |
| |
Loeb & Loeb LLP
345 Park Avenue New York, NY 10154 Attn: Giovanni Caruso Facsimile No.: Telephone No.: (212) 407-4866 E-mail: gcaruso@loeb.com |
|
| If to the Company or the Surviving Corporation, to: | | | with a copy (which will not constitute notice) to: | |
|
ProSomnus Holdings Inc.
5860 W Las Positas Blvd., Suite 25 Pleasanton, CA 94588 Attn: Leonard Liptak Telephone No.: (925) 353-7904 E-mail: lliptak@prosomnus.com |
| |
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 Third Avenue New York, NY 10017 Attn: James McKnight, Esq. Facsimile No.: (212) 983-3115 Telephone No.: (212) 692-6794 E-mail: JMMcKnight@mintz.com |
|
| If to the Seller Representative to: | | | with a copy (which will not constitute notice) to: | |
|
HGP II, LLC
c/o HealthpointCapital 505 Park Ave., 17th Floor New York, NY 10022 Attn: Laing Rikkers Telephone No.: (917) 757-3343 E-mail: lrikkers@healthpointcapital.com |
| |
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 Third Avenue New York, NY 10017 Attn: James McKnight, Esq. Facsimile No.: (212) 983-3115 Telephone No.: (212) 692-6794 E-mail: JMMcKnight@mintz.com |
|
| AAA Procedures | | |
10.5
|
|
| Accounts Receivable | | |
4.7(f)
|
|
| Acquisition Proposal | | |
5.6(a)
|
|
| Adjustment Amount | | |
1.17(d)
|
|
| Agreement | | |
Preamble
|
|
| Alternative Transaction | | |
5.6(a)
|
|
|
Amended Organizational Documents
|
| |
1.7
|
|
| Antitrust Expenses | | |
8.3
|
|
| Antitrust Laws | | |
5.9(b)
|
|
| Audited Company Financials | | |
4.7(a)
|
|
| Balance Sheet Date | | |
4.7(a)
|
|
| Business Combination | | |
9.1
|
|
| Cayman Islands Companies Law | | |
Recitals
|
|
| Certificate of Merger | | |
1.2
|
|
| CFO | | |
1.17(a)
|
|
| Closing | | |
2.1
|
|
| Closing Date | | |
2.1
|
|
| Closing Filing | | |
5.14(b)
|
|
| Closing Press Release | | |
5.14(b)
|
|
| Closing Statement | | |
1.17(a)
|
|
| Company | | |
Preamble
|
|
| Company Benefit Plan | | |
4.20(a)
|
|
| Company Disclosure Schedules | | |
Article IV
|
|
| Company Financials | | |
4.7(a)
|
|
| Company IP | | |
4.14(d)
|
|
| Company IP Licenses | | |
4.14(a)
|
|
| Company Material Contract | | |
4.13(a)
|
|
| Company Permits | | |
4.10
|
|
| Company Personal Property Leases | | |
4.17
|
|
| Company Real Property Leases | | |
4.16
|
|
| Company Registered IP | | |
4.14(a)
|
|
| Conversion | | |
1.9
|
|
| D&O Indemnified Persons | | |
5.18(a)
|
|
| D&O Tail Insurance | | |
5.18(b)
|
|
| Debt Agreements | | |
5.20(b)
|
|
| Debt Amount | | |
5.20(b)
|
|
| Debt Investment | | |
5.20(b)
|
|
| Debt Investors | | |
5.20(b)
|
|
| DGCL | | |
Recitals
|
|
| Dispute | | |
10.5
|
|
| Earnout Shares | | |
1.21(a)
|
|
| Effective Time | | |
1.2
|
|
| Enforceability Exceptions | | |
3.2
|
|
| Environmental Permits | | |
4.21(a)
|
|
| Equity Agreements | | |
5.20(a)
|
|
| Equity Amount | | |
5.20(a)
|
|
| Equity Incentive Plan | | |
5.12(a)
|
|
| Equity Investment | | |
5.20(a)
|
|
| Equity Investors | | |
5.20(a)
|
|
| Escrow Account | | |
1.20(a)
|
|
| Escrow Agent | | |
1.20(a)
|
|
| Escrow Agreement | | |
1.20(a)
|
|
| Escrow Amount | | |
1.20(a)
|
|
| Escrow Property | | |
1.20(a)
|
|
| Escrow Shares | | |
1.20(a)
|
|
| Estimated Closing Statement | | |
1.16
|
|
| Exchange Agent | | |
1.14(a)
|
|
| Expenses | | |
8.3
|
|
| Extension | | |
5.3(a)
|
|
| Federal Securities Laws | | |
5.7
|
|
| Financing Agreements | | |
5.20(b)
|
|
| Financing Amount | | |
5.20(b)
|
|
| Health Care Program | | |
4.11(h)
|
|
| Independent Expert | | |
1.17(b)
|
|
| Independent Expert Notice Date | | |
1.17(b)
|
|
| Interim Period | | |
5.1(a)
|
|
| Investors | | |
5.20(a)
|
|
| Letter of Transmittal | | |
1.14(a)
|
|
| Loeb | | |
10.17(a)
|
|
| Merger | | |
Recitals
|
|
| Merger Consideration | | |
1.8
|
|
| Merger Sub | | |
Preamble
|
|
| Minimum Cash Condition | | |
7.1(h)
|
|
| Mintz | | |
10.17(b)
|
|
| Non-Redeeming Stockholders | | |
5.20(a)
|
|
| Objection Statement | | |
1.17(b)
|
|
| OFAC | | |
3.19(c)
|
|
| Off-the-Shelf Software | | |
4.14(a)
|
|
| Outbound IP License | | |
4.14(a)
|
|
| Outside Date | | |
8.1(b)
|
|
| Parties | | |
Preamble
|
|
| Party | | |
Preamble
|
|
| PIPE Investors | | |
5.20(a)
|
|
| Post-Closing Purchaser Board | | |
5.17(a)
|
|
| Proxy Statement | | |
5.12(a)
|
|
| Public Certifications | | |
3.6(a)
|
|
| Public Shareholders | | |
9.1
|
|
| Purchaser | | |
Preamble
|
|
| Purchaser Disclosure Schedules | | |
Article III
|
|
|
Purchaser Extraordinary General Meeting
|
| |
5.12(a)
|
|
| Purchaser Financials | | |
3.6(b)
|
|
| Purchaser Initial Shareholders | | |
Recitals
|
|
| Purchaser Material Contract | | |
3.13(a)
|
|
| Purchaser Representative | | |
Preamble
|
|
|
Purchaser Representative Documents
|
| |
10.15(a)
|
|
|
Purchaser Shareholder Approval Matters
|
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5.12(a)
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| Purchaser Support Agreement | | |
Recitals
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| Redemption | | |
5.12(a)
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| Registration Statement | | |
5.12(a)
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| Reincorporation | | |
1.7
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| Reincorporation Effective Time | | |
3.5(b)
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| Related Person | | |
4.22
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| Released Claims | | |
9.1
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| Representative Party | | |
1.17(b)
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Required Company Stockholder Approval
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5.13
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Required Purchaser Shareholder Approval
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7.1(a)
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| Resolution Period | | |
10.5
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| SEC Reports | | |
3.6(a)
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| SEC SPAC Accounting Changes | | |
3.6(a)
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| Section 409A Plan | | |
4.20(k)
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| Seller Representative | | |
Preamble
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| Seller Representative Documents | | |
10.16(a)
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| Signing Filing | | |
5.14(b)
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| Signing Press Release | | |
5.14(b)
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| Specified Courts | | |
10.6
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| Stockholder Merger Consideration | | |
1.8
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| Surviving Corporation | | |
1.1
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| Top Customers | | |
4.25
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| Top Suppliers | | |
4.25
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| Transaction Financing | | |
5.20(b)
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| Transmittal Documents | | |
1.14(b)
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| Voting and Support Agreements | | |
Recitals
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Signature
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Title
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/s/ Bill Chen
Bill Chen
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| | President and Sole Director (Principal Executive Officer), Principal Financial Officer and Principal Accounting Officer | |