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Item 2. |
Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
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References to the “Company,” “ARYA Sciences Acquisition Corp V,”
“ARYA,” “our,” “us” or “we” refer to ARYA Sciences Acquisition Corp
V. The following discussion and analysis of the Company’s financial
condition and results of operations should be read in conjunction
with the unaudited interim condensed financial statements and the
notes thereto contained elsewhere in this report. Certain
information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and
uncertainties.
Cautionary Note Regarding Forward-Looking Statements
Some of the statements contained in this Quarterly Report on Form
10-Q may constitute “forward-looking statements” for purposes of
the federal securities laws. Our forward-looking statements
include, but are not limited to, statements regarding our or our
management team’s expectations, hopes, beliefs, intentions or
strategies regarding the future. In addition, any statements that
refer to projections, forecasts or other characterizations of
future events or circumstances, including any underlying
assumptions, are forward-looking statements. The words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “possible,” “potential,”
“predict,” “project,” “should,” “would” and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Quarterly Report
on Form 10-Q are based on our current expectations and beliefs
concerning future developments and their potential effects on us.
There can be no assurance that future developments affecting us
will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which
are beyond our control) or other assumptions that may cause actual
results or performance to be materially different from those
expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, the
following risks, uncertainties (some of which are beyond our
control) or other factors:
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we have no operating history and no revenues, and you have no basis
on which to evaluate our ability to achieve our business
objective;
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our ability to select an appropriate target business or
businesses;
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our ability to complete a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business
combination with one or more businesses (the “Business
Combination”);
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our expectations around the performance of a prospective target
business or businesses;
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our success in retaining or recruiting, or changes required in, our
officers, key employees or directors following our initial Business
Combination;
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our officers and directors allocating their time to other
businesses and potentially having conflicts of interest with our
business or in approving our initial Business Combination;
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our potential ability to obtain additional financing to complete
our initial Business Combination;
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our pool of prospective target businesses;
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our ability to consummate an initial Business Combination due to
the uncertainty resulting from the recent COVID-19 pandemic;
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the ability of our officers and directors to generate a number of
potential Business Combination opportunities;
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our public securities’ potential liquidity and trading;
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the use of proceeds not held in the trust account or available to
us from interest income on the trust account balance;
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the trust account not being subject to claims of third
parties;
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our financial performance following our initial public offering
(the “Initial Public Offering”); and
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the other risks and uncertainties discussed herein, in our filings
with the SEC and in our final prospectus relating to our Initial
Public Offering, filed with the SEC on March 1, 2021.
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Should one or more of these risks or uncertainties materialize, or
should any of our assumptions prove incorrect, actual results may
vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
Overview
We are a blank check company incorporated as a Cayman Islands
exempted company on February 22, 2021. We were formed for the
purpose of effecting a Business Combination that we have not yet
identified. Our sponsor is ARYA Sciences Holdings V, a Cayman
Islands exempted limited company (the “Sponsor”).
Our registration statement for our Initial Public Offering was
declared effective on July 12, 2021. On July 15,
2021, we consummated its
Initial Public Offering of 14,950,000 Class A ordinary shares (the
“Public Shares”), including the 1,950,000 Public Shares as a result
of the underwriters’ full exercise of their over-allotment option,
at an offering price of $10.00 per Public Share, generating gross
proceeds of $149.5 million, and incurring offering costs of
approximately $8.7 million, inclusive of approximately $5.2 million
in deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we
consummated the private placement (“Private Placement”) of 499,000
Class A ordinary shares (the “Private Placement Shares”), at a
price of $10.00 per Private Placement Share to the Sponsor,
generating gross proceeds of approximately $5.0 million (Note
4).
Upon the closing of the Initial
Public Offering and the
Private Placement, $149.5 million ($10.00 per Share) of the net
proceeds of the Initial Public Offering and certain of the proceeds
of the Private Placement were placed in a trust account
(“Trust Account”), located in the
United States, with Continental Stock Transfer & Trust Company
acting as trustee, and will be invested only in United States
“government securities” within the meaning of Section 2(a)(16) of
the Investment Company Act of 1940, as amended (the “Investment
Company Act”), having a maturity of 185 days or less or in money
market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S.
government treasury obligations, until the earlier of: (i) the
completion of a Business Combination and (ii) the distribution of
the Trust Account as described below.
Our management has broad discretion with respect to the specific
application of the net proceeds of the Initial Public Offering and
the sale of Private Placement Shares, although substantially all of
the net proceeds are intended to be applied generally toward
consummating a Business Combination.
If we have not completed a Business
Combination within the Combination Period, the Company will (i)
cease all operations except for the purpose of winding up; (ii) as
promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest earned on the funds held in the Trust
Account and not previously released to us to pay our income taxes,
if any (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of the then-outstanding Public
Shares, which redemption will completely extinguish Public
Shareholders’ rights as shareholders (including the right to
receive further liquidation distributions, if any); and (iii) as
promptly as reasonably possible following such redemption, subject
to the approval of our remaining shareholders and our board of
directors, liquidate and dissolve, subject in the case of clauses
(ii) and (iii) to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other
applicable law.
We intend to effectuate our initial Business Combination using cash
from the proceeds of our Initial Public Offering and the sale of
the Private Placement Shares, our shares, debt or a combination of
cash, equity and debt.
The issuance of additional shares in a Business Combination:
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may
significantly dilute the equity interest of investors in our
Initial Public Offering, which dilution would increase if the
anti-dilution provisions in the Class B ordinary shares resulted in
the issuance of Class A ordinary shares on a greater than
one-to-one basis upon conversion of the Class B ordinary
shares;
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may
subordinate the rights of holders of Class A ordinary shares if
preference shares are issued with rights senior to those afforded
our Class A ordinary shares;
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could
cause a change in control if a substantial number of our Class A
ordinary shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any,
and could result in the resignation or removal of our present
officers and directors;
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may have
the effect of delaying or preventing a change of control of us by
diluting the share ownership or voting rights of a person seeking
to obtain control of us; and
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may
adversely affect prevailing market prices for our Class A ordinary
shares.
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Similarly, if we issue debt or otherwise incur significant debt, it
could result in:
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default and foreclosure on our assets if our operating revenues
after an initial Business Combination are insufficient to repay our
debt obligations;
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acceleration of our obligations to repay the indebtedness even if
we make all principal and interest payments when due if we breach
certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that
covenant;
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our immediate payment of all principal and accrued interest, if
any, if the debt is payable on demand;
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our inability to obtain necessary additional financing if the debt
contains covenants restricting our ability to obtain such financing
while the debt is outstanding;
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our inability to pay dividends on our Class A ordinary
shares;
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using a substantial portion of our cash flow to pay principal and
interest on our debt, which will reduce the funds available for
dividends on our Class A ordinary shares if declared, expenses,
capital expenditures, acquisitions and other general corporate
purposes;
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limitations on our flexibility in planning for and reacting to
changes in our business and in the industry in which we
operate;
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increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in
government regulation; and
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limitations on our ability to borrow additional amounts for
expenses, capital expenditures, acquisitions, debt service
requirements, execution of our strategy and other purposes and
other disadvantages compared to our competitors who have less
debt.
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Results of Operations
Our entire activity since inception up to June 30, 2021 was in
preparation for our formation and the Initial Public Offering. We
will not be generating any operating revenues until the closing and
completion of our initial Business Combination.
For the three months ended June 30, 2021, we had net loss of
approximately $7,000, which consisted of general and administrative
expenses.
For the period from February 22, 2021 (inception) through June 30,
2021, we had net loss of approximately $16,000, which consisted of
general and administrative expenses.
Liquidity and Capital Resources
As of June 30, 2021, we had approximately $42,000 in our operating
bank account, and working capital deficit of approximately
$309,000.
Our liquidity needs to date have been
satisfied through a contribution of $25,000 from Sponsor to cover
for certain offering costs in exchange for the issuance of the
Founder Shares, the loan of approximately $151,000 from the Sponsor
pursuant to the Note (as defined in Note 4) and advances from the
Sponsor, and $2 million in proceeds from the consummation of the
Private Placement not held in the Trust Account. We fully repaid
the Note on July 15, 2021. In addition, in order to finance
transaction costs in connection with a Business Combination, the
Sponsor or an affiliate of the Sponsor, or certain of our officers
and directors may, but are not obligated to, provide the Company
Working Capital Loans. As of June 30, 2021, there were no
amounts outstanding under any Working Capital Loan.
Based on the foregoing, management believes that we will have
sufficient working capital and borrowing capacity from our Sponsor
or an affiliate of our Sponsor, or certain of our officers and
directors to meet our needs through the earlier of the consummation
of a Business Combination or one year from this filing. Over this
time period, we will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial
Business Combination candidates, performing due diligence on
prospective target businesses, paying for travel expenditures,
selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business
Combination.
Management continues to evaluate the impact of the COVID-19
pandemic on the industry and has concluded that while it is
reasonably possible that the virus could have a negative effect on
our financial position, results of our operations and/or search for
a target company, the specific impact is not readily determinable
as of the date of the condensed financial statements. The condensed
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Contractual Obligations
Administrative Support Agreement
Commencing on the effective date of the registration statement on
Form S-1 related to the Initial Public Offering through the earlier of consummation of the
initial Business Combination and our liquidation, we agreed to
reimburse the Sponsor for office space, secretarial and
administrative services provided to us in the amount of $10,000 per
month.
We have not incurred any costs for the three months ended June 30,
2021 and for the period of February 22, 2021 (inception) through
June 30, 2021.
Registration and Shareholder Rights
The holders of Founder Shares,
Private Placement Shares and Private Placement Shares that may be
issued upon conversion of Working Capital Loans, are entitled to
registration rights pursuant to a registration and shareholder
rights agreement signed upon the consummation of the Initial Public
Offering. The holders of these securities are entitled to make up
to three demands, excluding short form demands, that we register
such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed
subsequent to our completion of a Business Combination. However,
the registration and shareholder rights agreement provides that the
Company will not permit any registration statement filed under the
Securities Act to become effective until termination of the
applicable lock-up period, which occurs (i) in the case of the
Founder Shares, in accordance with the letter agreement that our
initial shareholders entered into and (ii) in the case of the
Private Placement Shares, 30 days after the completion of our
Business Combination. We will bear the expenses incurred in
connection with the filing of any such registration
statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the
final prospectus relating to the Initial Public Offering to
purchase up to 1,950,000 additional Public Shares to cover
over-allotments at the Initial Public Offering price less the
underwriting discounts and commissions. On July 15, 2021, the
underwriters fully exercised the over-allotment option.
The underwriters were paid an
underwriting discount of $0.20 per Public Share, or approximately
$3.0 million in the aggregate, paid upon the closing of the Initial
Public Offering. In addition, $0.35 per Public Share, or
approximately $5.2 million in the aggregate will be payable to the
underwriters for deferred underwriting commissions. The deferred
fee will become payable to the underwriters from the amounts held
in the Trust Account solely in the event that we complete a
Business Combination, subject to the terms of the underwriting
agreement.
Critical Accounting Policies
Net loss per ordinary shares
Net loss per ordinary share is computed by dividing net loss
applicable to shareholders by the weighted average number of Class
B ordinary shares outstanding during the period, as calculated
using the treasury method. Weighted average shares at June 30, 2021
were reduced for the effect of an aggregate of 487,500 Class B
ordinary shares that are subject to forfeiture if the
over-allotment option is not exercised in full or in part by the
underwriters (see Note 4). At June 30, 2021, we did not have any
dilutive securities and other contracts that could, potentially, be
exercised or converted into ordinary shares and then share in the
earnings under the treasury method. As a result, diluted loss per
ordinary share is the same as basic loss per share of ordinary
shares for the periods presented.
Deferred Offering Costs Associated with our Initial Public
Offering
Deferred offering costs consist of
legal, accounting, and other costs incurred through the date of the
condensed financial statements that are directly related to our
Initial Public Offering and were charged to shareholders’ equity
upon the completion of our Initial Public Offering on July 15,
2021.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet
effective, accounting standards if currently adopted would have a
material effect on the accompanying unaudited condensed financial
statements.
Off-Balance Sheet Arrangements
As of June 30, 2021, we did not have any off-balance sheet
arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”)
contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify
as an “emerging growth company” and under the JOBS Act are allowed
to comply with new or revised accounting pronouncements based on
the effective date for private (not publicly traded) companies. We
are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised
accounting standards on the relevant dates on which adoption of
such standards is required for non-emerging growth companies. As a
result, the financial statements may not be comparable to companies
that comply with new or revised accounting pronouncements as of
public company effective dates.
Additionally, we are in the process of evaluating the benefits of
relying on the other reduced reporting requirements provided by the
JOBS Act. Subject to certain conditions set forth in the JOBS Act,
if, as an “emerging growth company,” we choose to rely on such
exemptions we may not be required to, among other things, (i)
provide an auditor’s attestation report on our system of internal
control over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act of 2002, (ii) provide all of the compensation
disclosure that may be required of non-emerging growth public
companies under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, (iii) comply with any requirement that may be
adopted by the PCAOB regarding mandatory audit firm rotation or a
supplement to the auditor’s report providing additional information
about the audit and the financial statements (auditor discussion
and analysis) and (iv) disclose certain executive compensation
related items such as the correlation between executive
compensation and performance and comparisons of the executive
compensation to median employee compensation. These exemptions will
apply for a period of five years following the completion of our
Initial Public Offering or until we are no longer an “emerging
growth company,” whichever is earlier.
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
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We are a smaller reporting company as defined by Rule 12b-2 of the
Exchange Act and are not required to provide the information
otherwise required under this item.
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Item 4. |
Controls and Procedures
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Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the
objective of ensuring that information required to be disclosed in
our reports filed under the Exchange Act, such as this Quarterly
Report on Form 10-Q, is recorded, processed, summarized, and
reported within the time period specified in the SEC’s rules and
forms. Disclosure controls are also designed with the objective of
ensuring that such information is accumulated and communicated to
our management, including the chief executive officer and chief
financial officer, as appropriate to allow timely decisions
regarding required disclosure. Our management evaluated, with the
participation of our principal executive officer and principal
financial and accounting officer (our “Certifying Officers”), the
effectiveness of our disclosure controls and procedures as of June
30, 2021, pursuant to Rule 13a-15(b) under the Exchange Act. Based
upon that evaluation, our Certifying Officers concluded that, as of
June 30, 2021, our disclosure controls and procedures were
effective.
We do not expect that our disclosure controls and procedures will
prevent all errors and all instances of fraud. Disclosure controls
and procedures, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the
objectives of the disclosure controls and procedures are met.
Further, the design of disclosure controls and procedures must
reflect the fact that there are resource constraints, and the
benefits must be considered relative to their costs. Because of the
inherent limitations in all disclosure controls and procedures, no
evaluation of disclosure controls and procedures can provide
absolute assurance that we have detected all our control
deficiencies and instances of fraud, if any. The design of
disclosure controls and procedures also is based partly on certain
assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been
no change in our internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
PART II - OTHER INFORMATION
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Item 1. |
Legal Proceedings
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None.
As of the date of this Quarterly Report on Form 10-Q, there have
been no material changes to the risk factors disclosed in our final
prospectus relating to our Initial Public Offering filed with the
SEC on July 14, 2021. We may disclose changes to such factors or
disclose additional factors from time to time in our future filings
with the SEC.
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
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Simultaneously with the consummation of the Initial Public Offering
and the exercise of the over-allotment option by the underwriters
in full, our sponsor purchased 499,000 Private Placement Shares, at
a price of $10.00 per Private Placement Share to the Sponsor,
generating gross proceeds of approximately $5.0 million. A portion
of the proceeds from the Private Placement Shares was added to the
proceeds from the Initial Public Offering held in the Trust
Account.
In connection with the Initial Public Offering, our sponsor had
agreed to loan us an aggregate of up to $300,000 pursuant to the
Note. This loan is non-interest bearing and payable on the
consummation of the Initial Public Offering. The Company borrowed $150,000 under the Note and
fully repaid the Note amount on July 15, 2021.
Of the gross proceeds received from the Initial Public Offering and
the full exercise of the option to purchase additional Shares,
$149,500,000 was placed in the Trust Account. The net proceeds of
the Initial Public Offering and certain proceeds from the Private
Placement are invested in U.S. government treasury bills with a
maturity of 180 days or less and in money market funds meeting
certain conditions under Rule 2a-7 under the Investment Company Act
which invest only in direct U.S. government treasury
obligations.
We paid a total of approximately $3.0 million in underwriting
discounts and commissions related to the Initial Public Offering.
In addition, the underwriters agreed to defer $5.2 million in
underwriting discounts and commissions.
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Item
3.
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Defaults
upon Senior Securities
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None.
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Item
4.
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Mine Safety Disclosures.
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Not applicable.
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Item
5.
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Other
Information.
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None.
The following exhibits are filed or furnished as a part of, or
incorporated by reference into, this Quarterly Report on Form
10-Q.
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Exhibit
Number
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Description
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Amended and Restated Memorandum and Articles of
Association.(1)
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Specimen Ordinary Share Certificate.(2)
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Description of Registrant’s Securities.*
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Private Placement Shares Purchase Agreement between the Company and
the Sponsor.(1)
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Investment Management Trust Agreement between Continental Stock
Transfer & Trust Company and the Company.(1)
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Registration and Shareholder Rights Agreement among the Company,
the Sponsor and certain other equityholders named therein.(1)
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Letter Agreement among the Company, the Sponsor and the Company’s
officers and directors.(1)
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Administrative Services Agreement between the Company and the
Sponsor.(1)
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Form of Indemnity Agreement.(2)
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Certification of Chief Executive Officer (Principal Executive
Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the
Securities Exchange Act of 1934, as Adopted Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.*
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Certification of Chief Financial Officer (Principal Financial and
Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under
the Securities Exchange Act of 1934, as Adopted Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.*
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Certification of Chief Executive Officer (Principal Executive
Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.**
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Certification of Chief Financial Officer (Principal Financial and
Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
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101.INS
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XBRL Instance Document.*
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101.SCH
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XBRL Taxonomy Extension Schema Document.*
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.*
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* Filed herewith.
** Furnished herewith.
(1) Incorporated by reference to the registrant’s Current Report on
Form 8-K, filed with the SEC on July 15, 2021.
(2) Incorporated by reference to the registrant’s Form S-1, filed
with the SEC on June 24, 2021.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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Dated:
August 27, 2021
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ARYA SCIENCES ACQUISITION CORP V
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By:
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/s/
Michael Altman
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Name:
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Michael
Altman
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Title:
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Chief
Financial Officer
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