As filed with the Securities and Exchange Commission on January27, 2021.October 30, 2023

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549

______________________________________________

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

______________________________________________

Rosecliff Acquisition Corp ISpectral AI, Inc.

(Exact name of registrant as specified in its charter)

______________________________________________

Delaware

 

67708731

 

85-3987148

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

__________________2515 McKinney Avenue, Suite 1000
Dallas, Texas 75201
(972) 499-4934

767 5th Avenue 34th Floor
New York, New York 10153
Telephone: (212) 492-3000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

__________________

Michael Murphy____________________________

Wensheng Fan
Chief Executive Officer
c/o Rosecliff Acquisition Corp I
767 5
th2515 McKinney Avenue, 34th FloorSuite 1000
New York, New York 10153Dallas, Texas 75201
Telephone: (212) 492-3000(972) 499-4934

(Name, address, including zip code, and telephone number, including area code, of agent for service)

______________________________________________

Copies to:

P. Michelle Gasaway, Esq.
Gregg A. Noel, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687
-5000

Richard Baumann, Esq.
Stuart Neuhauser, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
(212) 370
-1300

__________________Herbert F. Kozlov, Esq.
Lynwood E. Reinhardt, Esq.
Reed Smith LLP
599 Lexington Avenue

New York, New York 10022-7650
(212) 521-5400

____________________________

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:box. £

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filerfiler:

 

£

 

Accelerated filerfiler:

 

£

  

Non-accelerated filerNon-accelerated filer:

 

S

 

Smaller reporting companycompany:

 

S

      

Emerging growth companycompany:

 

S

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. £

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CALCULATION OF REGISTRATION FEE

Title of Each Class of Security Being Registered

 

Amount Being Registered

 

Proposed Maximum Offering Price per Security(1)

 

Proposed
Maximum
Aggregate
Offering
Price
(1)

 

Amount of Registration Fee

Units, each consisting of one share of Class A common stock, par value $0.0001 per share, and one-third of one redeemable warrant(2)

 

23,000,000 Units

 

$

10.00

 

$

230,000,000

 

$

25,093

 

Class A common stock included as part of the units(3)(4)

 

23,000,000 Shares

 

 

 

 

 

 

(5)

Redeemable warrants included as part of the units(3)(4)

 

7,666,667 Warrants

 

 

 

 

 

 

(5)

Total

   

 

  

$

230,000,000

 

$

25,093

 

____________

(1)      Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the “Securities Act”).

(2)      Includes 3,000,000 units, consisting of 3,000,000 shares of Class A common stock and 1,000,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.

(3)      Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(4)      Maximum number of shares of Class A common stock and redeemable warrants, as applicable, included in the units described above, including those that may be issued upon exercise of a 45-day option granted to the underwriters described above.

(5)      No fee pursuant to Rule 457(g).

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdictionstate where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

SUBJECT TO COMPLETION, DATED JANUARY27, 2021

$200,000,000Subject to Completion

Rosecliff Acquisition Corp IPreliminary Prospectus dated October30, 2023.

20,000,000 Units

__________________Spectral AI, Inc.

Rosecliff Acquisition Corp I is a newly incorporated blank check company formed for the purposePRIMARY OFFERING OF
Up To 8,433,231 Shares of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any industry or geographic location (subject to certain limitations described in this prospectus), we currently intend to focus our efforts on identifying high growth technology and techCommon Stock Issuable Upon Exercise of Warrants

-enabledSECONDARY OFFERING OF
businesses domestically in industries that are being disrupted by advances in technology and on technology paradigms.Up To 10,069,748 Shares of Common Stock

This isprospectus relates to the issuance by Spectral AI, Inc. (“we,” “us,” “our,” the “Company,” “Registrant,” and “Spectral”) of an initial public offeringaggregate of our securities. Each unit has an offering price of $10.00 and consists of one share(a) up to 8,433,231 shares of our Class A common stock, and one-thirdpar value $0.0001 per share (the “Common Stock”) that are issuable upon the exercise of 8,433,231 warrants (the “Warrants”), which were originally issued in Rosecliff Acquisition Corp I’s (“RCLF”) initial public offering (the “RCLF IPO”) as part of RCLF’s units at a price of $10.00 per unit (the “Units”), with each unit consisting of one redeemable warrant.share of Common Stock and one third of one Warrant, by the holders thereof. Each whole warrantWarrant entitles the holder thereof to purchase one share of our Class A common stockCommon Stock at a price of $11.50 per share, subjectshare.

This prospectus also relates to adjustment as describedthe offer and resale from time to time by the selling stockholders (including their transferees, donees, pledgees and other successors-in-interest) named in this prospectus and only whole warrants are exercisable. No fractional warrants will be(the “selling stockholders”) of (i) up to 10,069,748 shares of Common Stock, which consists of (a) up to 8,623,081 shares of Common Stock issued upon separationin connection with closing of the units and only whole warrants will trade. The warrants will become exercisable onBusiness Combination (as defined herein) (the “Closing”) at an equity consideration value of $10.00 per share by certain of the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. Subject to the terms and conditions describedselling stockholders named in this prospectus, we may redeem(b) up to 880,000 shares of Common Stock that were originally issued to the warrants onceInitial Holders (as defined herein) in the warrants become exercisable. form of founder shares prior to the RCLF IPO at a price of approximately $0.004 per share, and (c) up to 566,667 shares of Common Stock that were issued to certain service providers of the Company in connection with the Closing.

We have also grantedwill not receive any proceeds from the underwriters a 45-day optionsale of shares of Common Stock by the selling stockholders pursuant to this prospectus. We will receive up to approximately $96.9 million from the exercise of the Warrants for cash, but will not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. Each Warrant entitles the holder thereof to purchase one share of Common Stock at a price of $11.50 per share. On October 24, 2023, the closing price for our Common Stock was $2.54.

We believe the likelihood that the holders will exercise their Warrants, as applicable, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price of our Common Stock is less than the exercise price thereof, we believe the holders are unlikely to exercise their Warrants. Conversely, the holders are more likely to exercise their Warrants the higher the price of our Common Stock is above the exercise price thereof. The Warrants are exercisable on a cashless basis under certain circumstances specified in the Warrant Agreement (as defined herein). To the extent that any Warrants are exercised on a cashless basis, the aggregate amount of cash we would receive from such exercises will decrease. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity.

In connection with shareholder votes to approve Business Combination and related matters, shareholders of RCLF elected to redeem an aggregate of 178,231 shares of common stock, par value $0.0001 per share, of RCLF initially sold in the RCLF IPO. As a result, an aggregate of approximately $1.85 million was paid to such redeeming shareholders at or prior to the Closing out of the Trust Account. The selling stockholders can sell, under this prospectus, up to an(a) 10,069,748 shares of Common Stock, constituting approximately 62.4% of our issued and outstanding shares of Common Stock as of October 24, 2023. Sales of a substantial number of our shares of Common Stock and/or Warrants in the public market by the selling stockholders and/or by our other existing securityholders, or the perception that those sales might occur, could increase the volatility of and cause a significant decline in the market price of our securities and could impair our ability to raise capital through the

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sale of additional 3,000,000 unitsequity securities. See “Risk Factors — Sales of a substantial number of our securities in the public market by the selling stockholders and/or by our existing stockholders could cause the price of our shares of Common Stock and Warrants to cover overfall.”

The sale of all or a portion of the securities being offered in this prospectus could result in a significant decline in the public trading price of our securities. Despite such a decline in the public trading price, some of the selling stockholders may still experience a positive rate of return on the securities they purchased due to the price at which such selling stockholder initially purchased the securities. See “— -allotmentsCertain existing stockholders purchased, or may purchase, securities in the Company at a price below the current trading price of such securities and may experience a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return,.”

We are registering the securities for resale pursuant to the selling stockholders’ registration rights under certain agreements between us, on the one hand, and the selling stockholders, on the other hand. Our registration of the securities covered by this prospectus does not mean that the selling stockholders will offer or sell any of the securities.

The selling stockholders may offer, sell or distribute all or a portion of their shares of Common Stock publicly or through private transactions at prevailing market prices or at negotiated prices. The selling stockholders will bear all commissions and discounts, if any.any, attributable to their sales of the shares of Common Stock.

We provide more information about how the selling stockholders may sell the shares of Common Stock or Warrants in the section titled “(Prospectus cover continued from following page.)Plan of Distribution.”

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), and “smaller reporting company” under applicable federal securities laws and will beare subject to reduced public company reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company.

Our Common Stock and Warrants are listed on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “MDAI” and “MDAIW,” respectively. On October 24, 2023, the closing price of our Common Stock was $2.54 and the closing price for our Warrants was $0.15.

Investing in our securities involves risks. See “Risk Factors”a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors beginning on page 34. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.

 

Price to Public

 

Underwriting Discounts and Commissions(1)

 

Proceeds, Before Expenses, to Us

Per Unit

 

$

10.00

 

$

0.55

 

$

9.45

Total

 

$

200,000,000

 

$

11,000,000

 

$

189,000,000

____________

(1)      Includes $0.35 per unit, or $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also “Underwriting” for a description8 of compensation and other items of value payable to the underwriters.

Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $200.0 millionand under similar headings in any amendment or $230.0 million if the underwriters’ over-allotment option is exercised in full ($10.00 per unit), will be deposited into a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee. Except with respectsupplements to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initialprospectus. business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

The underwriters are offering the units for sale on a firm commitment basis. Delivery of the units will be made on or about         , 2021.

Neither the SECU.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined ifpassed upon the accuracy or adequacy of this prospectus is truthful or complete.prospectus. Any representation to the contrary is a criminal offense.

Book-Running Manager

BTIG

The date of this prospectus is , 2021.

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(Prospectus cover continued from preceding page.)

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account described below calculated as of two business days prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding shares of our Class A common stock that were sold as part of the units in this offering, which we refer to collectively as our public shares, subject to the limitations described herein. If we have not completed our initial business combination within 24 months from the closing of this offering, we will redeem 100% of 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to applicable law and as further described herein.

Our sponsor, Rosecliff Acquisition Sponsor I LLC, a Delaware limited liability company (which we refer to as our “sponsor” throughout this prospectus), has committed, pursuant to a written agreement, to purchase an aggregate of 4,000,000 warrants (or 4,400,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of $1.50 per warrant ($6,000,000 in the aggregate or $6,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will close simultaneously with the closing of this offering. We refer to these warrants throughout this prospectus as the private placement warrants. Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at $11.50 per share, subject to adjustment as provided herein.

Our initial stockholders currently hold 5,750,000 shares of our Class B common stock (which we refer to as “founder shares” as further described herein), up to 750,000 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The shares of our Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities (as described herein), are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which the shares of our Class B common stock will convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, 20% of the sum of all shares of our Class A common stock issued and outstanding upon the completion of this offering, plus all shares of our Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination. Prior to our initial business combination, holders of our Class B common stock will have the right to elect all of our directors and may remove members of the board of directors for any reason. On any other matter submitted to a vote of our stockholders, holders of our Class B common stock and holders of our Class A common stock will vote together as a single class, except as required by law.

Prior to this offering, there has been no public market for our units, Class A common stock or warrants. We intend to apply to list our units on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “RCLF.U” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. The shares of Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless BTIG, LLC informs us of its decision to allow earlier separate trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission (the “SEC”) containing an audited balance sheet of the company reflecting our receipt of the gross proceeds of this offering and issuing a press release announcing when such separate trading will begin. Once the securities constituting the units begin separate trading, we expect that the Class A common stock and warrants will be listed on Nasdaq under the symbols “RCLF” and “RCLF WS,” respectively.

We are responsible for the information contained in this prospectus. We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.October 30, 2023.

 

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TABLE OF CONTENTS

 

Page

ABOUT THIS PROSPECTUS

ii

MARKET AND INDUSTRY DATA

iii

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

iv

BASIS OF PRESENTATION AND GLOSSARY

v

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

vii

SUMMARY

 

1

THE OFFERING

 

12

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

336

RISK FACTORS

 

348

USE OF PROCEEDS

 

6857

DIVIDEND POLICYDetermination of Offering Price

 

7257

DILUTIONMarket Information for Common Stock and Dividend Policy

 

73

CAPITALIZATION

7558

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

7659

PROPOSED BUSINESSBusiness

 

8270

MANAGEMENTManagement

 

85106

PRINCIPAL STOCKHOLDERSExecutive and Director Compensation

112

Certain Relationships and Related Party Transactions

116

Beneficial Ownership of Securities

119

Selling Stockholders

121

Description of Securities

 

123

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

126

DESCRIPTION OF SECURITIESRestrictions on Resale of Securities

 

129

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONSPlan of Distribution

 

146130

UNDERWRITINGMATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

 

154132

EXPERTS

139

LEGAL MATTERS

 

161139

EXPERTS

161

WHERE YOU CAN FIND ADDITIONAL INFORMATION

161

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTSSTATEMENT

 

F-1

i

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Until           , 2021, all dealersABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that effect transactionswe filed with the SEC using a “shelf” registration process. By using a shelf registration statement, we may issue an aggregate of up to 8,433,231 shares of our Common Stock are issuable upon the exercise of 8,433,231 Warrants, which were originally issued in these securities, whether or not participatingthe RCLF IPO as part of RCLF’s Units, with each Unit consisting of one share of Common Stock and one third of one Warrant, by the holders thereof. Each Warrant entitles the holder thereof to purchase one share of our Common Stock at a price of $11.50 per share.

This prospectus also relates to the offer and resale from time to time by the selling stockholders of (i) up to 10,069,748 shares of Common Stock, which consists of (a) up to 8,623,081 shares of Common Stock issued in connection with the Closing at an equity consideration value of $10.00 per share by certain of the selling stockholders named in this offering, may be requiredprospectus, (b) up to deliver a prospectus. This is in addition880,000 shares of Common Stock that were originally issued to the dealer’s obligationInitial Holders in the form of founder shares prior to deliverthe RCLF IPO at a price of approximately $0.004 per share, and (c) up to 566,667 shares of Common Stock that were issued to certain service providers of the Company in connection with the Closing.

We will not receive any proceeds from the sale of shares of Common Stock by the selling stockholders pursuant to this prospectus. We will receive up to approximately $96.9 million from the exercise of the Warrants but will not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise. Each Warrant entitles the holder thereof to purchase one share of Common Stock at a price of $11.50 per share. We believe the likelihood that the holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price of our Common Stock is less than the exercise price thereof, we believe the holders are unlikely to exercise their Warrants. Conversely, the holders are more likely to exercise their Warrants, the higher the price of our Common Stock is above the exercise price thereof. The Warrants are exercisable on a cashless basis under certain circumstances specified in the Warrant Agreement. To the extent that any Warrants are exercised on a cashless basis, the aggregate amount of cash we would receive from such exercises will decrease. We expect to use any such proceeds for general corporate and working capital purposes, which would increase our liquidity.

We may also file a prospectus when acting as an underwriter andsupplement or post-effective amendment to the registration statement of which this prospectus forms a part that may contain material information relating to these offerings. The prospectus supplement or post-effective amendment may also add, update or change information contained in this prospectus with respect to unsold allotmentsthat offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or subscriptions.post-effective amendment, you should rely on the prospectus supplement or post-effective amendment, as applicable. Before purchasing any securities, you should carefully read this prospectus, any post-effective amendment, and any applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information.”

Neither we nor the selling stockholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any postTrademarks-effective amendment, or any applicable prospectus supplement prepared by or on behalf of us or to which we have referred you. Neither we nor the selling stockholders take responsibility for and can provide no assurance as to the reliability of any other information that others may give you. Neither we nor the selling stockholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus, any post-effective amendment and any applicable prospectus supplement to this prospectus is accurate only as of the date on its respective cover. Our business, financial condition, results of operations and prospects may have changed since those dates.

As used in this prospectus, unless otherwise indicated or the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “Registrant,” and “Spectral” refer to the consolidated operations of Spectral AI, Inc., formerly known as Rosecliff Acquisition Corp I, and its subsidiaries. References to “RCLF” refer to the Company prior to the consummation of the Business Combination and references to “Legacy Spectral” refer to Spectral MD Holdings, Ltd. prior to the consummation of the Business Combination.

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MARKET AND INDUSTRY DATA

This prospectus contains, referencesand any post-effective amendment or any prospectus supplement may contain, information concerning the market and industry in which we conduct our business. Spectral operates in an industry in which it is difficult to obtain precise industry and market information. We have obtained market and industry data in this prospectus from industry publications and from surveys or studies conducted by third parties that it believes to be reliable. We cannot assure you of the accuracy and completeness of such information, and it has not independently verified the market and industry data contained in this prospectus or the underlying assumptions relied on therein. As a result, you should be aware that any such market, industry and other similar data may not be reliable. While we are not aware of any misstatements regarding any industry data presented in this prospectus, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the section entitled “Risk Factors” below.

iii

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TRADEMARKS, TRADE NAMES AND SERVICE MARKS

We and our subsidiaries own or have rights to trademarks, trade names and service marks belonging to other entities.that they use in connection with the operation of their business. In addition, their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks appearing in this prospectus, are the property of their respective owners. Solely for convenience, in some cases, the trademarks, and trade names and service marks referred to in this prospectus may appearare listed without the applicable ®, M orand SM symbols, but such references are not intended to indicate, in any way, that the applicable licensortheir respective owners will not assert, to the fullest extent under applicable law, itstheir rights to these trademarks, trade names and trade names. Weservice marks.

iv

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BASIS OF PRESENTATION AND GLOSSARY

Bylaws” are to the Amended and Restated Bylaws of Spectral AI, Inc.

Closing” are to the closing of the Business Combination;

Closing Date” are to September 11, 2023;

Code” are to the U.S. Internal Revenue Code of 1986, as amended;

Common Stock” are to shares of the Company’s Class A common stock, par value $0.0001 after the Business Combination.

DGCL” is to the Delaware General Corporation Law, as may be amended from time to time;

Equity Incentive Plan” is to the Spectral AI, Inc. 2023 Equity Incentive Plan, which will be approved and adopted by the Company at its first annual meeting following the Business Combination;

Exchange Act” is to the Securities Exchange Act of 1934, as amended;

First Effective Time” is to the effective time of the First Merger;

Founder Shares” are to the shares of RCLF Class B common stock initially purchased by the Initial Holders in a private placement prior to the RCLF IPO and the shares of Common Stock issued upon conversion of such shares of Class B common stock;

GAAP” is to generally accepted accounting principles in the United States, as applied on a consistent basis;

Initial Holders” are to the Sponsor and each independent director of RCLF;

Investment Company Act” is to the Investment Company Act of 1940, as amended;

Legacy Spectral” is to Spectral MD Holdings, Ltd., a Delaware corporation, prior to the consummation of the Business Combination;

Merger Sub I” is to Ghost Merger Sub I Inc., a Delaware corporation and a direct, wholly owned subsidiary of RCLF;

Merger Sub II” is to Ghost Merger Sub II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of RCLF;

Nasdaq” is to the Nasdaq Stock Market LLC;

RCLF” is to Rosecliff Acquisition Corp I, a Delaware corporation;

RCLF Class A common stock” is to the RCLF Class A common stock, par value $0.0001 per share, prior to the Business Combination;

RCLF Class B common stock” is to the RCLF Class B common stock, par value $0.0001 per share, prior to the Business Combination;

“RCLF common stock” are to the RCLF Class A common stock and RCLF Class B common stock prior to the Business Combination;

RCLF IPO” are to the initial public offering by RCLF, which closed on February 17, 2021;

Registration Rights/Lock-Up Agreement” is to the Amended and Restated Registration Rights Agreement to be entered into at Closing by RCLF, the Sponsor, the directors and officers of RCLF, Spectral and certain stockholders of Spectral;

SEC” is to the U.S. Securities and Exchange Commission;

Securities Act” is to the Securities Act of 1933, as amended;

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SPACs” are to special purpose acquisition companies;

Spectral Awards” are to the Spectral Options, Spectral Warrants and Spectral RSUs;

Sponsor” is to Rosecliff Acquisition Sponsor I LLC, a Delaware limited liability company;

Trust Account” are to the trust account established by RCLF for the benefit of its stockholders with Continental Stock Transfer & Trust Company.

Units” are to the Units sold in the RCLF IPO, with each unit consisting of one share of RCLF Class A common stock and one-third of one Warrant; and

Warrants” are to the warrants included as a component of the Units sold in the IPO, each of which is exercisable for one share of Common Stock, in accordance with its terms.

Unless specified otherwise, amounts in this prospectus are presented in U.S. dollars.

Defined terms in the financial statements contained in this prospectus have the meanings ascribed to them in the financial statements.

Unless specified otherwise, amounts in this prospectus are presented in U.S. dollars.

Defined terms in the financial statements contained in this prospectus have the meanings ascribed to them in the financial statements.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995 (the “PSLRA”), including, among other things, statement regarding the plans, strategies and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “forecast,” “intend” “may,” “might,” “plan,” “possible,” “potential,” “project,” “scheduled,” “seek,” “should,” “will” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the Company’s ability to:

•        effectively develop and sell our product offerings and services;

•        compete in the highly-competitive and evolving industry;

•        manage risks associated with the healthcare industry;

•        maintain key strategic relationships with partners and distributors;

•        enhance future operating and financial results;

•        adhere to the regulatory pathway for and timing of FDA, CE and UKCA regulatory submissions and proceeds;

•        receive U.S. government contracts and future awards;

•        achieve anticipated target markets for burn wound and diabetic foot ulcers;

•        explore potential future indications and applications for DeepView and areas of interest supported by BARDA;

•        secure future and pending U.S. patent applications and foreign and international patent applications;

•        manage risks associated with the Company’s dependence on a small number of outside contract manufacturers;

•        continue to develop new products and innovations to meet constantly evolving customer demands;

•        comply with laws and regulations applicable to the business;

•        stay abreast of modified or new laws and regulations applicable to the business;

•        acquire or make investments in other businesses, patents, technologies, products or services to grow the business, and realize the anticipated benefits therefrom;

•        attract, train, and retain effective officers, key employees or directors;

•        respond to fluctuations in foreign currency exchange rates and political unrest and regulatory changes in international markets into which we expand or otherwise operate in;

•        successfully defend litigation or administrative proceedings;

•        upgrade and maintain information technology systems;

•        acquire and protect intellectual property;

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•        maintain the listing of its Common Stock and Warrants on Nasdaq;

•        meet future liquidity requirements, which may require additional financing; and

•        effectively respond to general economic and business conditions.

Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Except as required by applicable law, we do not intendplan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances, or otherwise.

You should read this prospectus completely and with the understanding that our use or displayactual future results may be materially different from what we expect. We qualify all of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of usour forward-looking statements by any other companies.these cautionary statements.

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SUMMARY

This summary only highlights the more detailedselected information appearing elsewhere in this prospectus. Youprospectus or the documents incorporated by reference herein. Because it is a summary, it may not contain all of the information that may be important to you. To understand this offering fully, you should read this entire prospectus, carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

Definitions

Unless otherwise stated in this prospectus or the context otherwise requires, references to:

•        “amended and restated certificate of incorporation” are to our amended and restated certificate of incorporation to be in effect upon completion of this offering;

•        “common stock” are to our Class A common stock and our Class B common stock;

•        “directors” are to our current directors and our director nominees named in this prospectus;

•        “equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt;

•        “founder shares” are to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to this offering and our shares of Class A common stock that will be issued upon conversion thereof as provided herein;

•        “initial stockholders” are to our sponsor and the other holders of our founder shares prior to this offering (if any);

•        “letter agreement” are to the letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus formsis a part;part and the documents incorporated by reference herein carefully, including the information set forth under the heading “Risk Factors” and our financial statements.

•        Overview of the Company“management” or

We are an artificial intelligence (“AI”) company focused on medical diagnostics for faster and more accurate treatment decisions in wound care. Anchored by our “management team” areinternally developed DeepView® System, our AI-based digital wound healing assessment in predictive medical diagnostics provides clinicians with an objective and immediate assessment of a wound’s healing potential. We have received over $280 million of U.S. Government contracts, including under the U.S. federal mass casualty countermeasures program, which we have used develop our burn indication and to our directorsexpand into diabetic foot ulcers (“DFU”) and officers;anticipated multiple other clinical indications.

Our DeepView System integrates proprietary imaging technology with AI•        -enabled“private placement warrants” are algorithms to see deep below the skin surface to provide a healing potential assessment in seconds by clearly defining healing versus non-healing tissue invisible to the warrantsnaked eye. DeepView delivers a binary wound healing prediction specifically engineered to be issuedallow the physician to our sponsormake a more accurate, timely and informed decision regarding next step treatment plan for a patient’s wounds. Our DeepView System has received United Kingdom Conformity Assessed (“UKCA”) marking for use in a private placement simultaneouslythe United Kingdom and has Class 1 medical device classification with the closingUnited States Food and Drug Administration (“FDA”).

The Business Combination and Related Transactions

On April 11, 2023, RCLF, Merger Sub I, Merger Sub II, and Legacy Spectral entered into a Business Combination Agreement, (the “Business Combination Agreement”), pursuant to which, among other transactions, on the Closing Date, Merger Sub I merged with and into Legacy Spectral (the “First Merger”), with Legacy Spectral surviving the Merger as a wholly-owned subsidiary of this offering;RCLF, and, immediately following the First Merger, Legacy Spectral merged with and into Merger Sub II, with Merger Sub II surviving the Second Merger as a direct, wholly-owned subsidiary of RCLF (the “Second Merger” and, together with the First Merger and other transactions described in the Business Combination Agreement, the “Business Combination”). In connection with the Closing, RCLF changed its name to “Spectral AI, Inc.” and Merger Sub II changed its name to Spectral MD Holdings, LLC.

•        “publicUnder the terms of the Business Combination Agreement, at the effective time of the First Merger (the “First Effective Time”), each share of Legacy Spectral common stock issued and outstanding immediately prior to the First Effective Time (excluding shares issued and outstanding immediately prior to the First Effective Time held by a Legacy Spectral stockholder who has not voted in favor of adoption of the Business Combination Agreement or consented thereto in writing and who is entitled to demand and has properly exercised appraisal rights of such shares in accordance with Section 262 of the DGCL and otherwise complied with all of the provisions of the DGCL relevant to the exercise and perfection of dissenters’ rights (the “dissenting shares” are to) and each 10.31 shares of our Class ALegacy Spectral common stock sold as partsubject to Legacy Spectral Awards (as defined below)) were cancelled and converted into the right to receive 1 share of Common Stock with any fractional shares rounded down to the nearest whole share.

At the Effective Time, each outstanding Legacy Spectral stock option (each, a “Legacy Spectral Option”), whether vested or unvested, was converted into an option to purchase that number of shares of the units in this offering (whether they are purchased in this offering or thereafter in the open market);

•        “public stockholders” areCommon Stock equal to the holdersquotient of our public(x) the number of shares including our sponsor, directors and officersof Legacy Spectral common stock underlying such Legacy Spectral Option immediately prior to the extent our sponsor, directorsClosing divided by (y) 10.31, at an exercise price per share equal to (A) the exercise price per share of Legacy Spectral common stock underlying such Legacy Spectral Option immediately prior to the Closing multiplied by (B) 10.31 with any fractional Legacy Spectral Option rounded to the nearest whole Legacy Spectral Option.

At the Effective Time, after giving effect to the warrant exercise, each outstanding Legacy Spectral warrant to purchase Legacy Spectral common stock (each a “Legacy Spectral Warrant”), whether or officersnot exercisable, was converted into a warrant to purchase publicthat number of shares provided their status as a “public stockholder” shall only exist with respectof Common Stock equal to the quotient of (x) the number of shares of Legacy Spectral common stock underlying such public shares;

•        “Rosecliff” areLegacy Spectral Warrant immediately prior to Rosecliff Venture Management, LLC, a Delaware limited liability company, and its affiliated entities, excluding our company and sponsor;

•        “sponsor” are to Rosecliff Acquisition Sponsor I LLC, a Delaware limited liability company;

•        “warrants” are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market); and

•        “we,” “us,” “our” or our “company” are to Rosecliff Acquisition Corp I, a Delaware corporation.

Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option and the forfeiture by our sponsor of 750,000 founder shares.Closing

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GENERALdivided by (y) 10.31, at an exercise price per share equal to (A) the exercise price per share of Legacy Spectral common stock underlying such Legacy Spectral Warrant immediately prior to the Closing multiplied by (B) 10.31 with any fractional share of Legacy Spectral common stock underlying such Warrant rounded down to the nearest whole share.

We areAt the Effective Time, each Legacy Spectral restricted stock unit (whether to be settled in cash or shares) outstanding immediately prior to the First Effective Time (each, a newly formed blank check company incorporated“Legacy Spectral RSU” and, collectively, the “Legacy Spectral RSUs,” and, together with the Legacy Spectral options and Legacy Spectral warrants, the “Legacy Spectral Awards”) was converted into the right to receive a restricted stock unit based on shares of Common Stock (each, a “New RSU,” and, collectively, the “New RSUs”) with substantially the same terms and conditions as were applicable to such Legacy Spectral RSU immediately prior to the First Effective Time (including with respect to vesting and termination-related provisions), except that such New RSU relates to such number of shares of RCLF common stock equal to the quotient of (i) the number of shares of Legacy Spectral common stock subject to such Legacy Spectral RSU immediately prior to the First Effective Time, divided by (ii) 10.31, with any fractional shares rounded down to the nearest whole share.

Immediately after giving effect to the Business Combination, there were 15,688,268 issued and outstanding shares of Common Stock. RCLF’s public units separated into their component securities upon consummation of the Business Combination and, as a Delaware corporationresult, no longer trade as a separate security and were delisted from Nasdaq.

The Spectral’s Common Stock and Warrants commenced trading on Nasdaq under the symbols “MDAI” and “MDAIW”, respectively, on September 12, 2023.

The rights of holders of our Common Stock and Warrants are governed by our Charter, Bylaws, and the DGCL, and, in the case of the Warrants, the Warrant Agreement, dated as of February 11, 2021, by and between RCLF and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agreement”). For additional information, see the section entitled “Description of Securities.”

Lock-Up Provisions

On September 11, 2023, in connection with the consummation of the Business Combination and as contemplated by the Business Combination Agreement, the Company entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”) with the Sponsor, certain former stockholders of Legacy Spectral, set forth on Schedule 1 thereto (such stockholders, the “Target Holders”), and Frank S. Edmonds and Heather Bellini (together with Michael P. Murphy and Brian Radecki, (collectively, the “Director Holders” and, collectively with the Sponsor, the Target Holders and any person or entity who thereafter becomes a party to the Registration Rights Agreement, the “Holders” and each, a “Holder”). Pursuant to the Registration Rights Agreement, among other things, the Company agreed to undertake certain shelf registration obligations in accordance with the Securities Act and certain subsequent related transactions and obligations, including, among other things, undertaking certain registration obligations, and the preparation and filing of required documents.

In addition, the Registration Rights Agreement contained lock-up provisions, pursuant to which the Holders agreed, among other things, that their shares received as merger consideration may not be transferred until the date on which the last reported sale price of the Common Stock equals or exceeds $12.50 per share for any ten (10) trading days within any thirty (30)-trading day period commencing after the purposeClosing Date or, if earlier, the date that is 180 days after the Closing Date.

Summary Risk Factors

Investments in our securities involve substantial risk. The occurrence of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businessesof the events or entities, which we refer to throughoutcircumstances described in the section of this prospectus asentitled “Risk Factors,” alone or in combination with other events or circumstances, may have a material adverse effect on our initial business, combination. cash flows, financial condition and results of operations. Important factors and risks that could cause actual results to differ materially from those in the forward-looking statements include, among others, the following:

•        We have incurred significant losses since inception and may not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directlybe able to achieve significant revenues or indirectly, with any business combination target with respect to an initial business combination with us.profitability.

•        We believe that our management team’s decades of experience and relationships with leading technology companies and their founders, executives and investors, the extensive industry and geographical reachare devoting substantially all of our management team’s networkefforts towards research and our management team’s prior experience in private markets investing will give us a competitive advantage in pursuing a broad range of opportunities in many industries. Although we may pursue an initial business combination target in any sector, industry or geographic location, we currently intend to focus our efforts on identifying high growth technology and tech-enabled businesses domestically in industries that are being disrupted by advances in technology and on technology paradigms.

Our management team believes that recent years have brought a wide range of technical breakthroughs that have fundamentally shifted the frontiers of possibility in the ways we live and work. Innovations as diverse as cloud and mobile computing, artificial intelligence, machine learning and cybersecurity, catalyzed by corresponding hardware innovations, have unlocked accelerated cycles of change, radically impacting industries and business models globally. We believe that the transformative effects of these innovations have reshaped both large and small industries across the world. We also believe that because of the impact of COVID-19, there are attractive businesses that may have additional capital needs over the next few years, which could further increase the pipeline of potential opportunities.

Our objective is to generate attractive returns for stockholders by actively supporting the next-generation of exceptional public companies. We expect to target companies with certain industry and business characteristics, including long term growth prospects, strong management team, high barriers to entry, opportunities for consolidation, strong recurring revenues, sustainable operating margins and attractive free cash flow characteristics.

OUR SPONSOR

Our sponsor, Rosecliff Acquisition Sponsor I LLC, is managed by an affiliate of Rosecliff, and its non-managing members include Jordan Zimmerman and Kieran Goodwin. Rosecliff is part of a family of investment vehicles which include seed, venture, growth equity and credit funds with an aggregate of over $800 million in committed capital. Michael Murphy founded Rosecliff in 2016 after a successful career as an entrepreneur and investor and has built a strong track record of investing in disruptive companies. Jordan Zimmerman has acted as an advisor to Rosecliff on a variety of investments and projects since its launch in 2016. Mr. Zimmerman is the Founder of Zimmerman Advertising, one of the top advertising agencies in the United States per adbrands.net’s ranking of the top United States advertising & other agencies of 2018. Mr. Goodwin was the Founder and Portfolio Manager of Panning Capital Management, a hedge fund that combined fundamental bottoms-up research with a deep understanding of derivatives and securities markets. Messrs. Murphy, Zimmerman and Goodwin will serve on our management team. Messrs. Murphy and Zimmerman will also serve on our Board of Directors. Our sponsor and management team intend to bring to our company the rigorous, thoughtful and creative approach that they have developed through years of building businesses and evaluating business combination opportunities. We believe that they bring differentiated sets of advantages to potential target businesses and their stockholders. Combined, our sponsor and management team offer deep and broad sector knowledge, access to wide professional networks and extensive experience across private and public markets. Furthermore, we intend to leverage the capabilities of the entire Rosecliff platform to further compound our areas of differentiation and strategy.

Although we may pursue a target business in any industry, we expect to focus our efforts on industries that complement our management team members’ backgrounds. We expect to deploy a proactive, disciplined and thematic sourcing strategy and focus our efforts on identifying companies where we believe the combinationdevelopment of our management team’s experience, industry insights, professional relationships and capital markets and deal structuring experience can be catalysts to enhance the growth potential and value of such company. We believe this strategy will allow us to provide opportunities for a highly attractive, risk-adjustedDeepView System. return to our stockholders.

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Rosecliff•        We depend on government funding, which if lost or reduced, could have a material adverse effect on our research and development activities and our ability to commercialize our DeepView technology. Our largest contract is with BARDA and is the largest single source of revenue for us. Our BARDA contract is not guaranteed to be extended.

Rosecliff•        The regulatory review process is an investment firm withexpensive, time-consuming, and uncertain and we may be unable to obtain clearance, approval, De Novo classification, or certification for our DeepView technology.

•        We may experience significant delays in completing clinical trials, which could prevent or significantly delay our targeted product launch timeframe and impair our viability and business plan.

•        New legislation and regulations and legislative and regulatory reforms may make it more difficult and costly for us to obtain regulatory clearance, approval, De Novo classification, or certification of our DeepView System, or to manufacture, market and distribute our device after clearance, approval, or classification is obtained.

•        Disruptions at the FDA and foreign regulatory agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a missiontimely manner, which could negatively impact our business.

•        The ongoing labor shortage may limit our ability or the investigators’ ability to find and invest in market-leading companiesretain medical staff that create significant value for stakeholders. Rosecliff’s family of funds currently has over $800 million in committed capital and a demonstrated track record of backing industry-disrupting companies.

Rosecliff was founded in 2016 by Michael Murphy. Mr. Murphy has been an active investor in start-ups and expansion-stage private companies, both personally and asare needed to conduct the Founder of Rosecliff’s fund business. Today, Rosecliff’s fund investment platform takes a multi-disciplinaryclinical studies approach with three distinct strategies: early-stage venture, later-stage venture and growth equity and credit. Rosecliff is led by two managing partners, each with deep sector knowledge and extensive investment experience. Together, the family of funds provides investment solutions to founders at every stage of a company’s lifecycle.

•        Early-Stage Venture:    Rosecliff’s early-stage venture practice is comprised of three dedicated early-stage seed investment funds: Rosecliff Venture Partners I L.P., Rosecliff Venture Partners II L.P.Modifications to our DeepView GEN 3 System may require new clearances, approvals, De Novo classifications, certifications, or new or amended certifications, and Rosecliff Venture Partners IV L.P. The three investment vehicles have an aggregate of approximately $200 million in committed capital and focus on early-stage venture capital investments in both large consumer and enterprise markets in which technology provides a competitive advantage. Rosecliff’s involvement with companies goes beyond capital. The Rosecliff team focuses on building true partnerships with founders and management teams by working closely with companies on their business models, helping companies scale through partnerships and sharing their experiences in helping companies develop into world-class brands. Rosecliff typically invests alongside regionalmay require us to cease marketing or industry-focused co-investors whoto recall the modified device until clearances, approvals, De Novo classifications, or the relevant certifications are deeply connected, well respected in the industry and have the know-howobtained. to be supportive to early-stage venture investments.

•        Later-Stage VentureQuality problems and Growth Equity:    Rosecliff is alsoproduct liability claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a growth equitymaterial adverse effect on our business, results of operations, financial condition, and later-stagecash flows. venture investor with an aggregate of approximately $500 million in committed capital across three funds: Rosecliff Venture Partners III L.P., Rosecliff Venture Partners V L.P. and Rosecliff Opportunity Fund I L.P. Rosecliff’s later-stage venture and growth equity investments are focused on technology-enabled businesses that disrupt existing, multi-billion dollar industries and can create significant value for stakeholders. Since being founded in 2016, Rosecliff has assembled a team with extensive business experience, vast personal and professional networks and a common vision for identifying, investing in and building disruptive, technology-enabled businesses. Rosecliff has a demonstrated record of sourcing compelling opportunities, smartly structuring investments, attracting high level talent to management roles and boards, rapidly building companies and executing successful liquidity events.

•        Rosecliff Credit Opportunity Fund I:We must comply with anti    In 2020, Rosecliff launched Rosecliff Credit Opportunities I L.P.-kickback, its first non-traditional venture capital fund with approximately $125 million in committed capital. Rosecliff’s Credit Fund has an intentionally broad mandate to support more mature businesses with traditional credit financing opportunities, as well as later-stage venture businesses which either require capex, equipment orfraud and abuse, false claims, transparency, and other forms of alternative financings and/or have reached a growth phase that warrants taking on venture debt rather than further diluting managementhealthcare laws and existing investors. The fund also serves as the managing member of our sponsor.

Across these funds, Rosecliff has played an active role in identifying opportunities and helping develop leading companies, including:regulations.

•        Allbirds:    Allbirds shoes were named ‘The World’s Most Comfortable Shoe’ by TIME Magazine in 2016. The brand began as direct-to-consumer and has since expandedIf our manufacturers fail to many storefronts around the world, offering products made from materials as diverse as wool, eucalyptus fiber and sugarcane. Rosecliff has long sought to invest in bold, disruptive consumer brandscomply with the dual mission of improving individual’s livesregulatory quality system regulations or any applicable equivalent regulations, our proposed operations could be interrupted, and our planet. Rosecliff hadoperating results would suffer.

•        Actual or perceived failure to comply with data protection, privacy and security laws, regulations, standards and other requirements could negatively affect our business, financial condition or results of operations.

•        As the opportunityregulatory framework for AI technology evolves, our business, financial condition and results of operation may be adversely affected.

•        If we are unable to investestablish sales, marketing and distribution capabilities either on our own or in Allbirds’ earliest roundcollaboration with third parties, we may not be successful in commercializing our DeepView System, if approved.

•        We may not be able to achieve or maintain satisfactory pricing and margins for our DeepView technology.

•        We will depend upon third-party suppliers, including contract manufacturers and single and sole source suppliers, making us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of financing alongside a strong group of investorsoperations.

•        We may encounter difficulties in managing our growth, which could disrupt our operations.

•        We are highly dependent on our senior management, directors and has been a supporter of thekey personnel, and our business throughout its journey — doubling down multiple times through Rosecliff’s later-stagecould be harmed if we are unable to attract and retain personnel necessary for our success. funds as well.

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•        Wheels Up:    Wheels Up is a leading brandThe use of artificial intelligence, including machine learning, in private aviation, with a digital marketplace platform and offering a total private aviation solution. Most recently, Wheels Up partnered with Delta Airlines (NYSE: DAL), a testament to its strong brand presenceour analytics platforms may result in the industry. Rosecliff saw the combination of growing consumer adoption in private air travel coupled with new technologies that made the model feasible and invested with conviction in one of Wheels Up’s earliest financing rounds and has been a strong supporter ever since.reputational harm or liability.

•        Casper (NYSE: CSPR):    Casper, a pioneerProduct liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of our DeepView System. These suits could result in the direct-to-consumer mattress industry, rolled out its iconic mattress-in-a-box in early 2014expensive and has experienced significant growth. Casper has benefited from consumers’ shifting presence to eCommercetime-consuming litigation, payment of substantial damages, and an increased focus on personal wellness and the importance of sleep. Rosecliff was drawn to the mission of Philip Krim (Founder & CEO of Casper) during Casper’s early stages and continues to support the business as a shareholderincrease in the now public company.our insurance rates.

•        Ro:    Ro is a patient-driven telehealth company that aims to be a patient’s first call for allThe success of their healthcare needs. Using technology, Ro empowers physicians to provide high-quality, affordable care whenour algorithms depends on our significant repository of proprietary DFU and where patients need it most. Early on, Rosecliff saw the potential that emerging technologies could have in shaping the consumer healthcare landscape, which informed its decision to be among Ro’s earliest backers.burn data.

•        PetalChanges in patent law or its interpretation could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products.:    With

•        Our patent rights and other intellectual property may be subject to priority, ownership or inventorship disputes, interferences, and similar proceedings and we may not be able to enforce our intellectual property rights throughout the world.

•        Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

•        We will incur increased costs as a deep backgroundresult of operating as a public company, and experiencethe Company’s management will be required to devote substantial time to new compliance and investor relations initiatives.

•        Anti-takeover provisions in both traditionalour governing documents and emerging financial technologies, the Rosecliff team saw the potential for Petal since its meeting with Petal’s Founder & CEO, Jason Gross. Inunder Delaware law could make an acquisition of us more difficult.

•        The price of Common Stock and Warrants may be volatile.

•        Sales of a few short years, Petal has built a solution for the underserved millennial credit card market.

We believe that the experience of Michael Murphy, the other memberssubstantial number of our management team,securities in the Rosecliff brandpublic market by the selling stockholders and/or by our existing stockholders could cause the price of our shares of Common Stock and Rosecliff’s extensive networkWarrants to fall.

•        Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of companies,operations.

•        If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and entrepreneurs will provide us withthe trading price of our Common Stock may decline.

•        Certain existing stockholders purchased, or may purchase, securities in the Company at a competitive advantage in sourcingprice below the current trading price of such securities and may experience a potential initial business combination target. Rosecliff’s partners and advisors have created a differentiated network with access to founders and leaders across disruptive start-ups, the investment community and Fortune 500 companies. Further, we expect the Rosecliff familypositive rate of funds to serve as a source of proprietary insight and deal flow. Basedreturn based on the consistent level of high-quality and high-volume deal flow the Rosecliff investment team has seencurrent trading price. Future investors in the Company may not experience a similar rate of return.

•        Warrants will become exercisable for Company common stock, which would increase the number of shares eligible for resale in the public market over the past few years, we believe Rosecliff can provide us with compelling opportunities for potential initial business combination targets.

In addition, through its demonstrated track record of creating long-term value, hands-on approach and well-regarded brand, Rosecliff has become a valuable partner for innovative companies across the venture ecosystem. We planresult in dilution to leverage the position and connectivity of Rosecliff to help effectuate an initial business combination that will provide long-term value for our stockholders.

MANAGEMENT

EXECUTIVE OFFICERS•        The Warrants may never be in the money, and they may expire worthless and the terms of the Warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding Warrants approve of such amendment.

Michael Murphy•        Your unexpired Warrants may be redeemed prior to their exercise at a time that is disadvantageous to you, thereby making your Warrants worthless.

Michael Murphy,Emerging Growth Company

As a company with less than $1.235 billion in revenue during our Chief Executive Officer and a member of our Board of Directors, began his investing career over 25 years ago. His career has been focused on beinglast fiscal year, we qualify as an entrepreneur“emerging growth company” as defined in the investingJumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”). An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

•        the option to present only two years of audited financial statements and financial service industry. In the past, he was the Founderonly two years of a wealth management firm, hedge fundrelated “Management’s Discussion and multiple commercial real estate portfolios.

As described above,Analysis of Financial Condition and Results of Operations in 2016, Mr. Murphy founded Rosecliff and has served as its Managing Partner since its inception. Over the past four years, Rosecliff has made over 80 investments, raised over $800 million in assets under management, launched seven investment funds and experienced multiple portfolio company exits.

Rosecliff has a team of analysts, associates and partners that assist in sourcing, structuring, investing and supporting new investment opportunities. The deals can extend from early stage startup companies to late stage growth equity opportunities to pre IPO deals. Mr. Murphy’s extensive network has helped Rosecliff create a vast funnel of incoming deals each year for the firm. A few select transactions from the Rosecliff portfolio include; Allbirds, Casper, Postmates, Ro, Thirty Madison, Petal and Wheels Up.this prospectus;

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Mr. Murphy is currently a board member•        not being required to comply with the auditor attestation requirements of multiple private, venture capital backed companies including Cargo Systems, Inc. (“Cargo Systems”), TheSquareFoot, Inc. (“Squarefoot”), For Days, Inc. (“ForDays”) and Agile Stacks, Inc. (“Agile Stacks”). He brings his extensive experience, knowledge and passion to assist companies in their growth phase.

Mr. Murphy previously was a contributor on CNBC and regularly appeared onSection 404 of the network’s FASTMONEY segment. Currently, Mr. Murphy is a regular contributor on Fox Network and makes appearances each week on Varney & Co, Mornings with Maria & Cavuto. He uses this platform to discuss trends in both private equity and public markets.

Mr. Murphy earned a BachelorSarbanes-Oxley Act of Arts in Business Administration from Hofstra University.

2002, as amended (the “SarbanesJordan Zimmerman

Jordan Zimmerman, our President and a member of our Board of Directors, is the Chairman and Founder of Zimmerman Advertising. Mr. Zimmerman founded Zimmerman Advertising in 1984 and has continued to work tirelessly, personifying a commitment to be the best. Mr. Zimmerman trademarked his advertising strategy, “Brandtailing®,” a maverick combination of long-term-Oxley brand building and short-term sales boosting that delivers measurable results. Highly respected within the advertising world, Mr. Zimmerman is often asked to address industry groups and participate in panel discussions across the country.

Zimmerman Advertising has worked with highly recognizable and successful businesses in the consumer sector, such as Nissan, McDonald’s, Dunkin’ Donuts, Five Below, Party City, Kay Jewelers, AutoNation, Michaels, Advance America, TBC/Tire Kingdom, Office Depot, and Carfax. The agency works with these companies to help increase brand awareness, market share and overall company growth. Zimmerman Advertising’s goal is to help make the companies it partners with market leaders in their respective fields. Mr. Zimmerman strives to drive growth by dreaming bigger, acting limitlessly and leading fearlessly.

The following projects highlight select successes of Mr. Zimmerman’s career.Act”);

•        Five Below:    Zimmerman Advertising assisted in generating brand awarenessnot being required to comply with any requirement that may be adopted by handling overall creativethe Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and media duties for Five Below. The partnership was designed to transform the retailer into a multimedia brand that appealed to its core audience.financial statements (i.e., an auditor discussion and analysis);

•        AutoNation:    AutoNation is a largereduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and recognizable automotive retailer. The partnership drove more than just business success. It produced a profoundly impactful community purpose called the “Drive Pink/Pink Plate” initiative to celebrate the victories that so many have had in their fight against cancer. As of December 2020, AutoNation has raised over $25 million for cancer fighting charities.registration statements; and

•        Michaels:    Michaels isexemptions from the nation’s largest specialty providerrequirements of artsholding a nonbinding advisory vote of stockholders on executive compensation, stockholder approval of any golden parachute payments not previously approved and crafts materials. This partnership helped fuel expansionhaving to a much broader audience and encourageddisclose the fun of “making” and customizing products from scratch. The “Make Creativity Happen” initiative helped to develop further brand awareness by strategically bringing creativity, imagination and innovation into Michaels’ stores.

•        McDonald’s:    Zimmerman Advertising was responsible for orchestrating the implementation of new strategies to help fuel the growth of over 4,000 restaurants. These strategies included innovating and leading digital media, marketing research, social marketing and analytics to drive brand growth.

•        Nissan:    Zimmerman Advertising partnered with Nissan to assist in building a unified brand that resonates with customers by showcasing a unique driving experience. The “Tech that Moves People” campaign focused on Nissan’s Intelligent Mobility and the Nissan Leaf, the world’s first mass produced 100% electric vehicle.

Outside of work, Mr. Zimmerman is an author, a philanthropist, a Horatio Alger Award recipient and a Golden Circle Memberratio of the National Multiple Sclerosis Society who proudly works hardcompensation of our chief executive officer to grow his community in many ways but none more than his driving dedication to improving the education system in this country as a foundational step in making life better for generations to come.

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In March 2015, with a donationthese provisions until the last day of $10 million dollars fromour fiscal year following the Jordan Zimmerman Family Foundation, Mr. Zimmerman established the University of South Florida Zimmerman School of Advertising and Mass Communications and its highly regarded Zimmerman Advertising Program. Mr. Zimmerman has a hands-on approach to building the curriculum and has helped the program to build an established media program. Mr. Zimmerman was appointed by the Governor of Florida for a second term to sit on the Board of Trustees at the University of South Florida where he has served as the Chairmanfifth anniversary of the Board since 2019.

Mr. Zimmerman earned a Bachelorcompletion of Arts in Advertising and an MBA from the University of South Florida and was awarded an honorary Doctorate of Business Administration from Nova Southeastern University.

Kieran Goodwin

Kieran Goodwin, our Chief Financial Officer, founded Panning Capital Management, L.P. (“Panning”) in 2012 and was Co-Managing Partner and Portfolio Manager until 2018. Panning was a long/short credit hedge fund with a peak AUM of $2.5 billion during Mr. Goodwin’s tenure. From 2004 to 2010, Mr. Goodwin was the Head of Trading and one of five partners and four members of the Global Investment Committee at King Street Capital Management (“King Street”). As Head of Trading, Mr. Goodwin was responsible for managing King Street’s twenty traders. During his time at King Street, the firm’s AUM grew from $4 billion to approximately $20 billion. Mr. Goodwin previously was a Managing Director at both UBS and Merrill Lynch, where he ran proprietary trading books.

Since 2018, Mr. Goodwin has invested his own capital in both private and public markets. He is an investor in many early-stage companies and currently serves on the board of directors of Tradewell Technologies Inc. and Zoomi Inc. Additionally, he serves on the board of directors Voya Prime Rate Trust, a public closed-end loan fund.

Mr. Goodwin received a Bachelor of Arts in Computer Science, cum laude, from Duke University in 1991.

BOARD OF DIRECTORS

Brian Radecki

Brian Radecki, a member of our Board of Directors, is the Founder, Chief Executive Officer and member of the Board of Directors of Rapa Therapeutics (“Rapa”), a clinical stage start-up biotechnology company, spun out of the National Cancer Institute in September 2017. Rapa is developing a cell therapy platform focused on cutting-edge curative immunotherapy treatments for cancer, neurodegenerative, autoimmune and inflammatory diseases. After experiencing many people close to him being afflicted by these deadly illnesses, Mr. Radecki has made it his mission to find a better way to treat and help people with these devastating diseases.

Mr. Radecki is an active angel investor in, or advisor to, several companies across various industries — from start-ups with zero revenue, to pre-IPO and large public companies. He has over 20 years of experience building both small private and large public companies. He works closely with many top-tier private equity, venture capital and institutional investors along with entrepreneurs, boards of directors and senior management teams to build disruptive and innovative platform companies by executing strategic plans to get things done.

Mr. Radecki is currently an investor and director on the board of Wheels Up. Previously, Mr. Radecki was an early investor in, and served on the board of directors of, Rain King Software, Inc., a leading sales and marketing intelligence platform, when it was acquired in August 2017 by Zoom Info (NASDAQ: ZI) (formerly DiscoverOrg); Docutech, a document, eSign, eClosing and compliance technology provider, when it was acquired by First American (NYSE: FAF) for $350 million in March 2020; and Optimal Blue, a digital marketplace in the residential mortgage industry, which was recently acquired by Black Knight, Inc. (NYSE: BKI). Also, Mr. Radecki invested pre-IPO in other companies including Beyond Meat (NASDAQ: BYND) and Skillz Inc. (NYSE: SKLZ), which is merging (via SPAC) with Flying Eagle Acquisition Corp. (NASDAQ: FEAC). A number of his early or pre-IPO investments have resulted in returns over 10 times his multiple on investment (“MOI”).

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After working approximately 20 years at public companies, Mr. Radecki retired in 2016 from CoStar Group Inc. (“CoStar”) (NASDAQ: CSGP), a provider of commercial real estate information, analytics and online marketplaces, where he held several senior operational and financial roles over 18 years, including Executive Vice President, Chief Financial Officer and VP of Research Operations (the Company’s largest operating area). While at CoStar, Mr. Radecki oversaw or played a major role in CoStar’s accounting and finance operations in the U.S. and U.K. — from internal audit, tax and budgeting to SEC reporting, Sarbanes-Oxley compliance and due diligence.

Additionally, Mr. Radecki helped lead CoStar’s 1998 initial public offering multiple follow on equity offerings and international expansion, as well as leading several acquisitions and the integration of public companies, including Comps.com (NASDAQ: CDOT) in 2000 for $102 million, and LoopNet (NASDAQ: LOOP) in 2012 for $860 million. Also, Mr. Radecki was named the Washington Business Journal’s “CFO of the Year” in the large company category for 2012. During 2014, he led and raised nearly $1.1our securities. However, if (i) our annual gross revenue exceeds $1.235 billion, (ii) we issue more than $1.0 billion of non-convertibledebt and equity. Mr. Radecki also playedin any three-year period or (iii) we become a major role“large accelerated filer” (as defined in acquisitionsRule 12b-2 under the Exchange Act) prior to the end of Apartments.com in 2014 for $585 million and ApartmentFinder in 2015 for $170 million, which allowed CoStarsuch five-year period, we will cease to successfully enter a new strategic vertical and significantly expanded CoStar’s total addressable market. Mr. Radecki was instrumental in building CoStar from a small pre-IPO start-up to a multi-billion dollar publicbe an emerging growth company. During his tenure, CoStar’s substantial growth resulted in an over 2,000% shareholder return.

Before joining CoStar, Mr. Radecki worked at Axent Technologies, Inc. (Nasdaq: AXNT), an international security software company; Azerty, Inc. and the public accounting firm, Lumsden & McCormick, LLP, both based in Buffalo, NY.

Mr. Radecki earned a Bachelor of Science from University of New York at Buffalo, with a dual degree in Accounting and Finance.

Frank S. Edmonds

Frank S. Edmonds, a director nominee, has been a Partner at Panning Capital Management, L.P. since 2013, where he served as Co-Managing Partner and Head of Research from 2013 to 2018. From 2002 to 2012, Mr. Edmonds was a Senior Research Analyst at King Street, where he served as one of five partners and four members of the Global Investment Committee. Prior to King Street, Mr. Edmonds was a research analyst at Oak Hill Advisors. Mr. Edmonds serves on the boards of Shane’s Rib Shack, a fast casual barbeque restaurant business with 65 locations in the Southeast, as well as the Darden Graduate School of Business and the Jefferson Scholars Foundation. Mr. Edmonds is currently the Chair of the Investment Committee at Woodberry Forest School. Frank received a B.A. in History/American Studies and joint M.B.A./J.D. degrees from the University of Virginia.

BUSINESS STRATEGY

We are focused on creating sustainable long-term value for our stockholders by identifying potential opportunities that can generate outsized returns. We believe our exceptional network and deep ties across the technology ecosystem will create a competitive advantage in sourcing attractive opportunities. We plan to identify and complete our initial business combination with a technology company that complements the experience of our management team and can benefit from its operational expertise and deal sourcing network. We have identified the following general criteria that we believe are important in evaluating prospective partner businesses for our initial business combination. We intend to use the following criteria in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a partner business that does not meet these criteria:

•        Focus:    We intend to seek companies in the technology industry. We have an accomplished track record of investing in this industry and expect to focus on businesses that engage with technology to serve customers in a novel and transformational manner. We believe our management team’s expertise and understanding of innovative businesses will be paramount in identifying and assessing an initial business combination candidate.

•        People driven:    Serial entrepreneurs, visionary leaders and trusted partners — we intend to seek management teams with whom we would be proud to partner for the next decade or more and who we believe have the vision, energy and execution capability to deliver on our high expectations for growth and franchise value. This is the standard against which Rosecliff measures all of the management teams with whom it partners, whether they are running public or private companies.

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•        Growth:    We intend to invest in businesses that are on, or have the potential to be on, what we believedeemed to be a promising growth path. We believe that these businesses, in particular, will benefit from access to incremental capital and over the long term, will benefit from consistent access to public markets. We will seek businesses“large accelerated filer” at such time that we believe(a) have a sustainable competitive advantage and will support and sustain our expectations of their growth.

•        Significant addressable market relative to current company size:    We intend to seek companies that we believe have a clear runway for sustained growth in their existing core businesses, well beyond our expected investment horizon.

•        Sustainable competitive differentiation:    We believe that identifying and deeply dissecting the “moat” around a company is the most critical element of understanding that company, as true differentiation can provide years of durable, compounding growth and expanding margins.

•        Economic model:    Ultimately, a business must have the ability to generate high levels of cashflow over time, even if it chooses to use that cash to reinvest for the future. We expect to spend significant time evaluating a company’s financial model and unit economics to seek to discern the trajectory of its margin profile in the coming years. We will seek to acquire a business that has historically generated, or that we believe has the near-term potential to generate, strong and sustainable free cash flow.

•        Appropriate valuations:    We are rigorous, disciplined, and valuation-centric investors, with a keen understanding ofan aggregate worldwide market value upsideof common equity securities held by non-affiliates of $700.0 million or more as of the last business day of our most recently completed second fiscal quarter, (b) have been required to file annual and potential downside risks.

These criteria are not intended to be exhaustive. Any evaluation relatingquarterly reports under the Exchange Act, for a period of at least 12 months and (c) have filed at least one annual report pursuant to the merits of a particular initial business combination may be based, to the extent relevant, on these general criteria as well as other considerations and factors that our management team may deem relevant. In the event that we decide to enter into an initial business combination with a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation materials or tender offer documents, as applicable, that we would file with the SEC. In evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will be made available to us.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers.

Each of the members of our sponsor, our directors and officers will, directly or indirectly, own founder shares and/or private placement warrants following this offering and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.Exchange Act.

We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.

Past experience or performanceelected to take advantage of Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates is not a guarantee of either (1) our ability to successfully identify and execute a transaction or (2) success with respect to any business combination that we may consummate. You should not rely on the historical record of Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates as indicative of future performance. See “Risk Factors — Past performance by Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates may not be indicative of future performance of an investment in the company.”

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Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties. As a result, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation will provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officercertain of the company and it is an opportunity that we are able to complete on a reasonable basis.

In addition, our officers or directors may be investors, or have other direct or indirect interests,reduced disclosure obligations in a business with which we may enter into a business combination agreement and/or in certain funds or other persons that may purchase shares in this offering or that may otherwise purchase shares of our Class A common stock in the public market.

Our officers, directors and any of their respective affiliates may sponsor or form, or, in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

Rosecliff may become aware of a potential business combination opportunity that may be an attractive opportunity for our company. However, Rosecliff is not under any obligation to source any potential opportunities for our initial business combination or refer any such opportunities to our company or provide any other services to our company. Rosecliff’s role with respect to our company is expected to be primarily passive and advisory in nature. Rosecliff may have fiduciary and/or contractual duties to its investment vehicles and to companies in which Rosecliff has invested. As a result, Rosecliff may have a duty to offer business combination opportunities to certain Rosecliff funds, other investment vehicles or other entities before other parties, including our company. Additionally, certain companies in which Rosecliff has invested may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial business combination. Transactions of these types may present a conflict of interest because Rosecliff may directly or indirectly receive a financial benefit as a result of such transaction.

We believe that any such potential conflicts of interest of Rosecliff and our officers and directors will be naturally mitigated by the differing nature of targets that Rosecliff typically considers most attractive for its venture capital activities and the types of initial business combination opportunities that we expect to be most attractive for our company.

Our directors and officers are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. See “Risk Factors — Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”

Initial Business Combination

Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account). We refer to this as the 80% fair market value test. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.

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We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target business or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.

Prior to the effectiveness of the registration statement of which this prospectus formsis a part we will file a Registration Statement on Form 8-A with the SECand may elect to voluntarily register our securities under Section 12take advantage of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).other reduced reporting requirements in future filings. As a result, the information that we willprovide to our stockholders may be subjectdifferent than you might receive from other public reporting companies in which you hold equity interests.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period to the rules and regulations promulgated under the Exchange Act.comply with new or revised accounting standards. We have no current intentionelected to use the extended transition period to comply with new or revised accounting standards. As a result of filing a Form 15this election, our financial statements may not be comparable to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummationcompanies that comply with public company effective dates.

Exercise of Warrants

The exercise price of our initial business combination.Warrants is $11.50 per share of Common Stock. We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price of our Common Stock is less than $11.50 per share, we believe holders of our Warrants are unlikely to exercise their Warrants. Conversely, the Warrant holders are more likely to exercise their Warrants the higher the price of our Common Stock is above $11.50 per share. The closing price of our Common Stock on the Nasdaq on October 24, 2023 was $2.54, which is below the $11.50 exercise price of the Warrants. The Warrants are exercisable on a cashless basis under certain circumstances specified in the Warrant Agreement. To the extent that any Warrants are exercised on a cashless basis, the aggregate amount of cash we would receive from the exercise of the Warrants will decrease.

Corporate Information

We are an “emerging growth company,” as definedwere incorporated in Section 2(a) ofDelaware on November 17, 2020, under the Securities Act of 1933, as amended (the “Securities Act”), as modifiedname Rosecliff Acquisition Corp I, in order to effectuate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. RCLF completed its initial public offering on February 11, 2021. On September 11, 2023, RCLF and Legacy Spectral consummated the transactions contemplated by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligibleCombination Agreement. On the Closing Date, RCLF changed its name to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the pricesSpectral AI, Inc.

The mailing address of our securities may be more volatile.

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

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock thatprincipal executive office is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

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

Our executive offices are located at 767 5th2515 McKinney Avenue, 34th Floor, New York, New York 10153Suite 1000, Dallas, Texas 75201, and our telephone number is (212) 492(972) 499-3000-4934. Upon completion of this offering, our corporate website address will be             . Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this prospectus or the registration statement of which this prospectus is a part. You should not rely on any such information in making your decision whether to invest in our securities.

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THE OFFERING

In making your decision whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.

SecuritiesShares of Common Stock offered by us

 

20,000,000 units (or 23,000,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of:

•   one share8,433,231 shares of Class A common stock; and

•   one-thirdCommon Stock issuable upon exercise of one redeemable warrant.Warrants.

Proposed Nasdaq symbolsShares of Common Stock offered by the selling stockholders

 

Units: “RCLF.U”

Class A common stock: “RCLF”

Warrants: “RCLF WS”10,069,748 shares of Common Stock.

Trading commencement and separationShares of Class A common stock and warrants



The units will begin trading on or promptly after the date of this prospectus. The shares of Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless BTIG, LLC informs us of its decisionCommon Stock outstanding prior to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.

Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination.

Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K




In no event will the shares of Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet of the company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

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Units:

Number issued and outstanding before this offering

 


015,688,268 shares of Common Stock (as of October 24, 2023).

Number issued andWarrants outstanding afterprior to this offering

 


20,000,000(1)8,433,231 Warrants (as of October 24, 2023).

Common stock:

Number issued and outstanding before this offering


5,750,000(2),(3)

Number issued and outstanding after this offering


25,000,000(1),(3),(4)

Warrants:

Number of private placement warrants to be sold in a private placement simultaneously with this offering



4,000,000(1)

Number of warrants to be outstanding after this offering and the sale of private placement warrants



10,666,667(1)

Exercisability

Each whole warrant offered in this offering is exercisable to purchase one share of Class A common stock, subject to adjustment as provided herein, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

We structured each unit to contain one-third of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a whole warrant to purchase one whole share, which we believe will make us a more attractive business combination partner for target businesses.

____________

(1)      Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of 750,000 founder shares.

(2)      Consists solely of founder shares and includes up to 750,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.

(3)      Founder shares are currently classified as shares of Class B common stock, which shares will automatically convert into shares of Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”

(4)      Includes 20,000,000 public shares and 5,000,000 founder shares.

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Exercise price per Warrant

 

$11.50 per share, subject to adjustment as described herein.

In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our shares of Class A common stock during the 20-trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 and $10.00 per share redemption trigger prices described below under “Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% and 100%, respectively, of the higher of the Market Value and the Newly Issued Price.11.50.

Exercise period

The warrants will become exercisable on the later of:

•   30 days after the completionUse of our initial business combination; andproceeds

•   12 months from the closing of this offering;

provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement, including as a result of a notice of redemption described below under “Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”).

We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed (and

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if such registration statement is not effective by that date, holders of the warrants will be permitted to exercise their warrants on a “cashless basis”); provided that if our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement.

The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00



Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):

•   in whole and not in part;

•   at a price of $0.01 per warrant;

•   upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

•   if, and only if, the last reported sale price of our Class A common stock for any 20-trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”).

 

We will not redeemreceive any proceeds from the warrants as described above unless a registration statement undersale of shares of Common Stock by the Securities Act coveringselling stockholders pursuant to this prospectus. We will receive any proceeds from the issuanceexercise of the Warrants for cash, but not from the sale of the shares of Class A common stockCommon Stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.such exercise.

Risk factors

 

Except as described below, noneYou should carefully read the “Risk Factors” beginning on page 8 and the other information included in this prospectus for a discussion of factors you should consider carefully before deciding to invest in our Common Stock or Warrants.

Nasdaq symbol for our Common Stock

“MDAI”

Nasdaq symbol for our Warrants

“MDAIW”

Lock-Up Restrictions

Substantially all of our stockholders, including the private placement warrants will be redeemable by us so long as theyselling stockholders, are held by our sponsor or its permitted transferees.subject to certain restrictions on transfer until the termination of applicable lock-up periods. See “Restrictions on Resale of Securities.”

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Redemption

INFORMATION RELATED TO THE OFFERED SECURITIES

This prospectus relates to the issuance by us of an aggregate of an aggregate of up to 8,433,231 shares of our Common Stock are issuable upon the exercise of 8,433,231 Warrants, which were originally issued in the RCLF IPO as part of RCLF’s Units, with each unit consisting of one share of Common Stock and one third of one Warrant, by the holders thereof. Each Warrant entitles the holder thereof to purchase one share of our Common Stock at a price of $11.50 per share.

This prospectus also relates to the offer and resale from time to time by the selling stockholders of (i) up to 10,069,748 shares of Common Stock, which consists of (a) up to 8,623,081 shares of Common Stock issued in connection with the Closing at an equity consideration value of warrants when the price per share of Class A common stock equals or exceeds $10.00 per share by certain of the selling stockholders named in this prospectus, (b) up to 880,000 shares of Common Stock that were originally issued to the Initial Holders in the form of founder shares prior to the RCLF IPO at a price of approximately $0.004 per share, and (c) up to 566,667 shares of Common Stock that were issued to certain service providers of the Company in connection with the Closing.

The following table includes information relating to the securities held by the selling stockholders, including the price each selling stockholder paid for the securities, the potential profit relating to such securities and any applicable lock-up restrictions. The following table is derived in part from our internal records and is for illustrative purposes only. The table should not be relied upon for any purpose outside of its illustrative nature. The public offering price in the RCLF IPO was $10.00 per share. Consequently, as set forth in the table below, some of the selling stockholders may realize a positive rate of return on the sale of their Common Stock covered by this prospectus even if the market price per share of our Common Stock is below $10.00 per share, in which case the public shareholders may experience a negative rate of return on their investment.

Selling Stockholder

 

Number of
Offered
Securities

 

Effective
Purchase
Price per
Offered
Security

 

Potential
Profit per
Offered
Security
(1)

 

Potential
Aggregate
Gross Profit
(1)

 

Lock-Up
Restrictions

Certain Legacy Spectral stockholders

 

8,623,081

 

$

10.00

 

$

(7.46

)

 

$

(64,328,184

)

 

(2)

Founder Shares

 

880,000

 

$

0.004

 

$

2.536

 

 

$

2,231,680

 

 

(2)

BTIG, LLC

 

166,667

 

$

7.50

 

$

(4.96

)

 

$

(826,668

)

 

(3)

Cantor Fitzgerald, L.P.

 

400,000

 

$

7.50

 

 

(4.96

)

 

$

(1,984,000

)

 

(3)

____________

(1)      Notwithstanding any restrictions on the transferability of the shares of our Common Stock, the potential profit per security offered and potential aggregate gross profit are calculated assuming that all such shares of Common Stock were sold at a price of $2.54 per share, which was the closing price of our Common Stock on October 24, 2023. The trading price of our Common Stock may be different at the time a selling stockholder decides to sell its securities.

(2)      The Sponsor, certain former stockholders of Legacy Spectral, and the Director Holders (as defined in the Registration Rights Agreement) are subject to certain lock-up restrictions contained in the Registration Rights Agreement. For more information on the lock-up restrictions, see “Restrictions on Resale of Securities — Lock-up Provisions.”

(3)      Certain investment banks provided services to the Company in connection with the Business Combination and their fees were satisfied through the issuance of shares of Common Stock and/or a combination of Common Stock and a cash payment, as applicable. The investment banks are not subject to any lock-up or other restrictions on transfer.



Once the warrants become exercisable, we may redeem the outstanding warrants:

•   in whole and not in part;

•   at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table set forth under “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” based on the redemption date and the “fair market value” of our Class A common stock (as defined below) except as otherwise described in “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants”;

•   if, and only if, the Reference Value (as defined above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00”) equals or exceeds $10.00 per share as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and

•   if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also concurrently be called for redemption on the same terms as the outstanding public warrants, as described above.

The “fair market value” of our Class A common stock shall mean the volume weighted average price of our Class A common stock during the ten trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. We will provide our warrant holders with the final fair market value no later than one business day after the ten-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment).

No fractional shares of Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A common stock to be issued to the holder. Please see the section entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” for additional information.

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Founder shares

On December 10, 2020, our sponsor paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in consideration of 5,750,000 founder shares, par value $0.0001 per share. In January 2021, our sponsor transferred a total of 130,000 founder shares to our independent director, our director nominee and certain other individuals at their original per-share purchase price. Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The purchase price of these founder shares was determined by dividing the amount contributed to us by the number of founder shares issued. Our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the outstanding shares of our common stock upon the consummation of this offering. Up to 750,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.

The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:

•   prior to our initial business combination, only holders of our Class B common stock have the right to vote on the election of directors and holders of a majority of our outstanding shares of Class B common stock may remove a member of the board of directors for any reason;

•   the founder shares are subject to certain transfer restrictions contained in a letter agreement that our initial stockholders, directors and officers have entered into with us, as described in more detail below;

•   pursuant to such letter agreement, our initial stockholders, directors and officers have agreed to waive: (1) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (2) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any extended time that we have to consummate a business combination beyond 24 months as a result of a stockholder vote to amend our amended and restated certificate of incorporation (an “Extension Period”) (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders, directors and officers have agreed to vote any founder shares and public shares held by them in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001,

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or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved;

•   the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and

•   the founder shares are entitled to registration rights.

Transfer restrictions on founder
shares


Pursuant to a letter agreement with us, our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination (x) if the last reported sale price of our shares of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20-trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except with respect to permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.

Founder shares conversion and anti-dilution rights


We have 5,750,000 shares of Class B common stock, par value $0.0001 per share, issued and outstanding. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which the shares of Class B common stock will convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of our Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of all shares of common stock issued and outstanding upon the completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for our shares of Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt.

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Election and removal of directors; Voting rights


Prior to our initial business combination, only holders of our Class B common stock will have the right to vote on the election of directors. Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. In addition, prior to our initial business combination, holders of a majority of the outstanding shares of our Class B common stock may remove a member of our board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of a majority of at least 90% of the outstanding shares of our common stock voting at a stockholder meeting. With respect to any other matter submitted to a vote of our stockholders, including any vote in connection with our initial business combination, except as required by applicable law or stock exchange rule, holders of our Class A common stock and holders of our Class B common stock will vote together as a single class, with each share entitling the holder to one vote.

Private placement warrants

Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.50 per warrant ($6,000,000 in the aggregate or $6,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. For a portion of the purchase price, private placement warrants may be exercised only for a whole number of shares. If we do not complete our initial business combination within 24 months from the closing of this offering or during any Extension Period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless. The private placement warrants will not be redeemable by us (except as described above under “Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Our sponsor, as well as its permitted transferees, have the option to exercise the private placement warrants on a cashless basis.

Transfer restrictions on private placement warrants


The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination, except as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.”

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Proceeds to be held in trust account

Nasdaq listing rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the $206.0 million in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or $236.6 million if the underwriters’ over-allotment option is exercised in full, $200.0 million ($10.00 per unit), or $230.0 million ($10.00 per unit) if the underwriters’ over-allotment option is exercised in full (including $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions), will be deposited into a U.S.-based trust account at J. P. Morgan Chase Bank, N. A. with Continental Stock Transfer & Trust Company acting as trustee), and $2.0 million will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries.

Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

Anticipated expenses and funding sources


Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay taxes or to redeem our public shares in connection with an amendment to our amended and restated certificate of incorporation, as described above. Based upon current interest rates, we expect the trust account to generate approximately $160,000 of interest annually (assuming an interest rate of 0.08% per year). Unless and until we complete our initial business combination, we may pay our expenses only from:

•   the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $1,000,000 in expenses relating to this offering; and

•   any loans or additional investments from our sponsor, members of our management team or any of their respective affiliates or other third parties, although they are under no obligation to loan funds to, or otherwise invest in, us; and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of our initial business combination.

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Conditions to completing our initial business combination


There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Nasdaq listing rules require that an initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account). We refer to this as the 80% fair market value test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public stockholders with our analysis of our satisfaction of the 80% fair market value test, as well as the basis for our determinations.

We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test; provided that in the event that our initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses.

Permitted purchases and other transactions with respect to our securities



If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their

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public shares. However, our sponsor, directors, officers, advisors or any of their respective affiliates are under no obligation or duty to do so and they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. If our sponsor, directors, officers, advisors or any of their respective affiliates engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. See “Proposed Business — Permitted purchases and other transactions with respect to our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to enter into private transactions with.

We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our sponsor, directors, officers, advisors or any of their respective affiliates will be restricted from making any purchases if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

Redemption rights for public stockholders upon completion of our initial business combination



We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein.

The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination.

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Manner of conducting redemptions

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (1) in connection with a stockholder meeting called to approve the initial business combination or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirement or we choose to seek stockholder approval for business or other reasons.

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:

•   conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and

•   file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination, and we instead may search for an alternate business combination (including, potentially, with the same target). If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will:

•   conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and

•   file proxy materials with the SEC.

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We expect that a final proxy statement would be mailed to public stockholders at least ten days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.

If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders, officers and directors will count towards this quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their permitted transferees will own at least 20% of our outstanding shares of common stock entitled to vote thereon. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.

Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).

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Tendering share certificates in connection with a tender offer or redemption rights



We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting against the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares.

Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold stockholder vote




Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, without our prior consent. We believe the restriction described above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.

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Redemption rights in connection with proposed amendments to our amended and restated certificate of incorporation




Some other blank check companies have a provision in their charter which prohibits the amendment of certain charter provisions. Our amended and restated certificate of incorporation will provide that any of its provisions (other than amendments relating to provisions governing the election or removal of directors prior to our initial business combination, which require the approval of a majority of at least 90% of our shares of common stock attending and voting in a stockholder meeting), including those related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the sale of the private placement warrants into the trust account and not release such amounts except in specified circumstances), may be amended if approved by holders of at least 65% of our issued and outstanding common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our issued and outstanding common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our issued and outstanding common stock. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Class B common stock is required to approve the election or removal of directors. Prior to an initial business combination, we may not issue additional securities that can vote pursuant to our amended and restated certificate of incorporation on any initial business combination or any amendments to our amended and restated certificate of incorporation. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their public shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination.

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Release of funds in trust account on closing of our initial business combination



On the completion of our initial business combination, all amounts held in the trust account will be disbursed directly by the trustee or released to us to pay amounts due to any public stockholders who properly exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination. If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or the redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

Redemption of public shares and distribution and liquidation if no initial business combination



Our amended and restated certificate of incorporation will provide that we have only 24 months from the closing of this offering to complete our initial business combination. If we have not completed our initial business combination within such time period or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the allotted time period.

Our initial stockholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the allotted time frame and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.

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Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.

Limited payments to insiders

There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, directors or officers, or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination:

•   repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;

•   payment to our sponsor of a total of $10,000 per month for office space, support and administrative services (see “Certain Relationships and Related Party Transactions — Support Services Agreement.”);

•   payment of customary fees for financial advisory services;

•   reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

•   repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our directors and officers to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender.

These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.

Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors or officers, or our or any of their respective affiliates.

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Audit committee

Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. If any noncompliance is identified, then the audit committee will be charged with the responsibility to promptly take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”

Conflicts of interest

Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis. For more information, see the section entitled “Management — Conflicts of Interest.”

In addition, our officers or directors may be investors, or have other direct or indirect interests, in a business with which we may enter into a business combination agreement and/or in certain funds or other persons that may purchase shares in this offering or that may otherwise purchase shares of our Class A common stock in the public market.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity. See “Risk Factors — Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”

We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to complete our initial business combination.

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Indemnity

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of interest which may be withdrawn to pay taxes except as to any claims by a third-party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.

RisksRISK FACTORS

We are a newly incorporated company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” beginning on page 34 of this prospectus.

Summary of Risk Factors

An investmentInvesting in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before makingrisks. Before you make a decision to investbuy our securities, in our units.addition to the risks and uncertainties discussed above under “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the specific risks set forth herein. If any of the following eventsthese risks actually occur, it may materially harm our business, financial condition, liquidity and operating results may be materially adversely affected. In that event,of operations. As a result, the tradingmarket price of our securities could decline, and you could lose all or part of your investment. Additionally, the risks and uncertainties described in this prospectus or any prospectus supplement are not the only risks and uncertainties that we face. We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business, prospects, financial condition or operating results. The following discussion should be read in conjunction with our financial statements and the financial statements of the Company and notes to the financial statements included herein.

Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refers to the Company and its subsidiaries.

Risks Related to Our Financial Condition and Capital Requirements

We have incurred significant losses since inception and may not be able to achieve significant revenues or profitability.

We have incurred substantial net losses since our inception. For the six months ended June 30, 2023 and the year ended December 31 2022, on a pro-forma and consolidated basis, we incurred net losses of $8,893 million and $8.130 million, respectively, and on a pro forma basis our consolidated cash balance at September 30, 2023 was expected to be $7,855 million. We had an accumulated deficit of $28.3 million as of June 30, 2023. Our losses have resulted primarily from costs incurred in connection with our design, manufacturing and development activities, research and development activities, building our commercial infrastructure, legal, and general and administrative expenses associated with our operations.

We do not know whether or when we will become profitable. Our ability to generate revenue and achieve profitability will depend upon our ability, alone or with others, to complete the development of our DeepView System, including receipt of the necessary regulatory clearances, approvals, or classifications and thereafter to successfully commercialize our DeepView System. We may be unable to achieve these goals. We may also encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by medical device companies in rapidly evolving fields.

In addition, as a U.S. public company, we will incur significant legal, accounting and other expenses. Accordingly, we expect to continue to incur significant operating losses for the foreseeable future and we cannot assure you that we will achieve profitability in the future or that, if we do become profitable, we will sustain profitability. Our failure to achieve and sustain profitability in the future will make it more difficult to finance the capital requirements needed to operate our business and accomplish our strategic objectives, which would have a material adverse effect on our business, financial condition and results of operations, and cause the market price of our common stock to decline.

We are devoting substantially all of our efforts towards research and development of our DeepView System.

Our business, prospects, results of operations and financial condition depend upon our ability, alone or with others, to complete the development of our DeepView System, including receipt of the necessary regulatory clearances, approvals, or classifications and thereafter to successfully commercialize our DeepView System. In addition, though we are currently focused on the DFU and burn applications for DeepView, there are other pipeline applications that we are considering for future commercialization. However, we may be unable to achieve these goals. Approval or clearance from the FDA and comparable regulatory bodies may never be obtained. We also may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by medical device companies in rapidly evolving fields. Our failure to receive the necessary approvals and clearances and to successfully commercialize our DeepView System would have a material adverse effect on our business, prospects, results of operations and financial condition.

Further, our business plan and pipeline depend on, and, as further described below, funding under many of our existing contracts depend on, and future contracts may also depend on, our ability to meet certain milestones or achieve certain timelines with our applications and indications. Our ability to achieve these depends on numerous

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factors, including the factors described in this “Risk Factors” section, many of which may not be within our control. Our inability to achieve our milestones and timelines could have a material adverse impact on our business, prospects, results of operations and financial condition.

We depend on government funding, which if lost or reduced, could have a material adverse effect on our research and development activities and our ability to commercialize our DeepView technology. Our largest contract is with BARDA and is the largest single source of revenue for us. Our BARDA contract is not guaranteed to be extended.

We have not made any commercial sales of our DeepView System. We receive almost all of our revenue from fixed fees and costs payable by the Biomedical Advanced Research and Development Authority (“BARDA”), which is part of the U.S. Health and Human Services (“HHS”) Office of the Assistant Secretary for Preparedness and Response in the United States, and to a lesser extent the Defense Health Agency (“DHA”) of the United States Department of Defense. We currently have agreements with each of BARDA and the DHA to support continued development of the next generation of our DeepView technology. While we believe we have very good working relationships with BARDA and DHA, the loss of one or both of our contracts with BARDA and DHA would have an adverse impact on our business, prospects, results of operations and financial condition. While we expect diversification of customers in future years, assuming we are able to obtain the necessary regulatory clearances, approvals, De Novo classifications, or certifications (each of which cannot be guaranteed and may take longer than planned) to commercialize our product, for the time being we are substantially dependent on funding from BARDA and DHA.

Our BARDA contract is the largest single source of revenue for us. On September 27, 2023, the Company executed a new contract with BARDA, providing the Company with additional funding of up to $149.9 million, including an initial award of approximately $55.0 million to support the clinical validation and FDA clearance of our DeepView System, in place of the prior contract Option 2 award which was approximately $22.0 million. This will include the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support the clinical validation study and to transition the use of our DeepView System to being used routinely upon FDA clearance. The contract also includes options, similar to our prior BARDA contracts, with an additional total value of approximately $95.0 million which can be exercised for additional product development, procurement and the expanded deployment of DeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research to support the broader clinical adoption of the DeepView System. The Company is also completing work on the Option 1B of its prior contract award relating to our Burn Training study, which was extended through December 31, 2023 upon which the Company will receive approximately $2.0 million of additional funding. While we currently have no reason to believe that we will fail to achieve these contract milestones and decision gates or that these further options will not be exercised, and while the BARDA contract has been renewed or extended historically, there is no guarantee that the BARDA contract will be renewed or extended in the future, and there are no assurances that we will achieve the contract milestones and decision gates on a timely basis, or at all. As the BARDA contract is significant to us and is our largest single source of revenue, a decision by BARDA not to exercise further options would have a material adverse impact on our business, prospects, results of operations and financial condition.

Under the terms of the BARDA contract, the U.S. government has the right to terminate the contract for convenience or to terminate for default if we fail to meet our obligations as set forth in the contract. While the government has a right to terminate the BARDA contract for convenience, we believe that the government generally does not terminate funding awards unless there is reason, such as the funding contract becomes too costly, the agency seeks to avoid a dispute with another branch of government, or the agency decides to restructure its contractual arrangements and perform work in-house. We believe it is unlikely that BARDA will terminate its contract with us. However, there can be no guarantee that the BARDA contract will not be terminated.

If BARDA were to terminate its contract with us, we may be entitled to settlement costs for payment for work already performed, but not yet paid, including costs incurred in anticipation of performance, and costs arising from termination and settling the termination, for example. However, as the BARDA contract is critical to our business at this time, non-extension or termination of the BARDA contract would have a material adverse impact on our business, prospects, results of operations and financial condition.

The DHA Department of Defense Small Business Technology Transfer (“STTR”) Phase II contract expires on October 31, 2023. We intend to seek to enter into an extension of the Phase II contract or a new Phase III contract to pursue commercial applications of the research or development completed in the current Phase II contract. Though

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the Company has no reason to believe that it will not be offered a Phase III contract, and while DHA contracts have been renewed or extended historically, there is no guarantee that the contract will be extended after the base period or that we will be offered a Phase III contract. As this contract is a key contract for the Company, non-extension of the contract, or a failure to enter into a new contract, would have a material adverse impact on the Company’s business, prospects, results of operations and financial condition. Under the terms of the DHA contract, the U.S. government has the right to terminate the contract for convenience or to terminate for default if we fail to meet our obligations as set forth in the contract.

We also are party to a Research Project Award agreement with the Advanced Technology International as Consortium Manager for MTEC. This agreement extends the DHA Phase II contract for the development of the handheld device of the DeepView System. Under the terms of this agreement, MTEC will pay us a firm fixed fee based upon our achievement of certain milestones (such as development of the image technology in the handheld device, validation of the design and development of a handheld device from the current cart based system, completion of verification testing builds, and development of commercialization plan) through April 5, 2025. However, there are no assurances that we will achieve the contract milestones on a timely basis, or at all. Failure to receive the fee under the contract could have a material adverse impact on the Company’s business, prospects, results of operations and financial condition.

As part of the BARDA contract, we represented that we are a small business concern under NAICS Code 541714 (“Research and Development in Biotechnology”). We are also registered with the FDA as a small business, based on self-assessment. For this representation to continue to be accurate, we would have to continue to comply with the small business size standards published by the U.S. Small Business Association for NAICS Code 541714. If we were to grow beyond 1,000 employees as a result of an expansion or any acquisition, we would no longer qualify as a small business concern; this could threaten our ability to maintain the BARDA contract.

We may need additional funding to finance our planned operations, and may not be able to raise capital when needed, which could force us to delay clinical trials necessary to market our products or delay establishment of sales and marketing capabilities or other activities necessary to commercialize our products.

As of June 30, 2023, on a pro-forma consolidated basis, we had $7.855 million in cash and cash equivalents, and an accumulated deficit of $28.3 million. Based on our current operating plan, we believe that our cash and cash equivalents, together with the remaining funding available to us under the BARDA contract, will be sufficient to meet our capital requirements and fund our operations through at least the next 12 months from the release date of the consolidated financial statements included in this prospectus. However, we have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Changing circumstances could cause us to consume capital significantly faster than we currently anticipate, and we may need to raise capital sooner or in greater amounts than currently expected because of circumstances beyond our control.

We may require additional capital in the future to fund our operating expenses and to further our product development efforts, including seeking the necessary regulatory clearances, approvals, De Novo classifications, or certifications (each which cannot be guaranteed and may take longer than planned) for our DeepView System and growing our sales and marketing organization. Moreover, we expect to incur additional expenses associated with operating as a U.S. public company, including legal, accounting, insurance, exchange listing and SEC compliance, investor relations and other expenses. To the extent additional capital is necessary, there are no assurances that we will be able to raise additional capital on favorable terms or at all, and therefore we may not be able to execute our business plan. Our future funding requirements will depend on many factors, including:

•        the cost of our research and development activities;

•        the scope, rate of progress and cost of our clinical studies;

•        the cost and timing of additional regulatory clearances, approvals, De Novo classifications, or certifications;

•        the degree and rate of market acceptance of our DeepView System, assuming we receive the necessary regulatory clearances, approvals, De Novo classifications, or certifications (each of which cannot be guaranteed and may take longer than planned);

•        the scope and timing of investment in our sales force and expansion of our commercial organization;

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•        the costs associated with manufacturing our DeepView System at increased production levels;

•        the terms and timing of any collaborative, licensing and other arrangements that we may establish;

•        the costs associated with any product recall that may occur;

•        the costs of attaining, defending and enforcing our intellectual property rights;

•        the emergence of competing new products or technologies or other adverse market developments; and

•        the impact on our business from the global COVID-19 pandemic or any other pandemic, epidemic or outbreak of an infectious disease.

We may seek to raise additional capital through equity offerings or debt financings and such additional financing may not be available to us on acceptable terms, or at all. In addition, any additional equity or debt financing that we raise may contain terms that are not favorable to us or our stockholders. For example, if we raise funds by issuing equity or equity-linked securities, the issuance of such securities could result in dilution to our stockholders. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of our common stock. In addition, the issuance of additional equity securities by us, or the possibility of such issuance, may cause the market price of our common stock to decline, and the price per share at which we sell additional shares of our common stock, or securities convertible into or exercisable or exchangeable for shares of our common stock, in future transactions may be higher or lower than the price per share paid by investors in this offering.

In addition, the terms of debt securities issued or borrowings could impose significant restrictions on our operations including restrictive covenants, such as limitations on our ability to incur additional debt or issue additional equity, limitations on our ability to pay dividends, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could adversely affect our ability to conduct our business. In the event that we enter into collaborations or licensing arrangements to raise capital, we may be required to accept unfavorable terms, such as relinquishment or licensing of certain rights related to our products or technologies that we otherwise would seek to develop or commercialize ourselves. In addition, we may be forced to work with a partner, which could lower the economic value of our programs to us.

If we are unable to obtain adequate financing on terms satisfactory to us when we require it, we may be required to terminate or delay the development of our DeepView technology or any future products, delay clinical trials necessary to market our products, or delay establishment of sales and marketing capabilities or other activities necessary to commercialize our products. If this were to occur, our ability to grow and support our business and to respond to market challenges could be significantly limited, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Product Development and Regulatory Review

The regulatory review process is expensive, time-consuming, and uncertain and we may be unable to obtain clearance, approval, De Novo classification, or certification for our DeepView technology.

The research, design, testing, manufacturing, labeling, selling, marketing and distribution of medical devices are subject to extensive regulation by country-specific regulatory authorities, which regulations differ from country to country.

We have historically received 510(k) clearance from the FDA for previous generations of our DeepView technology and we believe that our BDD status, and clinical partners with regulatory experience who have been identified in Europe, will assist us in securing the required regulatory clearances, approvals, or De Novo classifications for our third generation DeepView System (“DeepView GEN 3 System”). However, there is no guarantee that our DeepView GEN 3 System or any future products will receive the requisite regulatory clearance, approval, or De Novo classification for clinical testing, manufacturing, or marketing. While preliminary results have been encouraging and indicative of the potential performance of our DeepView technology, data already obtained, or obtained in the future, from clinical studies do not necessarily predict the results that will be obtained from later clinical studies. We will be required to incur significant costs in obtaining regulatory clearances, approvals, or De Novo classifications for our DeepView GEN 3 System.

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In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive 510(k) clearance, approval of a pre-market approval application (“PMA”) or be granted De Novo classification pursuant to the Federal Food, Drug, and Cosmetic Act (the “FDCA”), unless an exemption applies. In the 510(k) clearance process, before a device may be marketed, the FDA must determine that a proposed device is “substantially equivalent” to a legally-marketed “predicate” device, which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or a 510(k)-exempt device. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support substantial equivalence. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, pre-clinical, clinical trial, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. The De Novo classification process is available for novel devices of low to moderate risk, for which there are no legally marketed devices on which to base the substantial equivalence determination, or after the applicant receives a not-substantially-equivalent decision from FDA in response to a 510(k) application. Should the De Novo classification request be declined, the device, as a Class III device, would require pursuit of a PMA under Section 515 of the FDCA, requiring additional time and expense. Oftentimes the length of the time and expense are prohibitively long and high, respectively, and it may be impractical or impossible to pursue the PMA regulatory route should our De Novo request be denied.

In order to sell our device in member states of the European Union (“EU”), the device must also comply with the general safety and performance requirements of the EU Medical Devices Regulation (Regulation (EU) No 2017/745). Compliance with these requirements is a prerequisite to be able to affix the European Conformity (“CE”) mark to our device, without which it cannot be sold or marketed in the EU. All medical devices placed on the market in the EU must meet the general safety and performance requirements laid down in Annex I to the EU Medical Devices Regulation including the requirement that a medical device must be designed and manufactured in such a way that, during normal conditions of use, it is suitable for its intended purpose. Medical devices must be safe and effective and must not compromise the clinical condition or safety of patients, or the safety and health of users and — where applicable — other persons; provided that any risks which may be associated with their use constitute acceptable risks when weighed against the benefits to the patient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art.

To demonstrate compliance with the general safety and performance requirements we must undergo a conformity assessment procedure, which varies according to the type of medical device and its risk classification. Except for low-risk medical devices (Class I), where the manufacturer can self-assess to the conformity of its products with the general safety and performance requirements (except for any parts which relate to sterility, metrology or reuse aspects), a conformity assessment procedure requires the intervention of a notified body. See “Business — Government Regulation — Regulation of Medical Devices in the European Union.”

Furthermore, regulatory clearance, approval, De Novo classification, or certification by any regulatory authority does not ensure marketing authorization or similar registration, clearance, approval, or certification by regulatory authorities in other countries. However, failure to obtain or delay in obtaining authorization, registration, clearance, approval, or certification in one or more regulatory jurisdictions may have a negative effect on the regulatory process in others.

We may experience significant delays in completing clinical trials, which could prevent or significantly delay our targeted product launch timeframe and impair our viability and business plan.

The completion of any clinical trials of our DeepView System, or other studies that we may be required to undertake in the future, could be delayed, suspended or terminated for several reasons, including:

•        we may fail to or be unable to conduct the clinical trials in accordance with regulatory requirements;

•        selection and onboarding of clinical sites or a Contract Research Organization (“CRO”) may take longer than anticipated;

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•        sites participating in a clinical trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that are permitted to be involved in the trial;

•        patients may not enroll in, remain in or complete, clinical trials at the rates we expect;

•        adverse events or unexpected developments may occur that affect the patients’ safety;

•        supply issues may prevent us from continuing to use our investigational devices in clinical evaluations; and

•        clinical investigators may not perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol and good clinical practices.

In addition, the FDA, applicable foreign regulatory entities or notified body can delay, limit or deny clearance, approval, De Novo classification, or certification of a device for many reasons, including:

•        our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are substantially equivalent, in the case of a 510(k) clearance, safe or effective for their intended uses, in the case of a PMA, or that general controls alone or general and special controls together provide reasonable assurance of safety and effectiveness for the intended use, in the case of De Novo classification;

•        the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials (including, for purposes of the EU, clinical investigations) or the interpretation of data from pre-clinical studies or clinical trials, as applicable and to the extent required to support marketing authorization or certification;

•        our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

•        the manufacturing process or facilities we use may not meet applicable requirements;

•        unanticipated discovery of issues that relate to safety or effectiveness of the device during or after the regulatory review process; and

•        the potential for policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data, as applicable, and/or regulatory filings insufficient for clearance, approval, De Novo classification, or certification.

If our clinical trials are delayed, it will take us longer to ultimately launch our DeepView System in the market and generate revenues. Moreover, our development costs will increase if we have material delays in our clinical trials or if we need to perform more or larger clinical trials than planned.

If the third parties on which we rely to conduct our clinical trials, to assist us with pre-clinical development or to prepare our regulatory submissions do not perform as contractually required or expected, we may not be able to obtain regulatory clearance, approval, De Novo classification, certification or other required regulatory authorizations or certifications to commercialize our products.

We do not have the ability to independently conduct all of our pre-clinical and clinical trials for our DeepView System and to prepare the associated regulatory submissions without the participation of third-party research hospitals, burn and wound centers. We must rely on third parties such as CROs, medical institutions and clinical investigators to conduct such trials. If these third parties do not successfully carry-out their contractual duties or comply with regulatory obligations, including compliance with Good Clinical Practice (“GCP”) requirements or meet expected deadlines, if these third parties need to be replaced, if the quality or accuracy of the data they obtain is compromised due to a failure to adhere to our clinical protocols or regulatory requirements or for other reasons, or if the prepared regulatory submission does not meet the regulatory agencies’ expectations or requirements, our pre-clinical development activities or clinical trials may be extended, delayed, suspended or terminated. Furthermore, our third-party clinical trial investigators may be delayed in conducting our clinical trials for reasons outside of their control, including the COVID-19 pandemic, or another pandemic, epidemic or outbreak of an infectious disease. In the event of such extensions, delays, suspensions or terminations, we may not be able to obtain regulatory clearance, approval, De Novo classification, certification or other required regulatory authorizations or certifications for, or successfully commercialize, our DeepView System on a timely basis, if at all, and our business, financial condition and results of operations may be adversely affected.

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New legislation and regulations and legislative and regulatory reforms may make it more difficult and costly for us to obtain regulatory clearance, approval, De Novo classification, or certification of our DeepView System, or to manufacture, market and distribute our device after clearance, approval, or classification is obtained.

From time to time, legislation is drafted and introduced in the legislative bodies of the countries in which we intend to sell our DeepView System, assuming we receive the necessary regulatory clearance, approval, De Novo classification, or certification to revise the process for regulatory approval, clearance, authorization, De Novo classification, certification, manufacture and marketing of regulated products or the reimbursement thereof. In addition, regulations and guidance are often revised or reinterpreted by the applicable competent authority in ways that may significantly affect our business and our products. For example, over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products. In November 2018, FDA officials announced forthcoming steps that the FDA intended to take to modernize the premarket notification pathway under Section 510(k) of the FDCA. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. In May 2019, the FDA solicited public feedback on these proposals. These proposals have not yet been finalized or adopted, and the FDA may work with Congress to implement such proposals through legislation. Accordingly, it is unclear the extent to which any proposals, if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase the costs of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively affect our business.

In September 2019, the FDA finalized guidance describing an optional “safety and performance based” premarket review pathway for manufacturers of “certain, well-understood device types” to demonstrate substantial equivalence under the 510(k) clearance pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance process. The FDA has developed and maintains a list of device types appropriate for the “safety and performance based” pathway and announced that it intends to continue to develop product-specific guidance documents that identify the performance criteria for each such device type, as well as the testing methods recommended in the guidance documents, where feasible. The FDA may establish performance criteria for classes of devices for which we or our competitors seek or currently have received clearance, and it is unclear the extent to which such performance standards, if established, could impact our ability to obtain 510(k) clearance or otherwise create competition that may negatively affect our business.

In October 2021, the FDA issued a final rule on the De Novo classification process, which became effective on January 3, 2022. The rule explains when the De Novo classification route may be available to applicants, and what information should be included in the request so that the FDA can determine whether to grant the De Novo classification request. This includes, for example, the device’s regulatory history, proposed indications for use, device description, labeling, advertisements, and information demonstrating that when subject to general controls, or general and special controls, the probable benefit to health outweighs any probable injury or illness from such use. The FDA will grant the De Novo classification request if none of the reasons in the regulations for declining a De Novo request applies to the product at issue, including that the request includes false information or omits material information, the device has already been classified under a PMA, or an inspection of the device facility results in a determination that general or general and special controls would not provide reasonable assurance of safety and effectiveness.

The FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business. Any new statutes or regulations or revisions or reinterpretations of existing statutes or regulations may impose additional costs or lengthen review times or make it more difficult to obtain clearance, approval, or De Novo classification for, or to manufacture, market or distribute our DeepView System. We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business. Such changes could, among other things, require: additional testing prior to obtaining clearance, approval, or De Novo classification; changes to manufacturing methods; recall, replacement or discontinuance of our products; or additional record keeping.

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The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or delay regulatory clearance, approval, or De Novo classification of our DeepView System. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing clearance, approval, or De Novo classification that we may have obtained and we may not achieve or sustain profitability.

In addition, the landscape concerning medical devices in the EU has evolved in recent years. On May 25, 2017, the EU Medical Devices Regulation entered into force, which repeals and replaces the EU Medical Devices Directive and the Active Implantable Medical Devices Directive. The Medical Devices Regulation, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the EU for medical devices and ensure a high level of safety and health while supporting innovation.

The EU Medical Devices Regulation entered into application on May 26, 2021. The new regulation among other things:

•        strengthens the rules on placing devices on the market (e.g., reclassification of certain devices and wider scope than the EU Medical Devices Directive) and reinforces surveillance once they are available;

•        establishes explicit provisions on manufacturers’ responsibilities for the follow up of the quality, performance and safety of devices placed on the market;

•        imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation;

•        improves the traceability of medical devices throughout the supply chain to the end user or patient through the introduction of a unique device identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk;

•        sets up a central database (Eudamed) to provide the European Commission, competent authorities, economic operators, notified bodies, sponsors, patients, healthcare professionals and the public with comprehensive information on products available in the EU; and

•        strengthens the rules for the assessment of certain high risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.

These modifications may have an effect on the way we develop our business in the EU and EEA. For example, as a result of the transition towards the new regime, notified body review times have lengthened, and product introductions could be delayed or canceled, which could adversely affect our ability to grow our business.

In the United Kingdom (“UK”), post-Brexit, medical devices are regulated under the Medical Devices Regulations 2002 (“MDR 2002”), which implement the three EU Medical Devices Directives into UK law. The UK decided it would not give effect to the EU Medical Devices Regulation. Instead, the UK government and the Medical Devices and Healthcare Regulatory Authority (“MHRA”) are currently considering amending the UK MDR. This new regulatory framework for medical devices in the UK is expected to become applicable as from July 2024. It is not clear to what extent the future UK regulatory framework will align with the EU Medical Devices Regulation, which may lead to duplicative or divergent requirements.

Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products or limit our ability to sell to clinicians. It is impossible to predict whether legislative changes will be enacted or if regulations, guidance or interpretations will change and what the impact of such changes, if any, may be.

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Disruptions at the FDA and foreign regulatory agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.

The ability of the FDA, foreign regulatory agencies and the notified body, to review and clear, approve, certify, or grant De Novo classifications for new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees and statutory, regulatory and policy changes. Average review times at these organizations have fluctuated in recent years as a result. In addition, government funding of other government agencies that oversee clearances and approvals and that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at these agencies and bodies may slow the time necessary for new devices to be reviewed and/or cleared, approved or certified, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Separately, in response to the global COVID-19 pandemic, in March 2020, the FDA temporarily postponed all domestic and foreign routine surveillance facility inspections. Subsequently, in July 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system and in May 2021, the FDA issued a new report outlining the agency’s plan to move toward a more consistent state of inspectional capacity and priorities for domestic and foreign inspections that were not performed during the pandemic. In July 2021, the FDA stated that it had largely returned to standard operations for domestic inspections; however, the agency’s foreign inspectional activities were still hampered by the pandemic. In January 2022, the FDA again put certain inspectional activities on hold because of the spread of the Omicron variant of COVID-19. In February of the same year, the FDA announced that it had resumed domestic inspection activities and certain foreign inspections. However, it is possible that new variants or a new public health emergency will emerge in the future, further interrupting and affecting the agency’s ability to carry out inspections in a timely manner. In such cases, regulatory authorities and certification bodies outside the United States may adopt similar restrictions, inspection priorities, or other policy measures in response to the COVID-19 or any other public health emergency or revert to relying on remote interactive evaluations, record requests or information from trusted regulatory partners if on-site inspections are not feasible.

In addition, the FDA reallocated its personnel and resources during the COVID-19 pandemic, including for reviewing applications for emergency use authorizations for certain medical devices that may be helpful in responding to the pandemic. If a prolonged government shutdown occurs in the future, or if future global health concerns prevent the FDA, and other foreign regulatory authorities and certification bodies from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA, and other regulatory authorities and certification bodies to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

For instance in the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. While several notified bodies have been designated, the COVID-19 pandemic significantly slowed down their designation process and the current designated notified bodies are facing a large amount of requests with the new regulation, resulting in longer notified body review times. This situation could impact our ability to grow our business in the EU and EEA.

The ongoing labor shortage may limit our ability or the investigators’ ability to find and retain medical staff that are needed to conduct the clinical studies

The COVID-19 pandemic has caused and, there still remains an ongoing shortage of labor force, including nurses, doctors, clinicians, and other medical personnel despite the changing economic and financial conditions. This shortage is causing medical institutions and other establishments to change their operations to accommodate the shortage, and in many cases, it results in increased personnel costs in finding and retaining the staff necessary to conduct the institutions’ and establishments’ operations. If the ongoing shortage continues or becomes worse, our ability to conduct clinical trials may be negatively affected, and we may need to modify or stop clinical trials, or expend greater resources in identifying and retaining the appropriate personnel necessary for the clinical investigations.

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Risks Related to Ongoing Government Regulation

Even if we receive regulatory clearance or approval, or even if the FDA grants our De Novo classification request, we will continue to be subject to extensive ongoing regulation. If we fail to maintain necessary clearances, approvals, classifications, or certifications from the FDA, other applicable foreign regulatory authorities and notified bodies; or if there are state, federal or international level regulatory changes, our commercial operations could be harmed.

If the FDA clears, approves, or grants the De Novo classification for our DeepView technology, it will be subject to extensive ongoing regulation in the United States by the FDA and by corresponding state regulatory agencies and authorities. It will also be subject to extensive regulation by EU institutions as well as EU member states’ regulatory authorities and notified bodies and the regulatory bodies of any other countries in which we receive the necessary regulatory approvals. These regulations pertain to the design, development, evaluation, manufacturing, testing, labeling, marketing, sale, advertising, promotion, distribution, shipping and servicing of products. These entities regulate and oversee record-keeping procedures, safety alerts, recalls, market withdrawals, removals and field corrective actions, post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to reoccur, could lead to death or serious injury, and product import and export.

The regulations to which we will be subject are complex and have become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. Such regulations, and interpretations thereof, may limit our ability to market or prevent us from marketing our products. Further, the FDA, foreign regulatory agencies and U.S. state agencies have broad enforcement powers, and our failure to comply with state, federal and international regulations could lead to enforcement actions such as warning letters or untitled letters; the imposition of injunctions, suspensions or loss of regulatory clearance or approvals; product recalls; safety alerts; termination of distribution; product seizures; consent decrees; civil penalties; or import detentions, import refusals, or import alerts. In the most extreme cases, criminal sanctions, administrative sanctions (e.g., seizure), injunctions, or closure of our manufacturing facilities are possible.

Even after clearance, approval, or De Novo classification, under the FDCA and FDA regulations, the scope of marketing claims we can make about cleared or approved devices, or devices that were granted De Novo classification is limited to the indications that were previously reviewed and permitted by the FDA. Other countries also have similar laws and regulations restricting marketing to such indications. If a regulatory agency determines that any of our marketing claims exceed the scope of permitted indications in a particular country, we may be subject to enforcement action and/or we may be required to cease making the challenged marketing claims, issue corrective communications, pay fines or stop selling products until the incorrect claims have been corrected.

Sales of our DeepView System outside the United States, if approved, will be subject to foreign regulatory requirements that vary widely from country to country, and such regulatory requirements have been changing and increasing in some countries. Complying with international regulatory requirements can be an expensive and time-consuming process. We may be unable to obtain or maintain regulatory clearances, approvals, De Novo classifications, or certifications in these countries. We may incur significant costs in attempting to obtain, renew, or modify foreign regulatory clearances or approvals, De Novo classifications, or certifications. If we experience difficulties in receiving, maintaining, renewing or modifying necessary clearances, approvals, De Novo classifications, or certifications to market our products outside the United States, or if we fail to receive, renew, modify or maintain those clearances, approvals, De Novo classifications, or certifications, we may be unable to market our products or enhancements in certain international markets effectively, or at all.

Modifications to our DeepView GEN 3 System may require new clearances, approvals, De Novo classifications, certifications, or new or amended certifications, and may require us to cease marketing or to recall the modified device until clearances, approvals, De Novo classifications, or the relevant certifications are obtained.

We have obtained 510(k) clearances for the previous versions of our DeepView System (DeepView GEN1 and GEN2), although we have not commercially marketed the devices. In the United States, any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, design, or manufacture, requires a new 510(k) clearance, or depending on the type and extent of the modification, a De Novo classification or a PMA. If we wish to market modified versions of DeepView System, we will need to make this determination before doing so and document our conclusion regarding the necessity of further regulatory review. The FDA may review such determinations and may not agree with our decisions regarding

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whether new 510(k), PMA, or De Novo classifications are necessary. If we are found to be marketing our products for off-label uses or indications for use that have not received the requisite clearances, approvals, De Novo classifications, or certifications, we might become subject to FDA and other competent authorities’ enforcement action or have other resulting liability. In addition, if the FDA or the competent authorities in the EU member states and EEA countries determine that our promotional materials or training constitute promotion of a use which is unapproved, not cleared, not covered by the De Novo classification order, not covered by a CE mark, or not in compliance with other regulatory authorities’ requirements, they could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, an injunction, product seizures, consent decrees, civil fines, criminal penalties, import detention, import refusals, or import alerts.

If our DeepView System is found to cause or contribute to adverse medical events, this could interrupt, delay, or prevent its continued development, or negatively affect the clearance, approval, De Novo classification, or certification. We may be required to report them to the FDA or comparable regulatory authority, and if we fail to do so, we could be subject to sanctions that could harm our reputation, business, financial condition and results of operations, and become subject to further administrative and regulatory enforcement actions. The discovery of serious safety issues with our DeepView System, or a recall of our device either voluntarily or at the direction of the FDA or another governmental authority, could have a negative impact on us.

If our DeepView System is approved for commercialization, we will be subject to the FDA’s medical device reporting regulations and similar foreign regulations, which require us to report to the FDA or comparable regulatory authorities when we receive or become aware of information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury. For investigational devices in clinical evaluation, investigators are required to submit a report of an unanticipated adverse device effect (“UADE”) to the sponsor within 10 working days after becoming aware of the UADE. We, as the sponsor, must evaluate the UADE and report the result of the investigation to FDA, institutional review boards, and all participating investigators within 10 working days of receiving the notice of the UADE. In certain cases, we may be required to terminate the clinical investigation. The timing of our obligation to report is triggered by the date when we receive the notice or when we otherwise become aware of the event, as well as the nature of the event. We may fail to report within the prescribed timeframe events of which we become aware. The investigator in the clinical evaluation may not be aware of the reporting or notification requirements or may otherwise fail to report a UADE. We may also fail to recognize that a reportable event has occurred, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of the product. If we fail to comply with our reporting obligations, the FDA or comparable regulatory authorities could act, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, delay or termination of clinical investigations, revocation of our marketing authorizations, seizure of our products or delay in obtaining marketing authorizations or certifications for our product candidates.

The FDA and in certain cases, equivalent foreign regulatory bodies, have the authority to require the recall of products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health. The FDA’s authority to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death. We may also choose to voluntarily recall a product if we determine that such reasonable probability exists, or otherwise, if any material deficiency is found. Such recalls, whether government-mandated or voluntary, could occur as a result of an unacceptable risk to health, component failures, malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects, or other deficiencies or failures to comply with applicable regulations. In addition, for investigational devices in development, non-compliance with the above or related requirements may have a negative effect on our application process, and the FDA or other foreign regulatory bodies may delay or refuse to clear, approve, issue the De Novo classification request, or issue a certification for our device.

Depending on the corrective action we take to redress a product’s deficiencies or defects, the FDA or foreign regulatory authorities or bodies may require, or we may decide, that we need to obtain new clearances, approvals, De Novo classifications, or certifications for the device before we may market or distribute the corrected device. Seeking such clearances, approvals, De Novo classifications, or certifications may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including FDA or foreign regulatory bodies’ warning letters, product seizures, injunctions, administrative penalties or civil or criminal fines.

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Quality problems and product liability claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect on our business, results of operations, financial condition, and cash flows.

Quality is extremely important to us and our customers due to the impact on patients, and the serious and potentially costly consequences of product failure. Our business exposes us to potential product liability risks that are inherent in the design, manufacture, and marketing of medical devices. Once commercialized, many of our products will be used in settings with seriously ill patients where the devices’ failure may cause serious adverse effects on the patients. Component failures, manufacturing non-conformances, design defects, off-label or unapproved use, insufficient training of healthcare professionals, or inadequate disclosure of product-related risks or product-related information with respect to our products, if they were to occur, could result in an unsafe condition or injury to a patient. These problems could lead to recall of, or issuance of a safety alert relating to, our products, and could result in product liability claims and lawsuits, including class actions. If such problems occur during clinical investigations, FDA or other foreign regulatory agencies may refuse to clear, approve, grant a De Novo classification request, or issue certifications for our products. In addition, negative publicity resulting from such problems may negatively affect or seriously hinder the sales of our products even after clearance, approval, De Novo classification, or certification. Any of the foregoing problems, including future product liability claims or recalls, regardless of their ultimate outcome, could harm our reputation and have a material adverse effect on our business, results of operations, financial condition and cash flows.

The FDA and other regulatory enforcement agencies actively enforce the laws and regulations prohibiting the promotion of off-label or unapproved uses. If we are found to have improperly promoted off-label or unapproved uses, we may become subject to significant liability.

We have obtained 510(k) clearances for the previous versions of our DeepView System (DeepView Gen1 and GEN2), although we have not commercially marketed the devices. If we decide to market any of our products, our marketing practices must stay within the scope of the permitted claims under the 510(k) clearances, or other clearance, approval, or De Novo classification order that we may receive in the future. The FDA and other regulatory enforcement agencies strictly regulate the promotional claims that may be made about medical devices. Devices authorized for marketing pursuant to a 510(k) clearance cannot be marketed for any intended use beyond the cleared indications. While we cannot restrict or dictate the healthcare professionals’ use of our devices, we cannot market for any off-label uses, or any uses that FDA has not reviewed and permitted. The use of the DeepView System for indications other than those for which FDA cleared, approved, or granted De Novo classification requests, or otherwise were certified by a notified body or foreign regulatory enforcement authority, may not effectively diagnose conditions not referenced in product indications, which could harm our reputation in the marketplace among clinicians. If we are found to have promoted such off-label uses or unapproved uses, we may become subject to significant government fines and other related liability. For example, if the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine, or criminal penalties, among others. It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion or promotion of unapproved uses. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

In addition, clinicians may misuse our products or use improper techniques if they are not adequately trained, potentially leading to misdiagnosis, injury, and an increased risk of product liability. If our device is misused or used with improper technique, we may become subject to costly litigation by clinicians or their patients. Even if we ultimately prevail, product liability claims could divert management’s attention from our core business and be expensive to defend. If we do not prevail, such claims may result in sizeable damages awards against us that may not be covered by insurance.

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We must comply with anti-kickback, fraud and abuse, false claims, transparency, and other healthcare laws and regulations.

If our DeepView System is approved for commercialization, our future operations will be subject to various federal and state healthcare laws and regulations. These laws will affect our sales, marketing and other promotional activities by limiting the kinds of financial arrangements, including sales programs, we may develop with hospitals, clinicians or other potential purchasers or users of medical devices and services. They also impose additional administrative and compliance burdens on us. In particular, these laws will influence, among other things, how we structure our sales, placement and rental offerings, including discount practices, clinician support, education and training programs and clinician consulting and other service arrangements. The laws that may affect our practices and arrangements include, but are not limited to:

•        the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, lease, order, or arranging for or recommending the purchase, lease or order of, any good or service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid. The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the Anti-Kickback Statute without proving that a person or entity had actual knowledge of, or a specific intent to violate, the law. The Anti-Kickback Statute is subject to evolving interpretations and has been applied by government enforcement officials to a number of common business arrangements in the medical device industry. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution; however, those exceptions and safe harbors are drawn narrowly, and there is no exception or safe harbor for many common business activities. Failure to meet all of the requirements of a particular statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute, but the legality of the arrangement will be evaluated on a case-by-case basis based on the totality of the facts and circumstances. Practices that involve remuneration to those who prescribe, purchase, or recommend medical device products, including discounts, or engaging individuals as speakers, consultants, or advisors, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability;

•        the U.S. federal civil False Claims Act, which prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds; knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government. In addition, any claims submitted as a result of a violation of the federal Anti-Kickback Statute constitute false claims and are subject to enforcement under the False Claims Act. Actions under the False Claims Act may be brought by the government or as a qui tam action by a private individual in the name of the government and to share in any monetary recovery. Qui tam actions are filed under seal and impose a mandatory duty on the U.S. Department of Justice to investigate such allegations. False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and significant mandatory penalties (adjusted annually for inflation) per false claim or statement for violations. Because of the potential for large monetary exposure, healthcare companies often resolve allegations without admissions of liability for significant and sometimes large settlement amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings. Many device manufacturers have resolved investigations of alleged improper activities, including causing false claims to be submitted as a result of the marketing of their products for unapproved and thus non reimbursable uses, and other interactions with prescribers and others including those that may have affected their billing or coding practices and submission to the federal government. Moreover, to avoid the risk of exclusion from federal healthcare programs as a result of a False Claims Act settlement, companies may enter into corporate integrity agreements with the government, which may impose substantial costs on companies to ensure compliance. There are also criminal penalties, including imprisonment and criminal fines, for making or presenting a false or fictitious or fraudulent claim or statement to the federal government;

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•        criminal healthcare statutes that were added by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, which impose criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate them in order to have committed a violation;

•        the Eliminating Kickbacks in Recovery Act (“EKRA”), 18 U.S.C. § 220, makes it a federal crime for anyone, with respect to services covered by a health care benefit program, to knowingly and willfully solicit or receive any remuneration in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory; or to pay or offer any remuneration to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory. EKRA applies more broadly than the federal Anti-Kickback Statute, as “health care benefit program” includes not only state and federal health care programs, but also private health plans. EKRA also has fewer statutory safe harbors and no regulatory state harbors. Violations of this provision may result in substantial fines and/or imprisonment. Additional violations that may be imposed include sanctions, licensure revocations, or the exclusion from participating in governmental healthcare programs;

•        the Physician Payments Sunshine Act (the “Sunshine Act”) and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Beginning January 1, 2022, manufacturers will also be required to report payments and other transfers of value made during the prior calendar year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and anesthesiology assistants; and

•        foreign and state laws and regulations, including state payment reporting, anti-kickback and false claims laws, that may apply to items or services reimbursed by any third-party payor, including private insurers; foreign and state laws that require medical device companies to comply with the medical device industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government and other national governments, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and foreign and state laws and regulations that require drug and device manufacturers to report information related to payments and other transfers of value to dental practitioners and other healthcare providers or marketing expenditures, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The scope and enforcement of these laws is substantial and subject to rapid change. The shifting compliance environment and the need to build and maintain robust compliance programs, systems, and processes to comply with different compliance and/or reporting requirements in multiple jurisdictions increase the possibility that we may run afoul of one or more of the requirements or that federal or state regulatory authorities might challenge our current or future activities under these laws. Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive. Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions or safe harbors, it is possible that some of our future activities could be subject to challenge under one or more of such laws. Any government investigation, even if we are able to successfully defend against it, will require the expenditure of significant resources, is likely to generate negative publicity, harm our reputation and potentially our financial condition and divert the attention of our management. Moreover, any investigation into our practices could cause adverse publicity and require a costly and time-consuming response. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment of individuals, exclusion from government funded healthcare programs, such as Medicare and Medicaid, imposition of compliance obligations and monitoring, and the curtailment or restructuring of our operations. Any of the foregoing consequences could seriously harm our business and our financial results.

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Healthcare reform measures could hinder or prevent the commercial success of our DeepView System.

In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system in ways that may harm our future revenues and profitability and the demand for our DeepView System, if it receives the necessary regulatory clearance, approval, or De Novo classification for commercialization. Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services. Current and future legislative and regulatory proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for the procedures associated with the use of our DeepView System. The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our DeepView System.

By way of example, in the United States, the Affordable Care Act (“ACA”) was enacted in March 2010 and substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacts our industry. The ACA contained a number of provisions, including those governing enrollment in federal healthcare programs, reimbursement changes and fraud and abuse measures, all of which have impacted existing government healthcare programs and will result in the development of new programs. Since its enactment, there have been numerous amendments to the ACA and revisions to implementing regulations, along with judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the Supreme Court ruled that states and individuals lacked standing to challenge the constitutionality of the ACA’s individual mandate, post-repeal of its associated tax penalty. Additionally, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began on February 15, 2021 and ended August 15, 2021. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. Under Republican leadership, the House of Representatives has yet to release its budget proposals for 2023. Nevertheless, virtually every Republican budget or fiscal plan over the last decade has included a repeal of the ACA and deep cuts to Medicaid. Additional legislative changes, regulatory changes and judicial challenges related to the ACA remain likely. We cannot predict what effect further changes related to the ACA, including under the Republican congress or Biden administration, will have on our business.

The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may harm:

•        our ability to set a price that we believe is fair for our DeepView System;

•        our ability to generate revenue and achieve or maintain profitability; and

•        the availability of capital.

We cannot predict what other laws and regulations will ultimately be enacted and implemented at the federal or state level or the effect of any future legislation or regulation in the United States on our business, financial condition, prospects and results of operations. Future changes in healthcare policy could increase our costs and subject us to additional requirements that may interrupt commercialization of our current and future solutions, decrease our revenue and impact sales of and pricing for our current and future products.

If our manufacturers fail to comply with the regulatory quality system regulations or any applicable equivalent regulations, our proposed operations could be interrupted, and our operating results would suffer.

We currently outsource all of our manufacturing through an original equipment manufacturer and as such we are not in direct control of the manufacture of our products and are, therefore, exposed to the risk of poor product quality, non-adherence to applicable standards, disruptions in supply chain, or other matters.

Our third-party manufacturers and suppliers will be required, to the extent of applicable regulation, to follow the quality system regulations of each jurisdiction in which we will seek to market our products and also will be subject to the regulations of these jurisdictions regarding the manufacturing processes. If our manufacturers or suppliers are found to be in significant non-compliance or fail to take satisfactory corrective action in response to adverse

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regulatory findings in this regard, regulatory agencies could take enforcement actions against such manufacturers or suppliers, which could impair or prevent our ability to produce our products in a cost-effective and timely manner in order to meet customers’ demands. Accordingly, our operating results would suffer.

In order to mitigate these risks, we perform regularly scheduled visits with our contract manufacturer and routinely inspect the quality and performance of the device in accordance with federally mandated standards and certification standards of the International Organization for Standardization (“ISO”). Our current contract manufacturer, Cobalt Product Solutions is located within a short driving distance from our headquarters and allows our employees to have hands-on interaction and timely inspections of the device. However, a future pandemic, epidemic or other infectious disease outbreak could hinder or prevent continued hands-on and timely inspections of the device and the facilities.

Actual or perceived failure to comply with data protection, privacy and security laws, regulations, standards and other requirements could negatively affect our business, financial condition or results of operations.

We may be subject to federal, state, and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy laws, and consumer protection laws and regulations that govern the collection, processing, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and the regulations implemented thereunder, or collectively, HIPAA, imposes obligations on “covered entities,” including certain health care providers, health plans, and health care clearinghouses, and their respective “business associates” that create, receive, maintain or transmit individually identifiable health information (“PHI”) for or on behalf of a covered entity, as well as their covered subcontractors with respect to safeguarding the privacy, security and transmission of individually identifiable health information. Entities that are found to be in violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about privacy practices, or an audit by HHS may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Depending on the facts and circumstances, we could be subject to penalties if we violate HIPAA.

Even when HIPAA does not apply, according to the Federal Trade Commission (the “FTC”), failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards.

In addition, certain state laws govern the privacy and security of health-related and other personal information in certain circumstances, some of which may be more stringent, broader in scope or offer greater individual rights with respect to protected health information than HIPAA, many of which may differ from each other, thus, complicating compliance efforts. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. For example, California enacted the California Consumer Privacy Act (the “CCPA”), which creates individual privacy rights for California consumers (as defined in the law), including the right to opt out of certain disclosures of their information, and places increased privacy and security obligations on entities handling certain personal data of consumers or households and may apply to us in the future. The CCPA also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Further, the California Privacy Rights Act (the “CPRA”), recently passed in California. The CPRA will impose additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions went into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. Enforcement of CPRA is scheduled to begin on July 1, 2023. The CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the United States, as other states or the federal government follow California’s lead and increase protections for U.S. residents. For example, on March 2,

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2021, the Virginia Consumer Data Protection Act, which took effect on January 1, 2023, was signed into law. Privacy initiatives have also been signed into law in Colorado (the Colorado Privacy Act, effective July 1, 2023), Connecticut (the Connecticut Personal Data Privacy and Online Monitoring Act, effective July 1, 2023), and Utah (the Utah Consumer Privacy Act, effective December 31, 2023).

Foreign data protection laws, including the General Data Protection Regulation (the “GDPR”), which went into effect in May 2018, may also apply to our processing of health-related and other personal data regardless of where the processing in question is carried out. The GDPR imposes stringent requirements for controllers and processors of personal data of individuals within the European Economic Area (the “EEA”). The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect, process, and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior. The GDPR, together with national legislation, regulations and guidelines of the EEA countries governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials and adverse event reporting. In particular, these obligations and restrictions involve the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EEA to jurisdictions deemed to have inadequate, security breach notifications and confidentiality of the personal data and imposition of substantial potential fines for breaches of the data protection obligations. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain. For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the EU (the “CJEU”). While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place, however, the nature of these additional measures is currently uncertain. The CJEU went on to state that if a competent supervisory authority believes that the standard contractual clauses cannot be complied with in the destination country and the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer. The European Commission has published revised standard contractual clauses for data transfers from the EEA: the revised clauses must be used for relevant new data transfers from September 27, 2021; existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022. If necessary, we will be required to implement the revised standard contractual clauses, in relation to relevant existing contracts and certain additional contracts and arrangements, within the relevant time frames. There is some uncertainty around whether the revised clauses can be used for all types of data transfers, particularly whether they can be relied on for data transfers to non-EEA entities subject to the GDPR.

Further, from January 1, 2021, companies have to comply with the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law. The UK GDPR mirrors the fines under the GDPR (e.g., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover). The European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from EU member states to the United Kingdom without additional safeguards. However, the United Kingdom adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews/extends that decision, and remains under review by the Commission during this period. The relationship between the UK and the European Union in relation to certain aspects of data protection law remains unclear, and it is unclear how UK data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the UK will be regulated in the long term. These changes will lead to additional costs and increase our overall risk exposure.

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Implementing mechanisms that endeavor to ensure compliance with the GDPR and relevant local legislation in EEA countries and the UK, if necessary, may be onerous and may interrupt or delay our development activities, and adversely affect our business, financial condition, prospects and results of operations. While we have taken steps to comply with the GDPR where applicable, including by reviewing our security procedures, and entering into data processing agreements with relevant contractors, our efforts to achieve and remain in compliance may not be fully successful.

Compliance with applicable US and foreign data protection, privacy and security laws, regulations and standards could require us to take on more onerous obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our or our partners’ or suppliers’ ability to operate in certain jurisdictions. Each of these constantly evolving laws can also be subject to varying interpretations. Any failure or perceived failure to comply could result in government investigations and enforcement actions (which could include civil or criminal penalties), fines, private litigation, and/or adverse publicity, and could negatively affect our operating results and business. Moreover, patients about whom we or our partners obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

Our employees, collaborators, independent contractors and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk that our employees, collaborators, independent contractors and consultants may engage in fraudulent or other illegal activity with respect to our business. Misconduct by these persons could include intentional, reckless and/or negligent conduct or unauthorized activity that violates:

•        FDA requirements, including those laws requiring the reporting of true, complete and accurate information to the FDA authorities, such as reporting of UADEs during clinical investigations;

•        GCP that relate to clinical investigations, including financial disclosure, informed consent and protection of human subjects, and requirements that relate to investigational device exemptions;

•        manufacturing standards, such as FDA’s Quality System Regulation (“QSR”) requirements;

•        federal and state healthcare fraud and abuse laws and regulations; or

•        laws that require the true, complete and accurate reporting of financial information or data.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a newly incorporatedwide range of pricing, discounting, marketing and promotion, sales commission, incentive programs and other business arrangements. Misconduct by these parties could also involve individually identifiable information, including, without limitation, the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Any incidents or any other conduct that leads to an employee, contractor, or other agent, or our company, receiving an FDA debarment or exclusion by OIG could result in penalties, a loss of business from third parties, and severe reputational harm.

It is not always possible to identify and deter misconduct by our employees and other agents, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties; treble damages; monetary fines; disgorgement; imprisonment; possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs; contractual damages; reputational harm; diminished profits and future earnings; additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws; and curtailment of our operations.

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As the regulatory framework for AI technology evolves, our business, financial condition and results of operation may be adversely affected.

We utilize artificial intelligence, including machine learning, in our analytics platforms. In recent years, the use of AI has come under increased regulatory scrutiny. The regulatory framework for AI technology is evolving and remains uncertain. It is possible that new laws and regulations will be adopted in the United States and in non-U.S. jurisdictions, where we intend to do business subject to our receipt of the necessary regulatory approvals, or that existing laws and regulations may be interpreted in new ways that would affect our operations and the ways in which we may use our AI technology. Specifically, such laws and regulations may limit our ability to use our AID models or require us to make changes to our technology that may decrease our operational efficiency, result in an increase to operating costs, or hinder our ability to provide our services. Further, the cost to comply with such laws, rules or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operation.

Any failure or perceived failure by us to comply with AI technology-related laws, rules and regulations could result in proceedings or actions against us by individuals, consumer rights groups, government agencies or others. We could incur significant costs in investigating and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our technology and business. Further, any such proceedings and any subsequent adverse outcomes may subject us to significant negative publicity. If any of these events were to occur, our business, results of operations and financial condition could be materially adversely affected.

We must comply with environmental and occupational safety laws.

Our research and development programs as well as our manufacturing operations involve the controlled use of hazardous materials. Accordingly, we are subject to federal, state and local laws, as well as the laws of foreign countries, governing the use, handling and disposal of these materials. In the event of an accident or failure to comply with environmental or occupational safety laws, we could be held liable for resulting damages, and any such liability could exceed our insurance coverage.

Risks Related to the Commercialization of our DeepView System

If approved, the commercial success of our DeepView System will depend upon the degree of market acceptance by clinicians.

Even if we receive the necessary regulatory approvals for commercialization, there is a risk that our DeepView System will not be accepted over competing products and that we will be unable to enter the marketplace or compete effectively. If the market for our DeepView System fails to develop or develops more slowly than expected, our business and operating results would be materially and adversely affected.

We believe that our DeepView System will allow clinicians to make more accurate and faster treatment decisions in the wound care sector. Whether clinicians choose to use our device over other market alternatives, however, is likely to be based on a determination that, among other things, our system is effective, safe, cost-effective and represents an acceptable method of diagnosis. Even if we can prove the effectiveness of our DeepView System through clinical trials, there may not be broad adoption and use of our device and clinicians may elect not to use our DeepView System for any number of reasons, including:

•        lack of experience with our DeepView System and concerns that we are new to market;

•        perceived liability risk generally associated with the use of our device;

•        lack or perceived lack of (i) sufficient clinical evidence regarding our claims of superior diagnostic assessment and (ii) long-term data, supporting clinical benefits or the cost-effectiveness of our device over existing diagnostic alternatives;

•        the failure of key opinion leaders to provide recommendations regarding our device, or to assure clinicians and healthcare payors of the benefits of our device as an attractive alternative to other diagnostic options;

•        long-standing relationships with companies and distributors that sell other diagnostic products for wound care assessment;

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•        concerns over the capital investment required to purchase our DeepView System and perform the DeepView procedure;

•        lack of availability of adequate third-party payor coverage or reimbursement;

•        competitive response and negative selling efforts from providers of alternative technologies;

•        failure to obtain favorable coverage decisions from payors, including, but not limited to, Medicare or Medicaid; and

•        limitations or warnings contained in the labeling cleared or approved by the FDA, if approved, or approved or certified by other authorities or bodies.

We believe that educating notable industry key opinion leaders and clinicians about the merits and benefits of our DeepView System, including safety, performance, ease of use and efficiency will be critical for increasing the adoption of our device. Widespread adoption of new medical device technologies typically follows early adoption and promotion by key opinion and thought leaders in the relevant sectors. We have taken steps to address this by establishing strong relationships with leading U.S. hospitals around the country. Spectral has enrolled subjects in its DFU studies in clinical and academic sites across the US and the EU with approximately 200 subjects (both adult and pediatric) across well-known medical facilities. Spectral has also signed with international partners such as the Royal College of Surgeons in Ireland, a well-respected institution in the field. We believe that we will be able to leverage these relationships to access other institutions and individuals, which should increase awareness and early adoption of our technology in the United States, UK and EU. U.S. adoption will also benefit from the potential future BARDA funding of technology placement for burns applications.

If clinicians do not adopt our DeepView System for any reason, including those listed above, our ability to execute our growth strategy will be impaired, and it will negatively affect our business, financial condition, prospects and results of operations. Even if our DeepView System achieves widespread market acceptance, it may not maintain such level of market acceptance over the long term if competing products or technologies, which are more cost-effective or received more favorably, are introduced. In addition, our limited commercialization experience makes it difficult to evaluate our current business and predict our future prospects. We cannot predict how quickly, if at all, clinicians will accept our DeepView System or, if accepted, how frequently it will be used. Failure to achieve or maintain market acceptance and/or market share could materially and adversely affect our ability to generate revenue and would have a material adverse effect on our business, financial condition and results of operations.

We have no operating historyexperience in marketing and selling our DeepView System and we may provide inadequate training, fail to increase our sales and marketing capabilities, or fail to develop and maintain broad brand awareness in a cost-effective manner.

We have no experience marketing and selling our DeepView System. If our DeepView System is approved for commercialization, we expect to rely on a direct sales force to sell our product in targeted geographic regions and territories. Any failure to grow and maintain our direct sales force could harm our business. The members of our direct sales force will receive extensive training on our DeepView System and will possess technical expertise with respect to our technology. The members of our sales force will be at-will employees. The loss of these personnel to competitors, or otherwise, could materially harm our business. If we are unable to retain our direct sales force personnel or replace them when needed with individuals of comparable expertise and qualifications, or if we are unable to successfully instill such expertise in replacement personnel, our product sales, revenues and youresults of operations could be materially harmed.

Identifying and recruiting qualified sales and marketing professionals and training them on our DeepView System, on applicable federal and state laws and regulations, and on our internal policies and procedures will require significant time, expense and attention. It may take several months or more before a sales representative is fully trained and productive. Our sales force may subject us to higher fixed costs than those of companies with competing products that can utilize independent third parties, placing us at a competitive disadvantage. Our business may be harmed if our efforts to train and grow our sales force do not generate significant product sales and revenue, and our higher fixed costs may slow our ability to reduce costs in the face of a sudden decline in demand for our technology. Any failure to hire, develop and retain talented sales personnel, to achieve desired productivity levels in a reasonable period of time or timely reduce fixed costs, could have no basisa material adverse effect on which to evaluateour business, financial condition and results of operations.

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If our DeepView System is approved for commercialization, our ability to achieve broader market acceptance of our device will depend, to a significant extent, on our sales, marketing and educational efforts. We plan to dedicate significant resources to our sales, marketing and educational programs. Our business may be harmed if these efforts and expenditures do not generate sufficient revenue. In addition, we believe that developing and maintaining broad awareness of our DeepView System in a cost-effective manner is critical to achieving broad acceptance of our device. Promotional and educational activities may not generate clinician awareness or generate sufficient revenue, and even if they do, any revenue generated may not offset the costs and expenses we incur. If we fail to successfully promote our DeepView System in a cost-effective manner, we may fail to attract or retain the market acceptance necessary to realize a sufficient return on our promotional and educational efforts, or to achieve broad adoption of our products.

If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing our DeepView System, if approved.

We do not have any infrastructure currently in place for the sales, marketing or distribution of our DeepView System, or compliance functions related to such activities, and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. To market and successfully commercialize our DeepView System, if approved, we must build our sales, distribution, marketing, managerial, compliance, and other non-technical capabilities or make arrangements with third parties to perform these services. We expect to build a focused sales, distribution and marketing infrastructure to market the DeepView System, if approved. There are significant expenses and risks involved with establishing our own sales, marketing and distribution capabilities. Any failure or delay in the development of our internal sales, marketing, distribution and compliance capabilities could delay any product launch, which would adversely impact the commercialization of our product

If third-party payors do not provide coverage and reimbursement for the use of our DeepView System, our business objective.and prospects will be negatively impacted.

If we receive the necessary regulatory approval to commercialize our DeepView System, sales of our DeepView System will depend, in part, on the extent to which the use of our device is covered and reimbursed by third-party payors, including private insurers and government healthcare programs such as Medicare Advantage plans and plans purchased through the ACA marketplace. Where third-party payor coverage is not available, patients will be responsible for all of the costs associated with the use of our device. Even if a third-party payor covers a particular use of our device, the resulting reimbursement rate may not be adequate to cover a provider’s cost to purchase our product or ensure such purchase is profitable for the provider.

Third-party payors, whether governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In addition, in certain countries, no uniform policy of coverage and reimbursement for medical device products and services exists among third-party payors. Therefore, coverage and reimbursement for medical device products and services can differ significantly from payor to payor. In addition, payors continually review new technologies for possible coverage and can, without notice, deny coverage for these new products and procedures. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our device to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained, or maintained if obtained.

Further, future coverage and reimbursement may be subject to increased restrictions, such as additional prior authorization requirements, both in the United States and in relevant international markets in which we plan to operate, assuming we receive the necessary approvals. Third-party coverage and reimbursement for procedures using our DeepView System may not be available or adequate in either the United States or international markets. If demand for our DeepView System is adversely affected by changes in third-party reimbursement policies and decisions, it could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to achieve or maintain satisfactory pricing and margins for our DeepView technology.

Manufacturers of medical devices have a history of price competition, and we can give no assurance that we will be able to achieve satisfactory prices for our DeepView System, if it is approved for commercialization. We will be subject to a number of factors on our ability to maintain satisfactory pricing and margins, including, but not limited to, payor reimbursement, sale pricing of our DeepView System, wide-spread adoption of the DeepView System at hospitals, clinics and burn centers, as well as production cost increases from third party suppliers and our contract

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manufacturers. For example, any decline in the amount that payors reimburse clinicians for our DeepView System could make it difficult for them to continue using, or to adopt, our device and could create additional pricing pressure for us. If we are forced to lower the price we charge for our DeepView System, our revenue and gross margins will decrease, which will adversely affect our ability to invest in and grow our business. If we are unable to maintain our sales or our prices, including during any international expansion, or if our costs increase and we are unable to offset such increase with an increase in our prices, our margins could erode. We will be subject to significant pricing pressure, which could negatively affect our business, financial condition and results of operations.

We will face competition from many sources, including larger companies, and we may be unable to compete successfully.

We operate in a highly competitive industry that is significantly affected by the introduction of new products and technologies and other activities of industry participants. Our DeepView System will compete directly against conventional methods of wound care assessment. We will compete with manufacturers and suppliers of devices, instruments and other supplies used in connection with such conventional diagnoses. The market for these devices and instruments is highly fragmented with primary supply chains concentrated across a few larger manufacturers and distributors, such as Cobalt Product Solutions, Sanmina Corporation and Plexus Manufacturing.

Many of our competitors have longer, more established operating histories, and significantly greater name recognition and financial, technical, marketing, sales, distribution and other resources, which may prevent us from achieving significant market penetration. These companies may enjoy several other competitive advantages, including established relationships with clinicians who are familiar with other alternatives for wound care assessment, additional lines of products, and the ability to offer rebates or bundle products to offer greater discounts or incentives to gain a competitive advantage and established sales, marketing and worldwide distribution networks.

We believe the primary competitive factors for companies that market new or alternative treatments and solutions in the wound care industry include acceptance by leading clinicians, patient outcomes and adverse event rates, patient experience and treatment time, ease-of-use and reliability, patient recovery time and level of discomfort, economic benefits and cost savings, intellectual property protection and the development of successful sales and marketing channels. One of the major hurdles to widespread adoption of our device will be overcoming established diagnostic patterns, which will require education of clinicians and their referral sources.

We may also compete with additional competitors and products outside the United States as well. Among other competitive advantages, such companies may have more established sales and marketing programs and networks, established relationships with clinicians and greater name recognition in such markets.

In addition, our current and potential competitors have established, or may establish, financial and strategic relationships among themselves or with existing or potential customers or other third parties to increase the ability of their products to address customer needs. Accordingly, it is possible that new competitors or alliances among competitors could emerge and acquire significant market share. Existing and/or increased competition could, therefore, adversely affect our market share and/or force us to reduce the price of our products, which could have an adverse impact on our business, prospects, results of operations and financial condition.

If we are unable to continue to innovate and improve our products and services, we could lose market share.

The markets for our products and services are characterized by changing technology and customer requirements. Changing customer requirements and the introduction of products or services or enhancements embodying new technology may render our existing DeepView System obsolete, unmarketable or competitively impaired and may exert downward pressures on the pricing of our device. One of our key competitive advantages is that we are currently the only AI-enabled wound imaging technology that translates raw physiological data/images into an output that is directly correlated to a wound healing prediction. We intend to continue to invest in technical developments in order to mitigate the impact of future competition.

It is critical to our success to be able to anticipate changes in technology or in industry standards, to successfully develop and introduce new, enhanced and competitive products on a timely basis, and to keep pace with technological change. This may place excessive strain on our capital resources, which may adversely impact our revenues and profitability. We cannot assure you that we will successfully develop new products or services or enhance and improve our existing products or services on a timely basis. Neither can we be certain that new products and enhanced and

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improved existing products will achieve market acceptance or that the introduction of new products or enhancing existing products by others, or changing customer requirements, will not render our products or services obsolete. Our inability to develop products or services that are competitive in technology and price and that meet client needs could have an adverse impact on our business, prospects, results of operations and financial condition.

We will depend upon third-party suppliers, including contract manufacturers and single and sole source suppliers, making us vulnerable to supply shortages and price fluctuations that could negatively affect our business, financial condition and results of operations.

If we receive the necessary regulatory approvals for commercialization, we will rely on third-party suppliers, including in some instances single or sole source suppliers, to provide us with certain components, sub-assemblies and finished products for our DeepView System. These components, sub-assemblies and finished products are critical and, for a small number of items, there are relatively few alternative sources of supply. For example, we primarily work with Cobalt Systems Product Solutions. We do not currently have long-term supply contracts with certain of the sole and single source suppliers of these key components, and there are no minimum purchase or payment requirements. Additionally, we believe we are not a major customer to many of our suppliers. Our suppliers may therefore give other customers’ needs higher priority than ours, and we may not be able to obtain adequate supply in a timely manner or on commercially reasonable terms. These single or sole source suppliers may be unwilling or unable to supply the necessary materials and components or manufacture and assemble our product in a reliable manner and at the levels we anticipate or at levels adequate to satisfy demand for our product. While our suppliers have generally met our demand for their products and services on a timely basis in the past, we cannot guarantee that they will in the future be able to meet our demand for such products and services, either because of acts of nature, the nature of our agreements with those suppliers or our relative importance to them as a customer, and our suppliers may decide in the future to discontinue or reduce the level of business they conduct with us.

We have not been qualified or obtained necessary regulatory clearances for additional suppliers for most of these components, sub-assemblies and materials. While we currently believe that alternative sources of supply may be available, we cannot be certain whether they will be available if and when we need them, or that any alternative suppliers or providers would be able to provide the quantity and quality of components and materials that we would need to manufacture and ship our products if our existing suppliers and providers were unable to satisfy our requirements.

To utilize other sources, we would need to identify and qualify new providers to our quality standards and obtain any additional regulatory clearances or approvals required to change providers, which could result in manufacturing delays and increase our expenses.

Although we believe that we have stable relationships with our existing suppliers, we cannot assure you that we will be able to secure a stable supply of components or materials going forward. In the event that any adverse developments occur with our suppliers, in particular for those components that are single or sole sourced, or if any of our suppliers modifies any of the components they supply to us, our ability to supply our products may be temporarily or permanently interrupted. Obtaining substitute components could be difficult, time and resource-consuming and costly. Also, there can be no assurance that we will be able to secure a supply of alternative components at reasonable prices without experiencing interruptions in our business operations.

Our dependence on third parties subjects us to a number of risks that could impact our ability to manufacture our products and harm our business, including:

•        Past performance by Rosecliff,interruption of supply resulting from modifications to, or anydiscontinuation of, its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates may not be indicative of future performance of an investment in the company.a third party’s operations;

•        Our public stockholders may not be afforded an opportunitydelays in product shipments resulting from uncorrected defects or errors, reliability issues or a third party’s failure to vote onproduce components that consistently meet our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.quality specifications;

•        If we seek stockholder approvalprice fluctuations due to a lack of long-term supply arrangements with our third parties for key components;

��        inability to obtain adequate supply or services in a timely manner or on commercially reasonable terms;

•        difficulty identifying and qualifying alternative third parties for the supply of components of our initial business combination, our initial stockholders, directors and officers have agreed to voteproducts in favor of such initial business combination, regardless of how our public stockholders vote.a timely manner;

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•        Your only opportunityinability of third parties to affectcomply with applicable provisions of the investment decision regarding a potential business combination will be limited toFDA’s QSR or other applicable laws or regulations enforced by the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.FDA, state, local and global regulatory authorities;

•        If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.

•        You will not be entitled to certain protections afforded to investors of some other blank check companies.

•        You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or warrants, potentially at a loss.

•        If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we may depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.

•        Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 outbreak and the status of debt and equity markets.

•        As the number of special purpose acquisition companies increases, there may be more competition to find an attractive target for an initial business combination. This could increase the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our initial business combination.

•        If we have not completed our initial business combination within 24 monthsensure the quality of the closing of this offering or during any Extension Period, our public stockholders may be forced to wait beyond such 24 months before redemption from our trust account.

•        The grant of registration rights to our initial stockholders and their permitted transferees may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

•        The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target and may not allow us to complete the most desirable business combination or optimize our capital structure.

•        We are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm regarding fairness. Consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.

•        We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

•        We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, directors or officers which may raise potential conflicts of interest.

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•        Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

•        Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring stockholder vote, potentially in a manner that you do not support.

•        Our directors and officers will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.

•        Each of our directors and officers are now, and all of them may in the future may become, affiliated with entities engaged in business activities similar to those intended to be conductedproducts manufactured by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

•        Our directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

•        The other risks and uncertainties discussed in “Risk Factors” and elsewhere in this prospectus.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some statements contained in this prospectus are forward-looking in nature. 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 prospectus 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, those factors described under the heading “Risk Factors” and:

•        our being a newly incorporated company with no operating history and no revenues;

•        our ability to select an appropriate target business or businesses;

•        our ability to complete our initial business combination;

•        our expectations around the performance of a prospective target business or businesses;

•        our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

•        our directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

•        our potential ability to obtain additional financing to complete our initial business combination;

•        our pool of prospective target businesses;

•        our ability to consummate an initial business combination due to the uncertainty resulting from the recent COVID-19 pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases);

•        the ability of our directors and officers to generate a number of potential business combination opportunities;

•        our public securities’ potential liquidity and trading;

•        the lack of a market for our securities;

•        the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

•        the trust account being subject to claims of third parties;

•        our financial performance following this offering;shipping and manufacture delays and interruptions caused by the ongoing COVID-19 crisis that we are not able to address, prepare for, or prevent;

•        production delays related to the evaluation and testing of products and services from alternative third parties and corresponding regulatory qualifications;

•        trends towards consolidation within the medical device manufacturing supplier industry; and

•        delays in delivery by our suppliers and service providers.

In addition, quarantines, shelter-in-place and similar government orders resulting from any future pandemic, epidemic or other infectious disease outbreak, or the perception that such orders, shutdowns or other riskrestrictions on the conduct of business operations could occur, could impact the suppliers upon which we rely, or the availability or cost of materials, which could disrupt the supply chain for our products.

Although we require our third-party suppliers and uncertainties discussed in “Risk Factors”providers to supply us with components and elsewhere in this prospectus.

Should one or more of these risks or uncertainties materialize, or should any ofservices that meet 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 underspecifications and other applicable securities laws.

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RISK FACTORS

An investmentlegal and regulatory requirements in our securities involvesagreements and contracts, and we perform incoming inspection, testing or other acceptance activities to ensure the components meet our requirements, there is a high degree of risk. You should consider carefully all of the risks described below, togetherrisk that these third parties will not always act consistent with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial conditionbest interests, and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

Risks Relating to Our Search for, and Consummation of or Inability to Consummate, a Business Combination

Our public stockholders may not be afforded an opportunity to vote onalways supply components or provide services that meet our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable law or stock exchange rules or if we decide to hold a stockholder vote for business or other reasons. For instance, Nasdaq listing rules currently allow us to engage in a tender offer in lieu of a stockholder meeting, but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our issued and outstanding shares, we would seek stockholder approval of such business combination. However, except as required by applicable law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority of the issued and outstanding shares of common stock do not approve of the business combination we consummate. Please see the section entitled “Proposed Business — Completing Our Initial Business Combination — Stockholders may not have the ability to approve our initial business combination” for additional information.

If we seek stockholder approval of our initial business combination, our initial stockholders, directors and officers have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our initial stockholders, directors and officers have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved. Our directors and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any. We expect that our initial stockholders and their permitted transferees will own at least 20% of our issued and outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of such business combination.

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder approval. Accordingly, if we do not seek stockholder approval, your only

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opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.

The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay and the payment of the deferred underwriting commissions. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination (including, potentially, with the same target). Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.

At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.

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The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the end of the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19 outbreak and the status of debt and equity markets.

The COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that has, and in the future could, adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we may consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete an initial business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors, limit the ability to conduct due diligence or limit the ability of a potential target company’s personnel, vendors and services providers to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for an initial business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of and perceptions to COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.

Finally, the outbreak of COVID-19 or other infectious diseases may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities.

We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

Our amended and restated certificate of incorporation will provide that we must complete our initial business combination within 24 months from the closing of this offering. We may not be able to find a suitable target business and complete our initial business combination within such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues both in the U.S. and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the outbreak of COVID-19 may negatively impact businesses we may seek to acquire. It may also have the effect of heightening many of the other risks described in this ‘‘Risk Factors’’ section, such as those related to the market for our securities and cross-border transactions.

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If we have not completed our initial business combination within such time period or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respectiveaffiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our securities.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Any such price per share may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, our sponsor, directors, officers, advisors or any of their respective affiliates are under no obligation or duty to do so and they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. See “Proposed Business — Permitted purchases and other transactions with respect to our securities” for a description of how our sponsor, directors, officers, advisors or any of their respective affiliates will select which stockholders to enter into private transactions with. The purpose of such purchases could be to vote such shares in favor of our initial business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. This may result in the completion of our initial business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth

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in the tender offer or proxy materials documents mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Completing Our Initial Business Combination — Tendering share certificates in connection with a tender offer or redemption rights.”

You will not be entitled to certain protections afforded to investors of some other blank check companies.

Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been selected, we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet of the company demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”

If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.

We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for our shares of Class A common stock, it will potentially

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reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

If the funds not being held in the trust account are insufficient to allow us to operate for at least the 24 months following the closing of this offering, we may be unable to complete our initial business combination.

The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the 24 months following the closing of this offering, assuming that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s plans to address this need for capital through this offering and potential loans from certain of our affiliates are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

We believe that, upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the 24 months following the closing of this offering; however, we cannot assure you that our estimatesuppliers have obtained and will be able to obtain or maintain all licenses, permits, clearances and approvals necessary for their operations or comply with all applicable laws and regulations, and failure to do so by them may lead to interruption in their business operations, which in turn may result in shortages of components supplied to us.

If we receive a significant number of warranty claims or our DeepView System requires significant amounts of service after sale, our operating expenses may substantially increase and our business and financial results will be adversely affected.

If our DeepView System is accurate. Ofapproved for commercialization, we intend to warrant each DeepView system against defects in materials and workmanship. We also expect to provide technical and other services beyond the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respectwarranty period pursuant to a particular proposed business combination, althoughsupplemental service plan that we do notsell for our DeepView system. We have any current intentionno history of commercial placements from which to do so. Ifjudge our rate of warranty claims, and we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

Asexpect that the number of special purpose acquisition companies increases, therewarranty claims we receive may increase as we scale our operations and as commercial placements age. If product returns or warranty claims are significant or exceed our expectations, we could incur unanticipated reductions in sales or additional operating expenditures for parts and service. In addition, our reputation could be damaged and our device may not achieve the level of market acceptance that we are targeting in order to achieve and maintain profitability. Unforeseen warranty exposure could negatively impact our business and financial results.

We need to ensure strong product performance and reliability to maintain and grow our business.

We need to maintain and continuously improve the performance and reliability of our DeepView System to achieve our profitability objectives. Poor product performance and reliability could lead to clinician dissatisfaction, adversely affect our reputation and revenues, and increase our service and distribution costs and working capital requirements. In addition, software and hardware incorporated into our DeepView System may contain errors or defects, especially when first introduced and while we have made efforts to test this software and hardware extensively, we cannot assure that the software and hardware, or software and hardware developed in the future, will not experience errors or performance problems.

Our reputation and the public image of our products, services and technologies may be more competitionimpaired if our products or services fail to find an attractive target for an initialperform as expected. If our products do not perform, or are perceived to not have performed, as expected or favorably in comparison to competitive products, our operating results, reputation, and business combination. This could increasewill suffer, including due to the costs associated with completing our initial business combinationreplacing products and may result in our inability to find a suitable targetdecreased demand for our initial business combination.

In recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered into business combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable target for an initial business combination.

In addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial business combination.

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Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.

In recent months, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable. These trends may continue into the future.

The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-business combination entity might need to incur greater expense and/or accept less favorable terms. Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s ability to attract and retain qualified officers and directors.

In addition, after completion of any initial business combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial business combination. As a result, in order to protect our directors and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.

If the net proceeds of this offering and the saleproduct offering. Any of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we may depend on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination.

Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $1,000,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their respective affiliates is under any obligation to loan funds to, or otherwise invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we have not completed our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors herein.

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third-party refuses to execute an agreement waiving such claims

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to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third-party that has not executed a waiver only if management believes that such third-party’s engagement would be significantly more beneficial to us than any alternative.

Examples of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we have not completed our initial business combination within the required time period, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the ten years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors.

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of interest which may be withdrawn to pay taxes, except as to any claims by a third-party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our directors or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.

In the event that the proceeds in the trust account are reduced below the lesser of (1) $10.00 per public share or (2) such lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share.

The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or 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. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest

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rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00 per share.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our public stockholders in connection with our liquidation would be reduced.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

•        restrictions on the nature of our investments; and

•        restrictions on the issuance of securities;

each of which may make it difficult for us to complete our initial business combination.

In addition, we may have imposed upon us burdensome requirements, including:

•        registration as an investment company with the SEC;

•        adoption of a specific form of corporate structure; and

•        reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain

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conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changesforegoing could have a material adverse effect on our business, investmentsfinancial condition, prospects and results of operations.

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Although we intend to test our products prior to shipment, defects or errors could nonetheless occur. Our operating results will depend on our ability to execute and, when necessary, improve our quality management strategy and systems and our ability to effectively train and maintain our employee base with respect to quality management. The failure of our quality control systems or those of our third-party suppliers could result in problems with facility operations or preparation or provision of products. In each case, such problems could arise for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with off-the-shelf materials, sub-assemblies, parts and other components or environmental factors and damage to, or loss of, manufacturing operations.

Our results of operations will be materially harmed if we are unable to accurately forecast demand for, and utilization of, our DeepView System and manage our inventory.

If our DeepView System is approved for commercialization, we will be required to forecast inventory needs and manufacture our DeepView System based on our estimates of future demand for, and utilization of, our device. Our ability to accurately forecast demand and utilization could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in demand for our products or for products of our competitors, our failure to accurately forecast acceptance of new products, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions. Inventory levels in excess of demand may result in inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand. Conversely, if we underestimate demand and utilization, our supply chain, manufacturing partners and/or internal manufacturing team may not be able to deliver components and products to meet our requirements, and this could result in damage to our reputation and relationships with clinicians and dental practitioners. In addition, if we experience a significant increase in demand or utilization, additional supplies of off-the-shelf materials, sub-assemblies, parts and other components or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements. We currently outsource all of our manufacturing through an original equipment manufacturer. Cobalt, located in Plano, Texas, is involved with manufacturing the current generation DeepView System and we anticipate that they will continue to do so for the foreseeable future. In addition to Cobalt, we integrate several other highly specialized contract manufacturers in the areas of optics, technology design and electronics. If any of these suppliers were unable to meet our requirements, we would need to find a replacement or supplemental supplier, which we may not be able to do on a timely basis, or at all. Any of the foregoing would materially which will adversely affect our business, financial condition, prospects and results of operations.

Risks Related to Our Business Operations

We may encounter difficulties in managing our growth, which could disrupt our operations.

We have experienced substantial growth in our operations, and we expect to experience continued substantial growth in our business. Over the next several years, we expect to significantly increase the scope of our operations, particularly in the areas of manufacturing, sales and support, research and development, product development, regulatory affairs, marketing and other functional areas, including finance, accounting, quality control, and legal, especially as we transition to operating as a U.S. public company. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational quality and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources, we may not be able to manage the expansion of our operations or recruit and train additional qualified personnel in an effective manner. In addition, the physical expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.

We are highly dependent on our senior management, directors and key personnel, and our business could be harmed if we are unable to attract and retain personnel necessary for our success.

We depend to a significant degree on the continued services of our senior management, directors and key personnel. Their knowledge of both the market and their skills and experience are critical elements to our success. Our senior management team, directors and employees are engaged with us on an ‘at will’ basis, meaning that both they and we are able to terminate the arrangement without notice. The loss of key personnel could have an adverse impact on our business, prospects, results of operations and financial condition.

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If we are not able to attract and retain highly skilled managerial, scientific and technical personnel, we may not be able to implement our business model successfully.

We will rely upon technical and scientific employees or third-party contractors to effectively establish, manage and grow our business. Consequently, we believe that our future viability will depend largely on our ability to attract and retain highly skilled managerial, sales, scientific and technical personnel. In order to do so, we may need to pay higher compensation or fees to our employees or consultants than we currently expect, and such higher compensation payments would have a negative effect on our operating results. Competition for experienced, high-quality personnel is intense and we cannot assure you that we will be able to recruit and retain such personnel. We may not be able to hire or retain the necessary personnel to implement our business strategy. Our failure to complyhire and retain such personnel could impair our ability to develop new products and manage our business effectively.

Our growth plans may place a significant strain on our management and operational, financial and personnel resources. In order to execute our strategy, we will need to hire additional individuals. These hires include product management, marketing and highly technical engineering roles. Furthermore, some of these hires will be in the UK and/or Europe to support our European strategy. Though we have never undertaken this level of growth, our Corporate Development Officer and the Human Resources Manager have instituted a long-term hiring plan with applicable laws key dates that ensure the individual is hired and trained months before the strategy must be executed. Furthermore, our ability to implement our strategy requires effective planning and management control systems. Therefore, our future growth and prospects will depend on our ability to manage this growth.

We expect to significantly increase the size of our organization over the next several years. As a result, we may encounter difficulties in managing our growth, which could disrupt our operations and/or regulations,increase our net losses.

As of June 30, 2023, we had 77 employees. Over the next several years, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of regulatory affairs, clinical and sales and marketing. There are significant expenses and risks involved with establishing our own sales, marketing and distribution capabilities. Any failure or delay in the development of our internal sales, marketing, distribution and compliance capabilities could delay any product launch, which would adversely impact the commercialization of our product. We also intend to continue to improve our operational, financial and management controls, reporting systems and procedures, which may require additional personnel. Such growth could place a strain on our administrative and operational infrastructure, and/or our managerial abilities, and we may not be able to make improvements to our management information and control systems in an efficient or timely manner. We may discover deficiencies in existing systems and controls.

Some of these employees will also be in countries outside of our corporate headquarters, which adds additional complexity. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. We may not be able to effectively manage these activities. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources.

Our software and our internal computer systems may fail and such failure could negatively affect our business, financial condition and results of operations.

The continued development, maintenance and operation of our software and technologies are important factors impacting the success of our products and level of market acceptance. These efforts are expensive and complex and may involve unforeseen difficulties, including material performance problems and undetected defects or other technical or human errors. We may encounter technical obstacles, and it is possible that we may discover additional problems that prevent our software and technologies from operating properly. If our software or technologies, individually or collectively, do not function reliably or fail to meet clinician or payor expectations of performance or outcomes, then clinicians may stop using our products and payors could attempt to cancel their contracts with us.

Proprietary software development is time-consuming, expensive and complex, and may involve unforeseen difficulties. Our software may contain errors or vulnerabilities. Any real or perceived errors, failures, bugs or other vulnerabilities discovered in our existing or new software could result in negative publicity and damage to our reputation, loss of customers, loss of or delay in market acceptance of our products, loss of competitive position, loss of revenue or liability for damages, overpayments and/or underpayments, any of which could harm our business and results of operation.

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Our information technology systems require an ongoing commitment of significant resources to maintain, protect, and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving legal and regulatory standards, the increasing need to protect patient and customer information, changes in the techniques used to obtain unauthorized access to data and information systems, and the information technology needs associated with any new products and services. There can be no assurance that our process of consolidating, protecting, upgrading and expanding our systems and capabilities, continuing to build security into the design of our products, and developing new systems to keep pace with continuing changes in information processing technology will be successful or that additional systems issues will not arise in the future.

We will rely on the proper function, security and availability of our information technology systems and data to operate our business, and a breach, cyber-attack or other disruption to these systems or data could materially and adversely affect our business, results of operations, financial condition, cash flows, reputation or competitive position.

We rely on information technology systems to conduct our operations. In the ordinary course of our business, we use third parties to process and store, sensitive intellectual property and other proprietary business information. Because of this, we and our software are at risk for cyber-attacks. Cyber-attacks can result from deliberate attacks or unintentional events and may include (but are not limited to) malicious third parties gaining unauthorized access to our software for the purpose of misappropriating financial assets, intellectual property or sensitive information (such as interpretedpatient data), corrupting data, or causing operational disruption.

In the future, we may rely on third-party vendors to supply and/or support certain aspects of our information technology systems. These third-party systems could also become vulnerable to cyber-attack, malicious intrusions, breakdowns, interference or other significant disruptions, and applied,may contain defects in design or manufacture or other problems that could result in system disruption or compromise the information security of our own systems.

We have taken numerous steps to ensure the protection of our devices and technology. We regularly engage each of our employees in data protection training, have enabled two-factor authentication, and do not distribute or share data across external systems. Furthermore, we take measures to ensure that our employees who come in contact with data or patients do not violate any standards involving the HIPAA or compromise a patient’s private health information.

While we believe that we have taken appropriate steps to protect our systems, there can be no assurance that our efforts will prevent service interruptions or security breaches in our systems or the unauthorized or inadvertent wrongful access or disclosure of confidential information that could have an adverse impact on our business, prospects, results of operations and financial condition or result in the loss, dissemination, or misuse of critical or sensitive information. If we suffer from a cyber-attack, whether by a third party or insider, we may incur significant costs (including liability for stolen assets or information) and repairing any damage caused to our network infrastructure and systems. Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy. Such theft could also lead to loss of intellectual property rights through our disclosure of our proprietary business information, and such loss may not be capable of remedying. We may also suffer reputational damage and loss of investor confidence. We could also be exposed to potential financial and reputational harm if we experience a cyber-attack.

The COVID-19 pandemic increased the risk of cybersecurity intrusions. Our reliance on internet technology and the number of our employees who worked remotely during the pandemic created additional opportunities for cybercriminals to exploit vulnerabilities. For example, there was an increase in phishing and spam emails as well as social engineering attempts from “hackers” hoping to use the COVID-19 pandemic to their advantage. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often were not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. If our systems are damaged or cease to function properly due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our business continuity plans do not effectively compensate timely, we may suffer interruptions in our ability to manage operations, and would also be exposed to a risk of loss, including financial assets or litigation and potential liability. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems or data or systems of our commercial partners, or inappropriate or unauthorized access to or disclosure or use of confidential, proprietary, or other sensitive, personal, or health information, we could incur liability and suffer reputational harm. Failure to maintain or protect our information technology systems effectively could negatively affect our business, financial condition and results of operations.

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There has been a developing trend of civil lawsuits and class actions relating to breaches of consumer data held by large companies or incidents arising from other cyber-attacks. Any data security breaches, cyber-attacks, malicious intrusions or significant disruptions could result in actions by regulatory bodies and/or civil litigation, any of which could materially and adversely affect our business, results of operations, financial condition, cash flows, reputation or competitive position.

While we maintain certain insurance coverage, our insurance may be insufficient or may not cover all liabilities incurred by such attacks. We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our abilityfinancial condition, operating results and reputation.

The use of artificial intelligence, including machine learning, in our analytics platforms may result in reputational harm or liability.

AI is enabled by or integrated into the data analytics inherent in our DeepView platforms and will continue to negotiatebe a substantial element of our product offerings going forward. As with many developing technologies, AI presents risks and completechallenges that could affect its further development, adoption, and use, and therefore our initialbusiness. AI algorithms may be flawed and continual data propagation may proof ineffective. Data sets may be insufficient, of poor quality, or contain biased information. If the analyses that AI applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, and brand or reputational harm. Some uses of AI present ethical issues, and our judgment as to the ethical concerns may not be accurate. If we use AI as part of our data analytics in a manner that is controversial because of the purported or real impact on our business combination,or vendors, this may lead to adverse results for our financial condition and operations or the financial condition and operations of our business, which may further lead to us experiencing competitive harm, legal liability and brand or reputational harm.

Product liability suits, whether or not meritorious, could be brought against us due to an alleged defective product or for the misuse of our DeepView system. These suits could result in expensive and time-consuming litigation, payment of substantial damages, and an increase in our insurance rates.

If we supply products or services that are defectively designed or manufactured, or our products contain defective components or are misused, or if someone claims any of the foregoing, whether or not meritorious, we may become subject to substantial and costly litigation. Misusing our technology or failing to adhere to the operating guidelines or our device producing inaccurate or unreliable readings could cause significant harm to patients. In addition, if our operating guidelines are found to be inadequate, we may be subject to liability. Product liability claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us. While we maintain product liability insurance, we may not have sufficient insurance coverage for all future claims. Any product liability claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage, could harm our reputation in the industry and could reduce revenue. Product liability claims in excess of our insurance coverage would be paid out of cash reserves harming our financial condition and adversely affecting our results of operations.

If we have not completed our initial business combination within 24 months of the closing of this offering or during any Extension Period, our public stockholders may be forced to wait beyond such 24 months before redemption from our trust account.

If we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will distribute the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein. Any redemption of public stockholders from the trust account shall be effected automatically by function of our amended and restated certificate of incorporation prior to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution are subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In that case, investors may be forced to wait beyond the initial 24 months before the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions of our amended and restated certificate of incorporation and then only in cases where investors have properly sought to redeem their shares of Class A common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we have not completed our initial business combination within the required time period and do not amend certain provisions of our amended and restated certificate of incorporation prior thereto.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the Delaware General Corporation Law (the “DGCL”), stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before

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any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of this offering (or the end of any Extension Period) in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we do not intend to comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the ten years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

We may not hold an annual stockholder meeting until after the consummation of our initial business combination. Our public stockholders will not have the right to elect or remove directors prior to the consummation of our initial business combination.

In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. We may not hold an annual meeting of stockholders until after we consummate our initial business combination and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL. Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity to discuss company affairs with management. In addition, prior to our initial business combination, (a) as holders of our Class A common stock, our public stockholders will not have the right to vote on the election of our directors, and (b) holders of a majority of the issued and outstanding shares of our Class B common stock may remove a member of our board of directors for any reason.

The grant of registration rights to our initial stockholders and their permitted transferees may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

Pursuant to an agreement to be entered into on or prior to the closing of this offering, at or after the time of our initial business combination, our initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to shares of our Class A common stock. In addition, our sponsor and its permitted transferees can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such warrants or the shares of Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.

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This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the shares of common stock owned by our initial stockholders or their permitted transferees, our private placement warrants or warrants issued in connection with working capital loans are registered for resale.

Because we are not limited to a particular industry, sector or geography or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.

While we intend to focus our search on identifying high growth technology and tech-enabled businesses domestically in industries that are being disrupted by advances in technology and on technology paradigms, we may seek to complete a business combination with an operating company of any size (subject to our satisfaction of the 80% fair market value test) and in any industry, sector or geography. However, we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination solely with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine withthat a financially unstable businessclaim or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operationsclaims of a financially unstable or development stage entity. Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leavenature were made against us, with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to our investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholder or warrant holder who chooses to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reduction in the value of their securities. Such stockholders and warrant holders are unlikely to have a remedy for such reduction in value.

We may seek acquisition opportunities in acquisition targets that may be outside of our management’s areas of expertise.

We will consider a business combination outside of our management’s areas of expertise if such business combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the

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transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

We may seek acquisition opportunities with an early-stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.

To the extent we complete our initial business combination with an early-stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel. Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.

We are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm regarding fairness. Consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.

Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

We may issue additional shares of Class A common stock or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.

Our amended and restated certificate of incorporation authorizes the issuance of up to 80,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 49,333,333 and 15,000,000 (assuming in each case that the underwriters have not exercised their over-allotment option) authorized but unissued shares of Class A and Class B common stock, respectively, available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but not upon conversion of the Class B common stock. Shares of Class B common stock are convertible into shares of our Class A common stock, initially at a one-for-one ratio but subject to adjustment as set forth herein. Immediately after this offering, there will be no preferred shares issued and outstanding.

We may issue a substantial number of additional shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock to redeem the warrants as described in “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” or upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation will provide, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle

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the holders thereof to (1) receive funds from the trust account or (2) vote pursuant to our amended and restated certificate of incorporation on any initial business combination or any amendments to our amended and restated certificate of incorporation. The issuance of additional shares of common or preferred stock:

•        may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock;

•        may subordinate the rights of holders of common stock if shares of preferred stock are issued with rights senior to those afforded our common stock;

•        could cause a change of control if a substantial number of shares of our common stock is 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 directors and officers;

•        may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;

•        may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and

•        may not result in adjustment to the exercise price of our warrants.

Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.

We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, directors or officers which may raise potential conflicts of interest.

In light of the involvement of our sponsor, directors and officers with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, directors and officers. Certain of our directors and officers also serve as officers and board members for other entities, including those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, directors and officers are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination as set forth in “Proposed Business — Completing Our Initial Business Combination — Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our independent and disinterested directors.

Rosecliff is not under any obligation to source any potential opportunities for our initial business combination or refer any such opportunities to our company or provide any other services to our company.

Rosecliff may become aware of a potential business combination opportunity that may be an attractive opportunity for our company. However, Rosecliff is not under any obligation to source any potential opportunities

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for our initial business combination or refer any such opportunities to our company or provide any other services to our company. Rosecliff’s role with respect to our company is expected to be primarily passive and advisory in nature. Rosecliff may have fiduciary and/or contractual duties to its investment vehicles and to companies in which Rosecliff has invested. As a result, Rosecliff may have a duty to offer business combination opportunities to certain Rosecliff funds, other investment vehicles or other entities before other parties, including our company. Additionally, certain companies in which Rosecliff has invested may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial business combination. Transactions of these types may present a conflict of interest because Rosecliff may directly or indirectly receive a financial benefit as a result of such transaction.

Since our initial stockholders will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

On December 10, 2020, our sponsor paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in consideration of 5,750,000 founder shares, par value $0.0001 per share. In January 2021, our sponsor transferred a total of 130,000 founder shares to our independent director, our director nominee and certain other individuals at their original per-share purchase price. Our initial stockholders will collectively own 20% of our issued and outstanding shares of common stock after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of the issued and outstanding shares of our common stock upon the consummation of this offering. The founder shares will be worthless if we do not complete an initial business combination.

In addition, our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable for one share of our Class A common stock, for a purchase price of $6,000,000 in the aggregate (or $6,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), or $1.50 per warrant, that will also be worthless if we do not complete a business combination. Each private placement warrant may be exercised for one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.

The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering except that: (1) prior to our initial business combination, only holders of our Class B common stock have the right to vote on the election of directors and holders of a majority of our outstanding shares of Class B common stock may remove a member of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions contained in a letter agreement that our initial stockholders, directors and officers have entered into with us; (3) pursuant to such letter agreement, our initial stockholders, directors and officers have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (ii) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (4) the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and (5) the founder shares are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them purchased during or after this offering in favor of our initial business combination. While we do not expect our board of directors to approve any amendment to or waiver of the

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letter agreement or registration rights agreement prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to or waivers of such agreements in connection with the consummation of our initial business combination. Any such amendments or waivers would not require approval from our stockholders, may result in the completion of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.

The personal and financial interests of our sponsor, directors and officers may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the deadline for completing our initial business combination nears.

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

•        default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

•        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;

•        our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

•        our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

•        our inability to pay dividends on our common stock;

•        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 common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

•        limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

•        increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

•        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.

We may be able to complete only one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations and profitability.

The net proceeds from this offering and the sale of the private placement warrants will provide us with $201,000,000 (or $231,000,000 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our initial business combination (which includes $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions being held in the trust account, and excludes estimated offering expenses of $1,000,000).

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We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

•        solely dependent upon the performance of a single business, property or asset; or

•        dependent upon the development or market acceptance of a single or limited number of products, processes or services.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.

We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our stockholders do not agree.

Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, directors, officers, advisors or any of their respective affiliates. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash

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available to us, we will not complete the business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).

In order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination that some of our stockholders or warrant holders may not support.

In order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination. To the extent any such amendment would be deemed to fundamentally change the nature of any of the securities offered through the registration statement of which this prospectus forms a part, we would register, or seek an exemption from registration for, the affected securities.

Certain provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of at least 65% of our outstanding common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.

Our amended and restated certificate of incorporation will provide that any of its provisions (other than amendments relating to the election or removal of directors prior to our initial business combination, which require the approval by holders of a majority of at least 90% of the issued and outstanding shares of our common stock voting at a stockholder meeting) related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the sale of the private placement warrants into the trust account and not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of at least 65% of our issued and outstanding common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of at least 65% of our issued and outstanding common stock. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority of the issued and outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the issued and outstanding shares of our Class B common stock is required to approve the election or removal of directors. We may not issue additional securities that can vote pursuant to our amended and restated certificate of incorporation on any initial business combination or any amendments to our amended and restated certificate of incorporation. Our initial stockholders, who will beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which will govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial business combination with which you do not agree.

Our initial stockholders have agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or

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(B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, directors and officers. Our public stockholders are not parties to, or third-party beneficiaries of, this agreement and, as a result, will not have the ability to pursue remedies against our sponsor, directors or officers for any breach of these agreements. As a result, in the event of a breach, our public stockholders would need to pursue a stockholder derivative action, subject to applicable law.

We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.

Although we believe that the net proceeds of this offering and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because we have not yet selected any target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you thatexpend substantial management resources and litigation costs in defending such financing will be available on acceptable terms,claim(s) and such claim(s), if at all. To the extent that additional financing proves to be unavailable when needed to completesuccessful, could reduce margins, harm our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.

In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our directors, officers or stockholders is required to provide any financing to us in connection with or after our initial business combination. If we have not completed our initial business combination within the required time period, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants will expire worthless.

Our initial stockholders will control the election of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a result, they will elect all of our directors prior to our initial business combination and may exert a substantial influence on actions requiring stockholder vote, potentially in a manner that you do not support.

Upon the closing of this offering, our initial stockholders will own 20% of our issued and outstanding shares of common stock (assuming they do not purchase any units in this offering). In addition, prior to our initial business combination, holders of the founder shares will have the right to elect all of our directors and may remove members of the board of directors for any reason. Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended by holders of a majority of at least 90% of the issued and outstanding shares of our common stock voting at a stockholder meeting. As a result, you will not have any influence over the election of directors prior to our initial business combination.

Neither our initial stockholders nor, to our knowledge, any of our directors or officers, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares of Class A common stock in this

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offering orreputation in the aftermarket or in privately negotiated transactions, this wouldmarket, and increase their influence over these actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote at least untilfuture insurance premiums, the completionoccurrence of our initial business combination.

A provisioneach of our warrant agreement may make it more difficult for us to consummate an initial business combination.

Unlike some blank check companies, if

(i)     we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share of Class A common stock;

(ii)    the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and

(iii)   the Market Value is below $9.20 per share,

then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 and $10.00 per share redemption trigger prices described below under “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% and 100%, respectively, of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.

Our warrants and founder shares maywhich could have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.

We will be issuing warrants to purchase 6,666,667 shares of Class A common stock (or 7,666,667 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Our initial stockholders currently hold 5,750,000 shares of Class B common stock (up to 750,000 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised). The shares of Class B common stock are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor, an affiliate of our sponsor or certain of our directors and officers make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. To the extent we issue shares of Class A common stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of Class A common stock and reduce the value of the Class A common stock issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.

The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us (except as described below under “Description of Securities — Redeemable Warrants — Public Redeemable Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”); (2) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights.

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Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and reportimpact on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business, with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.

If our management team pursues a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.

If we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

•        costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements of overseas markets;

•        rules and regulations regarding currency redemption;

•        complex corporate withholding taxes on individuals;

•        laws governing the manner in which future business combinations may be effected;

•        tariffs and trade barriers;

•        regulations related to customs and import/export matters;

•        longer payment cycles;

•        changes in local regulations as part of a response to the COVID-19 outbreak;

•        tax consequences, such as tax law changes, including termination or reduction of tax and other incentives that the applicable government provides to domestic companies, and variations in tax laws as compared to the United States;

•        currency fluctuations and exchange controls, including devaluations and other exchange rate movements;

•        rates of inflation, price instability and interest rate fluctuations;

•        challenges in collecting accounts receivable;

•        cultural and language differences;

•        employment regulations;

•        crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;

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•        deterioration of political relations with the United States;

•        obligatory military service by personnel; and

•        government appropriation of assets.

We may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such combination or, if we complete such combination, our operations might suffer, either of which may adversely impact ourprospects, results of operations and financial condition.

BecauseOur insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities.

While we must furnish our stockholders with target business financial statements,maintain commercial insurance at a level we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.

The federal proxy rules require that a proxy statement with respect to a vote on a business combination meetingbelieve is appropriate against certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally acceptedrisks commonly insured in the United States of America, or U.S. GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.

We may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in taxes imposed on stockholders.

We may effect a business combination with a target company in another jurisdiction, reincorporate in the jurisdiction in which the target company or business is located, or reincorporate in another jurisdiction. Such transactions may result in tax liability for a stockholder in the jurisdiction in which the stockholder is a tax resident (or in which its members are resident if it is a tax transparent entity), in which the target company is located, orindustry in which we reincorporate. We do not intendoperate, there is no guarantee that our insurer will cover costs or that we will be able to make any cash distributions to stockholders to pay such taxes. Stockholders may be subject to withholding taxes or other taxes with respect to their ownershipobtain the desired level of us aftercoverage on acceptable terms in the reincorporation.

Risks Relating to the Post-Business Combination Company

Subsequent to our completion of our initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other chargesfuture. The potential costs that could have a significant negative effect onbe associated with any shortfall of insurance coverage may cause delays and disruptions to our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure youadditional expenditure that this diligence will identify all material issues that may be present with a particular target business that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write down or write off assets, restructureincur could affect our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may ariseearnings and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholder or warrant holder who chooses to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reductioncompetitive position in the value of their securities. Such stockholdersfuture and, warrant holders are unlikely to have a remedy for such reduction in value.potentially, our

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financial position. We could suffer losses that may face risks related to tech-enabled companies and companies in the technology industry.

Business combinations with tech-enabled companies and companies in the technology industry entail special considerations and risks. If we are successful in completing a business combination with such a target business, wenot be fully compensated by insurance. In addition, certain types of risk may be, subject to, and possibly adversely affected by, the following risks:

•        if we door may become, either uninsurable or not develop successful new productseconomically insurable, or improve existing ones, our business will suffer;

•        we may invest in new lines of business that could fail to attractnot be currently or retain users or generate revenue;

•        we will face significant competition and if we are not able to maintain or improve our market share, our business could suffer;

•        the loss of one or more members of our management team, or our failure to attract and retain other highly qualified personnel in the future could seriously harmcovered by our business;

•        if our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users’ ability to access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether, which could seriously harm our business;

•        mobile malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of our products could seriously harm our business and reputation;

•        if we are unable to successfully grow our user base and further monetize our products, our business will suffer;

•        if we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed;

•        we may be subject to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business;

•        components used in our products may fail as a result of a manufacturing, design, or other defect over which we have no control, and render our devices inoperable;

•        an inability to manage rapid change, increasing consumer expectations and growth;

•        an inability to build strong brand identity and improve subscriber or customer satisfaction and loyalty;

•        an inability to deal with our subscribers’ or customers’ privacy concerns;

•        an inability to license or enforce intellectual property rights on which our business may depend;

•        an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;

•        potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute;

•        competition for the leisure and entertainment time and discretionary spending of subscribers or customers, which may intensify in part due to advances in technology and changes in consumer expectations and behavior; and

•        disruption or failure of our networks, systems or technology as a result of misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events.

insurance policies. Any of the foregoing could have an adverse impact on our business, prospects, results of operations followingand financial condition.

We also expect that operating as a business combination. However,U.S. public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our efforts in identifying prospective target businesses willboard of directors, on our board committees or as executive officers. We do not be limited to tech-enabled businesses or the technology industry. Accordingly,know, however, if we acquire a target business in another industry, these risks we will be subjectable to risks attendantmaintain existing insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would negatively affect our business, financial condition and results of operations.

The success of our algorithms depends on our significant repository of proprietary DFU and burn data.

As of December 31, 2022, approximately 263 billion pixels of proprietary DFU and burn data have been acquired and utilized for the deep learning algorithms training. We believe this presents a significant barrier to entry to would-be competitors in wound care healing assessments. The data collection to clinical output, the flow, quality and control of the data pipeline is managed entirely by us. Our DeepView System uses deep learning on its wound data repository to recognize patterns and correlations of injured tissue spectral signatures to produce reliable and reasonable assessment for clinicians to make accurate and faster treatment decisions.

We have developed strategic partnerships with multiple clinical and academic partners in the United States and Europe. Through our strategic partnerships with multiple clinical and academic partners, we are able to access large, diverse and specific industrysets of wound data inputs to develop, validate and improve our DeepView algorithms efficiently and effectively. We believe we have the pre-eminent proprietary clinical wound database. The depth and quality of our proprietary data is critical to developing a leading wound assessment technology with demonstrated clinical need across burn, DFU and other indications with a positive impact on health economics and patient outcomes, while safeguarding patient data and privacy. If we were no longer able to access or receive this data, it would have a material adverse effect on our business, prospects, results of operations and financial condition.

We may further seek strategic alliances, joint ventures or collaborations, or enter into licensing or partnership arrangements in which we operate or target business which we acquire, which may orthe future and may not be different thansuccessful in doing so, and even if we are, we may not realize the benefits or costs of such relationships.

We have developed strategic partnerships with multiple clinical and academic partners and, in the future, we may further form or seek strategic alliances, create joint ventures or collaborations or enter into licensing or partnership arrangements with third parties that we believe will complement or augment our sales and marketing efforts with respect to our DeepView System or future products. We may not be successful in our efforts to establish such collaborations, and we may not achieve the benefits expected from our current strategic partnerships or future collaborations. Any of these relationships may require us to incur non-recurring and other charges, indemnify the counterparty, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic alliance or other alternative arrangements for our products. We cannot be certain that, following a strategic alliance or similar arrangement, we will achieve the revenue or specific net income that justifies such transaction. In addition, any potential future collaborations may be terminable by our collaborators, and we may not be able to adequately protect our rights under these agreements. Any termination of collaborations we enter into in the future, or delays in entering into new strategic partnership agreements could delay tour sales and marketing efforts, which would harm our business prospects, financial condition and results of operations.

Additionally, we may not have sole decision-making authority with respect to any such collaboration or arrangement, which could create the potential risk of creating impasses on decisions, and our collaborators may have economic or business interests or goals that are, or that may become, inconsistent with our business interests or goals. It is possible that conflicts may arise with our collaborators, such as conflicts concerning the achievement of performance milestones, or the interpretation of significant terms under any agreement, such as those risks listed above.related to financial obligations, or the ownership or control of intellectual property developed during the collaboration. If any

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conflicts arise with our current or future collaborators, they may act in their selfWe-interest, which may be averse to our best interest, and they may breach their obligations to us. In addition, we have limited abilitycontrol over the amount and timing of resources that our current collaborators or any future collaborators devote to assessour collaborators’ or our future products and technologies.

As international expansion of our business occurs in future years, it will expose us to market, regulatory, political, operational, financial and economic risks associated with doing business outside of the managementUnited States.

Our long-term strategy is to increase our international presence, including securing regulatory clearances or approvals in targeted countries outside the United States. This strategy may include establishing and maintaining clinician outreach and education capabilities outside of the United States and expanding our relationships with international payors. Doing business internationally involves a prospective target businessnumber of risks, including:

•        difficulties in staffing and managing our international operations;

•        multiple, conflicting and changing laws and regulations such as a result, may completetax laws, privacy laws, export and import restrictions, employment laws, regulatory requirements and other governmental clearances, approvals, permits and licenses;

•        reduced or varied protection for intellectual property rights in some countries;

•        obtaining regulatory clearance, approval or certification where required for our initial business combinationproducts in various countries;

•        requirements to maintain data and the processing of that data on servers located within such countries;

•        complexities associated with a target business whose management may not have the skills, qualificationsmanaging multiple payor reimbursement regimes, government payors or abilities to manage a public company.patient self-pay systems;

When evaluating the desirability of completing our initial business combination with a prospective target business,•        limits on our ability to assesspenetrate international markets if we are required to manufacture our products locally;

•        financial risks, such as longer payment cycles, difficulty collecting accounts receivable, foreign tax laws and complexities of foreign value-added tax systems, the target business’s managementeffect of local and regional financial pressures on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;

•        restrictions on the site-of-service for use of our products and the economics related thereto for clinicians, providers and payors;

•        natural disasters, political and economic instability, including wars, terrorism, political unrest, outbreak of disease, boycotts, curtailment of trade and other market restrictions; and

•        regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the United States Foreign Corrupt Practices Act of 1977, or FCPA, U.K. Bribery Act of 2010 and comparable laws and regulations in other countries.

Any of these factors could significantly harm our future international expansion and operations and, consequently, have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent or other intellectual property protection for any products we develop or for our technology, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize any products we may develop, and our technology, may be limited due to a lackharmed.

We believe that one of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrectour key strengths is our market leading technology, including our proprietary AI algorithms and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholder or warrant holder who choosesoptical technology. In order to remain a stockholder or warrant holder, respectively, following our initial business combination could suffer a reduction incompetitive, we must develop, maintain, and protect the value of their securities. Such stockholders and warrant holders are unlikely to have a remedy for such reduction in value.

The directors and officers of an acquisition candidate may resign upon completionproprietary aspects of our initial business combination. The departurebrands, technologies, data, and products. We rely on a combination of a business combination target’s key personnel could negatively impactcontractual provisions, confidentiality procedures, patent, copyright, trademark, trade secret, and other intellectual property laws to protect the operations and profitability of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.

Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

We may structure our initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will complete such business combination only if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our issued and outstanding common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.

If our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.

Following our initial business combination, any or all of our management could resign from their positions as officers of the company, and the management of the target business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.proprietary

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Afteraspects of our initialbrands, technologies, data, and products. These legal measures afford only limited protection, and competitors or others may gain access to or use our intellectual property and proprietary information. Any failure to obtain or maintain patent and other intellectual property protection with respect to our products could harm our business, combination, ourfinancial condition and results of operationsoperations.

Our technology is protected with issued and/or allowed patents across nine families of active patents: (i) Burn/Wound Classification on MSI and prospects could be subject,PPG; (ii) Tissue classification on MSI and PPG; (iii) Amputation site analysis on MSI, ML and healthcare matrix; (iv) DFU healing potential prediction and wound assessment on MSI, ML and healthcare matrix; (v) High-precision, multi-aperture, MSI snapshot imaging; (vi) Wound assessment based on MSI; (vii) Burn/histology assessment based on MSI and ML; (viii) High-precision, single-aperture MSI snapshot imaging; and (ix) Topological characterization and assessment of tissues using MSI and ML.

As of the date of this prospectus, we have 10 issued and allowed U.S. patents with five U.S. patent applications pending. We have 10 issued and allowed international patents with 29 foreign and international patent applications pending. We protect our DeepView System trademarks primarily in four classes: pre-recorded/downloadable software, surgical, medical apparatus, computer and scientific services and medical and healthcare services. As of March 31, 2023, we maintain a portfolio of 57 trademarks and seven trademark applications pending relating to a significant extent,our DeepView and SnapShot product offerings. Our trademarks and pending trademark applications are spread over nine jurisdictions mostly in China, the UK and the EU. It is our intention to maintain these registrations indefinitely and to expand the economic, political, social and government policies, developments and conditions in the countrynumber of jurisdictions in which we operate.

The economic, political and social conditions,have registered trademarks as well as government policies, ofdeemed necessary to protect our freedom to use the countrymarks and/or block competitors in whichadditional markets. We will continue to primarily focus on protecting our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustainedintellectual property in the future. If inUnited States, UK and the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demandEU as those are the first commercial markets for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.products.

Risks Relating to Our Management Team

We are dependent upon our directors and officers and their departure could adversely affect our ability to operate.

Our operations are dependent upon a relatively small group of individuals. We believe that our success depends on the continued service of our directors and officers, at least until we have completed our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.

Our ability to successfully effect our initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of our or a target’s key personnel could negatively impact the operations and profitability of our post-combination business.

Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our assessmentintellectual property position will not be challenged or that all patents for which we have applied will be granted. As with other medical device companies, our success depends, in part, on our ability to obtain, maintain, expand, enforce, and defend the scope of our intellectual property portfolio or other proprietary rights, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, maintaining, defense and enforcement of any patents or other intellectual property rights. The process of applying for and obtaining a patent is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patents or patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or we may not be able to protect our proprietary rights at all. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, suppliers, consultants, advisors and other third parties, any of these individuals will proveparties may breach such agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to be correct. These individualsseek and obtain patent protection.

We may choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property rights may be unfamiliar withunavailable or limited in scope. It is also possible that we will fail to identify patentable aspects of our products or research and development results before it is too late to obtain patent protection. While the requirements of operating a company regulatedimaging modality — SnapShot MSI system and proprietary illumination system — are patent protected, our AI algorithm used in the system is not patent protected. The device performance is supported by the SEC, whichproprietary clinical data owned by Spectral. The loss or disclosure of both the data and the algorithm could cause usbe detrimental to have to expend timethe future development and resources helping them become familiar with such requirements.competitive advantage of our DeepView System.

In addition, our ability to obtain and maintain valid and enforceable patents depends in part on whether the directorsdifferences between our inventions and officersthe prior art allow our inventions to be patentable over the prior art. Furthermore, the publication of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel could negatively impactdiscoveries in scientific literature often lags behind the operationsactual discoveries, and profitability of our post-combination business. The role of an acquisition candidate’s key personnel uponpatent applications in the completion of our initial business combinationUnited States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be ascertained at this time. Althoughcertain that we contemplate that certain memberswere the first to file for patent protection of an acquisition candidate’s management team will remain associated with the acquisition candidate followingsuch inventions. Despite our initial business combination, it is possible that members of the management of an acquisition candidate will not wishefforts to remain in place. The loss of key personnel could negatively impact the operations and profitability ofprotect our post-combination business.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

Our key personnelproprietary rights, unauthorized parties may be able to remain withobtain and use information that we regard as proprietary. In addition, the issuance of a patent is not conclusive as to its inventorship, validity or enforceability, and our company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensationpatents may be challenged in the formcourts or patent offices in the United States and abroad, so even if we obtain patents, they may not provide us with adequate proprietary protection or competitive advantage against our competitors with similar products. Our patent applications may not result in issued patents and our patents may not be sufficiently broad to protect our technology or to prevent competitive technologies. In addition, the laws of cash payments and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial business combination

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willforeign jurisdictions may not beprotect our rights to the determining factor in our decisionsame extent as to whether or not we will proceed with any potential business combination, as wethe laws of the United States. For example, certain countries outside of the United States do not expect that anyallow patents for methods of our key personnel will remain withtreating the human body. This may preclude us afterfrom obtaining method patents outside of the completion of our initial business combination. The determination asUnited States having similar scope to whether any of our key personnel will remain with us will be made atthose we have obtained or may obtain in the time of our initial business combination.

Our directorsfuture in the United States. Changes in either the patent laws or their interpretation in the United States and officers will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact oncountries may diminish our ability to completeprotect our initialinventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value or validity of our intellectual property or narrow the scope of our patent protection. Additionally, we cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors or other third parties.

Moreover, even if we are able to obtain patent protection, such patent protection may be of insufficient scope to achieve our business combination.

Our directorsobjectives. The strength of patent rights generally, and officers are not requiredparticularly the patent position of medical device companies, involves complex legal, factual and scientific questions and can be uncertain, and has been the subject of much litigation in recent years. This uncertainty includes changes to and will not, commit their full timethe patent laws through either legislative action to change statutory patent law or court action that may reinterpret existing law or rules in ways affecting the scope or validity of issued patents. Even if patents do successfully issue from our affairs,patent applications, third parties may challenge the validity, enforceability, or scope of such patents, which may result in such patents being narrowed, invalidated, or held unenforceable. Decisions by courts and governmental patent agencies may introduce uncertainty in the enforceability or scope of patents owned by or licensed to us. Furthermore, the issuance of a conflictpatent does not give us the right to practice the patented invention. Third parties may also have blocking patents that could prevent us from marketing our own products and practicing our own technology. We may not be aware of interestall third-party intellectual property rights (for example, not be aware of a patent or not be aware of a patent’s scope) potentially relating to our products, product candidates or their intended uses, and as a result the impact of such third-party intellectual property rights upon the patentability of our own patents and patent applications, as well as the impact of such third-party intellectual property upon our ability to market our products without infringing third party patent rights, is highly uncertain. We cannot ensure that we do not infringe any patents or other proprietary rights held by others. If our products were found to infringe any proprietary right of another party, we could be required to pay significant damages or license fees to such party and/or cease production, marketing and distribution of those products.

Litigation may also be necessary to defend infringement claims of third parties or to enforce patent rights we hold or protect trade secrets or techniques we own. Further, third parties may seek approval to market their own products similar to or otherwise competitive with our products. In these circumstances, we may need to defend and/or assert our patents, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or agency with jurisdiction may find our patents invalid, unenforceable, or not infringed; competitors may then be able to market products and use manufacturing and analytical processes that are substantially similar to ours. Even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

Our success will also depend, in allocating their time betweenpart, on preserving our operationstrade secrets, maintaining the security of our data and know-how, and obtaining and maintaining other intellectual property rights. We rely on trade secret protection and confidentiality agreements for strategic purposes, to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. We may also rely on trade secret protection as temporary protection for concepts that may be included in a future patent filing. There can be no assurances that we can meaningfully protect or maintain intellectual property, trade secrets or other unpatented proprietary rights necessary to our business or in a form that provides us with a competitive advantage, or that others will not independently develop substantially equivalent proprietary products or processes or otherwise gain access to our proprietary technology. In addition, our trade secrets, data, and know-how could be subject to unauthorized use, misappropriation, or disclosure to unauthorized parties, despite our efforts to enter into confidentiality agreements with our employees, consultants, clients, and other vendors who have access to such information, and could otherwise become known or be independently developed or discovered by third parties. Our intellectual property, including trademarks, could be challenged, invalidated, infringed, and circumvented by third parties, and our search for atrademarks could also be diluted, declared generic or found to be infringing other marks. If any of the foregoing occurs, we could be forced to re-brand our products, resulting in loss of brand recognition, and requiring us to devote resources to advertising and marketing new brands, and suffer other competitive harm. Third parties may also adopt trademarks similar to ours, which could harm our brand identity and lead to market confusion. Failure to obtain and maintain intellectual property rights necessary to our business combination and their other responsibilities. We do not intendfailure to have any full-time employees prior toprotect, monitor and control the completionuse of our business combination. Eachintellectual property rights

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could negatively impact our ability to compete and cause us to incur significant expenses. The intellectual property laws and other statutory and contractual arrangements in the United States and other jurisdictions we depend upon may not provide sufficient protection in the future to prevent the infringement, use, violation or misappropriation of our directorstrademarks, data, technology and officers is engaged in several other business endeavors for which heintellectual property and services, and may not provide an adequate remedy if our intellectual property rights are infringed, misappropriated, or sheotherwise violated.

Additionally, we may find it necessary or prudent to acquire or obtain licenses from third-party intellectual property holders. However, we may be entitledunable to substantial compensationacquire or secure such licenses to any intellectual property rights from third parties that we identify as necessary for our products or any future products we may develop. The acquisition or licensing of third-party intellectual property rights is a competitive area, and our directorscompetitors may pursue strategies to acquire or license third-party intellectual property rights that we may consider attractive or necessary, and officers are not obligated to contribute any specific number of hours per week to our affairs.competitors could market competing products and technology. Our independent directors will also serve as officers and/or board members for other entities. If our directors’ and officers’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs whichcompetitors may have a negative impactcompetitive advantage over us due to their size, capital resources and greater development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to acquire or license third-party intellectual property rights on terms that would allow us to make an appropriate return on our abilityinvestment or at all. If we are unable to completesuccessfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant product, and our initialcustomers may be forced to stop using the relevant product, which could harm our business, combination. Please see “Management — Directors, Director Nomineesfinancial condition, prospects and Executive Officers” for a discussionresults of our officers’ and directors’ other business affairs.operations.

Each of our directors and officers are now, and all of themWe may, in the future, be a party to intellectual property litigation or administrative proceedings that are very costly and time-consuming and could interfere with our ability to sell and market our products.

The medical device industry is highly competitive and has been characterized by extensive litigation regarding patents, trademarks, trade secrets, and other intellectual property rights, and companies in the industry have used intellectual property litigation to gain a competitive advantage. It is possible that U.S. and foreign patents, along with pending patent applications or trademarks controlled by third parties, may become, affiliated with entities engagedbe alleged to cover our products, or that we may be accused of misappropriating third parties’ trade secrets. Additionally, our products include components that we purchase from vendors, and may include design components that are outside of our direct control. Our competitors, many of which have substantially greater resources and have made substantial investments in business activities similar to those intended to be conducted by uspatent portfolios, trade secrets, trademarks, and accordingly,competing technologies, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with oneapplied for or more businesses. Our sponsor and directors and officers are,obtained, or may in the future become, affiliated with entitiesapply for or obtain, patents or trademarks that are engaged in a similar business. Our sponsor and directors and officers are also not prohibited from sponsoring,will prevent, limit or otherwise becoming involvedinterfere with any other blank check companies priorour ability to us completingmake, use, sell, import, and/or export our initial business combination.products (or components thereof) or to use our technologies or our product names.

As described in “Management — Conflicts of Interest,” each ofThird parties, including our officers and directors presently has, and any of themcompetitors, may currently have patents or obtain patents in the future and claim that the manufacture, use or sale of our products infringes these patents. We have not conducted an extensive search of patents issued or assigned to other parties, including our competitors, and no assurance can be given that patents containing claims relating to our products, parts of our products, technology or methods do not exist, have not been filed or could not be filed or issued. In addition, because patent applications can take many years to issue and because publication schedules for pending applications vary by jurisdiction, there may be applications now pending that may result in issued patents that our current or future products infringe. Also, because the claims of published patent applications can change between publication and patent grant, there may be published patent applications that may ultimately issue with claims that we infringe. As the number of competitors in our market grows and the number of patents issued in this area increases, the possibility of patent infringement claims against us escalates. Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements. From time to time, we may receive threatening letters, notices or “invitations to license,” or may be the subject of claims that our products and business operations infringe or violate the intellectual property rights of others. The defense of these matters can be time-consuming, costly to defend, divert management’s attention and resources, damage our reputation and brand and cause us to incur significant expenses or make substantial payments. Vendors from which we purchase hardware or software may not indemnify us in the event that such hardware or software is accused of infringing a third-party’s patent or trademark or of misappropriating a third-party’s trade secret.

Because patent applications are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our products. Competitors may also contest our patents in court, at an administrative agency, or at the patent office, if issued, by proving that the invention was not original, was not novel, was obvious, or was obtained without disclosing all pertinent material prior art information to the patent office,

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among other reasons. For example, in litigation, a competitor could claim that our patents, if issued, are not valid for a number of reasons or are unenforceable due to inequitable conduct. If a court agreed, we would lose our rights to those challenged patents.

In addition, we may in the future be subject to claims by our former employees or consultants asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf. Although we generally require all of our employees and consultants and any other partners or collaborators who have access to our proprietary know-how, information or technology to assign or grant similar rights to their inventions to us, we cannot be certain that we have executed such agreements with all parties who may have additional, fiduciary, contractualcontributed to our intellectual property, nor can we be certain that our agreements with such parties will be upheld in the face of a potential challenge, or that they will not be breached, for which we may not have an adequate remedy.

Further, if third party claims of patent or trademark infringement or trade secret misappropriation are successfully asserted against us, such claims may harm our business, result in injunctions preventing us from selling our products, and require payment of license fees, damages, attorneys’ fees, and court costs, which may be substantial and have a material adverse impact on our business. In addition, if we are found to have willfully infringed third-party patents or trademarks or to have misappropriated trade secrets, we could be required to pay treble damages in addition to other penalties. Although patent, trademark, trade secret, and other intellectual property disputes in the medical device area have often been settled through licensing or similar arrangements, costs associated with such arrangements may be substantial and could include ongoing royalties that may substantially erode our margins. Further, we may be unable to obtain necessary licenses on satisfactory terms, if at all. If we do not obtain necessary licenses, we may not be able to redesign our products to avoid infringement, and as such may need to stop selling the infringing products, which would have a significant adverse impact on our business, financial condition, prospects and results of operations.

Similarly, interference, derivation, cancellation, and opposition proceedings provoked by third parties or brought by the U.S. Patent and Trademark Office (USPTO) may be necessary to determine priority with respect to our patents, patent applications, trademarks, or trademark applications. We may also become involved in other proceedings, such as reexamination, inter partes review, post-grant review, derivation, interference, supplemental examination, cancellation or opposition proceedings before the USPTO or other obligationsjurisdictional body relating to our intellectual property rights or dutiesthe intellectual property rights of others. Such challenges may result in loss of exclusivity or ability to make, use, and sell our products without infringing third-party intellectual property rights, or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical products and techniques without payment to us, or limit the duration of the patent protection of our technology. Adverse determinations in a judicial or administrative proceeding or failure to obtain necessary licenses or rights could prevent us from using, selling, manufacturing, or importing our products or using product names, which would have a significant adverse impact on our business, financial condition, prospects and results of operations.

Additionally, we may file lawsuits or initiate other proceedings to protect or enforce our patents, trademarks, or other intellectual property rights, which could be expensive, time consuming and unsuccessful. Former, current, or future licensees may violate the terms of their licenses and thereby infringe our intellectual property. Competitors may infringe our issued patents, trademarks, or other intellectual property. To counter infringement or unauthorized use by licensees, competitors, or other parties, we may be required to file infringement or misuse claims, which can be expensive and time-consuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims or file administrative actions against us alleging that we infringe their intellectual property. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. Furthermore, even if our patents or trademarks are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages and/or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market, and an adverse result in any litigation proceeding or administrative action could put one or more of our patents at risk of being invalidated or interpreted narrowly, which could adversely affect our competitive business position, financial condition, and results of operations. In addition, although we make efforts to comply with the patent marking provisions of 35 U.S.C. § 287(a), a court may decide that we have not met the requirements of the patent marking statute, which may prevent us from obtaining monetary damages that would otherwise have been due to us if we had complied with the marking statute.

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Even if we are successful in defending against intellectual property claims, litigation or other entities pursuantlegal proceedings relating to which such officerclaims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. Protracted litigation to defend or director isprosecute our intellectual property rights could also result in our customers or willpotential customers deferring or limiting their purchase or use of the affected products until resolution of the litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial negative impact on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce our resources available for development activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of litigation or other intellectual property related proceedings could harm our business, financial condition, prospects and results of operations.

In addition, third parties may assert infringement claims against our customers. These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers or indemnify our customers for any costs associated with their own initiation or defense of infringement claims, regardless of the merits of these claims. If any of these claims succeeds or settles, we may be forced to pay damages or settlement payments on behalf of our customers or may be required to presentobtain licenses for the products they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using our products.

Obtaining and maintaining intellectual property, including patent protection, depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental agencies, and our intellectual property, including patent protection, could be reduced or eliminated for non-compliance with these requirements.

The USPTO, United States Copyright Office (USCO) and various foreign governmental agencies require compliance with a business combination opportunitynumber of procedural, documentary, fee payment and other similar provisions during the application process. In addition, periodic maintenance fees, renewal fees, annuity fees and various other government fees often must be paid to such entities. Accordingly, ifthe USPTO, USCO and foreign agencies over the lifetime of any registered or applied-for intellectual property rights we may obtain in the future. While an unintentional lapse of an intellectual property registration or application can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the registration or application, resulting in partial or complete loss of intellectual property rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a registration or application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to maintain the intellectual property registrations and applications covering our products, we may not be able to stop a competitor from developing or marketing products that are the same as or similar to our products, which would have a material adverse effect on our business. We also have a duty to disclose to the USPTO any prior art known to us that may be material to the patentability of our officerspatents. If we failed to submit any such material prior art, a court or directors becomes aware of a business combination opportunity which is suitable foradministrative agency may deem one or more entitiesof our patents unenforceable.

Additionally, certain of our patent applications relate to which hesoftware inventions. Software-related patents in general are susceptible to validity or she has fiduciary, contractualpatentability challenges before the USPTO or in other obligationsjudicial or duties, he or she will honor these obligations and dutiesquasi-judicial proceedings for being directed to present such business combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. These conflicts may not be resolved in our favor and a potential target businessnon-statutory subject matter under 35 U.S.C. § 101.

Patent terms may be presentedinadequate to another entity priorprotect our competitive position on our products for an adequate amount of time.

Patents have a limited lifespan. The terms of individual patents depend upon the legal term for patents in the countries in which they are granted. In most countries, including the United States, if all maintenance fees are timely paid, the natural expiration of a utility patent is generally 20 years from its earliest non-provisional filing date in the applicable country. However, the actual protection afforded by a patent varies from country to country, and depends upon many factors, including the type of patent, the scope of its presentationcoverage, voluntary disclaimer of patent term to us. Our amended and restated certificateobtain a patent’s allowance, the availability of incorporation will provide that we renounce our interestregulatory-related extensions, the availability of legal remedies in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one reasonable for us to pursue.

For a complete discussion of our officers’ and directors’ business affiliationsparticular country and the potential conflictsvalidity and enforceability of interest that you shouldthe patent. Various extensions may be awareavailable, but the life of please see “Management — Directors, Director Nomineesa patent, and Officers,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”

Our directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict withthe protection it affords, is limited. Even if patents covering our interests.

We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which weproducts are a party or have an interest. In fact,obtained, once the patent life has expired, we may enter into abe open to competition from competitive products, which may harm our business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.prospects.

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In particular, affiliatesaddition, although upon issuance in the United States a patent’s term can be extended based on certain delays caused by the USPTO, this extension can be reduced or eliminated based on certain delays caused by the patent applicant during patent prosecution. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. If we do not have sufficient patent terms to protect our products, proprietary technologies and their uses, our business would be seriously harmed. As our patents expire, the scope of our sponsor have invested in a diverse set of industries.patent protection will be reduced, which may reduce or eliminate any competitive advantage afforded by our patent portfolio. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive target for such other affiliates.

In addition, our officers or directors may be investors, or have other direct or indirect interests, in a business with which we may enter into a business combination agreement and/or in certain funds or other persons that may purchase shares in this offering or that may otherwise purchase shares of our Class A common stock in the public market.

Our officers, directors and any of their respective affiliates may sponsor or form, or, in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target.

Past performance by Rosecliff, or any of its funds, investments orpatent portfolio companies, or our sponsor, directors or management team or their respective affiliates may not be indicativeprovide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Changes in patent law or its interpretation could diminish the value of future performance of an investmentpatents in the company.

Past experience or performance of Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates is not a guarantee of either (1)general, thereby impairing our ability to successfully identifyprotect our existing and executefuture products.

Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. In 2011, the Leahy-Smith America Invents Act (the Leahy-Smith Act) was signed into law. The Leahy-Smith Act includes a transaction or (2) success with respectnumber of significant changes to any business combinationU.S. patent law. These include provisions that weaffect the way patent applications are prosecuted and also may consummate. You should not rely onaffect patent litigation. These also include provisions that switched the historical recordUnited States from a “first-to-invent” system to a “first-to-file” system, allow third-party submission of Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates as indicative of future performance of an investment in the company or the returns the company will, or is likely to, generate going forward.

Members of our management team and board of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, may be, or may become, involved in litigation, investigations or other proceedings, including related to those companies or otherwise. This may have an adverse effect on us, which may impede our ability to consummate an initial business combination.

During the course of their careers, members of our management team and board of directors have had significant experience as founders, board members, officers, executives or employees of other companies. Certain of those persons have been, may be or may in the future become involved in litigation, investigations or other proceedings, including relatingprior art to the business affairsUSPTO during patent prosecution and set forth additional procedures to attack the validity of such companies, transactions entered into by such companies, or otherwise, including Michael Murphy, our Chief Executive Officer and a director, who in 2020 was fined $20,000patent by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and suspendedUSPTO administered post-grant proceedings. Under a first-to-file system, assuming the other requirements for six months from association with any FINRA member, aspatentability are met, the first inventor to file a result of not timely updating his broker-dealer registration form (Form U4) to disclose personal tax matters. FINRA’s decision in the matter included findings of willful violations, which Mr. Murphy had denied and contested. The Form U4 was updated, the personal tax matters have been satisfied, the status of the matter as reported by FINRA is final and the suspension ended as of January 19, 2021.

Any litigation, investigations or other proceedings may divert the attention and resources of our management team and board of directors away from identifying and selecting a target business or businesses for our initial business combination and may negatively affect our reputation, which may impede our ability to complete an initial business combination.

Risks Relating to our Securities

You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares and/or warrants, potentially at a loss.

Our public stockholderspatent application generally will be entitled to receive fundsthe patent on an invention regardless of whether another inventor had made the invention earlier. The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in 2013. A third-party that files a patent application in the USPTO after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third-party. This will require us to be cognizant of the time from invention to filing of a patent application. Since patent applications in the trust account only uponUnited States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we were the earliestfirst to occur of: (1)file any patent application related to our completionproducts or invent any of an initial business combination,the inventions claimed in our patents or patent applications.

The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications will be prosecuted and then only in connection with those sharesalso may affect patent litigation. These include allowing third-party submission of Class A common stock that such stockholder properly elected to redeem, subjectprior art to the limitations described herein; (2)USPTO during patent prosecution and additional procedures to attack the redemptionvalidity of any public shares properly submitteda patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. Because of a lower evidentiary standard in connection withUSPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a stockholder votepatent claim, a third-party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to amendhold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third-party may attempt to use the USPTO procedures to invalidate our amendedpatent claims that would not have been invalidated if first challenged by the third-party as a defendant in a district court action. Therefore, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. In addition, future actions by the U.S. Congress, the federal courts and the USPTO could cause the laws and regulations governing patents to change in unpredictable ways. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, prospects and results of operations.

In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and applications. Furthermore, the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. Similarly, foreign courts have made, and will likely continue to make, changes in how the patent laws in their respective jurisdictions are interpreted. We cannot predict future changes in the interpretation of patent laws or changes to patent laws that might be enacted into law by U.S. and foreign legislative bodies. Those changes may materially affect our patents or patent applications and our ability to obtain additional patent protection in the future.

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Our patent rights and restated certificateother intellectual property may be subject to priority, ownership or inventorship disputes, interferences, and similar proceedings.

We may also be subject to claims that former employees, collaborators, or other third parties have an interest in our patents and patent applications or other intellectual property as an inventor or co-inventor. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents and patent applications, such co-owners’ rights may be subject, or in the future subject, to assignment or license to other third parties, including our competitors. In addition, we may need the cooperation of incorporation (A)any such co-owners to modifyenforce any such patents and any patents issuing from such patent applications against third parties, and such cooperation may not be provided to us. Additionally, we may be subject to claims from third parties challenging our ownership interest in or inventorship of intellectual property we regard as our own, for example, based on claims that our agreements with employees or consultants obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations to assign inventions to another employer, to a former employer, or to another person or entity, despite our inclusion of valid, present-tense intellectual property assignment obligations. Litigation may be necessary to defend against claims, and it may be necessary or we may desire to enter into a license to settle any such claim.

If we or our licensors are unsuccessful in any priority, validity (including any patent oppositions), ownership or inventorship disputes to which we or they are subject, we may lose valuable intellectual property rights through the substanceloss of one or timingmore of our obligationpatents, or such patent claims may be narrowed, invalidated, or held unenforceable, or through loss of exclusive ownership of or the exclusive right to allow redemptionuse our owned or in-licensed patents. In the event of loss of patent rights as a result of any of these disputes, we may be required to obtain and maintain licenses from third parties, including parties involved in any such interference proceedings or other priority or inventorship disputes. Such licenses may not be available on commercially reasonable terms or at all or may be non-exclusive. If we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture, and commercialization of one or more of the product candidates we may develop. An inability to incorporate technologies, features or other intellectual property that are important or essential to our products could have a material adverse effect on our business and competitive position. The loss of exclusivity or the narrowing of our patent claims could limit our ability to stop others from using or commercializing similar or identical technology and product candidates. Even if we are successful in priority, inventorship or ownership disputes, it could result in substantial costs and be a distraction to management and other employees. Any litigation or the threat thereof may adversely affect our ability to hire employees or contract with independent sales representatives. Any of the foregoing could result in a material adverse effect on our business, financial condition, prospects and results of operations.

We may be subject to claims that our employees, consultants, advisors, or contractors have misappropriated the intellectual property of a third party, including trade secrets or know-how, or are in breach of a non-competition or non-solicitation agreement with our competitors, and third parties may claim an ownership interest in intellectual property we regard as our own. Such claims could harm our business, financial condition, prospects and results of operations.

As is common in the medical device industry, our employees, consultants, and advisors may be currently or previously employed or engaged at universities or other medical device or healthcare companies, including our competitors and potential competitors. Some of these employees, consultants, advisors, and contractors may have executed proprietary rights, non-disclosure, and non-competition agreements in connection with such previous employment. Although we try to ensure that our initialemployees, consultants, advisors, and contractors do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may in the future become subject to claims that we or these individuals have, inadvertently or otherwise, misappropriated the intellectual property, including trade secrets or other proprietary information, of their current or former employers, competitors or other third parties. Also, we may in the future be subject to claims that these individuals are violating non-compete agreements with their former employers. Litigation may be necessary to defend against these claims. If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could harm our business, combination or to redeem 100%financial condition and results of our public sharesoperations. Even if we do not completeare successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

In addition, while it is our initial business combination within 24 months from the closing of this offering or (B) with respectpolicy to any other provision relating to stockholders’ rights or pre-initial business combination activity;require our employees, vendors, and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to orcontractors who may be involved in the trust account. Holdersconception or development of warrants willintellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not have any right tobe self-executing, may be

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ineffective under current or future case law, or the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, youassignment agreements may be breached, and we may be forced to sell your public sharesbring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Such defects in assignment or resulting claims could harm our business, financial condition, prospects and results of operations.

If we fail to validly execute invention assignment agreements with our employees and contractors involved in the development of intellectual property or are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our products our business and competitive position may be harmed.

In addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets, know-how, and other confidential and proprietary information that is not patentable or that we elect not to patent. However, trade secrets can be difficult to protect, and some courts are less willing or unwilling to protect trade secrets. To maintain the confidentiality of our trade secrets and proprietary information, we generally have confidentiality and invention assignment provisions in contracts with our employees, consultants, suppliers, contract manufacturers, collaborators, and others upon the commencement of their relationship with us. However, we may not enter into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by such third parties, despite the existence generally of these confidentiality restrictions. These contracts may not provide meaningful protection for our trade secrets, know-how, or other proprietary information in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how, or other confidential or proprietary information. There can be no assurance that such third parties will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets or proprietary technology and processes will not otherwise become known or independently developed by competitors. We may need to share our proprietary information, including trade secrets, with future business partners, collaborators, contractors, and others located in countries at heightened risk of theft of trade secrets, including through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors. Despite the protections we do place on our intellectual property or other confidential and proprietary rights, monitoring unauthorized use and disclosure of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property or other proprietary rights will be adequate. In addition, the laws of many foreign countries will not protect our intellectual property or other proprietary rights to the same extent as the laws of the United States. Consequently, we may be unable to prevent our proprietary technology from being exploited abroad, which could affect our ability to expand to international markets or require costly efforts to protect our technology.

To the extent our intellectual property or other proprietary information protection is incomplete, we are exposed to a greater risk of direct competition. A third-party could, without authorization, copy or otherwise obtain and use our products or technology, or develop similar technology. Our competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts or design around our protected technology. Our failure to secure, protect and enforce our intellectual property rights could substantially harm the value of our products, brand, and business. The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our products and harm our business, the value of our investment in research and development or acquisitions could be reduced, and third parties might make claims against us related to losses of their confidential or proprietary information. Any of the foregoing could materially and adversely affect our business, financial condition, prospects and results of operations.

Further, it is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology, and in such cases, we could not assert any trade secret rights against such parties. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our trade secret rights and related confidentiality and nondisclosure provisions. If we fail to obtain or maintain trade secret protection, or if our competitors obtain our trade secrets or independently develop technology similar to ours or competing technologies, our competitive market position could be materially and adversely affected. In addition, some courts are less willing or unwilling to protect trade secrets, and agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not be enforceable in certain cases. Even though we use commonly accepted security measures, trade secret violations are often a matter of state law, and the criteria for protection of trade secrets can vary among different jurisdictions.

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We also seek to preserve the integrity and confidentiality of our data and other confidential information by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached and detecting the disclosure or misappropriation of confidential information and enforcing a claim that a party illegally disclosed or misappropriated confidential information is difficult, expensive, and time-consuming, and the outcome is unpredictable. Further, we may not be able to obtain adequate remedies for any such breach.

We may not be able to enforce our intellectual property rights throughout the world.

Filing, prosecuting, and defending patents or trademarks on our current and future products in all countries throughout the world would be prohibitively expensive. The requirements for patentability and trademarking may differ in certain countries, particularly developing countries. The laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from utilizing our inventions and trademarks in all countries outside the United States. Competitors may use our technologies or trademarks in jurisdictions where we have not obtained patent or trademark protection to develop or market their own products and further, may export otherwise infringing products to territories where we have patent and trademark protection, but enforcement on infringing activities is inadequate. These products or trademarks may compete with our current or future products or trademarks, and our patents, trademarks or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, may not favor the enforcement of patents, trademarks, and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents and trademarks or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent and trademark rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents and trademarks at risk of being invalidated or interpreted narrowly, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, certain countries in Europe and many other countries, including India and China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

We rely on trademarks and trade names to build brand recognition and to promote, distinguish and market our products and services. Our current or future registered and unregistered trademarks or trade names may be challenged, opposed, infringed, circumvented or declared generic or descriptive, determined to be not entitled to registration, or determined to be infringing other marks. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names or logos, which we need for name recognition by potential partners or customers in our markets of interest. During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions. Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections. If our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. If we are unable to establish name recognition based on our trademarks and trade names, we may not be able to compete effectively, and our business may be adversely affected.

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We may in the future license our trademarks and trade names to third parties. Although these license agreements may provide guidelines for how our trademarks and trade names may be used, a breach of these agreements or misuse of our trademarks and tradenames by our licensees may jeopardize our rights in or diminish the goodwill associated with our trademarks and trade names. Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, and service marks may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.

Trademark litigation can be expensive, and the outcome can be highly uncertain. Furthermore, in many countries, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. If we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease the use of such trademarks.

If we are unable to obtain licenses from third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmed.

It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain a license from these third parties. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. If we are unable to license such technology, or if we are forced to license such technology, on unfavorable terms, our business could be harmed. If we are unable to obtain a necessary license, we may be unable to develop or commercialize the affected product candidates, which could harm our business, and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or warrants, potentially atother forms of compensation. Even if we are able to obtain a loss.license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

Moreover, some of our patents and patent applications in the future may be jointly owned with third parties. If we are unable to obtain an exclusive license to any such third-party joint owners’ interest in such patents or patent applications, such joint owners may be able to license their rights to other third parties, including our competitors, who could market competing products and technology. In addition, we may need the cooperation of any such joint owners in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could harm our business, financial condition and results of operations.

If our third-party manufacturers do not respect our intellectual property and trade secrets and produce or sell competitive products using our designs or intellectual property, our business, financial condition, prospects and results of operation would be harmed.

Although our agreements with third-party manufacturing partners generally seek to preclude them from misusing our intellectual property and trade secrets, or using our designs to manufacture products for our competitors, we may be unsuccessful in monitoring and enforcing our intellectual property rights and may find counterfeit goods in the market being sold as our products and any future products similar to ours produced for our competitors using our intellectual property. Additionally, any steps to stop counterfeits may not be successful and customers who purchase these counterfeit goods may experience product defects or failures, harming our reputation and brand and causing us to lose future sales. Any of the foregoing could harm our business, financial condition and results of operations.

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Intellectual property rights do not necessarily address all potential threats, and limitations in intellectual property rights could harm our business, financial condition, prospects and results of operations.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:

•        others may be able to make products that are similar to our products or utilize similar technology but that are not covered by the claims of our patents or that incorporate certain technology in our products that is in the public domain;

•        we, or our future licensors or collaborators, might not have been the first to make the inventions covered by the applicable issued patent or pending patent application that we own now or may own or license in the future;

•        we, or our future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions;

•        we, or our future licensors or collaborators, may fail to meet our obligations to the U.S. government regarding any future patents and patent applications funded by U.S. government grants, leading to the loss or unenforceability of patent rights;

•        others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

•        it is possible that our patents or patent applications omit individuals who should be listed as inventors or include individuals that should not be listed as inventors, which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable;

•        claims of our patents or patent applications, if and when issued, may not cover our products or technologies or competitive products or technologies;

•        the inventors of our patents or patent applications may become involved with competitors, develop products or processes that design around our patents, or become hostile to us or the patents or patent applications on which they are named as inventors;

•        our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

•        we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents;

•        we may not develop additional proprietary technologies that are patentable;

•        the patents of others may harm our business; or

•        we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent covering such intellectual property.

Any of the foregoing could harm our business, financial condition, prospects and results of operations.

Our contracts with BARDA and DHA may affect our intellectual property rights.

Our contracts with BARDA and DHA include provisions that implement the Bayh-Dole Act of 1980 relating to a uniform patent policy among the many federal agencies funding research, which grants the U.S. government certain rights in inventions that may be conceived or first actually reduced to practice under the contract. In particular, pursuant to the Federal Acquisition Regulations which governs executive agencies acquisition of services with appropriated funds, the U.S. government is granted a nonexclusive, nontransferable, irrevocable, paid-up, worldwide license to practice such inventions or have such inventions practiced for or on behalf of the U.S. government. In addition to our intellectual property rights, the BARDA and DHA contracts each provide certain data rights to the U.S. government

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with unlimited rights in: (i) data first produced in the performance of this contract; (ii) form, fit, and function data delivered under the contract; (iii) data delivered under this contract (except for restricted computer software) that constitute manuals or instructional and training material for installation, operation, or routine maintenance and repair of items, components, or processes delivered or furnished for use under this contract; and (iv) all other data delivered under this contract unless provided otherwise for limited rights data or restricted computer software.

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We intend to apply to have our units listed on Nasdaq on or promptly after the date of this prospectus and our Class A common stock and warrants listed on or promptly after their date of separation. Although after giving effect to this offering we expect to meet the minimum initial listing standards set forth in the Nasdaq listing rules, we cannot assure you that our securities will be, or will continue to be listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and share price levels. In general, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum of 300 public holders. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listingNasdaq. If any of our securities on Nasdaq. For instance, our share price would generally be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5,000,000 and we would be required to have a minimum of 300 round lot holders of our unrestricted securities (with at least 50% of such round-lot holders holding unrestricted securities with a market value of at least $2,500). We cannot assure you that we will be able to meet those initial listing requirements at that time.

If Nasdaq delists any of our securitiesare delisted from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

•        a limited availability of market quotations for our securities;

•        reduced liquidity for our securities;

•        a determination that our Class A common stockCommon Stock are a “penny stock” which will require brokers trading in our Class A common stockCommon Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

•        a limited amount of news and analyst coverage; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvementlisting of our securities on Nasdaq did not benefit from the process undertaken in connection with an underwritten initial public offering.

Our Common Stock and our Warrants are listed on the Nasdaq under the symbols “MDAI” and “MDAIW,” respectively. Unlike an underwritten initial public offering of our securities, the initial listing of our securities as a result of the Business Combination did not benefit from the following:

•        the book-building process undertaken by underwriters that helps to inform efficient price discovery with respect to opening trades of newly listed securities;

•        underwriter support to help stabilize, maintain or affect the public price of the new issue immediately after listing; and

•        potential underwriter liability for material misstatements or omissions of fact in a prospectus used in connection with the securities being offered or for statements made by the underwriters’ securities analysts or other personnel.

The lack of such a process in connection with the listing of our securities could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for our securities in the near future than in connection with an underwritten initial public offering.

We will incur increased costs as a result of operating as a public company, and the Company’s management will be required to devote substantial time to new compliance and investor relations initiatives.

As a public company, the Company has and will continue to incur significant legal, accounting and other expenses that Legacy Spectral did not incur as a private company. The Company is subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires the filing of annual, quarterly and current reports with respect to a public company’s business and financial condition. The Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, require, among other things, that a public company establish and maintain effective disclosure and financial controls. As a result, the Company has and will continue to incur significant legal, accounting and other expenses that Legacy Spectral did not previously incur. The Company’s entire management team and many of its other employees will need to devote substantial time to compliance, and may not effectively or efficiently manage its transition into a public company.

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Further, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 1996,2010, the SEC has adopted additional rules and regulations in these areas, such as mandatory “say on pay” voting requirements that will apply to the Company when the Company ceases to be an emerging growth company. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which ismay lead to additional compliance costs and impact the manner in which the Company operates its business in ways it cannot currently anticipate.

The Company expects the rules and regulations applicable to public companies to lead to significant legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of the Company’s management and personnel from other business concerns, they could have a federal statute, preventsmaterial adverse effect on the Company’s business, financial condition and results of operations. The increased costs will decrease the Company’s net income or preemptsincrease the states from regulatingCompany’s net loss, and may require the saleCompany to reduce costs in other areas of certain securities,the Company’s business or increase the prices of the Company’s services. The Company cannot predict or estimate the amount or timing of additional costs it may incur to respond to these requirements. The impact of these requirements could also make it more difficult for the Company to attract and retain qualified persons to serve on its board of directors, board committees or as executive officers.

Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult.

The Charter, the Bylaws and Delaware law contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the Company’s board of directors. Among other things, the Charter and/or the Bylaws include the following provisions:

•        limitations on convening special stockholder meetings, which are referredcould make it difficult for our stockholders to as “covered securities.” Because we expectadopt desired governance changes;

•        a prohibition on stockholder action by written consent, which means that our unitsstockholders will only be able to take action at a meeting of stockholders and eventuallywill not be able to take action by written consent for any matter;

•        a forum selection clause, which means certain litigation against us can only be brought in the State of Delaware;

•        the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our Class Astockholders; and

•        advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, the board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder, or (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the common stock.

Any provision of the Charter, the Bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and warrantscould also affect the price that some investors are willing to pay for our common stock.

The Charter provides that the Court of Chancery of the State of Delaware will be listed on Nasdaq,the sole and exclusive forum for substantially all disputes between us and our units, Class A common stock and warrants will qualify as covered securities under such statute. Althoughstockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

The Charter provides that unless we consent in writing to the states are preempted from regulatingselection of an alternative forum, the saleCourt of covered securities,Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal statutedistrict court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action or proceeding brought

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on behalf of the Company, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee, agent or stockholder of the Company to the Company or to the Company’s stockholders, (iii) any action, suit or proceeding asserting a claim against the Company, its current or former directors, officers, or employees, agents or stockholders arising pursuant to any provision of the DGCL or our Charter or Bylaws, or (iv) any action, suit or proceeding asserting a claim against the Company, its current or former directors, officers, or employees, agents or stockholders governed by the internal affairs doctrine.

The exclusive forum provision set forth above does allownot apply to, and does not preclude or contract the statesscope of, either (i) exclusive federal jurisdiction pursuant to investigate companiesSection 27 of the Exchange Act for claims seeking to enforce any liability or duty created by the Exchange Act or the rules and regulations thereunder, or any other claim for which the U.S. federal courts have exclusive jurisdiction, or (ii) concurrent jurisdiction under Section 22 of the Securities Act for federal and state courts over all claims seeking to enforce any liability or duty created by the Securities Act or the rules and regulations thereunder. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

The choice of forum provision may limit a stockholder’s ability to bring, and increase the cost of, a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in the Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

The failure of any bank in which we deposit our funds could have an adverse effect on our financial condition.

We deposit substantial funds in financial institutions and may, from time to time, maintain cash balances at such financial institutions in excess of the Federal Deposit Insurance Corporation limit. In recent months, there has been significant volatility and instability among banks and financial institutions. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver, and for a period of time, customers of the bank did not have access to their funds and there was uncertainty as to when, if at all, customers would have access to funds in excess of the FDIC insured amounts. Although we did not maintain any funds at SVB, should one or more of the financial institutions at which deposits are maintained fail, there is no guarantee as to the extent that we would recover the funds deposited, whether through Federal Deposit Insurance Corporation coverage or otherwise, or the timing of any recovery.

Risks Relating to the Ownership of Our Securities

The price of Common Stock and Warrants may be volatile.

Fluctuations in the price of the Company’s securities could contribute to the loss of all or part of your investment. The valuation ascribed to the Company in the Business Combination may not be indicative of the price that will prevail in the trading market. If an active market for our securities develops and continues, the trading price of the Company’s securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a suspicionmaterial adverse effect on your investment in our securities and the Company’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of fraud,our securities may not recover and if there ismay experience a findingfurther decline.

Factors affecting the trading price of fraudulent activity, then the states can regulateCompany’s securities may include:

•        actual or baranticipated fluctuations in our quarterly financial results or the salequarterly financial results of coveredcompanies perceived to be similar to us;

•        changes in the market’s expectations about the Company’s operating results;

•        success of competitors;

•        the public’s reaction to our press releases, other public announcements and filings with the SEC,

•        operating results failing to meet the expectations of securities analysts or investors in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.period;

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We are not registering•        changes in financial estimates and recommendations by securities analysts concerning the Company or the industry in which the Company operates in general;

•        operating and stock price performance of other companies that investors deem comparable to the Company;

•        ability to market new and enhanced products and services on a timely basis;

•        changes in laws and regulations affecting our business;

•        commencement of, or involvement in, litigation involving the Company;

•        changes in the Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

•        the volume of shares of Class Athe Company’s common stock issuable upon exercise of the warrants under the Securities Act or available for public sale;

•        any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.

We are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamentalmajor change in the information set forth inCompany’s board or management;

•        sales of substantial amounts of the registration statementCompany’s common stock by our directors, executive officers or prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correctsignificant stockholders or the SEC issues a stop order. Ifperception that such sales could occur; and

•        general economic and political conditions such as recessions, changes in interest rates, changes in fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the shares issuable upon exercisemarket price of the warrants are not registered under the Securities Actour securities irrespective of our operating performance. The stock market in accordance with the above requirements, we will be required to permit holders to exercise their warrants on a cashless basis, in which case, the number of shares of Class A common stockgeneral, and Nasdaq specifically, have experienced extreme volatility that you will receive upon cashless exercise will be based on a formula subject to a maximum amount of shares equal to 0.361 shares of Class A common stock per warrant (subject to adjustment). However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky lawshas often been unrelated to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuanceoperating performance of the shares upon exerciseparticular companies. As a result of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrantthis volatility, you may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. There may be a circumstance where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding exemption does not exist for holders of the public warrants included as part of units sold in this offering. In such an instance, our sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise their warrants and sell the shares of Class A common stock underlying their warrants while holders of our public warrants would not be able to exercise their warrantssell your securities at or above the price at which it was acquired. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to the Company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and sellour ability to obtain additional financing in the underlyingfuture.

Sales of a substantial number of our securities in the public market by the selling stockholders and/or by our existing stockholders could cause the price of our shares of Class A common stock. IfCommon Stock and whenWarrants to fall.

Approximately 64.2% of our issued and outstanding Common Stock as of October 24, 2023 is being registered for resale pursuant to the warrants become redeemable by us, we may exercise our redemption right even if we are unableregistration statement of which this prospectus forms a part. The selling stockholders can sell, under this prospectus, (i) up to register or qualify the underlying10,069,748 shares of Class A common stock for sale under all applicable state securities laws. AsCommon Stock, which consists of (a) up to 8,623,081 shares of Common Stock issued in connection with the Closing at an equity consideration value of $10.00 per share, (b) up to 880,000 shares of Common Stock that were originally issued to the Initial Holders in the form of founder shares prior to the RCLF IPO at a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.

Our sponsor paid an aggregateprice of $25,000, or approximately $0.004 per founder share, and accordingly, you will experience immediate and substantial dilution upon(c) up to 566,667 shares of Common Stock that were issued to certain service providers of the purchaseCompany in connection with the Closing.

The sale of all or a portion of the securities being offered in this prospectus could result in a significant decline in the public trading price of our Class A common stock.

The difference betweensecurities. Despite such a decline in the public offeringtrading price, per share (allocating allsome of the unit purchase priceselling stockholders may still experience a positive rate of return on the securities they purchased due to the price at which such selling stockholder initially purchased the securities. See “Certain existing stockholders purchased, or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return.” below.

Sales of a substantial number of our shares of Class A common stock and none to the warrant includedCommon Stock and/or Warrants in the unit) andpublic market by the pro forma net tangible book value per share of Class A common stock after this offering constitutesselling stockholders and/or by our other existing stockholders, or the dilution to you andperception that those sales might occur, could depress the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 91.8% (or $9.18 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.82 and the initial offeringmarket price of $10.00 per unit. This dilution would increaseour shares of Common Stock and Warrants and could impair our ability to raise capital through the sale of additional equity securities.

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Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations.

The Company is subject to laws, regulations and rules enacted by national, regional and local governments and the Nasdaq. In particular, Company is required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on Company’s business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on Company’s business and results of operations.

If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our Common Stock may decline.

Effective internal controls over financial reporting are necessary for the Company to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause the Company to fail to meet its reporting obligations. In addition, any testing by the Company conducted in connection with Section 404 of the Sarbanes-Oxley Act (“Section 404”) or any subsequent testing by the Company’s independent registered public accounting firm, may reveal deficiencies in the Company’s internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to the Company’s financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in the Company’s reported financial information, which could have a negative effect on the trading price of the Company’s stock.

For as long as the Company is an emerging growth company, its independent registered public accounting firm will not be required to attest to the effectiveness of its internal controls over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of the Company’s internal controls over financial reporting could detect problems that the Company’s management’s assessment might not detect. Undetected material weaknesses in the Company’s internal controls over financial reporting could lead to restatements of the Company’s consolidated financial statements and require the Company to incur the expense of remediation.

If the Company is not able to comply with the requirements of Section 404 in a timely manner or it is unable to maintain proper and effective internal controls over financial reporting may not be able to produce timely and accurate consolidated financial statements. As a result, the Company’s investors could lose confidence in its reported financial information, the market price of the Common Stock could decline and the Company could be subject to sanctions or investigations by the SEC or other regulatory authorities.

If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our Common Stock, the price of our Common Stock could decline.

The trading market for our Common Stock will depend in part on the research and reports that third-party securities analysts publish about us and the industries in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline. Moreover, if one or more of the analysts who cover us downgrades our Common Stock, or if our reporting results do not meet their expectations, the market price of our Common Stock could decline.

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The Company is a holding company and our only significant asset is our ownership interest in our subsidiaries and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on the Common Stock or satisfy our other financial obligations, including taxes.

The Company is a holding company with no material assets other than its ownership of our subsidiaries. As a result, the Company has no independent means of generating revenue or cash flow. The Company’s ability to pay taxes and pay dividends will depend on the financial results and cash flows of our subsidiaries and the distributions we receive from our subsidiaries. Deterioration in the financial condition, earnings or cash flow of our subsidiaries for any reason could limit or impair our subsidiaries’ ability to pay such distributions. Additionally, to the extent that the anti-dilution provisionsCompany needs funds and our subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of any financing arrangements, or our subsidiaries are otherwise unable to provide such funds, it could materially adversely affect the Company’s liquidity and financial condition.

Dividends on the Common Stock, if any, will be paid at the discretion of the Class B common stock result inBoard, which will consider, among other things, the issuance of shares of Class A common stockCompany’s business, operating results, financial condition, current and expected cash needs, plans for expansion and any legal or contractual limitations on its ability to pay such dividends. Financing arrangements may include restrictive covenants that restrict the Company’s ability to pay dividends or make other distributions to its stockholders. In addition, the Company is generally prohibited under Delaware law from making a greater than one-to-one basis upon conversion ofdistribution to stockholders to the Class B common stockextent that, at the time of our initial business combination and would become exacerbatedthe distribution, after giving effect to the extentdistribution, liabilities of the Company (with certain exceptions) exceed the fair value of its assets. If our subsidiaries do not have sufficient funds to make distributions, the Company’s ability to declare and pay cash dividends may also be restricted or impaired.

Sales, or the perception of sales, of our common stock, including those registered in this registration statement, by us or our existing stockholders in the public market could cause the market price for our common stock to decline.

The sale of substantial amounts of shares of our common stock in the public market, or the perception that publicsuch sales could occur, could harm the prevailing market price of shares of our Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon the expiration or waiver of the lock-ups described above, shares held by certain of our stockholders seek redemptions fromwill be eligible for resale, subject to, in the trust. case of certain stockholders, volume, manner of sale and other limitations under Rule 144. As restrictions on resale end, the market price of shares of our Common Stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Common Stock or other securities.

In addition, becausethe shares of our Common Stock reserved for future issuance under the Equity Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume and manner of sale by affiliates under Rule 144, as applicable. The number of shares to be reserved for future issuance under the Equity Incentive Plan is expected to equal approximately 3,000,000 shares.

We expect to file one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock or securities convertible into or exchangeable for shares of our common stock issued pursuant to our equity incentive plans. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. The initial registration statement on Form S-8 is expected to cover approximately 3,000,000 shares of our common stock.

Certain existing stockholders purchased, or may purchase, securities in the Company at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price. Future investors in the Company may not experience a similar rate of return.

Certain stockholders in the Company, including certain of the anti-dilution protection inselling stockholders, acquired, or may acquire, shares of our Common Stock or Warrants at prices below the foundercurrent trading price of our Common Stock, and may experience a positive rate of return based on the current trading price.

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This prospectus relates to the offer and resale from time to time by the selling stockholders of (i) up to 10,069,748 shares any equity or equity-linked securitiesof Common Stock, constituting approximately 64.2% of our issued and outstanding Common Stock as of October 24, 2023, which consists of (a) up to 8,623,081 shares of Common Stock issued in connection with the Closing at an equity consideration value of $10.00 per share, (b) up to 880,000 shares of Common Stock that were originally issued to the Initial Holders in the form of founder shares prior to the RCLF IPO at a price of approximately $0.004 per share, and (c) up to 566,667 shares of Common Stock that were issued to certain service providers of the Company in connection with the Closing.

For example, based on the closing price of our Common Stock of $2.54 on October 24, 2023, the Initial Holders may experience potential profit of up to $2.536 per share of Common Stock, or $2,231,680 in the aggregate, based on the Initial Holders’ initial business combinationpurchase price of shares of Common Stock in the form of founder shares prior to the RCLF IPO at a price of approximately $0.004 per share. See the section entitled “Information Related to the Offered Securities” for additional information on the potential profits the other selling stockholders may experience.

Public stockholders may not be able to experience the same positive rates of return on securities they purchase due to the low price at which the Sponsor purchased shares of our Common Stock and Warrants.

Warrants will become exercisable for Company common stock, which would be disproportionately dilutiveincrease the number of shares eligible for resale in the public market and result in dilution to our Class A common stock.stockholders.

We may amendOutstanding warrants to purchase an aggregate of 8,433,231 shares of Common Stock will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. Each warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per full share, subject to adjustment as discussed below. Common Stock issued upon exercise of the Warrants are subject to the lock-up agreements described in the section title “Other Agreements — Lockup Agreement.” Pursuant to the Warrant Agreement, a holder of Warrants may exercise its Warrants only for a whole number of shares. This means that only a whole warrant may be exercised at any given time by a holder of Warrants. To the extent such warrants are exercised, additional shares of the Common Stock will be issued, which will result in dilution to the holders of the Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of the Common Stock.

The Warrants may never be in the money, and they may expire worthless and the terms of the Warrants may be amended in a manner that may be adverse to holders of public warrants with the approval by thea holder if holders of at least 65%50% of the then outstanding public warrants. As a result, the exercise priceWarrants approve of yoursuch amendment.

The warrants could be increased, the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.

Our warrants will bewere issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.the Warrant Agreement. The warrant agreementWarrant Agreement provides that the terms of the warrantsWarrants may be amended without the consent of any holder for the purpose of (i) curingto cure any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision, or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the interest of the registered holders of the warrants, provided thatbut requires the approval by the holders of at least 65%a majority of the then outstanding public warrants is requiredWarrants to make any change that adversely affects the interests of the registered holders of public warrants.Warrants. Accordingly, wethe Company may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 65%a majority of the then outstanding public warrants approve of such amendment and, solely with respect to any amendment toamendment. Although the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 65% of the number of the then outstanding private placement warrants. Although ourCompany’s ability to amend the terms of the public warrantsWarrants with the consent of at least 65%a majority of the then outstanding public warrantsWarrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash,Warrants, shorten the exercise period or decrease the number of shares of our Class A common stockthe Common Stock, as applicable, purchasable upon exercise of a warrant.Warrant.

Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole andThe Warrant Agreement contains an exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants,clause, which could limit thea Warrant holder’s ability of warrant holders to obtain a favorable judicial forum for disputes with our company.arising under the Warrant Agreement.

Our warrant agreement will provideThe Warrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us or the warrant agent arising out of or relating in any way to the warrant agreement,Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreementWarrant Agreement will not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act (or the rules and regulations thereunder) or any other claim for which the federal district courts of the United States of America are the sole and exclusive

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forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrantsthe Warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement.the Warrant Agreement. If any action, the subject matter of which is within the scope of the forum provisions of the warrant agreement,Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “NY foreign“foreign action”) in the name of any holder of our warrants,the Warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (a “NY enforcement(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such NY enforcement action by service upon such warrant holder’s counsel in the NY foreign action as agent for such warrant holder.

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This choice-of-forum of forum provision may limit a warrantWarrant holder’s ability to bring, and increase the cost of, a claim in a judicial forum that it finds favorable for disputes with our company,the Company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreementthe Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

WeYour unexpired Warrants may redeem your unexpired warrantsbe redeemed prior to their exercise at a time that is disadvantageous to you, thereby making your warrantsWarrants worthless.

We have the ability to redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant if, among other things, the Reference Valuelast reported sale price of shares of Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the Warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”)adjusted). Please see “ Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00.” If and when the warrantsWarrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the warrantsWarrants as set forth above even if the holders are otherwise unable to exercise the warrants.Warrants. Redemption of the outstanding warrantsWarrants as described above could force you to: (1) exercise your warrantsWarrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your warrantsWarrants at the then-current market price when you might otherwise wish to hold your warrants;Warrants; or (3) accept the nominal redemption price which, at the time the outstanding warrantsWarrants are called for redemption, we expect would be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us (except as described below under “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”) so long as they are held by our sponsor or its permitted transferees.Warrants.

In addition, we have the ability to redeem the outstanding warrantsWarrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrantWarrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”)adjusted). In such a case, the holders will be able to exercise their warrantsWarrants prior to redemption for a number of shares of Class A common stockCommon Stock determined based on the redemption date and the fair market value of our Class A common stock. Please see “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.”Common Stock. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrantsWarrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the Class A common stockCommon Stock had your warrantsWarrants remained outstanding. The value received upon exercise of the warrantsWarrants (1) may be less than the value the holders would have received if they had exercised their warrantsWarrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the warrants, including because the number of shares of Class A common stockCommon Stock received is capped at 0.361 shares of Class A common stockCommon Stock per warrantWarrant (subject to adjustment) irrespective of the remaining life of the warrants.

Because each unit contains one-third of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit contains one-third of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole warrants will trade. This is different from other offerings similar to ours whose units include one share of Class A common stock and one whole warrant to purchase one share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate for a third of the number of shares compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.Warrants.

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The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.

Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices and terms of the units, including the Class A common stock and warrants underlying the units, include:

•        the history and prospects of companies whose principal business is the acquisition of other companies;

•        prior offerings of those companies;

•        our prospects for acquiring an operating business at attractive values;

•        a review of debt to equity ratios in leveraged transactions;

•        our capital structure;

•        an assessment of our management and their experience in identifying operating companies;

•        general conditions of the securities markets at the time of this offering; and

•        other factors as were deemed relevant.

Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.

There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.

There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions, including as a result of the COVID-19 outbreak. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

Provisions in our amended and restated certificate of incorporation may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preferred stock, and the fact that prior to the completion of our initial business combination only holders of our shares of Class B common stock, which are held by our initial stockholders, are entitled to vote on the election of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.

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General Risk Factors

We are a newly incorporated company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

We are a newly incorporated company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.

We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates equals and exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our common stock held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

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Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with our company or our company’s directors, officers or other employees.

Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of our company, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company to our company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a claim against our company or any director, officer or employee of our company arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our bylaws, or (4) action asserting a claim against us or any director, officer or employee of our company governed by the internal affairs doctrine except for, as to each of (1) through (4) above, any claim (a) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (c) for which the Court of Chancery does not have subject matter jurisdiction. In addition, our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or our directors, officers, other employees or agents. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us and may have the effect of discouraging lawsuits against our directors and officers. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation. If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.

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USE OF PROCEEDSUse of Proceeds

We are offering 20,000,000 units atAny sales of Common Stock by the selling stockholders pursuant to this prospectus will be solely for the selling stockholders’ respective accounts. The Company will not receive any proceeds from any such sales.

The Company will receive up to an offering priceaggregate of $10.00 per unit. We estimate thatapproximately $96.9 million from the exercise of the Warrants, assuming the exercise in full of all of the Warrants for cash. The Company expects to use any such net proceeds of this offering together with the funds we will receive from the saleexercise of the private placement warrantsWarrants for general corporate and working capital purposes. The Company will be used as set forth in the following table.

 

Without
Over-Allotment
Option

 

Over-Allotment Option
Exercised

Gross proceeds

 

 

 

 

 

 

 

 

Gross proceeds from units offered to public(1)

 

$

200,000,000

 

 

$

230,000,000

 

Gross proceeds from private placement warrants offered in the private placement

 

 

6,000,000

 

 

 

6,600,000

 

Total gross proceeds

 

$

206,000,000

 

 

$

236,600,000

 

Estimated offering expenses(2)

 

 

 

 

 

 

 

 

Underwriting commissions (excluding deferred portion)(3)

 

$

4,000,000

 

 

$

4,600,000

 

Legal fees and expenses

 

 

325,000

 

 

 

325,000

 

Accounting fees and expenses

 

 

40,000

 

 

 

40,000

 

Printing and engraving expenses

 

 

35,000

 

 

 

35,000

 

SEC expenses

 

 

25,093

 

 

 

25,093

 

FINRA expenses

 

 

35,000

 

 

 

35,000

 

Directors and officers insurance premiums(4)

 

 

250,000

 

 

 

250,000

 

Nasdaq listing and filing fees

 

 

75,000

 

 

 

75,000

 

Miscellaneous expenses(5)

 

 

214,907

 

 

 

214,907

 

Total estimated offering expenses (other than underwriting commissions)

 

$

1,000,000

 

 

$

1,000,000

 

Proceeds after estimated offering expenses

 

$

201,000,000

 

 

$

231,000,000

 

Held in trust account(3)

 

$

200,000,000

 

 

$

230,000,000

 

% of public offering size

 

 

100

%

 

 

100

%

Not held in trust account(2)

 

$

1,000,000

 

 

$

1,000,000

 

The following table showshave broad discretion over the use of proceeds from the approximately $1,000,000 of net proceeds not held in the trust account(6).

 

Amount

 

% of Total

Legal, accounting, due diligence, travel and other expenses in connection with any business combination(7)

 

$

350,000

 

35.0

%

Legal and accounting fees related to regulatory reporting obligations

 

 

150,000

 

15.0

%

Payment for administrative and support services(8)

 

 

240,000

 

24.0

%

Reserve for liquidation expenses

 

 

100,000

 

10.0

%

Nasdaq continued listing fees

 

 

75,000

 

7.5

%

Other miscellaneous expenses

 

 

85,000

 

8.5

%

Total

 

$

1,000,000

 

100.0

%

____________

(1)      Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.

(2)      A portionexercise of the offering expenses have been paid fromWarrants. There is no assurance that the proceeds of a loan from our sponsor of up to $300,000 as described in this prospectus. These loans will be repaid upon completion of this offering outholders of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account. These expenses are estimates only. In the event that offering expenses are less than as set forth in this table,Warrants will elect to exercise any such amounts will be used for post-closing working capital expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.

(3)      The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $7,000,000, which constitutes the underwriters’ deferred commissions (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account, and the remaining funds, less amounts used to pay redeeming stockholders, will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on

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indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.

(4)      This amount represents the approximate amount of annualized director and officer liability insurance premiums we anticipate paying following the completion of this offering and until we complete a business combination.

(5)      Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual amounts exceed estimates.

(6)      These expenses are estimates only. Our actual expenditures for some or all of these items may differ fromsuch warrants or options, as applicable, for cash.

The exercise price of our Warrants is $11.50 per share of Common Stock. We believe the estimates set forth herein. For example,likelihood that the holders will exercise their Warrants, as applicable, and therefore the amount of cash proceeds that we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination basedwould receive, is dependent upon the level of complexity of such business combination. In the event we identify an initial business combination target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. Based upon current interest rates, we estimate that the interest earned on the trust account will be approximately $160,000 per year however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 0.08% per annum based upon current yields of securities in which the trust account may be invested. In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliatetrading price of our sponsor or certainCommon Stock. If the trading price of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

(7)      Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop” provision and commitment fees for financing.

(8)      This amount represents payment to our sponsor of a total of $10,000 per month for office space, support and administrative services. See “Certain Relationships and Related Party Transactions — Support Services Agreement.” Upon the earlier of consummation of our initial business combination and our liquidation, we will cease paying these monthly fees.

Nasdaq listing rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full), including $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions, will, upon the consummation of this offering, be placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. with ContinentalCommon Stock Transfer & Trust Company acting as trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Based upon current interest rates, we estimate that the interest earned on the trust account will be approximately $160,000 per year, assuming an interest rate of 0.08% per year. We will not be permitted to withdraw any of the principal or interest held in the trust account except for the withdrawal of interest to pay taxes, if any. The funds held in the trust account will not otherwise be released from the trust account until the earliest of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. Based on current interest rates, we expect that interest earned on the trust account will be sufficient to pay taxes.

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The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial business combination and to pay the deferred underwriting commissions. If our initial business combination is paid for using equity or debt, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or the redemption of our public shares, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective business combination, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessaryexercise price thereof, we believe the holders are unlikely to do so, we may be requiredexercise their Warrants. Conversely, the holders are more likely to raise additional capital,exercise their Warrants, as applicable, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, membershigher the price of our management team orCommon Stock is above the exercise price thereof. The closing price of our Common Stock on Nasdaq on October 24, 2023 was below the applicable exercise price of our Warrants. The Warrants are exercisable on a cashless basis under certain circumstances specified in the Warrant Agreement, respectively. To the extent that any Warrants are exercised on a cashless basis, the aggregate amount of their respective affiliates, butcash we would receive from such persons are not under any obligation to loan funds to, or otherwise invest in, us.exercises will decrease.

We will enter into an support services agreement pursuant to which weThe holders will pay our sponsor a total of $10,000 per month for office space, supportany underwriting discounts, selling commissions and administrative services. See “Certain Relationshipsstock transfer taxes and Related Party Transactions — Support Services Agreement.” Upon the earlier of consummation of our initial business combination and our liquidation, we will cease paying these monthly fees.

Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed $40,000 underfees incurred by such promissory note. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2021 or the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account.

In addition, in order to finance transaction costsholders in connection with an intended initial business combination, our sponsorany sale of their shares of Common Stock. The Company will generally bear all other costs, fees and expenses incurred in effecting the registration of the shares of Common Stock covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of Company counsel and independent registered public accountants.

DETERMINATION OF OFFERING PRICE

We cannot currently determine the price or an affiliateprices at which shares of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds asCommon Stock may be required. If we complete our initial business combination, we may repay such loaned amounts out ofsold by the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may also purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Please see “Proposed Business — Permitted purchases and other transactions with respect to our securities” for a description of how such persons will determine from whichselling stockholders to seek to acquire shares. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any,this prospectus.

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would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

We may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions and the agreement for our initial business combination may require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with such redemption and the related business combination, and may instead search for an alternate business combination (including, potentially, with the same target).

Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.

Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination or certain amendments to our amended and restated certificate of incorporation as described elsewhere in this prospectus. In addition, our initial stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the prescribed time frame. However, if our initial stockholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.

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MARKET INFORMATION FOR COMMON STOCK AND DIVIDEND POLICY

Market Information

Our Common Stock and Public Warrants are currently listed on Nasdaq under the symbols “MDAI” and “MDAIW,” respectively. As of October 24, 2023, there were 72 holders of record of our Common Stock and one holder of record of our Public Warrants. The actual number of stockholders of our Common Stock and the actual number of holders of our Warrants is greater than the number of record holders and includes holders of our Common Stock or Warrants whose shares of Common Stock or Warrants are held in street name by brokers and other nominees.

Dividend Policy

We have not declared or paid any cash dividends on our commoncapital stock to datedate. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment ofanticipate paying cash dividends in the foreseeable future. Any future determination related to our dividend policy will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be withinmade at the discretion of our board of directors at such time. In addition,after considering our business prospects, results of operations, financial condition, cash requirements and availability, debt repayment obligations, capital expenditure needs, contractual restrictions, covenants in the agreements governing current and future indebtedness, industry trends, the provisions of Delaware law affecting the payment of dividends and distributions to stockholders and any other factors or considerations the board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of this offering, in which case we will effect a stock dividend or other appropriate mechanism immediately prior to the consummation of this offering in an amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.deems relevant.

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DILUTION

The difference between the public offering price per share of Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A common stock which may be redeemed for cash), by the number of issued and outstanding shares of our Class A common stock.

At December 31, 2020, our net tangible book deficit was $(140,574), or approximately $(0.02) per share of Class B common stock. After giving effect to the sale of 20,000,000 shares of Class A common stock included in the units we are offering by this prospectus, the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2020 would have been $5,000,005, or $0.82 per share, representing an immediate increase in net tangible book value (as decreased by the value of 18,902,432 shares of Class A common stock that may be redeemed for cash and assuming no exercise of the underwriters’ over-allotment option) of $0.84 per share to our initial stockholders as of the date of this prospectus and an immediate dilution of $9.18 per share or 91.8% to our public stockholders not exercising their redemption rights. The dilution to new investors if the underwriters exercise the over-allotment option in full would be an immediate dilution of $9.28 per share or 92.8%.

The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:

 

Without Over-allotment

 

With Over-allotment

Public offering price

  

 

 

$

10.00

 

  

 

 

$

10.00

 

Net tangible book deficit before this offering

 

(0.02

)

 

 

 

 

 

(0.02

)

 

 

 

 

Increase attributable to public stockholders

 

0.84

 

 

 

 

 

 

0.74

 

 

 

 

 

Pro forma net tangible book value after this offering and the sale of the private placement warrants

  

 

 

 

0.82

 

  

 

 

 

0.72

 

Dilution to public stockholders

  

 

 

$

9.18

 

  

 

 

$

9.28

 

Percentage of dilution to public stockholders

  

 

 

 

91.8

%

  

 

 

 

92.8

%

For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $189,024,320 because holders of up to approximately 94.5% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per-share redemption price equal to the amount in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of shares of Class A common stock sold in this offering.

The following table sets forth information with respect to our initial stockholders and the public stockholders:

 

Shares Purchased

 

Total Consideration

 

Average Price Per Share

  

Number

 

Percentage

 

Amount

 

Percentage

 

Initial Stockholders(1)(2)

 

5,000,000

 

20.0

%

 

$

25,000

 

0.01

%

 

$

0.005

Public Stockholders

 

20,000,000

 

80.0

%

 

$

200,000,000

 

99.99

%

 

$

10.00

  

25,000,000

 

100.00

%

 

$

200,025,000

 

100.00

%

 

 

 

____________

(1)      Assumes the full forfeiture of 750,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.

(2)      Assumes conversion of Class B common stock into Class A common stock on a one-for-one basis. The dilution to public stockholders would increase to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of shares of Class A common stock on a greater than one-to-one basis upon such conversion.

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The pro forma net tangible book value per share after this offering is calculated as follows:

 

Without
Over-allotment

 

With
Over-allotment

Numerator:

 

 

 

 

 

 

 

 

Net tangible book deficit before this offering

 

$

(140,574

)

 

$

(140,574

)

Net proceeds from this offering and sale of the private placement warrants

 

 

201,000,000

 

 

 

231,000,000

 

Plus: Offering costs paid in advance, excluded from tangible book value before this offering

 

 

164,899

 

 

 

164,899

 

Less: Deferred underwriting commissions

 

 

(7,000,000

)

 

 

(8,050,000

)

Less: Proceeds held in trust subject to redemption

 

 

(189,024,320

)

 

 

(217,974,320

)

  

$

5,000,005

 

 

$

5,000,005

 

  

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

Class B common stock outstanding prior to this offering

 

 

5,750,000

 

 

 

5,750,000

 

Class B common stock forfeited if over-allotment is not exercised

 

 

(750,000

)

 

 

 

Class A common stock included in the units offered

 

 

20,000,000

 

 

 

23,000,000

 

Less: Shares subject to redemption

 

 

(18,902,432

)

 

 

(21,797,432

)

  

 

6,097,568

 

 

 

6,952,568

 

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CAPITALIZATION

The following table sets forth our capitalization at December 31, 2020, and as adjusted to give effect to the sale of our 20,000,000 units in this offering for $200,000,000 (or $10.00 per unit) and the sale of 4,000,000 private placement warrants for $6,000,000 (or $1.50 per warrant) and the application of the estimated net proceeds derived from the sale of such securities:

 

December 31, 2020

  

Actual

 

As Adjusted(2)

Note payable to related party(1)

 

$

40,000

 

 

$

 

Deferred underwriting commissions

 

 

 

 

 

7,000,000

 

Class A common stock subject to possible redemption; -0- and 18,902,432 shares, actual and as adjusted, respectively(3)

 

 

 

 

 

189,024,320

 

Preferred stock, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted

 

 

 

 

 

 

Class A common stock, $0.0001 par value, 80,000,000 shares authorized; -0- and 1,097,568 shares issued and outstanding (excluding -0- and 18,902,432 shares subject to possible redemption), actual and as adjusted, respectively

 

 

 

 

 

110

 

Class B common stock, $0.0001 par value, 20,000,000 shares authorized; 5,750,000 and 5,000,000 shares issued and outstanding, actual and as adjusted, respectively(4)

 

 

575

 

 

 

500

 

Additional paid-in capital(5)

 

 

24,425

 

 

 

5,000,070

 

Accumulated deficit

 

 

(675

)

 

 

(675

)

Total stockholders’ equity

 

$

24,325

 

 

$

5,000,005

 

Total capitalization

 

$

64,325

 

 

$

201,024,325

 

____________

(1)      Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering.

(2)      Assumes the full forfeiture of 750,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The proceeds of the sale of such shares will not be deposited into the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon the initial business combination.

(3)      Upon the completion of our initial business combination, we will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 following such redemptions, and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination. The “as adjusted” amount of our common stock, subject to redemption equals the “as adjusted” total assets of $201,024,325, less the “as adjusted” total liabilities of $7,000,000, less the “as adjusted” total stockholder’s equity of $5,000,005. The value of Class A common stock that may be redeemed is equal to $10.00 per share (which is the assumed redemption price) multiplied by 18,902,432 shares of Class A common stock, which is the maximum number of shares of Class A common stock that may be redeemed for a $10.00 purchase price per share and still maintain at least $5,000,001 of net tangible assets.

(4)      Actual share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted share amount assumes no exercise of the underwriters’ over-allotment option.

(5)      The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total stockholder’s equity of $5,000,005, minus Class A common stock (par value) of $110, minus Class B common stock (par value) of $500, plus the accumulated deficit of $675.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the sections titled “Unaudited pro forma condensed combined financial information” and our audited annual consolidated financial statements as of and for the years ended December 31, 2022 and 2021, and unaudited interim consolidated financial statements as of June 30, 2023, and for the three months ended June 30, 2023 and 2022, together with the respective related notes, in each case, included elsewhere in this prospectus. In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this prospectus. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless otherwise indicated or the context otherwise requires, references in this section to “we,” “our,” “us,” “the Company” or other similar terms refer to the business and operations of Spectral MD Holdings, Ltd. and its subsidiaries prior to the Business Combination (“Legacy Spectral”) and Spectral AI, Inc. following the consummation of the Business Combination (“Spectral”). References to “RCLF” refer to Rosecliff Acquisition Corp I prior to the consummation of the Business Combination.

Overview

We are an AI company focused on predictive medical diagnostics. We operate in one segment. We are devoting substantially all of our efforts towards research and development of our DeepView System, an internally developed MSI device which has designated FDA BDD status. Our DeepView System uses proprietary algorithms to distinguish between damaged and healthy human tissue invisible to the naked eye, providing “Day One” healing assessments. DeepView’s output is specifically engineered to allow the physician to make a blank check company incorporatedmore accurate, timely and informed decision regarding the treatment of the patient’s wound. Our focus from 2013 through 2021 was on the burn indication. In 2022 and 2023, we expanded our focus to include the diabetic foot ulcer (“DFU”) indication.

In the case of DFUs, a non-healing assessment would provide the physician with the appropriate justifications to use an advanced wound care therapy on “Day One”, in seconds, as opposed to the current approach that involves waiting up to 30 days to see how the wound develops before making such clinical assessment.

For burn wounds, a Delaware corporationnon-healing assessment could aid the clinician in making an immediate and objective determination for appropriate candidates for surgery as well as determining what specific areas of the burn wound will require excision and skin grafting. DeepView’s current accuracy for burn wounds is 92% for adults and 88% for pediatrics, compared with current physician accuracy of 50% to 75%, respectively, at best, according to industry literature.1 In addition, in head-to-head clinical trial evaluations, our DeepView System provided higher accuracy to “ground truth” on November 17, 2020burn wound analysis than the accuracy of burn specialists, reporting at 70-80% accuracy, and formed fornon-burn specialist physicians, reporting at 50-60% accuracy.2 We have conducted three large clinical studies with multiple sites across the purposeUnited States, enrolling 413 patients, including 329 adult burn patients and 84 pediatric patients. Through these studies, we were able to identify the burn assessment accuracy in both surgery and non-surgical treatment.

1       Henk Hoeksema, Karlien Van de Sijpe, Thiery Tondu, Moustapha Hamdi, Koenraad Van Landuyt, Phillip Blondeel, Stan Monstrey, Accuracy of effectingearly burn depth assessment by laser Doppler imaging on different days post burn, Burns, Volume 35, Issue 1, 2009, Pages 36 – 45, ISSN 0305-4179. The above article was exploring laser doppler imaging as an objective technique to determine the depth of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. burn wound and states “as has been demonstrated in several studies, a purely clinical, bedside evaluation of the burn depth in dermal burns is accurate only in about 50 – 75% of the cases.”

2       Rise of the (Learning) Machines: An Interim Analysis Assessing Burn Wound Healing; Jeffrey E. Carter, MD, FACS, et.al., https://clinicaltrials.gov/ct2/show/NCT05023135.

We have not selectedgenerated any business combination target and weproduct revenue to date. We have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cashreceived substantial support from the proceeds of this offering and the saleU.S. government for our DeepView System’s application for burn wounds, including from agencies such as BARDA, which is part of the private placement warrants, our shares, debt or a combinationHHS Office of cash, sharesthe Assistant Secretary for Preparedness and debt.

The issuance of additional shares of our common stock or preferred stock in a business combination:

•        may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisionsResponse in the Class B common stock resultedUnited States, established to aid in the issuance of shares of Class A common stock on a greater than one-to-one basis upon conversion of the Class B common stock;

•        may subordinate the rights of holders of our common stock if preferred stock are issued with rights senior to those afforded our common stock;

•        could cause a change of control if a substantial number of shares of our common stock is 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 directors and officers;

•        may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us;

•        may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and

•        may not result in adjustment to the exercise price of our warrants.

Similarly, if we issue debt or otherwise incur significant indebtedness, it could result in:

•        default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

•        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;

•        our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

•        our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

•        our inability to pay dividends on our common stock;

•        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 common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

•        limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

•        increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

•        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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As indicatedsecuring the United States from chemical, biological, radiological, and nuclear threats, as well as from pandemic influenza and emerging infectious diseases. We have also received funding from the NSF, NIH and the DHA. Since 2013, we have received approximately $280.0 million in the accompanying financial statements, at December 31, 2020 we had no cash, a working capital deficit of approximately $140,574funding from government contracts, primarily from BARDA, which accounts for $172.9 million. This has allowed us to develop our technology and deferred offering costs of $164,899. Further,further our clinical trials. We are currently in our third contract with BARDA, referred to as BARDA Burn III, which was signed in September, 2023 and is due to be completed in July 2030. Under this contract, we expect to further the DeepView System design, develop the AI algorithm, and take the necessary steps to obtain FDA approval for our DeepView GEN 3 System. However, approval from the FDA or other regulatory agencies, foreign or domestic, cannot be guaranteed and may take longer than planned. On September 27, 2023, the Company executed a new contract with BARDA, providing the Company with additional funding of up to $149.9 million, including an initial award of approximately $55.0 million to support the clinical validation and FDA clearance of our DeepView System, in place of the prior contract Option 2 award which was approximately $22.0 million. This will include the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support the clinical validation study and to transition the use of our DeepView System to being used routinely upon FDA clearance. The contract also includes options, similar to our prior BARDA contracts, with an additional total value of approximately $95.0 million which can be exercised for additional product development, procurement and the expanded deployment of DeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research to support the broader clinical adoption of the DeepView System. The Company is also completing work on the Option 1B of its prior contract award relating to our Burn Training study, which was extended through December 31, 2023 upon which the Company will receive approximately $2.0 million of additional funding. This grant funding is non-dilutive to our shareholders, and we believe it validates the important nature of its mission and technology.

In April 2023, we received a $4.0 million grant award from the Medical Technology Enterprise Consortium (“MTEC”), which, building on prior awards from DHA, is to be used to support military battlefield burn evaluation via a handheld DeepView. The MTEC Agreement extends the DHA Phase II contract for the development of the handheld device of the DeepView System. Under the terms of the MTEC Agreement, MTEC will pay us a firm fixed fee based upon our achievement of certain milestones described in the agreement through April 5, 2025. The milestone payment schedule is based on a three phased approach to the development of our handheld device. Phase 1 of the MTEC Agreement began in April 2023 and is scheduled to extend through at least July 2023 and is focused on the planning, design and testing of the handheld device for its intended applications. Phase 1 has a funding budget of $1,170,000. Once Phase 1 is completed, Phase 2 is intended to run through October 2024 and encompasses the development, design modification and build-out of the handheld device to the U.S. government standards as identified in the design and commercialization plans for the device. Phase 2 has a funding budget of $1,558,000. Phase 3 of the MTEC Agreement addresses the complete manufacturing of the device, the process validation of the production and completion of up to thirty handheld devices. Phase 3 begins following completion of Phase 2 and is intended to run through April 2024 with a funding budget of approximately $1,272,000.

Our DeepView System recently received United Kingdom Conformity Assessed (UKCA) marking for use in the United Kingdom and has Class 1 medical device classification with the United States Food and Drug Administration (FDA).

We anticipate that the DeepView System will have two revenue streams, a SaMD (software as a medical device), and an imaging device component. The SaMD model applies a SaaS treatment for the DeepView System which will feature a software licensing fee that includes maintenance, image hosting, and access to algorithm updates. The proprietary imaging device accesses artificial intelligence algorithms and is a universal platform to house multiple clinical applications. Pricing for these components will be evaluated and strategically set per country and site-of-service for heightened customer adoption.

Business Combination

On April 11, 2023, we entered into the Business Combination Agreement with Rosecliff Acquisition Corp I (“RCLF”), Ghost Merger Sub I Inc. (“Merger Sub I”) and Ghost Merger Sub II LLC (“Merger Sub II”), which was consummated on September 11, 2023 (the “Closing”). Pursuant to the Business Combination Agreement, on the Closing, in sequential order: (a) Ghost Merger Sub I merged with and into Spectral, with Spectral continuing as the surviving company and a wholly owned subsidiary of Spectral (the “Spectral Merger”) and then, (b) Spectral merged with and into Ghost Merger Sub II (the “SPAC Merger”, together with the Spectral Merger (the “Mergers”)), with Ghost Merger Sub II surviving the SPAC Merger as a direct wholly-owned subsidiary of Rosecliff. Rosecliff was renamed

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Spectral AI, Inc. (“Spectral AI” or the “Combined Company”), (the “Business Combination”). On September 12, 2023, Spectral AI began trading its shares on the NASDAQ stock exchange under the ticker symbol “MDAI” after delisting its shares from the AIM market of the London Stock Exchange on September 7, 2023.

In September 2023, prior to the closing of the Business Combination, the Company issued 7,679,198 shares of common stock for $3.4 million (the “Equity Issuance”).

The Business Combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP. Under the guidance in Accounting Standards Codification (“ASC”) 805, Business Combinations, RCLF, which is the legal acquirer, will be treated as the “acquired” company for financial reporting purposes and Spectral will be treated as the accounting acquirer. This determination was primarily based on the following:

(i)     Spectral expecting to have a majority of the voting power of the Combined Company;

(ii)    Spectral’s senior management comprising all of the senior management of the Combined Company;

(iii)   Spectral is expected to select six of the seven of the directors for the Board of Directors of the Combined Company;

(iv)   Spectral’s relative size of assets and operations compared to RCLF; and

(v)    Spectral’s operations comprising the ongoing operations of the post-combination company.

Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of a capital transaction in which we are issuing stock for the net assets of RCLF. The net assets of RCLF will be stated at historical cost, with no goodwill or other intangible assets recorded. Historical operations presented in future financial statements, prior to the Business Combination will be ours.

The most significant changes in our future reported financial position and results are expected to be a net decrease in cash (as compared to our consolidated balance sheet as of June 30, 2023) of approximately $0.3 million.

Public Company Costs

Upon consummation of the Business Combination, the Combined Company has continued as an SEC-registered and Nasdaq-listed company. We expect to hire additional staff and implement new processes and procedures to address public company requirements in anticipation of and following the completion of the Business Combination. We also expect to incur substantial additional expenses for, among other things, directors’ and officers’ liability insurance, director fees, internal control compliance, and additional costs for investor relations, accounting, audit, legal and other functions.

Key Operating and Financial Metrics

We regularly review a number of metrics, including the following key operating and financial metrics, to evaluate our business, measure our performance, identify trends in our business, prepare financial projections and make strategic decisions. We believe the operating and financial metrics presented are useful in evaluating our operating performance, as they are similar to measures by our public competitors and are regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA is a non-GAAP measure, as it is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for net (loss) income, calculated in accordance with GAAP. See “— Non-GAAP Financial Measures” for additional information on adopted non-GAAP financial measures and a reconciliation of these non-GAAP measures to the most comparable GAAP measures.

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The following table sets forth these metrics for the three and six months ended June 30, 2023 and 2022:

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

  

(In thousands)

Research and development revenue

 

$

4,251

 

 

$

6,390

 

 

$

9,329

 

 

$

12,234

 

Gross Profit

 

 

1,791

 

 

 

2,712

 

 

 

3,972

 

 

 

5,102

 

Gross margin

 

 

42.1

%

 

 

42.4

%

 

 

42.6

%

 

 

41.7

%

Operating loss

 

 

(2,990

)

 

 

(6

)

 

 

(5,889

)

 

 

(627

)

Net loss

 

 

(3,070

)

 

 

(265

)

 

 

(6,679

)

 

 

(793

)

Adjusted EBITDA

 

 

(2,591

)

 

 

290

 

 

 

(5,188

)

 

 

6

 

See “Non-GAAP Financial Measures” below for a reconciliation of net loss to Adjusted EBITDA.

Research and development revenue

We define research and development revenue as revenue generated from the research, testing and development of the DeepView System as utilized in connection with our burn indication. This research and development revenue reflects applied research and experimental development costs relating to our burn application as developed in connection with our BARDA and DHA contracts.

Gross Profit and Gross Margin

We define gross profit as research and development revenue, less cost of revenue, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue. Gross profit and margin can be used to understand our financial performance and efficiency and allows investors to evaluate our pricing strategy and compare against our competitors. Our management uses these metrics to make strategic decisions, pricing decisions, identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.

Adjusted EBITDA

We define adjusted earnings before interest, tax, depreciation and amortization (“Adjusted EBITDA”) as net loss excluding income taxes, depreciation of property, plant and equipment (including any related impairment charges), amortization of intangible assets (including any related impairment charges), interest expense, stock compensation, any non-operating financial income and expense. See “— Non-GAAP Financial Measures” for a reconciliation of GAAP net loss to Adjusted EBITDA.

Key Factors that May Influence Future Results of Operations

Our financial results of operations may not be comparable from period to period due to several factors. Key factors affecting our results of operations are summarized below.

Revenue Sources.    As a pre-commercialization company, we currently generate revenue almost exclusively from two U.S. governmental agencies. We are highly dependent upon the continuation of the existing U.S. governmental contract awards as well as future governmental procurement or other awards. Our operating results may not be comparable between periods as the timing and amount of awards or procurements from the U.S. government may be inconsistent with the timing of prior awards. In addition, it is possible that, depending on the outcome of our SSN application to BARDA, we may receive additional and potentially significant U.S. government awards. Our revenues may continue to incur significantbe almost exclusively dependent upon the terms of those awards.

Gross Margin.    As we begin commercial sales of the DeepView System, we may need to adjust our pricing and incentives to accelerate adoption and implementation of the DeepView System, which may negatively impact future revenue and gross margin percentages.

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Managing our Supply Chain.    We are reliant on contract manufacturers and suppliers to produce our components. While we have not been subject to any disruptions in our current production, there remain global supply chain challenges and logistics constraints, including component shortages, which may cause delays in critical components and inventory, longer lead times, increased costs and delays in product shipments. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished products on time and at reasonable costs. While we do not maintain sole-source suppliers, there is a concentration of suppliers which could lead to supply shortages, long lead times for components and supply changes. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, it could delay the manufacturing and installation of our products, which would adversely impact our cash flows and results of operations, including revenue and gross margin.

Components of Consolidated Statements of Operations

Research and Development Revenue

Our primary source of revenue is research and development revenue. Currently, we are highly dependent upon the reimbursement from BARDA for the burn diagnostic testing of our DeepView System. Our research and development revenue is affected by the amount of research and development that is expended each month with respect to our contract with BARDA. Our revenue growth is dependent on a number of factors including expanding the research and development expense under the BARDA contract, research and development reimbursed expenses relating to other contract awards from U.S. governmental agencies and the intended future commercial sales of our DeepView System.

Cost of Revenue

Our cost of revenues consists primarily of direct and indirect costs associated with the research and development expenses relating to the BARDA contract. Our revenue costs are affected by the extent of research and development expenses as well as expansion of work on other U.S. governmental projects and the expanded applications for our DeepView System.

Gross Profit

Gross profit may vary from period-to-period and is primarily affected by the current reimbursement rates under the BARDA contract and other U.S. governmental contract awards. These reimbursement rates are fixed under each contact award. Our gross profit represents this reimbursement rate plus a variable component relating to non-reimbursed expenses incurred in connection with the work completed on these contracts.

Operating Costs and Expenses

Operating costs and expenses consist of general and administrative expenses. These expenses relate to our operating expenses that are not reimbursed as part of the research and development revenue and reflect our organization’s support and operations staff. General and administrative expense consist primarily of salaries and benefits for this group of our employees and has increased from prior three months based on the increase in our personnel in these functions.

Other income (expense)

Other income (expense) primarily consists of interest expense, change in fair value of warrant liabilities and foreign exchange transaction gains/losses. Historic foreign exchange transaction loss primarily relates to the reduced exchange rate between the U.S. dollar and the British pound sterling for our deposit accounts that are denominated in British pound sterling. In addition, this amount includes costs associated with buying British pound sterling for payment of our employees and vendors in the pursuitUK.

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Table of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.Contents

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completionThe following table sets forth a summary of our initial business combination. We will generate nonconsolidated statements of operations for the periods presented:

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

  

(In thousands)

Research and development revenue

 

4,251

 

 

6,390

 

 

9,329

 

 

12,234

 

Cost of revenue

 

(2,460

)

 

(3,678

)

 

(5,357

)

 

(7,132

)

Gross profit

 

1,791

 

 

2,712

 

 

3,972

 

 

5,102

 

   

 

  

 

  

 

  

 

Operating costs and expenses:

  

 

  

 

  

 

  

 

General and administrative

 

4,781

 

 

2,718

 

 

9,861

 

 

5,729

 

Total operating costs and expenses

 

4,781

 

 

2,718

 

 

9,861

 

 

5,729

 

Operating loss

 

(2,990

)

 

(6

)

 

(5,889

)

 

(627

)

   

 

  

 

  

 

  

 

Other income (expense):

  

 

  

 

  

 

  

 

Net interest income (expenses)

 

41

 

 

3

 

 

86

 

 

(1

)

Change in fair value of warrant liability

 

(81

)

 

(38

)

 

(65

)

 

28

 

Foreign exchange transaction gain (loss)

 

 

 

(232

)

 

13

 

 

(204

)

Transaction costs

 

 

 

 

 

(738

)

 

 

Other income

 

 

 

19

 

 

 

 

17

 

Total other expense

 

(40

)

 

(248

)

 

(704

)

 

(160

)

   

 

  

 

  

 

  

 

Loss before income taxes

 

(3,030

)

 

(254

)

 

(6,593

)

 

(787

)

Provision for income taxes

 

(40

)

 

(11

)

 

(86

)

 

(6

)

Net loss

 

(3,070

)

 

(265

)

 

(6,679

)

 

(793

)

-operatingResearch and development revenue income

 

Three Months
Ended
June 30,

 

Change in

 

Six Months
Ended
June 30,

 

Change in

  

2023

 

2022

 

$

 

%

 

2023

 

2022

 

$

 

%

  

(In thousands, except percentages)

Research and development revenue

 

$

4,251

 

$

6,390

 

$

(2,139

)

 

(33.5

)%

 

$

9,329

 

$

12,234

 

$

(2,905

)

 

(23.7

)%

Research and development revenue decreased by 33.5% and 23.7%, respectively, or approximately $2.1 million and $2.9 million, respectively, for the three and six months ended June 30, 2023, as compared to the comparable periods in 2022, primarily due to decreased research and development work performed pursuant to the BARDA Burn II contract. New patient enrollments in our BARDA clinical study decreased in the formthree months ended June 30, 2023 compared to the three months ended June 30, 2022 as the Company is completing enrollment and transitioning to the closeout phase of the study.

For the three and six months ended June 30, 2023 and 2022, the Company’s revenues disaggregated by the major sources was as follows:

 

Three Months
Ended
June 30,

 

Change in

 

Six Months
Ended
June 30,

 

Change in

  

2023

 

2022

 

$

 

%

 

2023

 

2022

 

$

 

%

  

(In thousands, except percentages)

BARDA

 

$

4,020

 

$

6,255

 

$

(2,235

)

 

(35.7

)%

 

$

8,963

 

$

11,963

 

$

(3,000

)

 

(25.1

)%

Other U.S. governmental authorities

 

 

231

 

 

135

 

 

96

 

 

71.1

%

 

 

366

 

 

271

 

 

95

 

 

35.1

%

Total research and development revenue

 

$

4,251

 

$

6,390

 

$

(2,139

)

 

(33.5

)%

 

$

9,329

 

$

12,234

 

$

(2,905

)

 

(23.7

)%

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Table of Contents

Cost of Revenues and Gross Profit

 

Three Months
Ended
June 30,

 

Change in

 

Six Months
Ended
June 30,

 

Change in

  

2023

 

2022

 

$

 

%

 

2023

 

2022

 

$

 

%

  

(In thousands, except percentages)

Cost of revenue

 

$

2,460

 

 

$

3,678

 

 

$

(1,218

)

 

(33.1

)%

 

$

5,357

 

 

$

7,132

 

 

$

(1,775

)

 

(24.9

)%

Gross profit

 

 

1,791

 

 

 

2,712

 

 

 

(921

)

 

(34.0

)%

 

 

3,972

 

 

 

5,102

 

 

 

(1,130

)

 

(22.1

)%

Gross margin

 

 

42.1

%

 

 

42.4

%

 

 

 

 

  

 

 

 

42.6

%

 

 

41.7

%

 

 

 

 

  

 

Cost of revenue for the three and six months ended June 30, 2023 compared to the comparable periods in 2022 decreased by 33.1% and 24.9% respectively, or approximately $1.2 million and $1.8 million, respectively, primarily due to decreased activity to fulfill our U.S. governmental contracts, which is consistent with decreased research and development revenue.

Gross margin was relatively consistent for the three and six months ended June 30, 2023, as compared to the comparable periods in 2022.

General and Administrative

 

Three Months
Ended
June 30,

 

Change in

 

Six Months
Ended
June 30,

 

Change in

  

2023

 

2022

 

$

 

%

 

2023

 

2022

 

$

 

%

  

(In thousands, except percentages)

General and administrative

 

$

4,781

 

 

$

2,718

 

 

$

2,063

 

75.9

%

 

$

9,861

 

 

$

5,729

 

 

$

4,132

 

72.1

%

Percentage of revenue, net

 

 

112.5

%

 

 

42.5

%

 

 

   

 

 

 

105.7

%

 

 

46.8

%

 

 

   

 

General and administrative expense increased by 75.9% and 72.1%, respectively, or approximately $2.1 million and $4.1 million, respectively, for the three and six months ended June 30, 2023, as compared to the comparable periods in 2022. The increase was primarily due to an increase in our administrative staffing since 2022. Our headcount grew from 63 employees as of June 30, 2022 to 80 full-time employees as of June 30, 2023 resulting in an increase in general and administrative expense of approximately $0.7 million and $1.4 million, respectively, for the three and six months ended June 30, 2023. Additionally, R&D activities outside of BARDA have increased by approximately $0.9 million and $1.6 million, respectively, in the three and six months ended June 30, 2023 compared to the comparable periods in 2022.

Other income (expense)

 

Three Months
Ended
June 30,

 

Change in
$

 

Six Months
Ended
June 30,

 

Change in
$

  

2023

 

2022

 

2023

 

2022

 
  

(In thousands, except percentages)

Net interest income (expense)

 

$

41

 

 

$

3

 

 

$

38

 

 

$

86

 

 

$

(1

)

 

$

87

 

Change in fair value of warrant liability

 

 

(81

)

 

 

(38

)

 

 

(43

)

 

 

(65

)

 

 

28

 

 

 

(93

)

Foreign exchange transaction (loss) gain

 

 

 

 

 

(232

)

 

 

232

 

 

 

13

 

 

 

(204

)

 

 

217

 

Transaction costs

 

 

 

 

 

 

 

 

 

 

 

(738

)

 

 

 

 

 

(738

)

Other income

 

 

 

 

 

19

 

 

 

(19

)

 

 

 

 

 

17

 

 

 

(17

)

Total other expense

 

$

(40

)

 

$

(248

)

 

$

208

 

 

$

(704

)

 

$

(160

)

 

$

(544

)

Net interest income onfor the three and six months ended June 30, 2023 primarily relates to cash interest received by us from our deposit accounts.

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Change in the fair value of warrant liability decreased by approximately $43,000 and cash equivalents after this offering. There has been no significant change$93,000, respectively, for the three and six months ended June 30, 2023, as compared to the comparable period in our financial or trading position2022. The loss during the three and no material adverse change has occurred sincesix months ended June 30, 2023, was primarily due to the dateincreased present value calculation of our audited financial statements. After this offering, we expectthe warrants issued to incur increased expensesSP Angel Corporate Finance LLP (“SP Angel”) as a resultpart of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially afterthe Offering (defined below) in 2021. In conjunction with the closing of the Offering, we issued 762,712 warrants, with a strike price of $0.89 per share and a five-year life, to SP Angel, who acts as our nominated advisor (“NOMAD”) and joint broker. As of June 30, 2023, the strike price of the warrants was $0.75 per share as comparted to $0.72 as of June 30, 2022. The change in the strike price is due to the change in exchange rates, as the warrants will settle in shares denominated in British pound sterling. As our stock price had a greater increase for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022, the fair value of the warrants correspondingly had a greater increase in the three months ended June 30, 2023. As our stock price had an increase for the six months ended June 30, 2023 as compared to a decrease for the six months ended June 30, 2022, the fair value of the warrants correspondingly had an increase for the six months ended June 30, 2023 as compared to a decrease for the six months ended June 30, 2022.

Foreign exchange transaction loss for the three and six months ended June 30, 2022 relates to the decreased exchange rate between the U.S. dollar and the British pound sterling during the second quarter of 2022 for our deposit accounts that are denominated in British pound sterling. In addition, this offering.amount includes costs associated with buying British pound sterling for payment of our employees and vendors in the UK. Foreign exchange transaction loss for the three and six months ended June 30, 2023 is immaterial due to much lower balances in our deposit accounts and accounts payable denominated in British pound sterling and less fluctuation in the exchange rate between the U.S. dollar and the British pound sterling.

Transaction costs for the six months ended June 30, 2023 relate to non-recurring legal, accounting and consulting costs expended for potential business combinations that did not occur.

Non-GAAP Financial Measures

We use Adjusted EBITDA as a non-GAAP metric when measuring performance, including when measuring current period results against prior periods’ Adjusted EBITDA. This non-GAAP financial measure should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. In addition, Adjusted EBITDA should not be construed as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address.

Because of their non-standardized definitions, non-GAAP measures (unlike GAAP measures) may not be comparable to the calculation of similar measures of other companies. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Supplemental non-GAAP measures are presented solely to permit investors to more fully understand how Spectral management assesses underlying performance.

Adjusted EBITDA

We define Adjusted EBITDA as net income/(loss) excluding income taxes, depreciation of property, plant and equipment (including any related impairment charges), amortization of intangible assets (including any related impairment charges), interest expense, stock compensation, any non-operating financial income and expense.

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The following table presents our Adjusted EBITDA for the three and six months ended June 30, 2023 and 2022:

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

  

(In thousands)

Net loss

 

$

(3,070

)

 

$

(265

)

 

$

(6,679

)

 

$

(793

)

Adjust:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

 

3

 

 

 

2

 

 

 

5

 

 

 

6

 

Provision for income taxes

 

 

40

 

 

 

11

 

 

 

86

 

 

 

6

 

Net interest (income) expense

 

 

(41

)

 

 

(3

)

 

 

(86

)

 

 

1

 

EBITDA

 

 

(3,068

)

 

 

(255

)

 

 

(6,674

)

 

 

(780

)

Additional adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

396

 

 

 

294

 

 

 

696

 

 

 

627

 

Change in fair value of warrant liability

 

 

81

 

 

 

38

 

 

 

65

 

 

 

(28

)

Foreign exchange transaction loss (gain)

 

 

 

 

 

232

 

 

 

(13

)

 

 

204

 

Transaction costs

 

 

 

 

 

 

 

 

738

 

 

 

 

Other income

 

 

 

 

 

(19

)

 

 

 

 

 

(17

)

Adjusted EBITDA

 

 

(2,591

)

 

 

290

 

 

 

(5,188

)

 

 

6

 

Liquidity and Capital Resources

Our liquidity needs have been satisfied priorSources of Liquidity

As of June 30, 2023 we had approximately $8.2 million in cash, and an accumulated deficit of approximately $18.6 million.

Prior to our initial public offering (the “Offering”) on the completionAIM Market of this offeringthe London Stock Exchange in June, 2021, we historically funded our operations through receiptthe issuance of $25,000 fromnotes and the sale of preferred stock and common stock. We raised approximately $17.0 million from the founder sharesoversubscribed Offering on the AIM market to fund the development of the DFU indication for our sponsorDeepview System. In September 2023, we were awarded additional funding of $149.9 million associated with a new contract award with BARDA. The purpose of the BARDA contract funding is to execute the clinical training study of our DeepView System for burn wound healing assessment. See “Research and Development Revenue” above. With the proceeds from closing of our Offering during 2021 and the remaining funding under the BARDA contract, we believe that with the remaining proceeds from the Offering and the remaining funding under the BARDA contract we have sufficient working capital to fund operations for at least 12 months beyond the release date of the consolidated financial statements. Additionally, our contract with BARDA has a potential funding of up to $300,000 in loans from our sponsor under an unsecured promissory note. As of December 31, 2020, we had borrowed $40,000 under such promissory note. We estimate that the net proceeds from (1) the sale of the units in this offering, after deducting offering expenses of approximately $1,000,000 and underwriting commissions of $4,000,000 (excluding deferred underwriting commissions of $7,000,000), or $4,600,000 (excluding deferred underwriting commissions of $8,050,000) if the underwriters’ over-allotment option is exercised in full, and (2) the sale of the private placement warrants for a purchase price of $6,000,000 (or $6,600,000$149.9 million, in the aggregate, if the underwriters’ over-allotment option is exercised in full) will be $201,000,000 (or $231,000,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full), including $7,000,000 (or $8,050,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions will be deposited into the trust account. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries. The remaining $1,000,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,000,000 we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expensesall future options are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.executed.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes, if any. Delaware franchise tax is based on our authorized shares or on our assumed par and non-parOur future capital whichever yields a lower result. Under the authorized shares method, each share is taxed at a graduated rate based on the number of authorized shares with a maximum aggregate tax of $200,000 per year. Under the assumed par value capital method, Delaware taxes each $1,000,000 of assumed par value capital at the rate of $350; where assumed par value would be (1) our total gross assets following this offering, divided by (2) our total issued shares of common stock following this offering, multiplied by (3) the number of our authorized shares following this offering. Based on the number of shares of our common stock authorized and outstanding and our estimated total gross proceeds after the completion of this offering, our annual franchise tax obligation is expected to be capped at the maximum amount of annual franchise taxes payable by us as a Delaware corporation of $200,000. Our annual income tax obligationsrequirements will depend on many factors, including the amountrevenue growth rate, the success of interestfuture product development and other income earned oncapital investment required, and the amounts held in the trust account. Wetiming and extent of spending to support further sales and marketing and research and development efforts. In addition, we expect the interest earned on the amount in the trust accountto incur additional costs as a result of operating as a U.S. public company. There can be no assurance that we will be sufficient to pay our taxes. We expect the only taxes payable by us out of the fundssuccessful in the trust accountraising any additional capital. If additional financing is required from outside sources, we cannot be sure that any additional financing will be incomeavailable to us on acceptable terms, if at all. If we are unable to raise additional capital when desired, our business, operating results, and franchise taxes, if any. Tofinancial condition could be adversely affected.

Cash Flows

The following table summarizes our cash flows for the extent that shares of our common stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitionssix months ended June 30, 2023 and pursue our growth strategies.2022:

 

Six Months Ended
June 30,

  

2023

 

2022

  

(In thousands)

Net cash (used in) provided by operating activities

 

$

(5,527

)

 

$

38

 

Net cash used in financing activities

 

 

(481

)

 

 

(583

)

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PriorCash Flows (Used in) Provided by Operating Activities

Net cash used in operating activities increased by approximately $5.6 million for the six months ended June 30, 2023, as compared to the completionsix months ended June 30, 2022 resulting primarily from a decrease in net income, adjusted for non-cash items, of our initial business combination, we will have available to us $1,000,000approximately $5.6 million. This decrease is primarily driven by decreased research and development activity for the BARDA contract. The decrease is partially offset by a net increase of proceeds held outside$0.1 million cash flows from changes in operating assets and liabilities primarily driven by accounts receivable collections in excess of payments of accounts payable.

Cash Flows Used in Financing Activities

Net cash used in financing activities decreased approximately $0.1 million for the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxessix months ended June 30, 2023 compared to the extentsix months ended June 30, 2022. This was primarily attributable to repayment of $0.4 million for the interest earned onCompany’s Paycheck Protection Program Loan during the trust account is not sufficientsix months ended June 30, 2022, partially offset by payments of $0.3 million of offering costs related to pay our taxes.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts outthe Business Combination that have been deferred until the closing of the proceedsBusiness Combination.

Current Indebtedness

As of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

We expect our primary liquidity requirements during that period to include approximately $350,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $75,000 for Nasdaq continued listing fees; $240,000 for administrative and support services; $100,000 as a reserve for liquidation expenses and approximately $85,000 for general working capital that will be used for miscellaneous expenses and reserves net of estimated interest income.

These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, althoughJune 30, 2023, we do not have any current intention to do so. Ifdebt. In June 2022, we entered into an agreement where we paida financing arrangement for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amountportion of our available fundsinsurance premium for approximately $0.4 million (the “Note”). The Note bears interest at 6.7% per annum and is payable in equal monthly payments of principal and interest, maturing in May 2023. By June 30, 2023 the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

Controls and Procedures

We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control reporting requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2021. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we intend to take

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advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

Prior to the closingbalance of this offering, we have not completed an assessment, nornote has our independent registered public accounting firm tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:been fully paid.

•        staffing for financial, accounting and external reporting areas, including segregation of duties;

•        reconciliation of accounts;

•        proper recording of expenses and liabilities in the period to which they relate;

•        evidence of internal review and approval of accounting transactions;

•        documentation of processes, assumptions and conclusions underlying significant estimates; and

•        documentation of accounting policies and procedures.

Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.

Once our management’s report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent registered public accounting firm may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.

Quantitative and Qualitative Disclosures about Market Risk

The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Related Party Transactions

On December 10, 2020, our sponsor paid $25,000, or approximately $0.004 per share, to cover certain of our offering costs in consideration of 5,750,000 founder shares. In January 2021, our sponsor transferred a total of 130,000 founder shares to our independent director, our director nomineeFor the six months ended June 30, 2023 and certain other individuals at their original per-share purchase price. The purchase price of the founder shares was determined by dividing the amount of cash used to purchase such shares by the number of founder shares issued. Our initial stockholders will collectively own 20% of our issued and outstanding shares of common stock after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Up to 750,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.

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We will enter into a support services agreement pursuant to which we will pay our sponsor a total of $10,000 per month for office space, support and administrative services. See “Certain Relationships and Related Party Transactions — Support Services Agreement.” Upon the earlier of consummation of our initial business combination and our liquidation, we will cease paying these monthly fees.

Our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors, officers or our or any of their respective affiliates and will determine which expenses2022 and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As ofyears ended December 31, 2020,2022 and 2021, we had borrowed $40,000 under such promissory note. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2021 or the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions)did not held in the trust account.

In addition, in order to finance transaction costs in connectionhave any transactions with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.related parties.

Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.50 per warrant ($6,000,000 in the aggregate or $6,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us (except as described below under “Description of Securities — Redeemable Warrants — Public Redeemable Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”); (2) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights.

Pursuant to a registration rights agreement that we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of warrants issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions, as described herein. We will bear the costs and expenses of filing any such registration statements. See “Principal Stockholders — Registration Rights.”

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Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly ResultsArrangements

As of December 31, 2020,During the periods presented, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Critical Accounting Policies

There have been no material changes to the Company’s critical accounting policies and did not have any commitments or contractual obligations. No unaudited quarterly operating data isestimates discussed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies for the years ended December 31, 2022 and 2021 included in the Prospectus.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, of the notes to our consolidated financial statements included elsewhere in this prospectus for recently adopted accounting standards and recently issued accounting standards as of the dates of the statement of financial position included in this prospectusprospectus.

Emerging Growth Company

We are an emerging growth company, as we have conducted no operations to date.

JOBS Act

On April 5, 2012,defined in the JOBS Act was signed into law.Act. The JOBS Act contains provisionsprovides that among other things, relax certain reporting requirementsan emerging growth company can take advantage of an extended transition period for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to complycomplying with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electingstandards. This provision allows an emerging growth company to delay the adoption of new or revisedsome accounting standards and as a result, we may not comply with new or reviseduntil those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act for the adoption of certain accounting standards onuntil the relevant dates on which adoptionearlier of such standards is required for non-emergingthe date we (i) are no longer an emerging growth companies.company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

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Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate, foreign exchange, credit and inflation risks.

Interest Rate Sensitivity

We maintain a large amount of our assets in cash and cash equivalents. Our cash and cash equivalents are held primarily in cash deposits. The fair value of our cash and cash equivalents would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments. Additionally, changes to interest rates will impact on the cost of our future borrowings. With respect to our current “borrowings”, the interest rate on the Note for insurance premiums is fixed. Changes in prevailing interest rates could have a material impact on our results of operations.

Foreign Currency Risk

Our revenue is denominated in U.S. dollars. Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States and UK, with an insignificant portion of expenses incurred in our wholly owned subsidiaries in the UK and denominated in British pound sterling.

Credit Risk

Financial instruments that subject us to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable. The vast majority of our cash and cash equivalents are held in U.S. financial institutions which, at times, exceed federally insured limits. We have not recognized any losses from credit risks on such accounts. We believe we are not exposed to significant credit risk on cash and cash equivalents.

Additional credit risk is related to our concentration of receivables and revenues. One customer (which is a U.S. government agency) represents the majority of our research and development revenue and accounts receivable.

Inflation Risk

The recent increase in inflation partially contributed to the increase in the cost of our research and development as well as operating costs. If the cost of our products, employee costs, or other costs continue to be subject to significant inflationary pressures, such inflationary pressure may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses. Further, we may not be able to offset these increased costs through price increases. As a result, our inability to quickly respond to inflation could harm its cash flows and results of operations in the future.

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BUSINESS

Company Overview

We are an AI company focused on predictive medical diagnostics. We are devoting substantially all of our efforts towards research and development of our DeepView System, an internally developed AI driven MSI device which has FDA BDD status since 2018. Our DeepView System uses proprietary AI algorithms to distinguish between fully damaged, partially damaged and healthy human tissue characters invisible to the naked eye, providing a “Day One” healing potential assessments in seconds. DeepView’s output is specifically engineered to allow the physician to make a more accurate, timely and informed decision regarding the treatment of the patient’s wounds. Our focus from 2013 through 2021 was on the burn indication. In 2022, we expanded our focus to include the DFU indication.

In the case of DFUs, a non-healing assessment would provide the physician with the appropriate justifications to use an advanced wound care therapy on “Day One” in seconds, as opposed to the current approach that involves waiting up to 30 days to see how the wound develops before making such clinical assessment.

For burn wounds, a non-healing assessment could aid the clinician in making an immediate and objective determination for appropriate candidates for surgery as well as determining what specific areas of the burn wound will require excision and skin grafting. DeepView’s current accuracy for burn wounds is 92% for adults and 88% for pediatrics, compared with current physician accuracy of 50% to 75%, respectively, at best, according to industry literature. In addition, in head-to-head clinical trial evaluations, our DeepView System provided higher accuracy to “ground truth” on burn wound analysis than the accuracy of burn specialists, reporting at 70-80% accuracy, and non-burn specialist physicians, reporting at 50-60% accuracy.2 We have conducted three large clinical studies with multiple sites across the United States, enrolling 413 patients, including 329 adult burn patients and 84 pediatric patients. Through these studies, we were able to identify the burn assessment accuracy in both surgery and non-surgical treatment.

Our DeepView System has received United Kingdom Conformity Assessed (UKCA) marking for use in the United Kingdom and has Class 1 medical device classification with the United States Food and Drug Administration (FDA). Subject to our receipt of additional necessary regulatory clearances, approvals, De Novo classifications or certifications, our business will have two revenue streams, a SaaS model component predicated on utilizing the regulatory method, SaMD (software as a medical device), and an imaging device component. The SaaS component will feature a software licensing fee that includes maintenance, image hosting, and access to algorithm updates. The proprietary imaging device acquires the images for the AI algorithms and is a universal platform to house multiple clinical applications including burn and DFU. Pricing for these components will be evaluated and strategically set per country and site-of-service for heightened customer adoption.

The DeepView System technology consists of patented proprietary multi-spectral optics and sensors, capturing injured tissue images ranging from near UV lights, through the human visible wavelengths, all the way into the near infrared range (NIR). The broad wavelength ranges go beyond what the human eyes can see and capture what medical professionals cannot observe with their naked eyes. This wide range of wavelength images contains wound tissue physiology and captures the viability of various biomarkers within the skin and from the injured tissue spectral signatures. The imaging technology extracts appropriate clinical data, processes the image data to provide the injured tissue spectral signatures to the AI model and algorithms. The AI algorithm classifies various severities of the injuries as (i) full damaged (non-healing), (ii) partially damaged or (iii) healthy tissue (healing), and displays a comparison of the original image next to an image with a color overlay of the non-healing portions of the wound. The image acquisition takes 0.2 seconds, and all image processing and AI model classification takes approximately 20 to 25 seconds. DeepView’s proprietary optics can extract millions of pixels of data or AI model features from each group of raw images. This information is then used to build and continually improve the AI model, which is trained and tested against a proprietary and clinically validated database of approximately 263 billion pixels of DFU and burn data as of December 31, 2022.

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1        Henk Hoeksema, Karlien Van de Sijpe, Thiery Tondu, Moustapha Hamdi, Koenraad Van Landuyt, Phillip Blondeel, Stan Monstrey, Accuracy of early burn depth assessment by laser Doppler imaging on different days post burn, Burns, Volume 35, Issue 1, 2009, Pages 36 – 45, ISSN 0305-4179. The above article was exploring laser doppler imaging as an objective technique to determine the depth of a burn wound and states “as has been demonstrated in several studies, a purely clinical, bedside evaluation of the burn depth in dermal burns is accurate only in about 50-75% of the cases.”

2        Rise of the (Learning) Machines: An Interim Analysis Assessing Burn Wound Healing; Jeffrey E. Carter, MD, FACS, et.al., https://clinicaltrials.gov/ct2/show/NCT05023135.

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Below at Figure 1 is an example of the DeepView System technological process.

Figure 1 — DeepView Imaging technology

To our knowledge, there are no digital wound healing assessment in predictive medical diagnostic products that provide clinicians with an objective and immediate assessment of a wound’s healing potential and that benefit from the application of AI. Currently, healthcare professionals rely on their experience and subjective assessments to determine if wounds, such as burn injuries and DFUs, will heal under routine care or are in need of advanced wound care products and procedures including surgical interventions.

We have received substantial support from the U.S. government for our DeepView System’s application for burn wounds, including from agencies such as BARDA, which is part of the HHS Office of the Assistant Secretary for Preparedness and Response (“ASPR”) in the United States, established to aid in securing the United States from chemical, biological, radiological, and nuclear threats, as well as from pandemic influenza and emerging infectious diseases. We have also received funding from the National Science Foundation (“NSF”), National Institute of Health (“NIH”) and the DHA an agency within the Department of Defense (“DoD”). Since 2013, we have received approximately $280.0 million in funding from government contracts, primarily from BARDA, which accounts for $272.9 million. This has allowed us to develop our technology and further our clinical trials. On September 27, 2023, the Company executed a new contract with BARDA, providing the Company with additional funding of up to $149.9 million, including an initial award of approximately $55.0 million to support the clinical validation and FDA clearance of our DeepView System, in place of the prior contract Option 2 award which was approximately $22.0 million. This will include the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support the clinical validation study and to transition the use of our DeepView System to being used routinely upon FDA clearance. The contract also includes options, similar to our prior BARDA contracts, with an additional total value of approximately $95.0 million which can be exercised for additional product development, procurement and the expanded deployment of DeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research to support the broader clinical adoption of the DeepView System. The Company is also completing work on the Option 1B of its prior contract award relating to our Burn Training study, which was extended through December 31, 2023 upon which the Company will receive approximately $2.0 million of additional funding. This grant funding is non-dilutive to our stockholders, and we believe it validates the important nature of its mission and technology.

Subject to our receipt of the necessary regulatory clearances, approvals, De Novo classifications, or certifications, we intend to initially sell the DeepView technology throughout the United States for its burn indication and in the UK for its DFU indication. The sales channel for these two indications are different. We expect that our burn indication will be supported by existing and future governmental contracts, primarily from agencies such as BARDA and the DHA, while the DFU indication will be an add-on to the burn indication sales channel and will have its own separate sales channel to penetrate the podiatric and wound care clinics. In the United States, there are approximately 100 burn centers, 700 trauma centers and 5,400 federal and community hospitals with Emergency Rooms where the burn patients are most likely to visit upon injuries. The DeepView System provides a quick triage tool to the emergency rooms, so it can be decided quickly whether patients need routine care or should be transferred to trauma centers

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or burn centers for advanced cares, for quick and accurate surgical planning. Therefore, we plan to target our sales efforts to these facilities through our highly-trained technical sales support staff given the nature of DeepView as a truly disruptive AI driven diagnostic assistance tool. For the DeepView System’s burn application and following receipt of any future contract awards, we plan to partner with the U.S. governmental agency sponsors to implement the distribution of our DeepView System throughout the United States into key regions to support the United Stats’ mass casualty countermeasure directives, with the goal of making our country better prepared for mass casualty events and saving scarce healthcare resources.

Subject to our receipt of the necessary regulatory clearances, approvals, De Novo classifications, or certifications, we plan to begin our commercial sales efforts of the DeepView System’s DFU application in the UK through key clinical sites and related networks. We expect to engage contract sales organizations to distribute our DeepView System throughout the UK as well as France, Germany, Italy and Spain (“EU4”). Preliminary discussions with distributors are expected to occur during 2023 to determine which organizations possess the key relationships and insights for selling diagnostic systems within their respective countries. We intend to focus our commercial strategy initially in the UK, which we are targeting for early 2024, with the EU4 to follow in 2024, subject to CE mark approval for our technologies. Similar to the United States, the primary customer base for the DFU application in Europe will be outpatient wound centers and secondary sites of care that have a high-volume of DFU patients. We also expect to engage a market access consulting firm to help us navigate the various regional tender and contracting entities within each country. In the United States, subject to our receipt of the necessary regulatory clearances, approvals, De Novo classifications, or certifications, we anticipate including the DFU diagnosis indication in the DeepView Systems that are distributed through the burn indication sales efforts in hospitals’ emergency rooms and trauma centers, given that we can run multiple indications on the same imaging devices. In addition, podiatry practices are typically the first line of specialty care for DFUs in the United States. Vascular and cardiology companies and outpatient wound centers also treat wounds. We will need to grow our distribution network to support the expanded sales efforts for the DFU indication to these facilities by initially focusing on management companies that have multiple podiatric and/or wound care centers under their management. In this way, we believe we can build a mature sales model, pricing structure, and customer instructions, to enable us to further grow our distribution networks with third-parties and other sales channel sources.

As noted above, subject to our receipt of the necessary regulatory clearances, approvals, De Novo classifications, or certifications, our business is expected to have two revenue streams, a SaaS model component predicated on utilizing the regulatory method, SaMD (software as a medical device), and an imaging device component. The SaaS component will feature a software licensing fee that includes maintenance, image hosting, and access to algorithm updates. The capital sale component will be competitively priced for acceptance into independent practices and clinics.

We have obtained 510(k) clearance for the first two generations of our DeepView System. DeepView GEN 1, which employed photoplethysmography (“PPG”), an optical technique used to detect volumetric changes in blood in peripheral circulation, and received 510(k) FDA clearance in 2013, and DeepView GEN 2, which employed PPG and MSI, a technique which captures image data within specific wavelength ranges across the electromagnetic spectrum, and received 510(k) FDA clearance in 2017.

The DeepView GEN 1 device used PPG for analysis of blood flow in the microcirculation of a patient’s skin. The output from this device to the clinician was an image representing the strength of pulsatile blood flow within the skin computed using the PPG waveform by measuring the interaction of near-IR light with dynamic changes in vascularized tissues. These outputs were then used to evaluate tissue perfusion in wounds and their surrounding skin.

The DeepView GEN2 device, which received FDA clearance in 2017, was also indicated for analysis of blood flow in the microcirculation using PPG waveforms and incorporated a MSI sensor for later deployment of software to expand indications into AI assessments.

Despite receiving the necessary clearances, we decided not to fully commercialize these two previous iterations. Instead, we have been focusing on utilizing the BARDA contracts and DHA contracts to further integrate MSI light spectral analysis with our AI algorithms and improved optics throughout 2022 in order to further enhance the utility of our DeepView GEN 3 System.

Our DeepView GEN 3 System is being studied for its ability to accurately and rapidly assess, by quantitative prediction, the potential for burn injuries and DFU wounds to heal by delineating the viable to non-viable tissue. It has generated a 92% and 86% accuracy rating, respectively, in our clinical studies. The DeepView GEN 3 System collects the

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tissue reflectance spectrum of wavelengths of near UV to visible to near infrared (400 nm–1100 nm) wavelengths. We combine this injured tissue spectral signature with in-house developed AI upon a proprietary clinical database, to create optical imaging technology is aimed at improving wound assessment as an aid to therapeutic management of wound cares.

In 2018, the FDA designated our DeepView System with BDD status for its burn indication. The FDA’s designation as a Breakthrough Device allows for prioritized reviews and a dedicated line of communication with reviewing members of the FDA. In the first quarter of 2021, the Health Products Regulatory Authority of Ireland (HPRA) provided a medical device classification recommendation of IIa for our DeepView System. We have enrolled subjects in our DFU studies in clinical and academic sites across the United States and the EU. In 2022, we completed our first validation study with 100 adult subjects in the United States at five well-known medical facilities. In the third quarter of 2022, we extended the AI training study with an additional 100 adult subjects. We completed this study in January 2023, providing us with a much-improved DFU AI prediction performance at 86% (from the previous 81% and 83% respectively). In April 2023, we commenced our validation study with an additional 100 adult subjects at 10 well-known medical facilities. This study is expected to be completed in the third quarter of 2023. We have also signed with international partners such as the Royal College of Surgeons in Ireland, a well-respected institution in the field and have partnered with leading wound care physicians. We believe that we will be able to leverage these relationships to access other institutions and individuals, which should increase awareness and early adoption of our technology in the United States, the UK and the EU. U.S. adoption will also benefit from the potential future BARDA funding of technology placement for burns applications. Our focus will be on the continued development of the DFU AI model as we progress through the validation study.

We expect to complete the validation studies for the DFU application in the United States in 2023, while targeting for the FDA’s grant of our de novo request in 2024.

As discussed above, a fundamental difference between the 510(k) clearance and de novo classification pathways is that the 510(k) clearance pathway is available to devices that are substantially equivalent to predicate devices, which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or a 510(k)-exempt device. On the other hand, the de novo classification pathway is available for novel devices of low to moderate risk, for which there are no legally marketed devices on which to base the substantial equivalence determination, or after the applicant receives a not-substantially-equivalent decision from FDA in response to a 510(k) application.

Generally speaking, the types of support that are required for both pathways are similar in that the pathways are both intended for devices of low to moderate risks. For example, both require a description of the device that is the subject of the application, and a statement of the proposed intended use, including a general description of the diseases or conditions that the device will diagnose, treat, prevent, cure, or mitigate, and a description, where appropriate, of the patient population for which the device is intended. Depending on the exact device, the pathways may require submission of conclusions that are drawn from non-clinical and clinical tests to demonstrate that the device is safe and effective although generally speaking, it is more likely that a de novo classification request will need to be supported by data from a clinical trial than a 510(k) clearance application. At other times, references to certain industry or technological standards or testing, or voluntary consensus standards may be included within the applications. With regard to the timing of the review, the FDCA provides 90 days for FDA to review a 510(k) clearance application substantively, although as a practical matter, the agency’s review may take significantly longer if FDA needs additional information or has questions about the submitted information. Similarly, the law provides 120 days for FDA’s review of a de novo classification request but the review may take significantly longer if the agency has questions or needs additional information.

There are also certain differences between the information that needs to be submitted for each regulatory pathway. For example, the application for the 510(k) clearance must include identification of the predicate device and a comparison of the subject device to the predicate device. If the subject device has different technological characteristics from the predicate device, an explanation should be included regarding their impact on safety and effectiveness. These discussions are not included in a de novo classification request, considering that a device that is subject to the de novo classification pathway does not have a predicate to which the applicant compares it. On the other hand, a de novo classification request must include information such as (a) discussion of practices and procedures that may be an alternative to the subject device, where a description of existing alternative practices or procedures is provided, (b) if not subject to a previous 510(k) submission, information showing the searches used to establish that no

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predicate exists; and a list of classification regulations, 510(k) clearances, premarket approvals, and other information regarding devices that are potentially similar to the subject device, and (c) a summary of risks and mitigations for the subject device, among others.

Subject to our receipt of the necessary regulatory clearance or approval, we would expect to leverage results from the U.S. study for a simultaneous conformity assessment procedure in the EU to obtain the CE marking of conformity (“CE Mark”). Subject to our receipt of regulatory authorization to affix the CE Mark, we would expect to commence post-market studies in the UK and Germany. Subject to our receipt of the necessary regulatory clearance, approval or De Novo classification, we would expect to initiate commercialization in the United States during 2024. We are targeting initial sales in Europe in early 2024, subject to our receipt of the necessary regulatory approvals or authorizations. We intend to submit for FDA review of the burn application in 2025 in accordance with the projected timeline for our BARDA contract.

Burn Indication

Following the successful completion of our expanded proof of concept (“ePOC”) multi-center clinical study in the first quarter of 2021, we received two additional grants from BARDA, $20.6 million in March 2021 and $18.8 million in September 2021, to bolster our existing clinical database to train the AI algorithm, and to improve our DeepView technology in early burn wound healing assessment. The $20.6 million contract awarded under Option 1A was exercised by BARDA in March 2021 to execute the first stage of the clinical training study to train the DeepView AI algorithm at five sites. The contract option funding of $18.8 million under Option 1B of the BARDA contract was granted six months ahead of schedule, which enables us to accelerate the initiation of the second stage of our clinical training study with confidence. In August 2022, we received additional contract option funding of $8.2 million under a modification of Option 1B of the BARDA contract to set a qualified production line and enable the IT integration of DeepView into hospital infrastructure. In 2023, provided we reach certain milestones and decision gates as noted above, we expect to receive an additional $21.9 million pursuant to BARDA’s execution of Option 2 of the existing contract to further our clinical studies for validation and FDA submission needs. These awards expand the current clinical training study for burn wounds by adding clinical sites, further increase DeepView’s interoperability with health systems’ electronic health records (“EHRs”) and boosts the Company’s manufacturing capacity readiness. See “Information about Spectral — The BARDA Contract” for further details.

The Option 1B funding has expanded our clinical trial studies through 12 sites and up to 250 clinical subjects, including 190 adult and 60 pediatric burn subjects, resulting in one of the largest prospective multi-center burn studies ever conducted. The upcoming Option 2 funding is earmarked for our validation study prior to submission to the FDA for clearance of our DeepView GEN 3 System. We are focused on advancing our validation study in the third quarter of 2023 with 150 adult and pediatric subjects at up to 15 clinical sites.

The unpredictability of severe burn injuries is a complex critical care problem. As training in burn injuries is no longer required during medical training residency, the correct determination of burn depths is extremely low. In published literature, non-burn care providers are accurate 50% of the time, as compared to burn care physicians’ diagnostic accuracy of between 50%-75% of the time, in predicting early healing potential in burn injuries using visual clinical judgment. Due to the lack of lab tests and diagnostic tools, some Emergency Department (“ED”) physicians often adopt the “wait and see” approach for wound progression for 3-7 days, thereby occupying valuable bed space, additional costs, longer hospital stays and over-excision of viable skin. Some physicians prefer to directly transfer the patient to a specialty burn center. This practice is confirmed by the published Journal of Burn Care Research, which found that 41% of patients with Total Body Surface Area less than 10% were unnecessarily transferred to burn centers for specialized treatment and discharged within 24 hours.

In adult participants, the DeepView GEN3 System has shown 92% accuracy, with cross-validation from the AI model for identification of non-healing burn regions. This represents a significant improvement above the diagnostic accuracy of burn physicians assessing the same adult burn patients, and above 50% to 75% accuracy, according to industry literature. In addition, in head-to-head clinical trial evaluations, our DeepView System provided higher accuracy to “ground truth” on burn wound analysis than the accuracy of burn specialists, reporting at 70-80% accuracy, and non-burn specialist physicians, reporting at 50-60% accuracy. We have conducted three large clinical studies with multiple sites across the United States, enrolling 413 patients, including 329 adult burn patients and 84 pediatric patients. Through these studies we were able to determine burn assessment accuracy in both surgery and non-surgical treatment.

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In pediatric patients, the AI performance of the DeepView System showed 88% accuracy, underlining how the AI technology is responding with significant reliability to variability in the study population. Based on these strong results, we have bolstered our infrastructure to facilitate the expansion of the study to additional sites and have begun enrollment in a larger study in order to complete the AI algorithm’s development.

As of December 31, 2022, our proprietary and clinically validated database for burns is comprised of approximately 263 billion pixels of DFU and burn data. This database presents both a significant barrier to entry to would-be competitors in wound care healing assessment, and a potential additional commercial opportunity for us to develop further in the future.

In alignment with BARDA’s emergency preparedness mission, the $8.2 million contract expansion awarded in August 2022 provides funding to expand the current Burn AI dataset to include ED patient enrollment. The addition of EDs will facilitate our establishing a clinical benchmark for DeepView’s ED burn healing assessment, which we anticipate will have a major impact in the delivery of care for burns in that setting. In February 2022, the Company and the FDA conducted a pre-submission meeting for alignment on our ED strategy. The FDA’s feedback confirmed our ED approach and stated that they see utility of DeepView in Emergency Rooms across the United States.

On February 2, 2023, BARDA also announced its Sources Sought Notice (“SSN”) for Burn Wound Imaging Technologies. This SSN is the first step in BARDA’s procurement process. The SSN stated parameters for the program “seeking burn wound imaging technologies that could enable physicians to efficiently triage burn patients and make more informed treatment decisions. The technologies sought are expected to function in routine healthcare settings such as emergency departments as well as in specialized burn centers and trauma units. Imaging technologies that are well-integrated in routine healthcare settings inherently build national preparedness and the capability to apply these tools during mass casualties involving burn injuries.” We meet all of the requirements set forth in the SSN notification and filed our application by the deadline of February 28, 2023.

DFU Indication

In November 2021, we completed enrollment for our Institutional Review Board (“IRB”) approved multi-center training study to support the development of our DFU application for the DeepView System. The study enrolled a total of 100 adult subjects and was executed successfully and on schedule across five clinical sites in the United States.

The DFU images and clinical data collected are currently being incorporated into the database for the development of DeepView’s DFU algorithm. The data will also inform on key datapoints that will be captured in a planned validation study, and the incorporation of additional newly developed features. Data collected throughout the study will support our applications for FDA clearance and CE mark approval for DeepView’s DFU indication — one of the necessary milestones required to commercialize DeepView’s DFU application. While we believe the Company is well positioned to obtain both FDA clearance and CE mark approval, based on prior FDA BDD clearances for our DeepView GEN 1 and 2 Systems, there can be no assurance that the Company will be able to obtain FDA clearance or CE mark approval of our DeepView System.

We made substantial progress in our U.S. DFU Clinical Validation Study (the “US DFU Clinical Study”) in 2022. The endpoint of the clinical study is to predict on “Day One” whether the DFU wound will reduce in size by 50% by week four. In 2022, with additional analyses our DeepView System showed improvement of the AI diagnostic accuracy by five percentage points to 86%.

The data collected from the US DFU Clinical Study will be used to augment our existing proprietary and clinically validated database of DFU data and healthcare matrix information; and to validate the DeepView DFU AI algorithm as we prepare for U.S. regulatory submission in 2024.

In the first half of 2023, we have continued to enroll subjects in the US DFU Clinical Study to finalize our admission goal. Following effective cost management mainly related to the US DFU Clinical Study, we expect to increase investment in the DFU indication in 2023 to drive our commercialization strategy. In preparation of submitting for regulatory clearance, we will hold a pre-submission meeting with the FDA to ensure alignment for our future final regulatory submission. We intend to submit for U.K. Conformity Assessment (“UKCA”) regulatory evaluations early in 2024. We are currently targeting to receive the required UKCA certificates early in 2024, and to receive FDA clearance in 2024, although these approvals and clearances cannot be guaranteed, and may take longer than expected.

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In February 2023, we also initiated a clinical study in the EU with the Royal College of Surgeons in Ireland conducted at Connolly Hospital in Dublin, Ireland. The EU clinical study will collect data from DFU patients monitored for up to 12 weeks. The intention of the clinical study is to further develop the DeepView AI algorithm to support our regulatory submissions for UKCA, FDA clearance, and EU CE Mark. Our DeepView System recently received United Kingdom Conformity Assessed (UKCA) marking for use in the United Kingdom and has Class 1 medical device classification with the United States Food and Drug Administration (FDA).

Other DeepView Programs in Development

Funding from the U.S. government funding has also allowed us to develop additional “Horizon” indication uses of our DeepView System, including DeepView Snapshot M, DeepView AI 3-D wound measurement technology, and other indications. We believe that our DeepView System’s use in emergency rooms, trauma and burn centers and other would care facilities should be expanded to provide greater utility of the DeepView System in such settings.

DeepView SnapShot M

Our primarily additional indication is the DeepView SnapShot M, a fully handheld, portable, wireless diagnostic tool based on the DeepView System’s AI platform. The DeepView SnapShot M provides a potential new indication use for the U.S. government and emergency care, first responders and potentially home health care professionals. On June 23, 2021, we were awarded a two-year, $1.1 million, Sequential Phase II STTR contract by the DHA within the U.S. Department of Defense. This funding enables us to research and develop the DeepView SnapShot M product primarily for military and combat settings. We were awarded a $4.0 million grant from the Medical Technology Enterprise Consortium (“MTEC”), a 501(c)(3) biomedical technology consortium working in partnership with the Department of Defense, in April 2023, to develop our DeepView SnapShot M device in a Phase III feasibility and commercialization study. This grant, along with prior awards from DHA, based on our development of this device. The funding will be used to support military battlefield burn evaluation using DeepView SnapShot M.

3-D Wound Measurement Technology

We are also currently developing 3-D wound measurement technology for our DeepView System. This technology will produce rapid, accurate and easy-to-use wound size measurement images to produce an accurate 3-D tissue representation from a single image snapshot enabling distance, area and volume measurements with sub-millimetric accuracy without reference to any attendant markers or manually placed stickers or multiple images. We believe this is a significant improvement over current wound size measurement technologies which are limited in their ability to measure all three wound dimensions (distance, area and volume) or are otherwise cumbersome, requiring reference markers/stickers or multiple images to determine would size measurements. Our 3D wound measurement technology calculates the total body surface area (“TBSA”) of a wound. This technology will be integrated into our DeepView System and applies the “rule of nines”; a method that divides the body’s surface area into percentages to calculate the size of a burn or wound. For example, the front and back of the head and neck equal 9% of the body’s surface area and the front and back of each arm and hand equal 9% of the body’s surface area. This new technology will not only generate the TBSA measurement, but will also indicate the “healthy” versus “unhealthy” tissue for advanced treatment applications to be applied to the burn or wound area. This is a critical step in assuring that these alternative medical solutions will be successful in-patient applications. The 3-D wound size measurement tool has completed the proof-of-concept phase. We are currently developing this technology in cooperation with BARDA.

Other Horizon Indication Opportunities

We envision additional “Horizon” indication opportunities for our DeepView System across the spectrum of the wound care market, including venous leg ulcer, critical limb ischemia, amputation, cosmetics, and other digitally guided diagnostic opportunities, which are sometimes referred to as “Horizon indications.” We envision these or other indications being utilized on our current cart-based DeepView System in emergency rooms and other wound/trauma centers as software to be utilized with the existing machines.

From a regulatory perspective, we believe that these follow-on applications would all follow a similar 510(k) clearance process although in some cases, we may need to follow the De Novo classification or premarket approval pathway if we are unable to identify a predicate, or if the device is classified as a Class III device. There can be no assurance, however, that we will be able to achieve any regulatory clearance for any future indications or that we will be able to obtain any such clearance on our projected timelines.

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Business Focus and Milestones

Our current focus may be categorized in two parts: (1) we will continue to fulfill our contractual obligations and meet milestones under our BARDA Burn II contract (described in further detail below); and (2) we will pursue the commercialization of the DFU application in the UK, United States and EU4. Our near-term goals related to the BARDA Burn II contract are to deliver on the current phase of the contract (Phase 1a), and to complete the remaining phases of the BARDA Burn II contract. Completion of these contractual phases support our long-term goal of entering into a federal procurement contract with BARDA.

We intend to submit for FDA clearance of the burn application in 2025 in accordance with the projected timeline for the BARDA contract. We have scheduled a Quality Management System (“QMS”) certification audit in compliance with ISO 13485:2016 for Medical Devices. The certification audit is expected to occur in the first quarter of 2024. In parallel, we are in the process of evaluatingscheduling the benefitsDeepView System Technical Documentation audit necessary to obtain the CE Mark and UKCA certificates to allow market access in the EU and UK, respectively. On July 14, 2023, Spectral completed its UKCA Mark registration for the DeepView Imaging System. Figure 2 below provides a summary of relyingour key anticipated regulatory submissions. There can be no assurance that we will be able to obtain FDA clearance, UKCA or CE mark approval of our DeepView GEN 3 System on our projected timeline, or at all.

Figure 2 — Summary of key regulatory submissions

Strategic Partnerships

We have developed strategic partnerships with multiple clinical and academic partners. In the United States, we entered into clinical trial agreements with leading research hospitals across 13 sites that enrolled subjects in our Burn AI Training Study. The agreements are substantially similar by study and include a detailed listing of the clinical trial services for which we will pay, how much will be paid for each service, a start-up fee (if any), Investigational Review Board fees, monitoring fees, close-out fees, the contractual term, and other reduced reporting requirementsprovisions. The clinical trial services provided by each site generally include the JOBS Act. Subjectscreening of prospective patients and, for those patients to certain conditions set forthbe enrolled in the JOBS Act, if,study, imaging using our device according to the trial protocol, truthing sessions, and subject monitoring. Further, each agreement requires us to indemnify each respective clinical site for any losses, costs, expenses, or damages

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finally awarded by court order or finally paid in settlement or judgment incurred as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things: (1) provide an auditor’s attestation report ona result of third party claims, suits, demands, actions or proceedings, which arise out of: (i) the site’s performance of its obligations under the agreement in accordance with the protocol; (ii) our system of internal controls over financial reporting pursuant to Section 404use of the Sarbanes-Oxley Act; (2) provide allstudy results; (iii) the design or manufacture of the compensation disclosuredevice; (iv) our negligent acts or omissions or intentional misconduct; or (v) our violation of any applicable law, rule, or regulation. We maintain insurance in conjunction with this indemnification. The agreements may be terminated upon 30 days’ written notice, subject to conditions of paying all liabilities incurred through the date of termination. We will be adding to these sites as we begin our Validation Study.

In the EU and UK, we have engaged in a clinical partnership with the Royal College of Surgeons Ireland, as well as key opinion leaders to provide us greater knowledge in the wound care sector. Our partnerships with these institutions provide us the opportunity to collaborate with leading wound care providers to develop effective early stage wound assessment technology. These arrangements support the ongoing clinical validation studies we utilize in developing our algorithmic model through patient enrollment.

We continually look to expand our clinical support partnerships to provide a diverse population of subjects with which to complete our clinical studies. In addition, we have developed key development and manufacturing relationships for the production and delivery of our DeepView System. Below at Figure 3 is a summary of our current key clinical, developmental and manufacturing relationships.

Figure 3 — Summary of key relationships

Diabetic Foot Ulcers (DFU)

Diabetes (type 1 and type 2) affects over 34 million people in the United States alone and more than 460 million people worldwide. A further 88 million adults are affected by pre-diabetes in the United States. Twenty percent of the 30.2 million American adults with diabetes will develop a DFU in their lifetime. DFU is a severe chronic diabetic complication that consists of lesions in the deep tissues associated with neurological disorders and peripheral vascular disease in the lower limbs. It is the most frequently recognized, complex and costly symptom of diabetes and can lead to limb amputation if left undiagnosed, misdiagnosed or untreated. DFU-related mortality is as high as 5% during the first year and 42% within five years.

There is a large and growing number of diabetic patients who suffer from DFU, with over 4,000,000, 200,000 and 1,000,000 receiving treatment in the United States, UK and EU4, respectively, every year. However, there is currently no effective diagnostic pathway for DFU patients in the United States, UK or EU4.

For example, in the United States, patients may undergo standard wound care therapy for 30 days to determine if the ulcer has healed by 50%, before receiving more advanced wound care therapy (i.e., negative pressure wound therapy, synthetic skin substitute grafts, growth factors and biologic wound products, and hyperbaric oxygen therapy).

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In major European markets there are also significant delays in both initial diagnosis of DFUs and referral to specialist treatment programs. In France, England, Spain, and Germany, 54%, 50%, 59%, and 46% of DFU patients, respectively, are diagnosed by Week 4, while 65%, 48%, 51%, and 46% of the patients, respectively, are referred by Week 4.

Many of these chronic wounds will not respond to standard wound care therapy and would have benefited from advanced wound care therapy on “Day One.” Further complicating this clinical issue, we have identified that clinicians’ wound healing predictions have only a 50% accuracy rate. Unfortunately, diagnostic tools to assess the healing potential of DFUs, such as trans-cutaneous oxygen measurement, ankle-brachial index, and doppler ultrasounds do not provide a wound healing prediction. These systems are often inaccurate and only provide a range of values that indirectly correlate to wound healing.

All current systems claiming to be requiredeffective in determining DFU healing potential measure only one physiologic parameter, and none applies AI from multiple sources of information, such as photoplethysmography and MSI, to determine potential viability of the tissue. We believe that a single parameter cannot effectively discriminate healing from non-emerging-healing growth public companies underDFUs. The American Heart Association concurred noting in a 2019 scientific summary that “No single vascular test has been identified as the Doddmost important predictor of wound healing or major amputation for the threatened limb.”

In the United States, DFU patients have an annual cost of up to $63,100 per patient and see an outpatient provider, on average, 15.5 times per year. Non-Frank-healing Wall Street ReformDFUs in the United Kingdom are reported as being four times more expensive than DFUs that heal. Our primary objective is to provide physicians with a healing prediction that enables them to therapeutically intervene earlier in the patient’s care pathway. Our DeepView technology aims to reduce waiting times, minimize patient costs and Consumer Protection Act; (3) comply with any requirement that may be adoptedlower the probability of infections by offering advanced wound care therapy on “Day One.”

Burn Injuries

In the PCAOB regarding mandatory audit firm rotation or a supplementUnited States and the UK there are over 490,000 and 87,000 burn victims, respectively, who receive emergency medical treatment each year. According to the auditor’s report providing additional informationInstitute for Health Metrics and Evaluation, approximately nine million people worldwide seek medical treatment annually for burns, of which approximately 120,000 result in death. In the United States, there are only 134 specialized hospital departments that treat burn patients and about 250 burn surgeons in the auditcountry, and of recent medical graduates, only 1% or less train to become a burn specialist.

Burn victims have varying degrees of tissue damage upon initial admission to the financial statements (auditor discussionemergency room and analysis);burn surgeons must evaluate tissue viability, based on their subjective views and (4) disclose certain executive compensationexperience, as either healing or non-related-healing items such as the correlation between executive compensation and performance and comparisonsto determine what areas of the CEO’s compensationburn wound must be surgically excised for grafting. The diagnostic accuracy rate of burn surgeons assessing the viability of burned tissues is estimated to median employee compensation. These exemptions will applybe between 50% to 75%, which can result in unnecessary surgeries for burn patients.

In addition, the period of assessment is quite lengthy. Physicians typically admit the patient for a period of five years followingup to 21 days to wait for the completionviable tissue to present itself as healing or non-healing before taking the patient to surgery. This “wait and see” period comes at an above average cost for the facility and duress for the burn victim. Currently, the average hospital stay is 8.1 days with an average cost of this offeringapproximately $24,000. Our DeepView System aims to provide the physician with a “Day One” healing assessment and to enable the physician to triage the patient to the appropriate setting sooner. In addition, our technology aims to assist the physician in accurately determining which areas of the burn wound are appropriate for excision and grafting.

DeepView in Practice

DeepView is a predictive analytics platform that combines AI algorithms and MSI for wound prediction. It is non-invasive, non-radiation, non-laser and does not require the use of injectable dye. This integration can be characterized into four distinct components: DeepView imaging, data extraction, AI model building and AI wound healing prediction.

•        The DeepView technology consists of patented proprietary multi-spectral optics and sensors that can classify wound tissue physiology and capture the viability of various biomarkers within the skin.

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•        The imaging technology extracts appropriate clinical data, processes the image and displays a comparison of the original image next to an image with a color overlay of the non-healing portions of the wound. The image acquisition takes 0.2 seconds and the output takes approximately 20 to 25 seconds.

•        DeepView’s proprietary optics can extract millions of pixels of data or untilAI model features from each raw image. This information is then used to build and continually improve the AI model, which is trained and tested against a proprietary and clinically validated database of approximately 263 billion pixels of DFU and burn data as of December 31, 2022.

•        The AI algorithm then seeks to produce an objective, accurate, and immediate binary wound healing prediction. This prediction would be graphically represented to the clinician through a colored overlay of the original image that annotates the non-healing portion of the wound (See Figure 4 below).

Figure 4 — Illustration of DeepView’s binary decision assist output where the colored region marks the predicted non-healing portion of the wound

The DeepView System is designed to allow clinicians to make accurate, timely, and informed decisions regarding the treatment of the patient’s wound. In the case of DFUs, a non-healing assessment would provide the physician with the appropriate justification to use an advanced wound care therapy on “Day One” as opposed to waiting 30 days and potentially losing the patient to follow-up or risking patient non-compliance with standard wound therapy. The current clinical accuracy of DeepView in ongoing clinical trials is 86% for DFUs compared with current physician accuracy of 50%. Subject to FDA clearance of the product, for burn wounds, the clinician could make an immediate and objective determination for appropriate candidates for surgery as well as determining what specific areas of the burn wound will require skin grafting. In ongoing clinical trials, DeepView’s current accuracy for burn wounds is 92%, compared with current physician accuracy of 50 to 75%, according to industry literature. In addition, in head-to-head clinical trial evaluations, our DeepView System provided higher accuracy to “ground truth” on burn wound analysis than the accuracy of burn specialists, reporting at 70-80% accuracy, and non-burn specialist physicians, reporting at 50-60% accuracy. We have conducted three large clinical studies with multiple sites across the United States, enrolling 413 patients, including 329 adult burn patients and 84 pediatric burn patients. Through these studies we were able to determine burn assessment accuracy in both surgery and non-surgical treatment.

See the table below for an analysis of the current DeepView System’s benefits to patient care:

 

Burn

 

DFU

Current Time to Decision

 

21 Days

 

30 Days

DeepView® Time to Decision

 

Day 1

 

Day 1

Current Clinical Accuracy

 

50 – 75%

 

50%

DeepView® Accuracy in Ongoing Clinical Trials

 

92%

 

86%

DeepView® Estimated Cost savings

 

~$24,000 per stay

 

~$63,100 per stay

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Artificial Intelligence and Data Repository

We are developing what we believe to be the only AI enabled predictive wound healing diagnostic imaging technology that translates raw physiological data/images into an output to provide “Day One” healing assessments for wound care. Through our strategic partnerships with multiple clinical and academic partners, we are no longerable to access large, diverse and specific sets of wound data inputs to develop, validate and improve our DeepView algorithms efficiently and effectively. We believe we have the pre-eminent proprietary clinical wound database. The depth and quality of our proprietary data is critical to developing a leading wound assessment technology with demonstrated clinical need across burn, DFU and other indications with a positive impact on health economics and patient outcomes, while safeguarding patient data and privacy.

As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. See “Risk Factors — Issues in the use of artificial intelligence, including machine learning, in our analytics platforms may result in reputational harm or liability” for further details.

DeepView Development Program

The multi-generational development of our DeepView System is summarized below.

Generational Advancements

Technology

FDA Clearance Date

DeepView Gen 1

Photoplethysmography (PPG)

2013

DeepView Gen 2

PPG and Multi-Spectral Imaging (MSI)

2017

DeepView Gen 3

MSI and AI Algorithms

Targeting 2025 (subject to FDA clearance)

The first generation of our DeepView System, DeepView GEN 1, which gained FDA clearance in 2013 (510(k) pre-market notification, K124049), was based on generating reflectance PPG signals by measuring light interaction with dynamic changes in the vascularized tissues. This technique produced a map of blood flow in the microcirculation of tissue to detect relative difference in blood flow in tissues. Spectral’s PPG imaging was used it in clinical studies to investigate blood-flow changes in chronic wounds (e.g., pressure ulcers), surgical wounds (e.g., incision sites), and burns. This device was also used in animal studies to investigate its ability to differentiate viable tissue from burn tissue in an “emerging growth company,” whicheveranimal model of burn excision surgery. However, the data acquisition process for PPG signal collection involved video recording of 30 seconds which introduces artifacts in the signal when the patient cannot be still.

The second generation, DeepView GEN 2, which gained FDA clearance in 2017 (510(k), K163339), utilized, in addition to PPG, wide field MSI system to rapidly capture multiple reflectance measurements of pre-selected wavelengths of light characteristic of the target tissue damage. Unlike its predecessor, this device captured PPG signals in a seven second video and thus reduced motion related noise signal.

Following BARDA funding in 2014, we began focusing our technology on the integration of MSI and AI algorithms for tissue classification. Pre-clinical animal testing resulted in initial machine learning algorithms for the classification of seven tissue types found in burn excision surgery including blood, viable skin, viable wound dermis, non-viable skin (burned skin), and burned dermis to name a few. Following pre-clinical testing, we completed feasibility testing of burn assessment with this technique in 38 human subjects at a single burn center in 2018. In addition, we began exploring other clinical applications, such as determining the healing potential of DFUs and predicting the appropriate amputation site on the lower extremity for patients with critical limb ischemia.

The DeepView GEN 3 System differs from its predecessors in that it:

(i)     utilizes a proprietary multispectral imaging sensor called the SnapShot imaging sensor (US Patent No. 11,631,164, 2020);

(ii)    is earlier.re-designed to be a much more portable version with a smaller footprint; and

(iii)   stores the AI algorithms for burn and DFU assessment within the onboard software.

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DeepView GEN 3 utilizes a proprietary illumination system for tissue imaging with a patented highPROPOSED BUSINESS-resolution

multiGeneral-aperture

We SnapShot multispectral sensor. This sensor captures all required MSI data for processing in one 0.2 second image capture data. This sensor is rapid enough to essentially eliminate the noise from patient motion during image acquisition. The eight reflectance measurements captured at the experimentally pre-determined visible and near-infrared wavelengths are a newly formed blank check company incorporated as a Delaware corporationprocessed to yield the reflectance profile of the tissue at each image pixel location, or multispectral signature, characteristic of the tissue composition. Different wavelengths have different tissue penetration depths for tissue characterization. Differences in the purposespectral signatures between healing and non-healing tissue are utilized to make predictions of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout this prospectus as our initial business combination.wound healing. We have not selected any specific business combination targetyet applied for or received the FDA’s review for the DeepView GEN 3 device.

AI is in development for the GEN3 clinical indications, including classification of burn and weDFU healing potential. The AI methods have not, norbeen established for prediction of healing/non-healing tissue via Deep Learning (“DL”) developed using proprietary MSI data collected in from patients in clinical studies sponsored by Spectral. There are nine patent prosecution families that protect the intellectual property behind the imaging modality and clinical applications of DeepView GEN 3. Clinical data collection with the DeepView GEN 3 System device started in April 2020.

Technical Characterization

There are a number of non-contact, non-invasive, non-radiation optical modalities available for the assessment of burn wound severity such as near infrared spectroscopy, terahertz spectroscopy, laser Doppler imaging, optical coherence tomography, laser speckle imaging, special frequency domain imaging. There are several imaging tools already available commercially, some of which involve invasive procedures — NOVADAQ, Moore Instruments, Tissue Analytics, HITACHI. However, none of these devices are indicated for the prediction of wound healing potential.

AI Applications

Spectral is developing two applications for wound healing prediction that will be available on the GEN3 device. They include the assessment of burn wound depth and the assessment of DFU healing potential. The purpose of the burn wound AI algorithm is to automatically segment (or highlight) the regions of deep burn tissue within a DeepView image. Deeply burned tissue is typically treated by excision and grafting with skin harvested from a healthy region elsewhere on the body. Therefore the accurate identification and differentiation of severely burned skin from less severely burn skin has anyone on our behalf, engagedthe potential to improve treatment decisions regarding surgical excision as well as in any substantive discussions, directlyupstream burn care where burn depth effects resuscitation efforts for the patient.

In the development of these applications, the availability of MSI images and the true physiology of the burn or indirectly, with any business combination target with respect to an initial business combination with us.

We believe that our management team’s decades of experience and relationships with leading technology companies and their founders, executives and investors, the extensive industry and geographical reach of our management team’s network and our management team’s prior experience in private markets investing will give us a competitive advantage in pursuing a broad range of opportunities in many industries. Although we may pursue an initial business combination target in any sector, industry or geographic location, we currently intend to focus our efforts on identifying high growth technology and tech-enabled businesses domestically in industries that are being disrupted by advances in technology and on technology paradigms.

Our management team believes that recent years have brought a wide range of technical breakthroughs that have fundamentally shifted the frontiers of possibilityDFU in the waysimage are required. In our clinical studies where data is collected for AI development, we livefollow standardized protocols designed for accurate wound assessment. For burn wounds, a group of burn surgeons and work. Innovations as diverse as cloud and mobile computing, artificial intelligence, machine learning and cybersecurity, catalyzed by corresponding hardware innovations, have unlocked accelerated cycles of change, radically impacting industries and business models globally. We believe thata dermatopathologists are involved in the transformative effects of these innovations have reshaped both large and small industries across the world. We also believe that becauseclassification of the impacttrue depth of COVID-19, thereburn wounds for AI training. Punch biopsies taken immediately prior to surgical excision are attractive businesses that may have additional capital needs overinterpreted by a derma-pathologist for viable epidermis, dermis and other tissue structures such as hair follicles and sweat glands. In addition, when burn patients are not sent for surgery, the next few years, which could further increase the pipeline of potential opportunities.

Our objectivetrue burn physiology is to generate attractive returns for stockholdersdetermined by actively supporting the next-generation of exceptional public companies. We expect to target companies with certain industry and business characteristics, including long term growth prospects, strong management team, high barriers to entry, opportunities for consolidation, strong recurring revenues, sustainable operating margins and attractive free cash flow characteristics.

Our Sponsor

Our sponsor, Rosecliff Acquisition Sponsor I LLC, is managed by an affiliate of Rosecliff, and its non-managing members include Jordan Zimmerman and Kieran Goodwin. Rosecliff is part of a family of investment vehicles which include seed, venture, growth equity and credit funds with an aggregate of over $800 million in committed capital. Michael Murphy founded Rosecliff in 2016 after a successful career as an entrepreneur and investor and has built a strong track record of investing in disruptive companies. Jordan Zimmerman has acted as an advisor to Rosecliff on a variety of investments and projects since its launch in 2016. Mr. Zimmerman is the Founder of Zimmerman Advertising, onestandardized healing assessment of the top advertising agenciesburn tissue at 21-days post-burn. Using either punch biopsies or healing assessment data, a panel of three expert burn surgeons evaluates every DeepView GEN3 image collected in the United States per adbrands.net’s rankingstudy to obtain a consensus label of the top United States advertising & other agencies of 2018. Mr. Goodwin was the Founderburn’s true physiology. Only these rigorously evaluated labels from expert panels are used for DL algorithm development and Portfolio Manager of Panning Capital Management, a hedge fund that combined fundamental bottoms-up research with a deep understanding of derivatives and securities markets. Messrs. Murphy, Zimmerman and Goodwin will serve on our management team. Messrs. Murphy and Zimmerman will also serve on our Board of Directors. Our sponsor and management team intend to bring to our company the rigorous, thoughtful and creative approach that they have developed through years of building businesses and evaluating business combination opportunities. We believe that they bring differentiated sets of advantages to potential target businesses and their stockholders. Combined, our sponsor and management team offer deep and broad sector knowledge, access to wide professional networks and extensive experience across private and public markets. Furthermore, we intend to leverage the capabilities of the entire Rosecliff platform to further compound our areas of differentiation and strategy.

Although we may pursue a target business in any industry, we expect to focus our efforts on industries that complement our management team members’ backgrounds. We expect to deploy a proactive, disciplined and thematic sourcing strategy and focus our efforts on identifying companies where we believe the combination of our management team’s experience, industry insights, professional relationships and capital markets and deal structuring experience can be catalysts to enhance the growth potential and value of such company. We believe this strategy will allow us to provide opportunities for a highly attractive, risk-adjusted return to our stockholders.training.

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Below are sample images from our proofRosecliff-of-concept clinical study conducted at Wake Forest Baptist Medical Center Burn Center in Winston-Salem, North Carolina showing color images of clinical burns (left column), the DeepView GEN 3 System’s prediction of deep and non-viable burn tissue superimposed on color images where the algorithm identifies non-healing burns as purple (center column), and histologically determined depth of tissue damage, Ground Truth, for color images (right column) where white areas indicate the true regions of non-healing burns determined by histology result (Figure 5). These wounds include both light and dark pigmented patients, and the burn in the middle row is a healing burn as indicated by the lack of a white region in its Ground Truth image.

Figure 5 — Illustration of DeepView’s highlighted region that marks the predicted non-healing portion of the wound

RosecliffWe have the largest (over 1,000 biopsies) proprietary burn biopsy tissue bank known to date, resulting from our successful completion of three multicenter burn imaging studies. The tissue collected and stored in this bank is an investment firm with a missionvaluable resource for scientific advancement in wound research including drug development, gene expression, proteomics, and immunology.

The aim of the DFU AI application is to find and invest in market-leading companiesclassify DFUs that create significant value for stakeholders. Rosecliff’s familywill not respond to standard wound care therapy so that wound care doctors can rapidly transition these patient’s wounds to advanced therapies that accelerate healing. This is importance to wound care doctors because current standard of funds currently has over $800 million in committed capital andcare involves a demonstrated track record of backing industrywait-disrupting companies.

Rosecliff was founded in 2016 by Michael Murphy. Mr. Murphy has been an active investor in start-ups and expansion-stage private companies, both personally and as the Founder of Rosecliff’s fund business. Today, Rosecliff’s fund investment platform takes a multi-disciplinary-and-see approach with three distinct strategies: early-stage venture, later-stage venturewhere treatment is first given, and growth equity and credit. Rosecliffonly if the wound does not shows a measurable response after four weeks is led by two managing partners, each with deep sector knowledge and extensive investment experience. Together, the familytherapy changed to a more advanced method. This technology has the potential to expedite the use of funds provides investment solutionsadvanced treatment, saving patients up to founders at every stagea month of a company’s lifecycle.

•        Early-Stage Venture:    Rosecliff’s early-stage venture practice is comprised of three dedicated early-stage seed investment funds: Rosecliff Venture Partners I L.P., Rosecliff Venture Partners II L.P. and Rosecliff Venture Partners IV L.P. The three investment vehicles have an aggregate of approximately $200 million in committed capital and focus on early-stage venture capital investments in both large consumer and enterprise markets in which technology provides a competitive advantage. Rosecliff’s involvement with companies goes beyond capital. The Rosecliff team focuses on building true partnerships with founders and management teams by working closely with companies on their business models, helping companies scale through partnerships and sharing their experiences in helping companies develop into world-class brands. Rosecliff typically invests alongside regional or industry-focused co-investors who are deeply connected, well respected in the industry and have the know-how to be supportive to early-stage venture investments.

•        Later-Stage Venture and Growth Equity:    Rosecliff is also a growth equity and later-stage venture investor with an aggregate of approximately $500 million in committed capital across three funds: Rosecliff Venture Partners III L.P., Rosecliff Venture Partners V L.P. and Rosecliff Opportunity Fund I L.P. Rosecliff’s later-stage venture and growth equity investments are focused on technology-enabled businesses that disrupt existing, multi-billion dollar industries and can create significant value for stakeholders. Since being founded in 2016, Rosecliff has assembled a team with extensive business experience, vast personal and professional networks and a common vision for identifying, investing in and building disruptive, technology-enabled businesses. Rosecliff has a demonstrated record of sourcing compelling opportunities, smartly structuring investments, attracting high level talent to management roles and boards, rapidly building companies and executing successful liquidity events.

•        Rosecliff Credit Opportunity Fund I:    In 2020, Rosecliff launched Rosecliff Credit Opportunities I L.P., its first non-traditional venture capital fund with approximately $125 million in committed capital. Rosecliff’s Credit Fund has an intentionally broad mandate to support more mature businesses with traditional credit financing opportunities, as well as later-stage venture businesses which either require capex, equipment or other forms of alternative financings and/or have reached a growth phase that warrants taking on venture debt rather than further diluting management and existing investors. The fund also serves as the managing member of our sponsor.

Across these funds, Rosecliff has played an active role in identifying opportunities and helping develop leading companies, including:

•        Allbirds:    Allbirds shoes were named ‘The World’s Most Comfortable Shoe’ by TIME Magazine in 2016. The brand began as direct-to-consumer and has since expanded to many storefronts around the world, offering products made from materials as diverse as wool, eucalyptus fiber and sugarcane. Rosecliff has long sought to invest in bold, disruptive consumer brands with the dual mission of improving individual’s lives and our planet. Rosecliff had the opportunity to invest in Allbirds’ earliest round of financing alongside a strong group of investors and has been a supporter of the business throughout its journey — doubling down multiple times through Rosecliff’s later-stage funds as well.

•        Wheels Up:    Wheels Up is a leading brand in private aviation, with a digital marketplace platform and offering a total private aviation solution. Most recently, Wheels Up partnered with Delta Airlines (NYSE: DAL), a testament to its strong brand presence in the industry. Rosecliff saw the combinationunnecessary care.

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The DFU algorithm relies on MSI data within and around the wound. To capture this data, the borders of growing consumer adoption in private air travel coupled with new technologies that made the model feasible and invested with conviction in onewound must be known. Below are sample images of Wheels Up’s earliest financing rounds and has beenthree sets of results from the DeepView GEN 3 System for automated segmentation of DFU tissue, a strong supporter ever since.

•        Casper (NYSE: CSPR):    Casper, a pioneer inpart of the direct-to-consumer mattress industry, rolled out its iconic mattress-in-a-box in early 2014 and has experienced significant growth. Casper has benefited from consumers’ shifting presence to eCommerce and an increased focus on personal wellness andDFU assessment application, showing color photographs representative of the importance of sleep. Rosecliff was drawninput DeepView data to the missiontrained AI (left column), AI predicted locations of Philip Krim (Founder & CEOthe callous (yellow) and wound (cyan) (center column) and Ground Truth masks indicating the true location of Casper) during Casper’s early stagesthe callous (yellow) and continueswound (cyan) (right column) (See Figure 6).

Figure 6 — Sample images of three sets of results from the DeepView GEN 3 System for automated segmentation of wound tissue

Following wound segmentation, an algorithm is used to supportpredict the business as a shareholder in the now public company.

•        Ro:    RoDFU’s potential to respond to treatment. Below is a schematic representation of one way this prediction can be obtained using a DL approach (Figure 7). Input multispectral patient data processed by DL algorithm (center, grey box) to yield the probability output of positive for responsive or negative for non-driven-responsive telehealth company that aims to be(right, Figures 5 and 6, center column). DL is a patient’s first call for allsubset of their healthcare needs.Machine Learning (“ML”), which in turn is a subset of AI. Using technology, Ro empowers physicians to provide highmulti-quality-layer artificial neural network (center, grey box) comprised of convolution layers (slabs) and fully connected layers (dots), affordable care when and where patients need it most. Early on, Rosecliff saw the potential that emerging technologies could have in shaping the consumer healthcare landscape, which informed its decision to be among Ro’s earliest backers.

•        Petal:    With a deep background and experience in both traditional and emerging financial technologies, the Rosecliff team saw the potential for Petal since its meeting with Petal’s Founder & CEO, Jason Gross. In a few short years, Petal has built a solution for the underserved millennial credit card market.

We believe that the experience of Michael Murphy, the other members of our management team, the Rosecliff brand and Rosecliff’s extensive network of companies, investors and entrepreneurs will provide us with a competitive advantage in sourcing a potential initial business combination target. Rosecliff’s partners and advisors have created a differentiated network with access to founders and leaders across disruptive start-ups, the investment community and Fortune 500 companies. Further, we expect the Rosecliff family of funds to serve as a source of proprietary insight and deal flow. Based on the consistent level of high-quality and high-volume deal flow the Rosecliff investment team has seen in the market over the past few years, we believe RosecliffDL algorithm can provide us with compelling opportunities for potential initial business combination targets.

In addition, through its demonstrated track record of creating long-term value, hands-on approach and well-regarded brand, Rosecliff has become a valuable partner for innovative companies across the venture ecosystem. We plan to leverage the position and connectivity of Roseclifflearn directly from raw image data input to help effectuate an initial business combination that will provide longmake intelligent decisions and can increase its predictive accuracy for non-term-healing value for our stockholders.tissue when provided

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more data for algorithm training. Furthermore, while not shown explicitly in this figure, we have explored the use of combining patient medical data with images for classification of ulcer healing potential. Additionally, the process of algorithm training for DFU is different to that of burn since the input data for the two are mutually exclusive.

MANAGEMENTFigure 7 — Schematic representation of the steps involved in generating DeepView GEN 3 System output

Executive OfficersMedical Imaging Solutions

Central to the DeepView GEN 3 System is the proprietary AI analytics for the assessment, diagnosis, and quantitative prediction of wound healing potential applicable to both burns and DFUs. The AI analytics is driven by DL and ML algorithms that are being trained and optimized exclusively to the unique and proprietary MSI datasets acquired from clinical studies. Our inMichael Murphy-house expertise has made possible the necessary technology platform to interrogate the information contained in the rich multidisciplinary datasets of images and patient health data.

Michael Murphy, our Chief Executive OfficerIt is important to recognize that, to avoid costly and time-consuming clinical trials, many companies specializing in medical imaging analytics that are supported by AI utilize purchased or publicly available clinical datasets. When an AI device intended for use with a member of our Board of Directors, began his investing career over 25 years ago. His careerspecific clinical protocol has been focused on beingtrained using data obtained from an entrepreneurexternal source, such as data acquired through a different clinical protocol, the resulting device output could be compromised. This is a result of external data not adequately representing the same patient population or collection methods to which the algorithm will be applied in the investing and financial service industry. Inreal world. To meet the past, he was the Founder of a wealth management firm, hedge fund and multiple commercial real estate portfolios.

As described above, in 2016, Mr. Murphy founded Rosecliff and has served as its Managing Partner since its inception. Over the past four years, Rosecliff has made over 80 investments, raised over $800 million in assets under management, launched seven investment funds and experienced multiple portfolio company exits.

Rosecliff has a team of analysts, associates and partners that assist in sourcing, structuring, investing and supporting new investment opportunities. The deals can extend from early stage startup companies to late stage growth equity opportunities to pre IPO deals. Mr. Murphy’s extensive network has helped Rosecliff create a vast funnel of incoming deals each yearhigh standards necessary for the firm. A few select transactions fromdevelopment of predictive algorithms, the Rosecliff portfolio include; Allbirds, Casper, Postmates, Ro, Thirty Madison, Petalalgorithm is developed using data that was collected with the same imaging technology, under the same clinical circumstances, and Wheels Up.

Mr. Murphy is currently a board member of multiple private, venture capital backed companies including Cargo Systems, Squarefoot, ForDays and Agile Stacks. He brings his extensive experience, knowledge and passion to assist companies in their growth phase.

Mr. Murphy previously was a contributor on CNBC and regularly appeared on the network’s FASTMONEY segment. Currently, Mr. Murphysame population for which it is a regular contributor on Fox Network and makes appearances each week on Varney & Co, Mornings with Maria & Cavuto. He uses this platform to discuss trends in both private equity and public markets.intended.

Mr. Murphy earned a Bachelor of Arts in Business Administration from Hofstra University.

Jordan Zimmerman

Jordan Zimmerman, our President and a member of our Board of Directors, is the Chairman and Founder of Zimmerman Advertising. Mr. Zimmerman founded Zimmerman Advertising in 1984 and has continued to work tirelessly, personifying a commitment to be the best. Mr. Zimmerman trademarked his advertising strategy, “Brandtailing®,” a maverick combination of long-term brand building and short-term sales boosting that delivers measurable results. Highly respected within the advertising world, Mr. Zimmerman is often asked to address industry groups and participate in panel discussions across the country.

Zimmerman Advertising has worked with highly recognizable and successful businesses in the consumer sector, such as Nissan, McDonald’s, Dunkin’ Donuts, Five Below, Party City, Kay Jewelers, AutoNation, Michaels, Advance America, TBC/Tire Kingdom, Office Depot, and Carfax. The agency works with these companies to help increase brand awareness, market share and overall company growth. Zimmerman Advertising’s goal is to help make the companies it partners with market leaders in their respective fields. Mr. Zimmerman strives to drive growth by dreaming bigger, acting limitlessly and leading fearlessly.

The following projects highlight select successes of Mr. Zimmerman’s career.

•        Five Below:    Zimmerman Advertising assisted in generating brand awareness by handling overall creative and media duties for Five Below. The partnership was designed to transform the retailer into a multimedia brand that appealed to its core audience.

•        AutoNation:    AutoNation is a large and recognizable automotive retailer. The partnership drove more than just business success. It produced a profoundly impactful community purpose called the “Drive Pink/Pink Plate” initiative to celebrate the victories that so many have had in their fight against cancer. As of December 2020, AutoNation has raised over $25 million31, 2022, approximately 263 billion pixels of proprietary DFU and burn data have been acquired and utilized for cancer fighting charities.the DL algorithms training. Plans are in place to store anonymized patient data on a reputable cloud platform that incorporate administrative, technical, and physical safeguards consistent with the security regulations promulgated pursuant to HIPAA.

Key Strengths

We believe the following key strengths will help us to maintain and grow our business going forward:

Market Leading Technology

We have developed proprietary AI algorithms and optical technology to assist clinicians to make more accurate and faster treatment decisions in managing patient’s wounds. This technology is the result of 13 years of research and development, thousands of hours of user feedback, and most importantly, the continual commitment to ensuring that the output from DeepView answers a clinical question that is meaningful physicians. We own and control the entirety of our data pipeline. We do not rely on stock images or databases for our algorithms, only images and data

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that the solution collects in a controlled clinical environment. All optical technology has been developed in•        -house and is specifically engineered to collect this imaging data. A current image of our cartMichaels-based:    Michaels DeepView System appears below in Figure 8.

Figure 8 — DeepView Generation 3 System

Unmet Clinical Need

The biggest unmet need for clinicians treating DFU and burn wounds is the nation’s largest specialty providerlack of artsa diagnostic tool that provides an objective wound healing determination on “Day One.” While burns and crafts materials. This partnership helped fuelDFUs appear to be very different types of wounds, they are in fact similar from the perspective of assessment and diagnosis. The treatment pathways for each of these wounds can be generally characterized by a subjective initial assessment from the physician followed by multiple days of clinical observation to assess whether or not the wound responded to treatment. Both are primarily staged by their penetration depth into the skin and involvement of tissues below the skin in severe cases. Both DFUs and burns are diagnosed by expert clinical opinion without the aid of objective diagnostic tools that provide a wound healing prediction. Furthermore, the current methods of diagnosis rely on a “wait and see” approach that result in prolonged hospital stays and costly delays in the delivery of definitive treatment. Our goal is to eliminate these costly delays between initial screening and the delivery of a definitive treatment through the use of AI algorithms applied to our proprietary multispectral wound images. We believe that this unmet need for effectiveness and efficient assessment and treatment of burn wounds is recognized by BARDA, as demonstrated by their significant and continuing investment in us to date.

Significant Market Opportunity

Geography — DeepView has the potential to service a large total addressable market. We estimate that there are over 57,000 sites of clinical care in which the technology could be placed in the United States and over 20,000 sites across the UK and EU4. For all geographies, these sites include both acute inpatient hospitals and outpatient sites of care, in order to include physician offices. As we expand from the United States into the UK and EU4, we will consider follow-on markets for commercial expansion, to a much broader audienceincluding China, South Korea, Japan, the Middle East, and encouraged the fun of “making” and customizing products from scratch. The “Make Creativity Happen” initiative helped to develop further brand awareness by strategically bringing creativity, imagination and innovation into Michaels’ stores.South America.

•        Pipeline ApplicationsMcDonald’s:    Zimmerman Advertising was responsible for orchestrating the implementation of new strategies to help fuel the growth of over 4,000 restaurants. These strategies included innovating and leading digital media, marketing research, social marketing and analytics to drive brand growth.

•        Nissan:    Zimmerman Advertising partnered with Nissan to assist in building a unified brand that resonates with customers by showcasing a unique driving experience. The “Tech that Moves People” campaign — Though we are currently focused on Nissan’s Intelligent Mobilitythe DFU and burn applications for DeepView, there are other pipeline applications that we are considering for future commercialization. As noted above, we have already received U.S. government funding for the Nissan Leaf,development of our DeepView SnapShot M fully handheld device for use in combat, military and home health care uses. We are expanding the world’s first mass produced 100% electric vehicle.

Outside of work, Mr. Zimmerman is an author, a philanthropist, a Horatio Alger Award recipient and a Golden Circle Memberindication usage of the National Multiple Sclerosis Society who proudly works hardDeepView System to grow his communityincorporate a wound and burn measurement diagnostic tool for clinicians in many ways but none more than his driving dedicationconcert with BARDA. We have also explored the technology’s potential in diagnosis for venous leg ulcers, critical limb ischemia, level of lower limb amputation selection, post-operative perfusion assessment for peripheral interventions, and military applications. For all future pipeline applications, we believe that the technology would remain constant, in that we will leverage our data analytics algorithms to improvingimprove diagnostic analyses. However, we would need to conduct a clinical study to collect enough patient data to appropriately support algorithm development for each new application. These new algorithms could easily be uploaded to existing machines in the education systemfuture. From a regulatory perspective, we believe that these follow-on applications would all follow a similar 510(k) clearance process although in this countrysome cases, we may need to follow the de novo classification or premarket approval pathway if we are not able to identify a predicate, or if the device is classified as a foundational step in making life better for generations to come.

In March 2015, with a donation of $10 million dollars from the Jordan Zimmerman Family Foundation, Mr. Zimmerman established the University of South Florida Zimmerman School of Advertising and Mass Communications and its highly regarded Zimmerman Advertising Program. Mr. Zimmerman has a hands-on approach to building the curriculum and has helped the program to build an established media program. Mr. Zimmerman was appointed by the Governor of Florida for a second term to sit on the Board of Trustees at the University of South Florida where he has served as the Chairman of the Board since 2019.

Mr. Zimmerman earned a Bachelor of Arts in Advertising and an MBA from the University of South Florida and was awarded an honorary Doctorate of Business Administration from Nova Southeastern University.

Kieran Goodwin

Kieran Goodwin, our Chief Financial Officer, founded Panning Capital Management, L.P. (“Panning”) in 2012 and was Co-Managing Partner and Portfolio Manager until 2018. Panning was a long/short credit hedge fund with a peak AUM of $2.5 billion during Mr. Goodwin’s tenure. From 2004 to 2010, Mr. Goodwin was the Head of Trading and one of five partners and four members of the Global Investment Committee at King Street Capital Management (“King Street”). As Head of Trading, Mr. Goodwin was responsible for managing King Street’s twenty traders. During his time at King Street, the firm’s AUM grew from $4 billion to approximately $20 billion. Mr. Goodwin previously was a Managing Director at both UBS and Merrill Lynch, where he ran proprietary trading books.

Since 2018, Mr. Goodwin has invested his own capital in both private and public markets. He is an investor in many early-stage companies and currently serves on the board of directors of Tradewell Technologies Inc. and Zoomi Inc. Additionally, he serves on the board of directors Voya Prime Rate Trust, a public closed-end loan fund.

Mr. Goodwin received a Bachelor of Arts in Computer Science, cum laude, from Duke University in 1991.

Board of Directors

Brian Radecki

Brian Radecki, a member of our Board of Directors, is the Founder, Chief Executive Officer and member of the Board of Directors of Rapa Therapeutics (“Rapa”), a clinical stage start-up biotechnology company, spun out of the National Cancer Institute in September 2017. Rapa is developing a cell therapy platform focused on cutting-edge curative immunotherapy treatments for cancer, neurodegenerative, autoimmune and inflammatory diseases. After experiencing many people close to him being afflicted by these deadly illnesses, Mr. Radecki has made it his mission to find a better way to treat and help people with these devastating diseases.Class III device.

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Mr. RadeckiExisting and future revenue base from long term U.S. Government Contracts — BARDA

Since 2013, we have received approximately $280.0 million in funding from government contracts, primarily from BARDA, which accounts for $272.9 million. This has allowed us to develop our technology and further our clinical trials. On September 27, 2023, the Company executed a new contract with BARDA, providing the Company with additional funding of up to $149.9 million, including an initial award of approximately $55.0 million to support the clinical validation and FDA clearance of our DeepView System, in place of the prior contract Option 2 award which was approximately $22.0 million. This will include the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support the clinical validation study and to transition the use of our DeepView System to being used routinely upon FDA clearance. The contract also includes options, similar to our prior BARDA contracts, with an additional total value of approximately $95.0 million which can be exercised for additional product development, procurement and the expanded deployment of DeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research to support the broader clinical adoption of the DeepView System. The Company is an active angel investoralso completing work on the Option 1B of its prior contract award relating to our Burn Training study, which was extended through December 31, 2023 upon which the Company will receive approximately $2.0 million of additional funding. This grant funding is non-dilutive to our stockholders, and we believe it validates the important nature of its mission and technology. See “Information about Spectral — The BARDA Contract” for further details.

Significant Wound Data Repository from Artificial Neural Network

As of December 31, 2022, approximately 263 billion pixels of proprietary DFU and burn data have been acquired and utilized for the deep learning algorithms training. This presents a significant barrier to entry to would-be competitors in wound care healing assessments. The data collection to clinical output, the flow, quality and control of the data pipeline is managed entirely by us. Our DeepView System uses deep learning on its wound data repository to recognize patterns and correlations of injured tissue spectral signatures to produce reliable and reasonable assessment for clinicians to make accurate and faster treatment decisions. We believe that our strategic partnerships with various leading medical institutions and healthcare providers in the United States and Europe will enable us to access high quality image data and build the world’s leading wound biopsy tissue database. Our AI algorithms are designed and trained to the clinical Ground Truth that has been verified and vetted by various U.S. government agencies and leading clinicians in their respective fields. They have not yet been reviewed or advisorcleared by FDA.

Strategic Partnerships

We have developed strategic partnerships with multiple clinical and academic partners. In the United States, we are currently engaged with leading research hospitals that are enrolling subjects for our Burn AI training study. In the EU and UK, we have partnered with the Royal College of Surgeons Ireland, as well as key opinion leaders to several companies across various industries — from start-upsprovide us with zero revenue,greater knowledge in the wound care sector. Our partnerships with these institutions provide us with the opportunity to pre-IPO and large public companies. He has over 20 yearscollaborate with leading wound care providers to develop effective early stage wound assessment technology. We utilize these strategic partnerships to support the ongoing clinical validation studies we are using to develop our algorithmic model. Each of experience building both small private and large public companies. He works closely with many topour clinical study/trials include certain protocol requirements to ensure a uniform testing process for our technology.

-tierProven Experienced Management Team private equity, venture capital and institutional investors along with entrepreneurs, boards

Our board of directors and senior management teams to build disruptive and innovative platform companies by executing strategic plans to get things done.

Mr. Radecki is currently an investor and director on the board of Wheels Up. Previously, Mr. Radecki was an early investor in, and served on the board of directors of, Rain King Software, Inc., a leading sales and marketing intelligence platform, when it was acquired in August 2017 by Zoom Info (NASDAQ: ZI) (formerly DiscoverOrg); Docutech, a document, eSign, eClosing and compliance technology provider, when it was acquired by First American (NYSE: FAF) for $350 million in March 2020; and Optimal Blue, a digital marketplaceteam have significant experience in the residential mortgage industry, which was recently acquired by Black Knight, Inc. (NYSE: BKI). Also, Mr. Radecki invested pre-IPO in other companies including Beyond Meat (NASDAQ: BYND)technology and Skillz Inc. (NYSE: SKLZ), which is merging (via SPAC)healthcare sectors, with Flying Eagle Acquisition Corp. (NASDAQ: FEAC). A numbera track record of his early or pre-IPO investments have resulted in returns over 10 times his MOI.

After working approximately 20 years at public companies, Mr. Radecki retired in 2016 from CoStar Group Inc. (“CoStar”) (NASDAQ: CSGP), a provider of commercial real estate information, analytics and online marketplaces, where he held several seniorsuccessful entrepreneurship, operational and financial roles over 18 years, including Executive Vice President, Chief Financial Officer and VP of Research Operations (the Company’s largest operating area). While at CoStar, Mr. Radecki oversaw or played a major role in CoStar’s accounting and finance operations in the U.S. and U.K. — from internal audit, tax and budgeting to SEC reporting, Sarbanes-Oxley compliance and due diligence.

Additionally, Mr. Radecki helped lead CoStar’s 1998 initial public offering, multiple follow on equity offerings and international expansion, as well as leading several acquisitionsacumen, strategic relationships and the integrationability to understand and navigate the complexities of healthcare. Our directors also bring significant expertise from previous public companies, including Comps.com (NASDAQ: CDOT) in 2000 for $102 million,company experience along with financial, governance and LoopNet (NASDAQ: LOOP) in 2012 for $860 million. Also, Mr. Radecki was named the Washington Business Journal’s “CFO of the Year” in the large company category for 2012. During 2014, he led and raised nearly $1.1 billion of debt and equity. Mr. Radecki also played a major role in acquisitions of Apartments.com in 2014 for $585 million and ApartmentFinder in 2015 for $170 million, which allowed CoStar to successfully enter a new strategic vertical and significantly expanded CoStar’s total addressable market. Mr. Radecki was instrumental in building CoStar from a small pre-IPO start-up to a multi-billion dollar public company. During his tenure, CoStar’s substantial growth resulted in an over 2,000% shareholder return.

Before joining CoStar, Mr. Radecki worked at Axent Technologies, Inc. (Nasdaq: AXNT), an international security software company; Azerty, Inc. and the public accounting firm, Lumsden & McCormick, LLP, both based in Buffalo, NY.

Mr. Radecki earned a Bachelor of Science from University of New York at Buffalo, with a dual degree in Accounting and Finance.technical oversight.

Frank S. EdmondsRespected Advisory Board

Frank S. Edmonds, a director nominee, has been a Partner at Panning Capital Management, L.P. since 2013, where he served as CoWe have established an Advisory Board composed of industry experts and opinion leaders that will raise our profile. Its members will provide us with external, industry-Managing-specific Partnerperspectives and Headtechnical support. Brief biographical details of Research from 2013 to 2018. From 2002 to 2012, Mr. Edmonds was a Senior Research Analyst at King Street, where he served as one of five partners and four members of the Global Investment Committee. Prior to King Street, Mr. Edmonds was a research analyst at Oak Hill Advisors. He serves on the boards of Shane’s Rib Shack, a fast casual barbeque restaurant business with 65 locations in the Southeast, as well as the Darden Graduate School of Business and the Jefferson Scholars Foundation. He is currently the Chair of the Investment Committee at Woodberry Forest School. Mr. Edmonds received a B.A. in History/American Studies and joint M.B.A./J.D. degrees from the University of Virginia.our Advisory Board are summarized below.

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BUSINESS STRATEGYToby Cosgrove

We are focusedDr. Toby Cosgrove M.D. is the former President and Chief Executive Officer of Cleveland Clinic and currently serves as an Executive Advisor to the $5 billion healthcare system. Dr. Cosgrove is a sought-after speaker worldwide. He has addressed the World Economic Forum Annual Meeting at Davos, Switzerland, and the Senate Health, Education, Labor and Pensions Committee, in Washington, D.C. He is regularly quoted and featured in national magazines and newspapers, including a cover story in Time, and major articles in Newsweek, the New York Times, and the Washington Post. He has appeared on creating sustainable longCNN, Fox, MSNBC, NBC, CBS, “The Charlie Rose Show” on PBS, and other national media outlets.

The recipient of Cleveland Clinic’s Master Clinician Award, Innovator of the Year Award and Lerner Humanitarian Award, Dr. Cosgrove is also a member of Cleveland Medical Hall of Fame and Cleveland Business Hall of Fame. In 2007, he was named Cleveland Business Executive of the Year by the Sales and Marketing Executives of Cleveland, and Castle Connolly’s National Physician of the Year. He also received the Woodrow Wilson Center Award for Public Service as well as Harvard Business School’s Award from HBS Alumni, Cleveland, and the Humanitarian Award of the Diversity Center of Northeast Ohio. Dr. Cosgrove topped Inside Business’s “Power 100” listing for Northeast Ohio and is highly ranked among Modern Healthcare’s “100 most powerful people in healthcare” and “most powerful physician executives.”

-termJohn Botts, CBE

Mr. Botts is a Senior Advisor to Allen & Company, Chairman of The Ink Factory, and Advisor/Director to several early-stage value fortech platform companies. He is a former career banker with Citi running its investment banking division in Europe, including CVC. He is also a former Chairman of UBM plc, Euromoney plc, former Advisor of Corsair Capital, Director of Songbird (Canary Wharf), and currently serves as Director of Glyndebourne Productions (former Chair) and the Tate Foundation and as a Member of the Council on Foreign Relations.

Competition

To our stockholders by identifying potential opportunities that can generate outsized returns. We believe our exceptional network and deep ties across theknowledge, no other predictive wound-healing diagnostic imaging technology ecosystem will create ais available to clinicians who treat wounds. DeepView’s competitive advantage in sourcing attractive opportunities. We planis that it is the only AI-enabled wound imaging technology that translates raw physiological data/images into an output that is directly correlated to identifywound healing.

Several companies have developed wound imaging systems for burn injuries and complete our initial business combination with aDFUs; however, these systems incorporate technology companysuch as spatial frequency domain imaging, thermal imaging, photographic documentation, hyperspectral imaging, and near-infrared imaging that complementsprovide physiologic data to the experience of our management teamphysician. Ultimately, this physiologic data only provides an indirect linkage to wound healing and can benefit from its operational expertise and deal sourcing network. We have identified the following general criteria that we believe are important in evaluating prospective partner businesses for our initial business combination. We intend to use the following criteria in evaluating acquisition opportunities, but we may decide to enter into our initial business combination with a partner business that does not meet these criteria:

display a binary result of “healing vs. non•        -healingFocus:    We intend to seek companies.” Furthermore, the majority of systems in the technology industry. We have an accomplished trackwound care space are merely documentation tools that record measurements of investing in this industrythe wound for health record purposes and expect to focus on businesses that engage with technology to serve customers instill rely upon subjective clinician opinion for treatment decisions. The advent of a novel and transformational manner. We believe our management team’s expertise and understanding of innovative businesses will be paramount in identifying and assessing an initial business combination candidate.

•        People driven:    Serial entrepreneurs, visionary leaders and trusted partners — we intend to seek management teams with whom we would be proud to partner fortechnology such as the next decade or more and who we believe have the vision, energy and execution capability to deliver on our high expectations for growth and franchise value. This is the standard against which Rosecliff measures all of the management teams with whom it partners, whether they are running public or private companies.

•        Growth:    We intend to invest in businesses that are on, or haveDeepView System not only has the potential to disrupt the therapeutic pathway within the wound care market, but also to create a new diagnostic market for wound care that did not exist previously for clinics and physicians, subject to successful development of the device and FDA clearance. As noted above, although we have received FDA BDD clearance for our DeepView GEN 1 and DeepView GEN 2 Systems received FDA BDD clearance, there can be on, what we believe to be a promising growth path. We believe that these businesses, in particular, will benefit from access to incremental capital and over the long term, will benefit from consistent access to public markets. We will seek businessesno assurance that we believe have a sustainable competitive advantage and will support and sustainbe able to obtain FDA clearance, UKCA or CE mark approval of our expectations of their growth.DeepView System.

•        Clinical Studies

Significant addressable market relativeDFU Clinical Studies

In November 2021, we completed enrollment for our IRB approved multi-center training study to current company size:    We intend to seek companies that we believe have a clear runway for sustained growth in their existing core businesses, well beyondsupport the development of our expected investment horizon.

•        Sustainable competitive differentiation:    We believe that identifying and deeply dissecting the “moat” around a company is the most critical element of understanding that company, as true differentiation can provide years of durable, compounding growth and expanding margins.

•        Economic model:    Ultimately, a business must have the ability to generate high levels of cashflow over time, even if it chooses to use that cash to reinvestDFU application for the future. We expect to spend significant time evaluatingDeepView System. The study enrolled a company’s financial modeltotal of 100 adult subjects and unit economics to seek to discern the trajectory of its margin profilewas executed successfully and on schedule across five clinical sites in the coming years.United States. We will seek to acquire a business that has historically generated, or that we believe has the near-term potential to generate, strongfollowed up on this study with another training study with an additional enrollment of another 100 adult subjects, which was executed successfully and sustainable free cash flow.

•        Appropriate valuations:    We are rigorous, disciplined, and valuation-centric investors, with a keen understanding of market value, upside and potential downside risks.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general criteria as well as other considerations and factors that our management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business that does not meet the above criteria, we will disclose that the target business does not meet the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this prospectus, would beschedule across five clinical sites in the formUnited States, and concluded in January 2023. The DFU images and clinical data collected are currently being incorporated into the database for the development of proxy solicitation materials or tender offer documents, as applicable,DeepView’s DFU algorithm. The data informs on key datapoints that we would file withare captured in additional newly developed features of the SEC. In evaluating a prospective target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other information which will be made available to us.DeepView System.

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We are not prohibited from pursuing an initial business combinationIn February 2023, we commenced our validation study with a company that is affiliated withplanned enrollment of another 100 adult subjects across 10 clinical sites in the United States and EU. The data collected throughout the study will support our sponsor, directors or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers.

Eachapplications for FDA and CE mark approval for DeepView’s DFU indication — one of the necessary milestones required to commercialize DeepView’s DFU application. The completion of enrollment for the multi-center study is an important milestone and illustrates how we are delivering on the expected milestones since our initial public offering on the AIM market in June 2021. The development of the DeepView System for the DFU application and the user interface software have seen substantial progress.

The purpose of the validation study will be to test the algorithm’s wound healing prediction capability on a new set of patients. In April 2023, we held a pre-submission meeting with the FDA to ensure that the design of the validation study will meet the evidentiary requirements of the FDA. We expect that a few of the enrolling sites from the training study will be used in the validation study. The output from the validation study will be used to support the FDA and CE Mark regulatory applications, which are expected to be submitted in 2024. Our goal is for the Burn application to follow a similar clinical and regulatory framework with a forecasted 510(k) submission to the FDA in 2025.

Burn Wound Clinical Studies

Following the successful completion of the ePOC multi-center clinical study in the first quarter of 2021, we received two additional grants, $20.6 million in March 2021 and $18.8 million in September 2021, to bolster our existing clinical database to train the AI algorithm, and to improve the DeepView® technology in early burn wound healing assessment. The $20.6 million contract awarded under Option 1A was exercised by BARDA in March 2021 to execute the first stage of the clinical training study to train the DeepView AI algorithm at five sites. The contract option funding of $18.8 million under Option 1B of our prior contract with BARDA was granted six months ahead of schedule, which enabled us to accelerate the initiation of the second stage of our clinical training study with confidence. Funding from Option 1B was used to expand the study to 10 clinical sites, and from 100 to a total of 250 clinical subjects. This study was completed in the second quarter of 2023 and included 190 adult and 60 pediatric clinical subjects across 12 clinical sites; resulting in one of the largest prospective multi-center burn studies ever conducted. In adult participants, the DeepView GEN 3 System showed 92% accuracy, with cross-validation from the AI model for identification of non-healing burn regions. In pediatric patients the AI performance of the DeepView System showed 88% accuracy, underlining how the AI technology is responding with significant reliability to variability in the study population. Based on these strong results, we have bolstered our infrastructure to facilitate the expansion of the study to additional sites and will advance our validation study in 2023 in order to complete the AI algorithm’s development.

We will be conducting a clinical validation study with the objective of completing the development of the ML algorithm, the results from which will be used in submission to the FDA. We plan to enroll an additional 150 subjects (both adult and pediatric) across at least 15 clinical sites in the United States and the EU, beginning in the third quarter of 2023.

We were granted BDD status by the FDA in 2018 for the MSI combined with AI device technology applied to burn wound assessment. The BDD Program is a program issued to certain medical devices and device-led combination products that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions.

Our BDD status gives us prioritized reviews and a dedicated line of communication with reviewing members of our sponsor, our directorsthe FDA. We regularly engage with the reviewers and officers will, directly or indirectly, own founder shares and/or private placement warrants following this offeringmeet them on average twice a year to share development progress and accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business withfuture directions for feedback, which to effectuate our initial business combination. Further, such officersincludes clinical study design and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.

Past experience or performance of Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates is not a guarantee of either (1) our ability to successfully identify and execute a transaction or (2) success with respect to any business combination that we may consummate. You should not rely on the historical record of Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates as indicative of future performance. See “Risk Factors — Past performance by Rosecliff, or any of its funds, investments or portfolio companies, or our sponsor, directors or management team or their respective affiliates may not be indicative of future performance of an investment in the company.”

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his or her fiduciary duties.image data acquisition protocol for burn wounds. As a result if any of our officers or directors becomes awarethis continuing and transparent interaction with the FDA, we have gained a deeper understanding of the regulatory pathway for the DeepView GEN 3 System and have already established that a business combination opportunity which is suitable forcomponent of the marketing submission will involve an entity to which he or she has thenAI algorithm performance upgrade plan applicable at appropriate stages of the life span of the device.

-currentClinical Validation and Regulatory Pathway fiduciary or contractual obligations, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity to such entity, before

Based on the evaluated risk of the technology, we can pursue such opportunity. If these other entities decide to pursue any such opportunity, webelieve that DeepView may be precludedsubject to the Class II de novo classification pathway. We have received a recommendation from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation will provide that we renounce our interest in any business combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity asHPRA for a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis.

In addition, our officers or directors may be investors, or have other direct or indirect interests, in a business with which we may enter into a business combination agreement and/or in certain funds or other persons that may purchase shares in this offering or that may otherwise purchase shares of our Class A common stockIIa designation for CE Mark certification in the public market.

Our officers, directors and any of their respective affiliates may sponsor or form, or, in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

Rosecliff may become aware of a potential business combination opportunity that may be an attractive opportunity for our company. However, Rosecliff is not under any obligation to source any potential opportunities for our initial business combination or refer any such opportunities to our company or provide any other services to our company. Rosecliff’s role with respect to our company is expected to be primarily passive and advisory in nature. Rosecliff may have fiduciary and/or contractual duties to its investment vehicles and to companies in which Rosecliff has invested. As a result, Rosecliff may have a duty to offer business combination opportunities to certain Rosecliff funds, other investment vehicles or other entities before other parties, including our company. Additionally, certain companies in which Rosecliff has invested may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial business combination. Transactions of these types may present a conflict of interest because Rosecliff may directly or indirectly receive a financial benefit as a result of such transaction.EU.

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We believe that any such potential conflicts of interest of Rosecliffintend to present the DFU application as the first indication for regulatory approval in the United States, UK and our officersEU4. The burn indication for use may follow as a 510(k), subject to review and directors will be naturally mitigatedagreement by the differing natureFDA, supported by clinical data that is evaluated by a methodology similar to DFU.

We recognize that establishing the clinical foundation is key to the successful commercialization of targets that Rosecliff typically considers most attractiveour technology. We plan to establish this foundation by:

•        obtaining the input and clinical buy-in of physician key opinion leaders in wound care and burn surgery;

•        attending trade shows to showcase the Group’s technology (American Burn Association, Southern Burn Association, American College of Cardiology, and Society for its venture capital activitiesAdvanced Wound Care); and

•        publishing results in peer-reviewed journals (Journal of Wound Care, Journal of Vascular Surgery, Journal of Burn Care & Research).

The BARDA Contract

Since 2013, we have received approximately $280.0 million in government contracts, primarily from BARDA, which accounts for $272.9 million. This has allowed us to develop our technology and further our clinical trials. From 2013 through 2019 our BARDA “Burn I” contract we received $26.0 million and have been awarded an additional $96.9 million under our BARDA “Burn II” contract which was awarded in multiple tranches. On September 27, 2023, the Company executed a new contract with BARDA, providing the Company with additional funding of up to $149.9 million, including an initial award of approximately $55.0 million to support the clinical validation and FDA clearance of our DeepView System, in place of the prior contract Option 2 award which was approximately $22.0 million. This will include the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support the clinical validation study and to transition the use of our DeepView System to being used routinely upon FDA clearance. The contract also includes options, similar to our prior BARDA contracts, with an additional total value of approximately $95.0 million which can be exercised for additional product development, procurement and the typesexpanded deployment of initial business combination opportunities thatDeepView Systems at emergency rooms, trauma and burn centers. These deployments will enable the Company to conduct health economic and outcome research to support the broader clinical adoption of the DeepView System. The Company is also completing work on the Option 1B of its prior contract award relating to our Burn Training study, which was extended through December 31, 2023 upon which the Company will receive approximately $2.0 million of additional funding. Under this contract, we expect to be most attractivefurther the DeepView System design, develop the AI algorithm, and take the necessary steps to obtain FDA approval for our company.

Our directorsDeepView GEN 3 System. However, approval from the FDA or other regulatory agencies, foreign or domestic, cannot be guaranteed and officers are not required to commit any specified amount of timemay take longer than planned. This grant funding is non-dilutive to our affairs,stockholders, and accordingly,we believe it validates the important nature of its mission and technology.

The scope of work for the BARDA contract includes preclinical, clinical and manufacturing development activities that fall into the following areas: non-clinical efficacy studies; clinical activities; manufacturing activities; and all associated regulatory, quality assurance, management, and administrative activities. Under the terms of the contract, we must complete specific tasks required in three discrete work segments: (i) expanded proof-of-concept (POC) clinical study; (ii) algorithm training clinical study; and (iii) device validation clinical study.

The BARDA contract is a cost-plus-fixed fee contract. That is, we are entitled to receive reimbursement for all costs incurred in accordance with the contract provisions that advance the development of DeepView System portable optical imaging device and machine learning algorithm to classify burn would healing potential in mass casualty an conventional burn injuries, plus a fixed fee. The BARDA contract requires us to provide reporting deliverables that include monthly technical and annual reports and a final report. BARDA will make periodic assessments of progress and the continuation of the contract is based on our performance, the timeliness and quality of deliverables, and other factors. Under the terms of the BARDA contract, the U.S. government has the right to terminate the contract for convenience or to terminate for default if we fail to meet our obligations as set forth in the contract.

We own the intellectual property rights to inventions made in the performance of work under the BARDA contract, provided that we disclose such inventions to the U.S. government and notify the U.S. government of our election to retain title. The U.S. government will have conflicts of interesta nonexclusive, nontransferable, irrevocable, paid-up license to practice, or have practiced for or on its behalf, such inventions throughout the world, in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. See “Risk Factors — Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similaraddition to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”

Initial Business Combination

Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account). We refer to this as the 80% fair market value test. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target business or issue a substantial number of new shares to third-parties in connection with financing our initial business combination. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquiredrights customarily reserved by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valuedU.S. government for purposes of the 80% fair market value test. If our initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the target businesses. Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% fair market value test.

Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

Our executive offices are located at 767 5th Avenue 34th Floor, New York, New York 10153 and our telephone number is (212) 492-3000.

Mail addressed to the company and received at its registered office will be forwarded unopened to the forwarding address supplied by the company to be dealt with. None of the company or its sponsor, directors, officers, advisors or service providers will bear any responsibility for any delay howsoever caused with regards to mail reaching the forwarding address.intellectual property generated using government funds.

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StatusDefense Health Agency (DHA)

On June 23, 2021, we were awarded a $1.1 million, Sequential Phase II STTR contract by the DHA within the U.S. Department of Defense, which is paid to us on a monthly basis. This funding enables us to research and develop a fully portable, handheld version of our DeepView solution and expires on October 31, 2023. We were previously awarded a STTR Phase I and initial Phase II contract from the DHA. We have made considerable progress in the development of the miniaturized DeepView technology. We have developed an early scientific prototype of the DeepView technology with key optical and computing capabilities in a fully handheld, portable form.

The DHA Department of Defense STTR Phase I and initial Phase II contract expired on January 26, 2021. On July 1, 2021, we entered into a supplemental Phase II contract that extends the length of the award until October 2023 to pursue research and development of commercial applications. Under the terms of our current contract with DHA, the Company is required to provide 26 monthly reports and one final technical report at the end of the contract. The Company is allowed to advance the development of the research from this contract with the FDA, provided the Company shares all communication, both formal and informal, to or from FDA regarding the technology being developed under this contract with the DHA and its representatives are permitted to participate in any sponsor meetings both formal and informal with the FDA upon request. In addition, the Company is entitled to maintain ownership of the inventions generated from the contract in accordance with the terms contained in the DHA award.

We own the intellectual property rights to inventions made in the performance of work under the DHA contract, provided that we disclose such inventions to the U.S. government and notify the U.S. government of our election to retain title. The U.S. government will have a nonexclusive, nontransferable, irrevocable, paid-up license to practice, or have practiced for or on its behalf, such inventions throughout the world, in addition to other rights customarily reserved by the U.S. government for intellectual property generated using government funds.

MTEC Grant

On June 15, 2020, we entered into a Research Project Award agreement (the “MTEC Agreement”) with the Advanced Technology International as Consortium Manager for MTEC, a 501(c)(3) biomedical technology consortium working in partnership with the Department of Defense. In April 2023 we received a grant of approximately $4.0 million for the purpose of designing and developing a handheld device that will be capable of performing digital burn assessment in miliary and combat environments. The MTEC Agreement extends the DHA Phase II contract for the development of the handheld device of the DeepView System. Under the terms of the MTEC Agreement MTEC will pay us a firm fixed fee based upon our achievement of certain milestones described in the agreement through April 5, 2025. The milestone payment schedule is based on a three phased approach to the development of our handheld device. Phase 1 of the MTEC Agreement began in April, 2023 and is scheduled to extend through at least July 2023 and is focused on the planning, design and testing of the handheld device for its intended applications. Phase 1 has a funding budget of $1,170,000. Once Phase 1 is completed, Phase 2 is intended to run through October 2024 and encompasses the development, design modification and build-out of the handheld device to the U.S. government standards as identified in the design and commercialization plans for the device. Phase 2 has a funding budget of $1,558,000. Phase 3 of the MTEC Agreement addresses the complete manufacturing of the device, the process validation of the production and completion of up to thirty handheld devices. Phase 3 begins following completion of Phase 2 and is intended to run through April 2024 with a funding budget of approximately $1,272, 000. The MTEC Agreement includes general provisions regarding the provision of “government purpose rights” and “unlimited data rights” to the US Government relating to the results and intellectual property of the materials included in the contract award in which the Company has explicitly retained all of the intellectual property rights relating to the ownership of the intellectual property associated with the contract.

Commercialization and Revenue Strategy

We intend to pursue the complete development of our DeepView System and, if marketing approval is obtained, to commercialize it on our own, or potentially with a partner, in the United States and other regions. We currently have no sales, marketing or commercial product distribution capabilities and have no experience as a Public Company

We believe our structure will make us an attractive business combination partnercompany commercializing products. However, if necessary, we intend to target businesses. As an existing public company, we offer target businesses an alternativehire appropriately to build the traditional initial public offering through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. In this situation,necessary infrastructure and capabilities over time for the owners of the target business would exchange their capital stock, shares orUnited States, and potentially other equity securities in the target business for our shares or for a combinationregions, following further advancement of our sharesDeepView System. See “Risk Factors — If we are unable to establish sales, marketing and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associateddistribution capabilities either on our own or in collaboration with being a public company,third parties, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extentsuccessful in connection with a business combination with us.

Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offercommercializing our DeepView System, if approved” for further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.

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

Financial Position

With funds available for a business combination initially in the amount of $194,000,000 assuming no redemptions and after payment of $7,000,000 of deferred underwriting fees (or $222,950,000 assuming no redemptions and after payment of $8,050,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), in each case, after payment of estimated offering expenses of $1,000,000, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.

Completing Our Initial Business Combination

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to complete our initial business combination using cash from the proceeds of this offering and the sale of the private placement warrants, our shares, debt or a combination of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.details.

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IfUnited States

Subject to our initial business combination is paid for using equity or debt, or not allreceipt of the funds released fromnecessary regulatory clearances or approvals, we intend to market our DeepView System using a sales force to inpatient and outpatient sites of care throughout the trust accountUnited States. Podiatry practices are usedtypically the first line of specialty care for paymentDFUs in the United States, but vascular and cardiology groups and outpatient wound centers also treat wounds. Sales will initially target podiatry practices presiding in areas with high prevalence of diabetes such as the south and southeastern areas of the considerationUnited States. We will also target large hospital systems with outpatient wound care centers as they serve a large volume of DFU patients. As noted above, subject to our receipt of the necessary regulatory clearances, approvals, De Novo classifications and clearances, our business is expected to have two revenue streams, a SaaS model component predicated on utilizing the regulatory method, SaMD (software as a medical device), and an imaging device component. The SaaS component will feature a software licensing fee that includes maintenance, image hosting, and access to algorithm updates. The capital sale component will be competitively priced for acceptance into independent practices and clinics.

We expect to internally market the DeepView System to U.S. customers. The sales team will consist of sales executives, clinical education and technical field engineer to service the account and technology as well as having sales and relationship responsibility for their respective geographies. For the burn indication, the primary customer base will be emergency departments located in connection withapproximately 5,400 federal and community hospitals throughout the United States. Subject to our initial business combination orreceipt of the redemptionsnecessary clearances and approvals, commercial sales are expected to commence in 2024 for the DFU indication in the UK and in 2025 for burns indication, although the burn indication is expected to continue to attract considerable government funding through BARDA, having recently elected to enter Option 1B and Option 2 of our public shares, we may applyexisting contract, which extends the balanceterm through July 2024, if not supplemented or revised beforehand.

We believe that the first to market applications of the cash releasedDeepView System, Burn and DFU will deliver a paradigm shift from how the current standard of care treatment is provided. Like any disruptive technology it will require a coordinated and well executed plan to us fromhave a successful DeepView product launch. There are four critical milestones that need harmonious alignment: regulatory approval, clinical evidence, reimbursement, and adoption. These four milestones may have different timelines per country or clinical indication; however, all are required for seamless execution.

Regulatory

Due to the trust accountregulatory changes implemented post Brexit, we were able to receive a UKCA mark in September 2023 for general corporate purposes, includingboth the DeepView Imaging System, and plan to submit to receive a UKCA mark for maintenance or expansionits Burn AI software application since both are classified as a Class 1 device in the United Kingdom. For the majority of operationsdeveloped countries, the AI is a medical device classified as Class 2 and comes with a deeper evaluation and timeline of a minimum of six months for regulatory review. On July 14, 2023, Spectral completed its UKCA Mark registration for the imaging components of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target.

We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account.

DeepView System. In the case of an initial business combination funded with assets other thanUnited States, we expect that the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law or we decide to do so for business or other reasons, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third-party with respect to raising any additional funds through the sale of securities or otherwise.

Selection of a Target Business and Structuring of our Initial Business Combination

Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account). We refer to this as the 80% fair market value test. The fair market value of the target or targetsDeepView System will be determined by our board of directors based upon one or more standards generally accepted byunder a DeNovo application due to previously awarded BDD status. We expect to submit the financial community,DFU application to the FDA in early 2024. The new MDR requirements to obtain a CE mark are extensive. As such, as discounted cash flow valuation or value of comparable businesses. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.

In any case, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.

To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective target business, we expect to conductsubmit our application for a thorough due diligence review which may encompass, among other things, meetingsCE mark in the first half of 2024.

Clinical Evidence

Even if the DeepView System receives the necessary regulatory clearances and approval, each country with incumbent managementa national reimbursement payer system will require additional post-approval clinical evidence with their population and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legalprocesses to show the patient outcomes utilizing this new technology and other information, whichthe health economic impact. This clinical evidence is an important step towards developing key opinion leaders and establishing reimbursement.

Reimbursement

We expect to utilize our post-market clinical evidence and health economic impact analysis to submit to NHS for reimbursement for its Burn indication in the United Kingdom. Upon more market penetration, we will apply for NICE certification. In the United States, we expect the DeepView System will be made availableused in both inpatient and outpatient site of service. The process of reimbursement varies greatly between the two. The DeepView burn indication will be used inpatient both in EDs and Burn Centers and we expect that it will be reimbursed as an expense under the existing nationwide Diagnosis Related Group (“DRG”) codes for burns. We plan to us.

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.apply for Centers for Medicare & Medicaid

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Services (“CMS”) New Technology AddLack-On Payment (“NTAP”) as our BDD status already fulfills CMS’ requirement for demonstrating substantial clinical improvement. NTAP is a payment mechanism that is tied to burn diagnosis codes and allows additional payment to the site of Business Diversificationservice that diagnoses the patient. This will be a positive impact for our burn application in the ED setting. The DeepView DFU indication will utilize existing CPT codes while gaining the clinical evidence to apply for a unique CPT. The reimbursement for the DFU indication could vary regionally and from CMS to private payers.

Adoption

For an indefinite periodWe view our DeepView technology as disruptive by nature and there will be those who will want to “wait and see.” This emphasizes the importance of time afterhaving the completionright strategic partnerships, institutions, and physician key opinion leaders as early adopters. We plan to engage in relationships that can act as key opinion leaders to share their experience on why they adopted the DeepView technology. The adoption will be supported by a team of field clinical educators and digital marketing campaigns.

Manufacturing Arrangements

We currently outsource all of our initialmanufacturing through an original equipment manufacturer. Cobalt, located in Plano, Texas, is involved with manufacturing the current generation DeepView System and we anticipate that they will continue to do so for the foreseeable future.

In addition to Cobalt, we integrate several other highly specialized contract manufacturers in the areas of optics, technology design, and electronics. We employ experienced regulatory and quality control personnel to ensure that our manufacturing processes and quality management systems are in compliance with FDA and CE Mark regulations and standards. As we expand into the European market, we will most likely consider manufacturing devices in the EU in preparation for commercialization. We do not have any plans to develop our own manufacturing facility at this time.

Intellectual Property

We strive to protect and enhance the proprietary technologies that we believe are important to our business combination, the prospectsby seeking patents to cover our technology. We also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. Our success will depend significantly on our ability to obtain and maintain patent and trade secret protection for our success may depend entirely on the future performancetechnology, our ability to defend and enforce our intellectual property rights and our ability to operate without infringing any valid and enforceable intellectual property rights of a single business. Unlike other entities that have the resources to complete business combinationsthird parties.

Our technology is protected with multiple entities in one issued and/or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risksallowed patents across nine families of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:active patents:

•        subject us to negative economic, competitiveBurn/Wound Classification on MSI and regulatory developments, any or all of which may have a substantial adverse impactPPG;

•        Tissue classification on the particular industry in which we operate after our initial business combination;MSI and PPG;

•        Amputation site analysis on MSI, ML and healthcare matrix;

•        DFU healing potential prediction and wound assessment on MSI, ML and healthcare matrix;

•        High-precision, multi-aperture, MSI snapshot imaging;

•        Wound assessment based on MSI;

•        Burn/histology assessment based on MSI and ML;

•        High-precision, single-aperture MSI snapshot imaging; and

•        cause us to depend on the marketingTopological characterization and sale of a single product or limited number of products or services.

Limited Ability to Evaluate the Target’s Management Team

Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of completing our initial business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.

We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

Stockholders May Not Have the Ability to Approve our Initial Business Combination

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amendedtissues using MSI and restated certificate of incorporation. However, we will seek stockholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide to seek stockholder approval for business or other reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

Type of Transaction

Whether
Stockholder
Approval is
Required

Purchase of assets

No

Purchase of stock of target not involving a merger with the company

No

Merger of target into a subsidiary of the company

No

Merger of the company with a target

Yes

Under Nasdaq listing rules, stockholder approval would be required for our initial business combination if, for example:

•        we issue (other than in a public offering for cash) shares of our common stock that will be equal to or in excess of 20% of the number of our shares of common stock then outstanding;ML

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•        anyAs of our directors, officers or substantial stockholders (as defined by Nasdaq rules) hasthe date of this prospectus, we have 10 issued and allowed U.S. patents with 5 U.S. patent applications pending. We have 10 issued and allowed international patents with 29 foreign and international patent applications pending.

Our material owned and pending patent applications, their identification number, a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly,description, the type of patent protection, jurisdiction, and expiration date are included in the target business or assets to be acquired or otherwise and the present or potential issuance of shares of our common stock could result in an increase in outstanding common stock or voting power of 5% or more; ortable below.

•        Issued U.S. Patentsthe issuance or potential issuance of shares of our common stock will result in our undergoing a change of control.

The decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder approval is not required by applicable law or stock exchange rule will be made by us, solely in our discretion, and will be based on business and other reasons, which include a variety of factors, including, but not limited to:

Patent No.

Description

Type of Patent Protection

Jurisdiction

Expiration

11,304,604

Burn/wound classification based on combined MSI and (PPG)

Utility

United States

February 23, 2039

9,717,417

Tissue classification based on combined MSI and PPG

Utility

United States

October 28, 2035

9,962,090

Tissue classification based on combined MSI and PPG

Utility

United States

October 28, 2035

10,750,992

Amputation site analysis and tissue classification based on MSI, machine learning, and healthcare metrics

Utility

United States

March 2, 2038

11,337,643

Amputation site analysis and tissue classification based on MSI, machine learning, and healthcare metrics

Utility

United States

March 2, 2038

10,740,884

High-precision, multi-aperture, MSI snapshot imaging

Utility

United States

December 11, 2039

11,182,888

High-precision, multi-aperture, MSI snapshot imaging

Utility

United States

December 11, 2039

11,631,164

High-precision, multi-aperture, MSI snapshot imaging

Utility

United States

December 11, 2039

10,783,632

DFU healing potential prediction and wound assessment based on MSI, machine learning, and healthcare metrics

Utility

United States

December 11, 2039

•        the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company;

•        the expected cost of holding a stockholder vote;

•        the risk that the stockholders would fail to approve the proposed business combination;

•        other time and budget constraints of the company; and

•        additional legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.

Permitted Purchases and Other Transactions with Respect to our SecuritiesPending U.S. Patent Applications

In the event we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of securities such persons may purchase. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), our sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial business combination or not redeem their public shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event our initial stockholders, directors, officers, advisors or any of their respective affiliates determine to undertake any such transactions, such transactions could have the effect of influencing the vote necessary to approve such transaction. None of the funds held in the trust account will be used to purchase public shares or warrants in such transactions. They will be restricted from making any such purchases when they are in possession of any material non-public

Application No. information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to (1) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information and (2) clear certain trades prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.

In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling stockholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the

Description

Type of Patent
Protection

Jurisdiction

17/585,346

Tissue classification based on combined MSI and PPG

Utility

United States

18/178,875

High-precision, multi-aperture, MSI snapshot imaging

Utility

United States

18/177,493

DFU healing potential prediction and wound assessment based on MSI, machine learning, and healthcare metrics

Utility

United States

17/820,837

Wound assessment based on MSI, optical biomarkers, and machine learning

Utility

United States

18/152,654

Burn/histology assessment based on MSI and machine learning

Utility

United States

94

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tender offer rules under the Exchange Act or a going-privateIssued Foreign Patents transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.

The purpose of such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of our initial business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Our sponsor, directors, officers, advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with whom our sponsor, directors, officers, advisors or any of their respective affiliates may pursue privately negotiated transactions by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (in the case of public shares) following our mailing of tender offer or proxy materials in connection with our initial business combination. To the extent that our sponsor, directors, officers, advisors or any of their respective affiliates enter into a private transaction, they would identify and contact only potential selling or redeeming stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination. Such persons would select the stockholders from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, directors, officers, advisors or any of their respective affiliates will be restricted from purchasing shares if such purchases do not comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by our sponsor, directors, officers and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18

Patent No. under the Exchange Act will be restricted unless such purchases are made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, directors, officers and/or any of their respective affiliates will be restricted from making purchases of our common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

Description

Type of Patent Protection

Jurisdiction

Expiration

ZL201580070907.8

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

China

October 28, 2035

3212057

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

Europe

October 28, 2035

3212057

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

Belgium

October 28, 2035

3212057

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

Germany

October 28, 2035

3212057

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

France

October 28, 2035

3212057

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

United Kingdom

October 28, 2035

6893877

Burn/wound classification based on combined multi-spectral imaging (MSI) and photoplethysmography (PPG)

Utility

Japan

October 28, 2035

ZL201680076887.X

Tissue classification based on combined MSI and PPG

Utility

China

April 28, 2036

6785307

Tissue classification based on combined MSI and PPG

Utility

Japan

April 28, 2036

7186298

High-precision, multi-aperture, MSI snapshot imaging

Utility

Japan

December 11, 2039

Redemption Rights for Public Stockholders upon Completion of our Initial Business CombinationPending Foreign Patent Applications

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share

Application No. price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein. At the completion of our initial business combination, we will be required to purchase any public shares properly delivered for redemption and not withdrawn. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination.

Description

Type of Patent
Protection

Jurisdiction

16860418.9

Tissue classification based on combined MSI and PPG

Utility

Europe

19120058.3

Tissue classification based on combined MSI and PPG

Utility

Hong Kong

10-2018-7014959

Tissue classification based on combined MSI and PPG

Utility

South Korea

201880028365.1

Amputation site analysis and tissue classification based on MSI, machine learning, and healthcare metrics

Utility

China

18760531.6

Amputation site analysis and tissue classification based on MSI, machine learning, and healthcare metrics

Utility

Europe

62020010555.4

Amputation site analysis and tissue classification based on MSI, machine learning, and healthcare metrics

Utility

Hong Kong

11 2021 0111131

High-precision, multi-aperture, MSI snapshot imaging

Utility

Brazil

201980087508.0

High-precision, multi-aperture, MSI snapshot imaging

Utility

China

19895125.3

High-precision, multi-aperture, MSI snapshot imaging

Utility

Europe

202117023312

High-precision, multi-aperture, MSI snapshot imaging

Utility

India

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Manner of Conducting Redemptions

Application No.

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (1) in connection with a stockholder meeting called to approve the business combination or (2) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our issued and outstanding common stock or seek to amend our amended and restated certificate of incorporation would typically require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by applicable law or stock exchange listing requirement or we choose to seek stockholder approval for business or other reasons.

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:

•        conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and

•        file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination, and we instead may search for an alternate business combination (including, potentially, with the same target).

If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:

•        conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and

•        file proxy materials with the SEC.

We expect that a final proxy statement would be mailed to public stockholders at least ten days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration.

Description

Type of Patent
Protection

Jurisdiction

2022-188817

High-precision, multi-aperture, MSI snapshot imaging

Utility

Japan

2022-188833

High-precision, multi-aperture, MSI snapshot imaging

Utility

Japan

10-2021-7021579

High-precision, multi-aperture, MSI snapshot imaging

Utility

South Korea

11 2021 0111328

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

Brazil

201980087443.X

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

China

19894740.0

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

Europe

202117023888

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

India

2021-533805

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

Japan

2023-063250

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

Japan

10-2021-7021623

DFU healing potential prediction and wound assessment based on MSI, machine learning, healthcare metrics

Utility

South Korea

202180030012.7

Wound assessment based on MSI, optical biomarkers, and machine learning

Utility

China

21759766.5

Wound assessment based on MSI, optical biomarkers, and machine learning

Utility

Europe

202217054022

Wound assessment based on MSI, optical biomarkers, and machine learning

Utility

India

21842496.8

Burn/histology assessment based on MSI and machine learning

Utility

China

21842496.8

Burn/histology assessment based on MSI and machine learning

Utility

Europe

202317002043

Burn/histology assessment based on MSI and machine learning

Utility

India

2023-502581

Burn/histology assessment based on MSI and machine learning

Utility

Japan

PCT/US2022/022398

High-precision, single-aperture, MSI snapshot imaging with multiplexed illumination

Utility

International PCT Application

PCT/US2023/011157

Topological characterization and assessment of tissue including wounds, using MSI and machine learning

Utility

International PCT Application

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In addition, we support the development of our brand and product offerings through trademark protection at the United States Patent and Trademark Office. As of March 31, 2023, we maintain a portfolio of 57 trademarks and seven trademark applications pending relating to our DeepView SnapShot product offerings. Our trademarks and pending trademark applications are spread over nine jurisdictions mostly in China, the UK and the EU. It is our intention to maintain these registrations indefinitely and to expand the number of jurisdictions in which we have registered trademarks as deemed necessary to protect our freedom to use the marks and/or block competitors in additional markets. We will continue to look to protect our intellectual property in the United States, UK and the EU as those are the first commercial markets for our products.

The duration of trademark registrations varies from country to country; however, trademark are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. We have an active program designed to ensure that our trademarks are registered, renewed, protected and maintained. We plan to continue to use all of our core trademarks and plan to renew the registrations for such trademarks as needed.

We also rely on trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our competitive position. We seek to protect these trade secrets and other proprietary technology, in part, by entering into confidentiality agreements with parties who have access to them. We also enter into confidentiality and invention assignment agreements with our employees and our agreements with consultants include invention assignment obligations.

Government Regulation

Regulation of Medical Devices in the United States

The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices to ensure that we seek stockholdermedical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.

FDA Premarket Clearance and Approval Requirements

Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a premarket notification submitted under Section 510(k) of the FDCA, or approval of our initial business combination, we will distribute proxy materialsa PMA. Under the FDCA, medical devices are classified into one of three classes — Class I, Class II, or Class III — depending on the degree of risk associated with each medical device and in connection therewith, provide our public stockholdersthe extent of manufacturer and regulatory control needed to ensure its safety and effectiveness. Class I includes devices with the redemption rights described above upon completionlowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s general controls for medical devices, which include compliance with the applicable portions of the initial business combination.

If we seek stockholder approval, we will complete our initial business combination only if a majorityQSR; facility registration and product listing; reporting of adverse medical events; and truthful and non-misleading labeling, advertising, and promotional materials. Class II devices are subject to the FDA’s general controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the outstanding sharesdevice. These special controls can include performance standards, post-market surveillance, patient registries, and FDA guidance documents.

While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required to submit to the FDA a premarket notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device. The FDA’s permission to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Devices deemed by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable devices, or devices that have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device, are placed in Class III, requiring approval of a PMA. Some pre-amendment devices are unclassified but are subject to FDA’s premarket notification and clearance process in order to be commercially distributed. We have obtained 510(k) clearance for the first two generations of our common stock voted are voted in favor of the business combination. A quorumDeepView System. However, although we have received FDA BDD clearance for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders, officersour DeepView GEN 1 and directors will count towards this quorum and have agreed to vote any founder shares and any public shares held by them in favor of our initial business combination. These quorum and voting thresholds and agreements, may make it more likelyDeepView GEN 2 Systems, there can be no assurance that we will consummatebe able to obtain FDA clearance, UKCA or CE mark approval for our initial business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. In addition, our initial stockholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of a business combination.

Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions. Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination (including, potentially, with the same target).

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

Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares, without our prior consent. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.

Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days priorDeepView GEN 3 System.

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510(k) Clearance Marketing Pathway

Our current products are subject to requirements for pre-market notification and clearance under section 510(k) of the FDCA. To obtain 510(k) clearance, we must submit to the initially scheduled voteFDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed predicate device. A predicate device is a legally marketed device that is not subject to premarket approval (i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendments device) and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process). The FDA’s 510(k) clearance process usually takes from three to 12 months but may take longer. The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence. In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device establishments.

If the FDA agrees that the device is substantially equivalent to a predicate device currently on the proposalmarket, it will grant 510(k) clearance to approvecommercially market the business combinationdevice. If the FDA determines that the device is “not substantially equivalent” to a previously cleared device, the device is automatically designated as a Class III device. The device sponsor must then fulfill more rigorous PMA requirements or can request a risk-based classification determination for the device in accordance with the “de novo” process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval. The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k) or a PMA in the event we distribute proxy materials, first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination. If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until such marketing approval or clearance has been granted. Also, in these circumstances, the manufacturer may be subject to deliversignificant regulatory fines or penalties.

Over the last several years, the FDA has proposed reforms to its 510(k)-clearance process, and such proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k)-clearance process for their sharesproducts. For example, in November 2018, FDA officials announced steps that the FDA intended to take to modernize the 510(k) pathway. Among other things, the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use of newer predicates. These proposals included plans to potentially sunset certain older devices that were used as predicates under the 510(k)-clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated substantial equivalence to predicate devices that are more than 10 years old. These proposals have not yet been finalized or adopted, although the FDA may work with Congress to implement such proposals through legislation.

PMA Approval Pathway

Class III devices require PMA approval before they can be marketed, although some pre-amendment Class III devices for which the FDA has not yet required a PMA are cleared through the 510(k) process. The PMA process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies and human clinical trials. The PMA must also contain a full description of the device and its components, a full description of the methods, facilities, and controls used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years. An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, rather than simply voting againstFDA as to the initial business combination. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the closeapprovability of the tender offer period,device. The FDA may or upmay not accept the panel’s recommendation. In addition, the FDA will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers or suppliers’ manufacturing facility or facilities to two business days prior to the initially scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least ten days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.

There is a nominal cost associatedensure compliance with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker a fee of approximately $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.

Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or two business days prior to the scheduled date of the stockholder meeting set forth in our proxy materials, as applicable (unless we elect to allow additional withdrawal rights). Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.

If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.

If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering or during any Extension Period.QSR.

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The FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s). The FDA may approve a PMA with postRedemption-approval conditions intended to ensure the safety and effectiveness of Public Sharesthe device, including, among other things, restrictions on labeling, promotion, sale and Liquidation if No Initial Business Combinationdistribution, and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-marketing surveillance when deemed necessary to protect the public health or to provide additional safety and efficacy data for the device in a larger population or for a longer period of use. In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.

Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness.

Regulatory Pathway

Our amendedWe have had multiple interactions with the FDA since 2013 and restated certificatehave obtained 510(k) clearance for the first two generations of incorporation will provideour DeepView technology. DeepView GEN 1 employed photoplethysmography and was 510(k) cleared in 2013 and DeepView GEN 2, which employed PPG and MSI was FDA cleared in 2017. With the ongoing support of BARDA, these two previous iterations were not commercialized due to the integration of AI algorithms and improved optics throughout 2018 and 2019 in order to further enhance the utility of the system. The development of this improved technology enabled us to achieve BDD status for the technology’s burn application. The FDA’s designation as a Breakthrough Device allows for expedited regulatory approval pathways and a dedicated line of communication with reviewing members of the FDA. We have engaged in pre-submission meetings with the FDA to ensure that our regulatory pathway and data collection for the technology to meet the FDA’s requirements. We plan to pursue FDA clearance (de novo) for the DFU application in 2024.

We plan to submit for FDA clearance of the burn application in 2025 in accordance with the projected timeline for the BARDA contract. We are in the process of selecting a notified body to schedule the QMS certification audit in compliance with ISO 13485:2016 MDSAP under the U.S. and Canadian jurisdictions. We anticipate certification in 2025. In parallel, we are scheduling the DeepView System Technical Documentation audit necessary to obtain the CE Mark and UKCA certificates to allow market access in the EU and UK. On July 14, 2023, Spectral completed its UKCA Mark registration for the imaging components of the DeepView System. There can be no assurance, however, that we have only 24 months from the closing of this offeringwill be able to complete our initial business combination. If we have not completed our initial business combination within such periodobtain FDA clearance, UKCA or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to theCE mark approval of our remaining stockholdersDeepView GEN 3 System, despite having received FDA BDD clearance for our DeepView GEN 1 and our board2 Systems.

Clinical Trials

Clinical trials are almost always required to support a PMA and de novo classification and are sometimes required to support a 510(k) submission. All clinical investigations of directors, liquidatedevices to determine safety and dissolve, subjecteffectiveness must be conducted in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the prescribed time period.

Our initial stockholders have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the prescribed time period or during any Extension Period. However, if our initial stockholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame to complete our initial business combination.

Our sponsor, directors and officers have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholdersaccordance with the opportunityFDA’s investigational device exemption (“IDE”) regulations, which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equalhuman health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the aggregate amountFDA, which must become effective prior to commencing human clinical trials. If the device under evaluation does not present a significant risk to human health, then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.

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

If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subjectIDE application to the claimsFDA before initiating human clinical trials but must still comply with abbreviated IDE requirements when conducting such trials. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not bea patient and either is implanted; used in supporting or sustaining human life; substantially less than $10.00. Please see “Risk Factors — If third parties bring claims against us, the proceeds heldimportant in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors described above. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.diagnosing,

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

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third-party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third-party, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

In the event that the proceeds in the trust account are reduced below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor assertslaboratory test results, showing that it is unablesafe to satisfytest the device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under conditional approval.

Regardless of the degree of risk presented by the medical device, clinical studies involving human subjects must be approved by, and conducted under the oversight of an IRB for each clinical site. The IRB is responsible for the initial and continuing review of the IDE and may impose additional requirements for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and complying with labeling and record-keeping requirements. In some cases, an IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect its indemnification obligationsscientific soundness; study plan; or the rights, safety or welfare of human subjects.

During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them. The clinical investigators in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of the investigational device, and comply with all reporting and recordkeeping requirements. Additionally, after a trial begins, we, the FDA, or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

Post-market Regulation

After a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply. These include:

•        establishment registration and device listing with the FDA;

•        QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;

•        labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of “off-label” uses of cleared or approved products;

•        requirements related to promotional activities;

•        clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;

•        medical device reporting regulations, which require that a manufacturer report to the FDA if a device it has no indemnification obligations relatedmarkets may have caused or contributed to a particular claim, our independent directorsdeath or serious injury, or has malfunctioned and the device or a similar device that it markets would determine whetherbe likely to take legal action against our sponsorcause or contribute to enforce its indemnification obligations. While we currently expecta death or serious injury, if the malfunction were to recur;

•        correction, removal and recall reporting regulations, which require that our independent directors would take legal action on our behalf against our sponsormanufacturers report to enforce its indemnification obligationsthe FDA field corrections and product recalls or removals if undertaken to us, it is possible that our independent directors in exercising their business judgment may choose notreduce a risk to do so in any particular instance. Accordingly, we cannot assure you that duehealth posed by the device or to claims of creditors the actual valueremedy a violation of the per-share redemption price will not be substantially less than $10.00 per share. Please see “Risk Factors — If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholdersFDCA that may be less than $10.00 per share” and otherpresent a risk factors described above.

We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to $1,000,000 from the proceeds of this offering and the sale of the private placement warrants, with which to pay any such potential claimshealth;

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(including costs•        the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and expenses incurred in connection with our liquidation, currently estimatedregulations; and

•        post-market surveillance activities and regulations, which apply when deemed by the FDA to be no more than approximately $100,000). Innecessary to protect the event that we liquidatepublic health or to provide additional safety and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within the required time period, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will: (1) cease all operations excepteffectiveness data for the purpose of winding up; (2) 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 (which interest shall be net of taxes payable,device.

Manufacturing processes for medical devices and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following the end of our acquisition period and, therefore, we do not intendaccessories are required to comply with those procedures.the applicable portions of the QSR, which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use. The QSR also requires, among other things, maintenance of a device master file, device history file, and complaint files. As such,a manufacturer, we are subject to periodic scheduled and unscheduled inspections by the FDA. Failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, manufacturing operations and the recall or seizure of marketed products. The discovery of previously unknown problems with any marketed products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or approval, or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

The FDA has broad regulatory compliance and enforcement powers. We are subject to unannounced inspections by the FDA to determine our stockholders could potentially be liable for any claims tocompliance with the extent of distributions received by them (but no more)QSR and any liabilityother regulations, and these inspections may include the manufacturing facilities of our stockholderssuppliers and manufacturers. If the FDA determines that a manufacturer or supplier has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may extend well beyond the third anniversary of such date.

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.

As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extendingof the following sanctions:

•        warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties;

•        recalls, withdrawals, or administrative detention or seizure of our products;

•        operating restrictions or partial suspension or total shutdown of production;

•        refusing or delaying requests for 510(k) clearance or PMA approvals of new products or modified products;

•        withdrawing 510(k) clearances or PMA approvals that have already been granted;

•        refusal to grant export approvals for our products; or

•        criminal prosecution.

Regulation of Medical Devices in the European Union

In the EU, until May 25, 2021, medical devices were regulated by the Council Directive 93/42/EEC (the “EU Medical Devices Directive”), which has been repealed and replaced by Regulation (EU) No 2017/745 (the “EU Medical Devices Regulation”). Unlike directives, regulations are directly applicable in all EU member states without the need for member states to implement into national law.

All medical devices placed on the EU market must meet the general safety and performance requirements of the EU Medical Devices Regulation, including the requirement that a medical device must be designed and manufactured in such a way that, during normal conditions of use, it is suitable for its intended purpose. Medical devices must be safe and effective and must not compromise the clinical condition or safety of patients, or the safety and health of users and — where applicable — other persons; provided that any risks which may be associated with their use constitute acceptable risks when weighed against the benefits to the trustpatient and are compatible with a high level of protection of health and safety, taking into account the generally acknowledged state of the art.

Compliance with the general safety and performance requirements is remote. Further, our sponsor maya prerequisite for European Conformity Marking, or CE-Mark, without which medical devices cannot be liable onlymarketed or sold in the EU. To demonstrate compliance with the general safety and performance requirements medical device manufacturers must undergo a conformity assessment procedure, which varies according to the extent necessarytype of medical device and its (risk) classification. Except for low-risk medical devices (Class I), where the manufacturer can self-assess the conformity of its products with the general safety and performance requirements (except for any parts which relate to ensure that the amounts in the trust account are not reduced below: (1) $10.00 per public share;sterility, metrology or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the

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amountreuse aspects), a conformity assessment procedure requires the intervention of interest which may be withdrawna notified body. Notified bodies are independent organizations designated by EU member states to pay taxes, except as to any claims byassess the conformity of devices before being placed on the market. A notified body would typically audit and examine a third-party who executed a waiver of anyproduct’s technical dossiers and all rights to seek accessthe manufacturers’ quality management system. If satisfied that the relevant product conforms to the trust accountrelevant general safety and exceptperformance requirements, the notified body issues a CE marking certificate of conformity, which the manufacturer uses as a basis for its own declaration of conformity. The manufacturer may then apply a CE Mark to any claims under our indemnitythe device, which allows the device to be placed on the market throughout the EU.

Throughout the term of the underwriters of this offering against certain liabilities, including liabilities underCE Mark, the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsormanufacturer will not be responsible to the extent of any liability for such third-party claims.

If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to periodic surveillance audits to verify continued compliance with the applicable bankruptcyrequirements. In particular, there will be a new audit by the notified body before it renews the relevant CE marking certificate(s).

All manufacturers placing medical devices into the market in the EU must comply with the EU medical device vigilance system. Under this system, serious incidents and Field Safety Corrective Actions (“FSCAs”) must be reported to the relevant authorities of the EU member states. Manufacturers are required to take FSCAs defined as any corrective action for technical or medical reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market. An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device.

The aforementioned EU rules are generally applicable in the EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

U.S. Healthcare Fraud and Abuse Laws

In the United States, if our products become reimbursable by the federal and state government health care programs, we will become subject to a number of federal and state health care regulatory laws that constrain or restrict certain business practices in the health care industry. These laws include, but are not limited to, federal and state anti-kickback, false claims, transparency laws governing, or requiring disclosure of, payments and other transfers of value made to physicians and other health care providers, and other health care fraud and abuse laws.

The federal Anti-Kickback Statute is a criminal law that prohibits, among other things, the knowing and willful offer, payment, solicitation or receipt of remuneration, directly or indirectly, in cash or kind, to induce or reward patient referrals or the generation of business involving any item or service payable by federal health care programs such as Medicare and Medicaid. Federal courts have held that the Anti-Kickback Statute can be violated if just “one purpose” of a payment is to induce referral, and a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Given the breadth of the law, the federal Anti-Kickback Statute includes statutory exceptions and regulatory safe harbors that protect certain arrangements. Failure to meet the requirements of an exception or safe harbor, however, does not render an arrangement illegal. Rather, the government may evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and may be included in our bankruptcy estate and subject to greater scrutiny by enforcement agencies. Violations of the claims of third parties with priority overAnti-Kickback Statute can result in exclusion from federal and state government health care programs as well as civil and criminal penalties.

The Federal False Claims Act (the “FCA”) prohibits a person from knowingly presenting, or causing to be presented, a false or fraudulent request for payment from the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be ablefederal government, or from making a false statement or using a false record material to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petitionfalse claim or an involuntary bankruptcy petition is filed against usobligation to pay the government. The federal FCA further provides that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directorslawsuit thereunder may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages,initiated not only by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. Please see “Risk Factors — If, after we distribute the proceedsgovernment, but in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.”

Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.

Amended and Restated Certificate of Incorporation

Our amended and restated certificate of incorporation will contain certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. Our amended and restated certificate of incorporation will contain a provision which provides that, if we seek to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide public stockholders with the opportunity to redeem their public shares in connection with any such amendment. Our initial stockholders, officers and directors have agreed to waive any redemption rights with respect to any founder shares and any public shares held by them in connection with any such amendment. Specifically, our amended and restated certificate of incorporation will provide, among other things, that:

•        prior to the consummation of our initial business combination, we shall either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which public stockholders may seek to redeem their public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction, into their pro rata sharename of the aggregateUnited States by private parties through qui tam (or “whistleblower”) lawsuits. Moreover, the law defines a claim that includes items or service resulting from a violation of the Anti-Kickback Statute to be “false.” Penalties for a violation of the FCA include fines for each false claim, plus up to three times the amount thenof damage caused by each false claim. Violations can also result in exclusion from participation in federal and state government health care programs.

Further, the Civil Monetary Penalties Statute authorizes the imposition of civil monetary penalties and sometimes exclusion against an individual or entity based on deposita variety of prohibited conduct, including, but not limited to, violating the Anti-Kickback Statute, submitting false claims in violation of the trust account, calculated as of two business days priorFCA, or offering remuneration to a federal health care program beneficiary that the completion of our initial business combination, including interest (which interest shall be net of taxes payable),individual or (2) provide our public stockholders withentity knows or should know is likely to influence the opportunitybeneficiary to tender their public shares to us by means oforder or receive health care items or services from a particular provider.

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HIPAA also established federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a tender offer (and thereby avoidscheme to defraud any healthcare benefit program, including private third-party payors, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the Anti-Kickback Statute, a person or entity does not need for a stockholder vote) for an amount equal to their pro rata sharehave actual knowledge of the aggregate amount then on depositstatute or specific intent to violate it in order to have committed a violation.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services (“CMS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals beginning in 2022, and teaching hospitals. Applicable manufacturers and applicable group purchasing organizations must also report annually to CMS ownership and investment interests held by physicians and their immediate family members.

Several states have also adopted similar fraud and abuse laws as described above. The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion. Some state fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial insurers, not just those reimbursed by a federally funded healthcare program.

Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations, contractual damages, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and/or imprisonment.

U.S. Coverage and Reimbursement

In the United States, federal and state government healthcare programs, including Medicare and Medicaid, provide coverage for certain medical products and procedures. Where third-party payor coverage is not available, patients would be responsible for all of the costs associated with treatment using our products, once commercialized. Thus, availability of third-party payor reimbursement for our product will be important for our commercial success if the product is cleared by the FDA. No uniform policy of coverage and reimbursement among payors in the trust account, calculated asUnited States exists and coverage and reimbursement for procedures can differ significantly from payor to payor. As a result, the coverage determination process can be a time consuming and costly process that may require us to provide scientific and clinical support for the use of twoour products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. To contain costs of new technologies, third-party payors are increasingly scrutinizing new and existing treatments by requiring extensive evidence of favorable clinical outcomes. Providers may not ultimately purchase our products once commercialized if the providers do not receive sufficient reimbursement from payors for the cost of the product or procedures using our product. If third-party payors do not provide coverage or adequate reimbursement levels for procedures using our products, the demand for our products will not increase and/or there may be significant pricing pressure, either of which could adversely impact our business days priorand financial condition.

U.S. Healthcare Reform

In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the completionhealth care system, many of our initial business combination, including interest (which interest shall be netwhich are intended to contain or reduce healthcare costs. By way of taxes payable), in each case subjectexample, the ACA substantially changed the way healthcare is financed by both governmental and private insurers. Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the limitations described herein;

•        we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majorityACA without specifically ruling on the constitutionality of the outstanding shares of our common stock voted are voted in favor of the business combination at a duly held stockholders meeting;

•        if we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) 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, equalACA. Prior to the aggregate amount then on deposit inSupreme Court’s decision, President Biden issued an executive order initiating a special enrollment period from February 15, 2021 through May 15, 2021 (and later extended to August 15, 2021) for purposes of obtaining health insurance coverage through the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; and

•        prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote pursuant to our amended and restated certificate of incorporation on any initial business combination or any amendments to our amended and restated certificate of incorporation.

These provisions cannot be amended without the approval of holders of at least 65% of our issued and outstanding common stock.

Additionally, our amended and restated certificate of incorporation will provide that, prior to our initial business combination, only holders of our Class B common stock will have the right to vote on the election of directors and that holders of a majority of the outstanding shares of our Class B common stock may remove a member of the board of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of a majority of at least 90% of the outstanding shares of our common stock voting at a stockholder meeting.

Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of holders of a majority of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders.ACA marketplace. The

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Comparisonexecutive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare. It is unclear how other healthcare reform measures of Redemptionthe Biden administration or Purchase Pricesother efforts, if any, to challenge, repeal or replace the ACA will impact the ACA or our business.

We expect additional state and federal healthcare reform measures to be adopted in Connection withthe future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our Initial Business Combinationproducts once commercialized or additional pricing pressure.

Data Privacy and if we FailSecurity Laws

Numerous state, federal and foreign laws, including consumer protection laws and regulations, govern the collection, dissemination, use, access to, Complete our Initial Business Combination.confidentiality, and security of personal information, including health-related

The following table compares personal information. In the redemptionsUnited States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and federal and state consumer protection laws and regulations (e.g., Section 5 of the Federal Trade Commission Act (the “FTCA”)) that govern the collection, use, disclosure, and protection of health-related and other permitted purchases of public shares that may take place in connection withpersonal information could apply to our operations or the completionoperations of our initialpartners.

For example, HIPAA imposes privacy, security and breach notification obligations on certain health care providers, health plans, and health care clearinghouses, known as covered entities, as well as their business combinationassociates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities. Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Further, entities that knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA may be subject to criminal penalties.

Even when HIPAA does not apply, according to the FTC, misleading consumers about what is happening with their health information or failing to take appropriate steps to keep consumers’ personal information secure may constitute deceptive or unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTCA. The FTC also expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

In addition, certain state and non-U.S. laws, such as the California Consumer Privacy Act, the California Privacy Rights Act and the General Data Protection Regulation, govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to make compliance efforts more challenging, and can result in investigations, proceedings, or actions that lead to significant penalties and restrictions on data processing.

Facilities

Our corporate headquarters is located in Dallas, Texas, where we have not completedoccupy approximately 11,000 square feet of space under a lease agreement. The lease agreement for our initial business combination within 24 months fromcorporate headquarters expires in March 2024. While we believe our current facilities are sufficient to meet our current and anticipated future needs, we are actively seeking new leased space that will support the closinganticipated expansion of this offering or during any Extension Period.our operations. We anticipate leasing a new facility in 2024 which will be significantly larger than the current leased space to accommodate the planned expansion of our operations.

Redemptions in Connection
with our Initial Business
Combination

Other Permitted Purchases of
Public Shares
by our Affiliates

Redemptions if we fail to
Complete an Initial
Business Combination

Calculation of redemption price

Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 following such redemptions, and any limitations (including, but not limited to, cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.

If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. Such purchases will be restricted except to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions.

If we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares.

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Redemptions in Connection
with our Initial Business
Combination

Other Permitted Purchases of
Public Shares
by our Affiliates

Redemptions if we fail to
Complete an Initial
Business Combination

Impact to remaining stockholders

The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account).

If the permitted purchases described above are made, there will be no impact to our remaining stockholders because the purchase price would not be paid by us.

The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions.

Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419Human Capital Resources and Employees

We employ a growing and highly skilled employee base, including our sales force, and promote a culture of innovation to continuously iterate and enhance our products, systems and commercial footprint. Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.

We anticipate the expansion of our business in 2023 as we continue to build a focused and highly skilled team. We added 16 employees during the fiscal year 2022 and, at December 31, 2022 had 71 full-time employees in the United States and UK and have and will continue to make additional hires over the course of 2023 and beyond. The following table comparesnew hires will be made in all areas, in particular in operations, sales, marketing, and government contracts. This will further enable us to meet our technology, IP, clinical, regulatory, and commercial goals in 2023 and 2024.

With the terms of this offeringCompany accelerating towards commercialization, much focus has been given to the termsdevelopment, hiring, and retention of an offeringhighly skilled individuals with proven commercial track records. In 2022, we saw a headcount growth of +29% with the addition of 16 full-time employees. We continue to prioritize recruitment in the areas of operations, production, regulatory, marketing, government contracts, and product development, which we believe will enable it to meet technology, IP, clinical, regulatory and commercialization readiness goals in 2023 and 2024. None of our employees are subject to a collective bargaining agreement or represented by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.

Terms of Our Offering

Terms Under a Rule 419 Offering

Escrow of offering proceeds

Nasdaq listing rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. $200,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a U.S.-based trust account at J.P. Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee.

Approximately $170,100,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.

Investment of net proceeds

$200,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act.

Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.

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Terms of Our Offering

Terms Under a Rule 419 Offering

Receipt of interest on escrowed funds

Interest on proceeds from the trust account to be paid to stockholders is reduced by (1) any taxes paid or payable and (2) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.

Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.

Limitation on fair value or net assets of target business

Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account).

The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.

Trading of securities issued

The units will begin trading on or promptly after the date of this prospectus. The shares of Class A common stock and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless BTIG, LLC informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

No trading of the units or the underlying shares of Class A common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.

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Terms of Our Offering

Terms Under a Rule 419 Offering

Exercise of the warrants

The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering.

The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.

Election to remain an investor

We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest, which interest shall be net of taxes payable, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rules to hold a stockholder vote. If we are not required by applicable law or stock exchange rules and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a stockholder vote, a final proxy statement would be mailed to public stockholders at least ten days prior to the stockholder vote. However, we expect that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy

A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder. Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.

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Terms of Our Offering

Terms Under a Rule 419 Offering

solicitation. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Additionally, each public stockholder may elect to redeem its public shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed transaction.

Business combination deadline

If we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.

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Terms of Our Offering

Terms Under a Rule 419 Offering

Release of funds

Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within 24 months from the closing of this offering, subject to applicable law.

The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.

Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect Excess Shares (more than an aggregate of 15% of the shares sold in this offering), without our prior consent. Our public stockholders’ inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell Excess Shares in open market transactions.

Most blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.

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Terms of Our Offering

Terms Under a Rule 419 Offering

Tendering share certificates in connection with a tender offer or redemption rights

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the initially scheduled vote on the proposal to approve our initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two business days prior to the initially scheduled vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.

In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership.

Competition

We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individualstrade or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval of our initial business combination and we are obligated to pay cash for our shares of Class A common stock, it will potentially reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination.

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Conflicts of Interest

Our management team, in their capacities as directors, officers or employees of our sponsor or its affiliates or in their other endeavors, may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our sponsor, or third parties, before they present such opportunities to us. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis. For more information, see the section entitled “ Management — Conflicts of Interest.”

In addition, our officers or directors may be investors, or have other direct or indirect interests, in a business with which we may enter into a business combination agreement and/or in certain funds or other persons that may purchase shares in this offering or that may otherwise purchase shares of our Class A common stock in the public market.

Our officers, directors and any of their respective affiliates may sponsor or form, or, in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity. See “Risk Factors — Certain of our directors and officers are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”

We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to complete our initial business combination.

Indemnity

Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of interest which may be withdrawn to pay taxes, except as to any claims by a third-party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.

Facilities

We currently maintain our executive offices are located at 767 5th Avenue 34th Floor, New York, New York 10153.labor union. We consider our current office space adequate forrelationship with our current operations.

111employees to be good.

TableOur team is comprised of Contents

Employeesa diverse group of different backgrounds, orientations, beliefs, perspectives and capabilities. We are committed to a culture where diversity, respect, belonging and authenticity are valued. We are committed to hiring the best talent. Our recruiting strategy involves utilization of social media, employee referral programs, as well as internal and external recruiters.

We currently have three officersdesigned and do not intendimplemented our cash and stock compensation programs to have any full-time employees priorattract, motivate, and retain our employees. We regularly review our compensation structure to the completion of our initial business combination. Members of our management teamensure that we remain competitive, reward top performance, and ensure internal equity, while maintaining proper fiscal governance. Our compensation packages are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that any such person will devote in any time period will varydesigned based on whethermarket benchmarks. We offer robust benefits package including health (medical, dental and vision) insurance, paid time off, paid parental leave, a target business has been selected for our initial business combinationretirement plan and the current stage of the business combination process.

Periodic Reportinglife and Financial Informationdisability coverage.

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

We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.

We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

Prior to the effectiveness of the registration statement of which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.

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

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

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We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

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

Legal Proceedings

There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such, and we and the members of our management team haveWe are not been subject to any such proceeding in the 12 months preceding the date of this prospectus.material legal proceedings.

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MANAGEMENT

Directors, Director NomineesExecutive Officers and OfficersDirectors

The following table lists the names, ages and positions of the individuals who currently serve as our executive officers and directors.

Name

 

Age

 

TitlePosition

Michael MurphyExecutive Officers

Wensheng Fan

 

4854

 

Chief Executive Officer and Director

Jordan ZimmermanNiko Pagoulatos, Ph.D.

 

6450

 

President and DirectorChief Operating Officer

Kieran GoodwinNils Windler

 

5149

 

Chief Financial Officer

Brian RadeckiJeffrey Thatcher, Ph.D.

40

Chief Scientist

Non-Employee Directors

Cynthia Cai

59

Director

Richard Cotton

62

Director

Martin Mellish

65

Director

Michael Murphy

51

Director

Deepak Sadagopan

 

49

 

Director

Frank S. Edmonds

52

Director nominee

Our directors, director nominees and officers are as follows:

Executive Officers

Michael MurphyWensheng Fan

Wensheng Fan is a Co-Founder and the first employee of Spectral. For 11 years he served as CTO and COO, before becoming the CEO of Spectral. He is an executive, entrepreneur, and innovator with over 20 years of experience in natural speech recognition and imaging systems. Mr. Fan held various leadership roles in strategy, engineering, and operations with Sensata Technologies and Philips. He also has a long history of experience in business development and cross-functional team leadership, being a founder and/or early core member of multiple successful start-up companies. Under his leadership, Spectral’s DeepView® was granted FDA Breakthrough Device designation and is well on its way to disrupting the field of healthcare and medical technology. Mr. Fan received his B.S.E.E. degree from Tsinghua University in Beijing, China and M.S.E.E. degree from Northeastern University in Boston.

Niko Pagoulatos, Ph.D.

Niko Pagoulatos, Ph.D. is a technology executive and innovator with 25+ years of experience in engineering, clinical and business aspects of specialized medical ultrasound imaging. Dr. Pagoulatos is a team-oriented and results-driven leader with extensive experience and a strong track record in building and leading cross-functional teams to successfully commercialize innovative medical technologies with global clinical impact. Prior to joining Spectral, Dr. Pagoulatos held multiple executive roles at EchoNous, a global healthcare AI-focused medical ultrasound innovation company. Prior to EchoNous, Dr. Pagoulatos held director and advanced research and development engineering roles at FUJIFILM SonoSite, the world leader in point-of-care ultrasound, DYSIS Medical, a company focused on early detection and diagnosis of cervical disease using biophotonics, and Siemens Healthcare. Dr. Pagoulatos earned his B.S. in Physics from the University of Athens in Greece and completed his graduate studies at the University of Washington in Seattle, where he earned a M.S. in Bioengineering in addition to a M.S. and Ph.D. in Electrical Engineering.

Nils Windler

Mr. Windler brings more than 20 years of Finance and Operations experience and is recognized as a hands-on, forward-thinking executive and business strategist who leverages extensive financial, operations and sales experience to fuel revenue growth, enhance profitability and seamlessly execute organizational turnarounds and transformations. Prior to joining Spectral, Mr. Windler served as Senior Finance Leader and Business Finance Transformation Leader at 3M. Prior to its acquisition, Mr. Windler also served as Vice President of Finance for Americas at KCI, an Acelity company. Mr. Windler holds an MBA, General Management from The Berlin School of Economics & Law & Anglia Ruskin University in Cambridge, U.K. and a BA, Business Administration, Banking Management, Finance & Investments from The Berlin School of Economics and Law.

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Jeffrey Thatcher, Ph.D.

Jeffrey Thatcher, Ph.D. serves as the Chief Scientist at Spectral. He currently oversees technology and applications research for medical imaging systems. He is a former Howard Hughes Medical Institute (HHMI) undergraduate research fellow, has served as ourPI on three National Science Foundation (NSF) grants, and is currently the PI of a Health and Human Services Biomedical Advanced Research and Development Authority (HHS/BARDA) government contract to develop an imaging device to assist with burn care. Dr. Thatcher received a B.S. in molecular biology from Texas Tech University and Ph.D. in biomedical engineering from University of Texas Southwestern Medical Center.

Non-Employee Directors

Cynthia Cai

Dr. Cynthia Cai is an executive and investor with over twenty-five years of experience in the healthcare and life science industry. Extensive experience in equity investment, board membership, marketing, and business development. In-depth understanding of global biotech and life science business, widely recognized as having a unique ability to bridge collaboration between scientists and businesses, between the eastern and western worlds. Dr. Cai is the founder and president of Tharton Consulting, which provides investment and management consulting services. She is also a venture partner of Viva BioInnovator, an equity investor in biotech innovation with novel solutions to cross multiple therapeutic areas. Before that, she served as senior advisor to Northern Light Venture Capital, led its healthcare investment effort in the United States. Previously Dr. Cai had progressive leadership roles with Agilent Technologies, as global associate vice president of marketing, she was responsible for its billion-dollar Chromatography, Automation, and Mass Spec. business. Dr. Cai serves on the board of directors for Spectral (London: SMD), Arthrosi Therapeutics, F5 Therapeutics, AceLink Therapeutics, Exarta Therapeutics, and Amberstone Biosciences. She is also a member of the board for the Science History Institute in Philadelphia. Dr. Cai earned a B.A. and M. Eng. from Tsinghua University in Beijing, received her Ph.D. in Chemistry from the University of Massachusetts, and an MBA from The Wharton Business School of the University of Pennsylvania.

Richard Cotton

Richard Cotton has a wealth of experience in senior financial roles in life sciences and other sectors, including broadcast and photographic, automotive, filtration and metals. His experience covers all financial management and value creation activities from R&D, to manufacturing and commercial in international organizations. He has significant experience in the development and successful execution of strategy, corporate finance and M&A, capital markets and governance. Mr. Cotton was Chief Financial Officer of FTSE250 animal health company Dechra Pharmaceuticals plc, and prior to that Chief Financial Officer of medical device and drug formulation business Consort Medical plc. He was also Finance Director of Vitec Group plc, Group Finance Director at Wagon plc and Group Finance Director of McLeod Russel plc. Prior to this he held senior finance roles in Alcoa Inc. Fellow of the Chartered Institute of Management Accountants, Mr. Cotton holds a BA (Hons) in Business Studies from Kingston University.

Martin Mellish

Martin Mellish has served as founding director of Aspen Advisory Services Ltd., since 1994. Aspen is a London-based private office overseeing investments in North America, Europe, and Asia. Mr. Mellish serves as non-executive director of Nucana Ltd (NASD: NCNA; member, Audit Committee) a clinical-stage biopharmaceutical company focused on improved chemotherapy agents, and Levitronix Technologies Inc. (Chair, Audit Committee) a technology company handling high-purity fluids for the semiconductor and life science industries, among other non-executive directorships. He is a member of the International Advisory Council of the Massachusetts General Hospital (MGH), Boston. He holds an M.Sc. from the Master of Health Care Delivery Science program at Dartmouth; an SM (Management) from the Massachusetts Institute of Technology and an M.Sc. (Accounting) from Northeastern University.

Michael P. Murphy

Michael P. Murphy served as Chief Executive Officer of RCLF and a member of ourits Board of Directors since ourthe company’s inception. Mr. Murphy began his investing career over 25 years ago. His career has been focused on being an entrepreneur in the investing and financial service industry. In the past, he was the Founder of a wealth management

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firm, hedge fund and multiple commercial real estate portfolios. In 2016, Mr. Murphy founded Rosecliff Ventures and has served as its Managing Partner since its inception. Over the past four years, Rosecliff Ventures has made over 80 investments, raised over $800 million$1 billion in assets under management, launched seven investment funds and experienced multiple portfolio company exits. A few select transactions from the Rosecliff Ventures portfolio include; Allbirds, Casper, Postmates, Ro, Thirty Madison, Petal and Wheels Up. Mr. Murphy is currently a board member of multiple private, venture capital backed companies including Cargo Systems, Squarefoot, ForDays and Agile Stacks.companies. Mr. Murphy previously was a contributor on CNBC and regularly appeared on the network’s FASTMONEY segment. Currently, Mr. Murphy is a regular weekly contributor on Fox Network and makes appearances each week on Varney & Co, Mornings with Maria & Cavuto.Network. Mr. Murphy earned a Bachelor of Arts in Business Administration from Hofstra University.

We believe that Mr. Murphy’s significant investment experience, contacts and relationships make him well qualified to serve as a member of our board of directors.Deepak Sadagopan

Jordan Zimmerman has served as our President and a member of our Board of Directors since our inception. Mr. ZimmermanDeepak Sadagopan currently serves as the Chairman and FounderChief Operating Officer of Zimmerman Advertising, whichPopulation Health at Providence St. Joseph Health, where he founded in 1984. Mr. Zimmerman trademarked his advertising strategy, “Brandtailing®,” a maverick combination of long-term brand building and short-term sales boosting that delivers measurable results. Highly respected within the advertising world, Mr. Zimmerman is often asked to address industry groups and participate in panel discussionsleads population health initiatives across the country. Zimmerman Advertisingsystem to transform care. Mr. Sadagopan has workedmore than 22 years of experience in health care, serving in leadership roles at Siemens PLM Solutions, Quest Diagnostics, McKesson, and Edifecs. Over the past eight years, he has focused on working closely with highly recognizablepayers and successful businessesproviders on the use of technology to drive business decisions making the transition from volume to value-based delivery models. Mr. Sadagopan is a leading voice in ensuring value-based care and Health IT policy initiatives enable equitable access to health care. He serves on the consumer sector, such as Nissan, McDonald’s, Dunkin’ Donuts, Five Below, Party City, Kay Jewelers, AutoNation, Michaels, Advance America, TBC/Tire Kingdom, Office Depot,steering committee for HL7’s DaVinci Accelerator to guide value-based care collaboration between payers and Carfax. The agency works with these companiesproviders, and on the Department of Health and Human Services’ ONC FAST National Steering Committee to help increase brand awareness, market share and overall company growth.

Outside of work, Mr. Zimmerman is an author, a philanthropist, a Horatio Alger Award recipient and a Golden Circle Memberaccelerate interoperability data standards. He serves on the faculty of the National Multiple Sclerosis Society.

In March 2015, with a donation of $10 million dollars from the Jordan Zimmerman Family Foundation, Mr. Zimmerman established the University of South Florida Zimmerman School of Advertising and Mass Communications and its highly regarded Zimmerman Advertising Program. Mr. Zimmerman was appointed by the Governor of Florida for a second term to sit on the Board of TrusteesPublic Health at the University of South Florida where heWashington as Clinical Assistant Professor, teaching MHA courses in Value-Based Care and economics. Mr. Sadagopan earned his master’s degree in healthcare delivery and economics from Dartmouth College. He also has served as the Chairman of the Board since 2019. Mr. Zimmerman earned a Bachelor of Artsmaster’s degree in Advertising and an MBAengineering, specializing in data science, from the University of South FloridaConnecticut and was awardedhas completed an honorary Doctorateexecutive management program with the MIT Sloan School of Business Administration from Nova Southeastern University.Management.

Limitations on Liability and Indemnification of Officers and Directors

The Company entered into indemnification agreements with each of our directors and executive officers. The indemnification agreements require the Company to indemnify its directors and executive officers to the fullest extent permitted by Delaware law.

The Company maintains a directors’ and officers’ insurance policy pursuant to which our directors and officers are insured against liability for actions taken in their capacities as directors and officers. We believe these provisions in the Charter, Bylaws and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

For more details regarding the related party transactions between the Company and its other anticipated executive officers and directors, see the sections entitled “Certain Relationships and Related Party Transactions.

Corporate Governance

We have structured our corporate governance in a manner we believe Mr. Zimmerman’s entrepreneurial and senior leadership experience as well as his broad network makes him well qualified to serveclosely aligns our interest with those of our stockholders. Notable features of our corporate governance include:

•        we have independent director representation on our boardaudit, compensation and nominating and corporate governance committees, and our independent directors will meet regularly in executive sessions without the presence of directors.our corporate officers or non-independent directors; and

Kieran Goodwin•         has servedat least one of our directors will qualify as an “audit committee financial expert” as defined by the SEC.

Election of Officers

Each executive officer serves at the discretion of our Chief Financial Officer sinceBoard and holds office until his or her successor is duly appointed or until his or her earlier resignation or removal. There are no family relationships among any of our inception. Mr. Goodwin previously founded Panning Capital Management, L.P. (“Panning”) in 2012directors and was Co-Managing Partner and Portfolio Manager until 2018. Panning was a long/short credit hedge fund with a peak AUM of $2.5 billion duringexecutive officers.

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Mr. Goodwin’s tenure. From 2004Board Composition

Our Board consists of six directors, with an additional director to 2010, Mr. Goodwin wasbe nominated by the HeadBoard. Each of Tradingour current directors will continue to serve as a director until the election and onequalification of five partners and four membershis or her successor or until his or her earlier death, resignation or removal. The authorized number of directors may be changed by resolution of our Board. Vacancies on our Board may be filled by resolution of the Global Investment Committee at King Street Capital Management (“King Street”). As HeadBoard.

Our Board consists of Trading, Mr. Goodwin was responsible for managing King Street’s twenty traders. During his time at King Street,(i) Wensheng Fan, (ii) Cynthia Cai, (iii) Richard Cotton, (iv) Martin Mellish, (v) Michael P. Murphy, (vi) Deepak Sadagopan and (vii) one individual who shall be nominated by the firm’s AUM grew from $4 billion to approximately $20 billion. Mr. Goodwin previously was a Managing Director at both UBSBoard.

Four directors qualify as “independent directors” under Nasdaq listing rules, namely, Cynthia Cai, Richard Cotton, Martin Mellish, and Merrill Lynch, where he ran proprietary trading books. Since 2018, Mr. Goodwin has invested his own capital in both private and public markets. He is an investor in many early-stage companies and currently serves onDeepak Sadagopan. For more details, see the board of directors of Tradewell Technologies Inc. and Zoomi Inc. Additionally, he serves on the board of directors Voya Prime Rate Trust, a public closedsection entitled “-end loan fund. Mr. Goodwin received a Bachelor of Arts in Computer Science, cum laude, from Duke University in 1991.

Board of Directors

Brian Radecki has served as a memberIndependence of our Board of Directors since our inception..”

At any meeting of stockholders at which directors are to be elected, the number of directors elected may not exceed the greatest number of directors then in office in any class of directors. Beginning with the Company’s first annual meeting of stockholders, the directors shall be elected to hold office for a term expiring at the next annual meeting of stockholders of the Company and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal from office. Subject to the rights, if any, of the holders of any series of preferred stock to elect additional directors under circumstances specified in a preferred stock designation, directors may be elected by the stockholders only at an annual meeting of stockholders.

Our Board is chaired by Mr. Radecki currently serves asFan. Our Board believes that combining the Founder,positions of Chief Executive Officer and member of theChairman helps to ensure that our Board of Directors of Rapa Therapeutics (“Rapa”), a clinical stage start-up biotechnology company, spun out of the National Cancer Institute in September 2017. Mr. Radecki is an active angel investor in, or advisor to, several companies across various industries — from start-ups with zero revenue, to pre-IPOand large public companies. He has over 20 years of experience building both small private and large public companies. He works closely with many top-tier private equity, venture capital and institutional investors along with entrepreneurs, boards of directors and senior management teams to build disruptive and innovative platform companies by executing strategic plans to get things done.

Mr. Radecki is currently an investor and director on the board of Wheels Up. Previously, Mr. Radecki was an early investor in, and served on the board of directors of, Rain King Software, Inc., a leading sales and marketing intelligence platform, when it was acquired in August 2017 by Zoom Info (NASDAQ: ZI) (formerly DiscoverOrg); Docutech, a document, eSign, eClosing and compliance technology provider, when it was acquired by First American (NYSE: FAF) for $350 million in March 2020; and Optimal Blue, a digital marketplace in the residential mortgage industry, which was recently acquired by Black Knight, Inc. (NYSE: BKI). Also, Mr. Radecki invested pre-IPO in other companies including Beyond Meat (NASDAQ: BYND) and Skillz Inc. (NYSE: SKLZ), which is merging (via SPAC) with Flying Eagle Acquisition Corp. (NASDAQ: FEAC). After working approximately 20 years at public companies, Mr. Radecki retired in 2016 from CoStar Group Inc. (“CoStar”) (NASDAQ: CSGP), a provider of commercial real estate information, analytics and online marketplaces, where he held several senior operational and financial roles over 18 years, including Executive Vice President, Chief Financial Officer and VP of Research Operations (the Company’s largest operating area). While at CoStar, Mr. Radecki oversaw or played a major role in CoStar’s accounting and finance operations in the U.S. and U.K. — from internal audit, tax and budgeting to SEC reporting, Sarbanes-Oxley compliance and due diligence. Additionally, Mr. Radecki helped lead CoStar’s 1998 initial public offering, multiple follow on equity offerings and international expansion, as well as leading several acquisitions and the integration of public companies, including Comps.com (NASDAQ: CDOT) in 2000 for $102 million, and LoopNet (NASDAQ: LOOP) in 2012 for $860 million. Also, Mr. Radecki was named the Washington Business Journal’s “CFO of the Year” in the large company category for 2012. During 2014, he led and raised nearly $1.1 billion of debt and equity. Mr. Radecki also played a major role in acquisitions of Apartments.com in 2014 for $585 million and ApartmentFinder in 2015 for $170 million, which allowed CoStar to successfully enter a new strategic vertical and significantly expanded CoStar’s total addressable market. Mr. Radecki was instrumental in building CoStar from a small pre-IPO start-up to a multi-billion dollar public company. Before joining CoStar, Mr. Radecki worked at Axent Technologies, Inc. (Nasdaq: AXNT), an international security software company; Azerty, Inc. and the public accounting firm, Lumsden & McCormick, LLP, both based in Buffalo, NY.

Mr. Radecki earned a Bachelor of Science from University of New York at Buffalo,act with a dual degree in Accounting and Finance.

We believe Mr. Radecki’s qualifications to serve oncommon purpose. In addition, our board of directors include his extensive experience working at public companies in senior level operational, business development, accounting and financial roles, coupled with his substantial experience asBoard believes that a private angel investor, entrepreneur and advisor to organizations and executives, along with his track record in deal making and capital markets.

Frank S. Edmonds, a director nominee, has been a Partner at Panning Capital Management, L.P. since 2013, where he served as Co-Managing Partner and Head of Research from 2013 to 2018. From 2002 to 2012, Mr. Edmonds was a Senior Research Analyst at King Street, where he served as one of five partners and four

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members of the Global Investment Committee. Prior to King Street, Mr. Edmonds was a research analyst at Oak Hill Advisors. He serves on the boards of Shane’s Rib Shack, a fast casual barbeque restaurant business with 65 locations in the Southeast, as well as the Darden Graduate School of Business and the Jefferson Scholars Foundation. He is currently the Chair of the Investment Committee at Woodberry Forest School. He also serves on the board of Shane’s Rib Shack, a fast casual barbeque restaurant business with 65 locations in the southeast United States, Mr. Edmonds received a B.A. in History/American Studies and joint M.B.A. / J.D. degrees from the University of Virginia.

We believe that Mr. Edmonds’ significant investment experience, contacts and relationships make him well qualified to serve as a member of our board of directors.

Number, Terms of Office and Election of Directors and Officers

Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect that our board of directors will consist of four members.

Prior to our initial business combination, holders of our founder shares will have the right to elect all of our directors and remove members of the board of directors for any reason, and holders of our public shares will not have the right to vote on the election of directors during such time. Our directors are appointed for a term of two years. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of a majority of at least 90% of the issued and outstanding shares of our common stock voting at a stockholder meeting. Approval of our initial business combination will require the affirmative vote of a majority of our board directors, which must include a majority of our independent directors. Subject to any other special rights applicable to the stockholders, prior to our initial business combination, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors, or by holders of a majority of the issued and outstanding shares of our Class B common stock.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of acombined Chief Executive Officer a President, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.

Director Independence

Nasdaq listing rules require that a majority of our board of directors be independent within one year of our initial public offering. An “independent director”Chairman is defined generallybetter positioned to act as a personbridge between management and our Board, facilitating the regular flow of information. Our Board also believes that in the opinionit is advantageous to have a chairperson with significant history with and extensive knowledge of the company’s boardCompany, as is the case with Mr. Fan.

Independence of directors, has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company). Upon the effectiveness of the registration statement of which this prospectus forms a part, we expect to have two “independent directors” as defined in the Nasdaq listing rules and applicable SEC rules prior to completion of this offering. Our board has determined that each of Brian Radecki and Frank S. Edmonds is an independent director under applicable SEC and Nasdaq listing rules. We intend to appoint one additional independent director to our board within one year following this offering. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

Officer and Director Compensation

None of our directors or officers has received directly from us any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation, pursuant to a support services agreement we will enter into with our sponsor, we will pay our sponsor a total of $10,000 per month for office, support and administrative services. In addition, our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors, officers or our or any of their respective affiliates.

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After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion of our initial business combination will be determined by a compensation committee constituted solely by independent directors.

We are not party to any agreements with our directors and officers that provide for benefits upon termination of employment. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial business combination should be a determining factor in our decision to proceed with any potential business combination.

Committees of the Board of Directors

UponBased on information provided by each director concerning his or her background, employment, and affiliations, our Board has determined that the effective dateBoard meets independence standards under the applicable rules and regulations of the registration statementSEC and the listing standards of which this prospectus forms a part,Nasdaq. In making these determinations, our boardBoard considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of directors will haveour capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.

Board Committees

Our Board has three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. Subject to phase-in rules, the Nasdaq listing rules and Rule 10A-3Each of the Exchange Act require thatcommittees reports to the audit committee of a listed company be comprised solely of independent directors,Board as it deems appropriate and as the Nasdaq listing rules require that the compensation committee and the nominating and corporate governance committee of a listed company be comprised solely of independent directors. Each committee will operate under a charter that will be approved by our board of directors and will have theBoard may request. The composition, duties and responsibilities describedof these committees are set forth below. The charter of each committee will be available onIn the future, our website following the closing of this offering.Board may establish other committees, as it deems appropriate, to assist it with its responsibilities.

Audit Committee

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish anThe audit committee of the board of directors. The members of our audit committee will be Brian Radecki, Frank S. Edmonds and Michael Murphy. Brian Radecki will serve as chairman of the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Mr. Radecki and Mr. Edmonds will meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act but Mr. Murphy will not meet such standards. We intend to appoint one additional independent directorprovides assistance to our audit committee to replace Mr. Murphy within one year following this offering pursuant to the Nasdaq phase-in provisions for initial public offerings.

Each member of the audit committee is financially literate and our board of directors has determined that qualifies as an “audit committee financial expert” as definedBoard in applicable SEC rules and has accounting or related financial management expertise.

We will adopt an audit committee charter, which will detail the purpose and principal functions of the audit committee, including:

•        assisting board oversight of (1) the integrity of our financial statements, (2) our compliance withfulfilling its legal and regulatory requirements, (3)fiduciary obligations in matters involving our accounting, auditing, financial reporting and legal compliance functions by approving the services performed by our independent registered public accounting firm’s qualificationsfirm and independence,reviewing their reports regarding our accounting practices and (4)systems of internal accounting controls. The audit committee also oversees the performanceaudit efforts of our internal audit function and independent registered public accounting firm;

•        the appointment, compensation, retention, replacement,firm and oversight of the work oftakes those actions as it deems necessary to satisfy itself that the independent registered public accounting firm is independent of management. The rules of Nasdaq and any otherRule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent registered public accounting firm engaged by us;

•        pre-approving alldirectors. Our audit committee meets the requirements for independence of audit committee members under applicable SEC and non-audit services to be provided byNasdaq rules. All of the independent registered public accounting firm or any other registered public accounting firm engaged by us,members of our audit committee (Martin Mellish (Chairperson), Richard Cotton and establishing pre-approval policiesDeepak Sadagopan) meet the requirements for financial literacy under the applicable rules and procedures;regulations of the SEC and Nasdaq. In addition, Mr. Mellish qualifies as our “audit committee financial expert,” as such term is defined in Item 407 of Regulation S-K.

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•        reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;

•        setting clear hiring policiesOur Board adopted a new written charter for employees or former employees of the independent registered public accounting firm;

•        setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

•        obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm,committee, which is available on our website. The information on our website is not intended to form a part of or be incorporated by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

•        meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

•        reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us enteringreference into such transaction; and

•        reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.this registration statement.

Compensation Committee

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish aThe compensation committee determines our general compensation policies and the compensation provided to our officers. The compensation committee also makes recommendations to our Board regarding director compensation. In addition, the compensation committee reviews and determines security-based compensation for our directors, officers, employees and consultants and will administer our equity incentive plans. Our compensation committee also oversees our corporate compensation programs. Our compensation committee consists of the board of directors.Cynthia Cai (Chairperson) and Martin Mellish. The memberscomposition of our compensation committee will be Brian Radecki and Frank S. Edmonds. Mr. Edmonds will serve as chairman of the compensation committee. We will adopt asatisfies Nasdaq’s additional independence standards for compensation committee members.

Our Board has adopted a new written charter which will detail the purpose and responsibility offor the compensation committee, including:

•        reviewing and approvingwhich is available on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

•        reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;

•        reviewing our executive compensation policies and plans;

•        implementing and administering our incentive compensation equity-based remuneration plans;

•        assisting management in complying with our proxy statement and annual report disclosure requirements;

•        approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

•        producing a report on executive compensation to be included in our annual proxy statement; and

•        reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

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The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.website.

Nominating and Corporate Governance Committee

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish aThe nominating and corporate governance committee is responsible for making recommendations to our Board regarding candidates for directorships and the size and composition of the boardBoard, and consists of directors.Richard Cotton (Chairperson) and Cynthia Cai. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance and reporting and making recommendations to the Board concerning corporate governance matters. The membersfollowing member(s) of our nominating and corporate governance committee will be Brian Radeckiare independent, as defined under the Nasdaq listing rules: Richard Cotton and Frank S. Edmonds. Mr. Edmonds will serve as chair of the nominating and corporate governance committee. We will adoptCynthia Cai.

Our Board has adopted a nominating and corporate governance committeenew written charter which will detail the purpose and responsibilities offor the nominating and corporate governance committee, including:which will be available on our website after adoption.

•        Role of Our Board of Directors in Risk Oversightidentifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by

One of the board of directors, and recommending to the board of directors candidates for nomination for election at the annual stockholder meeting or to fill vacancies on the board of directors;

•        developing and recommending to the board of directors and overseeing implementationkey functions of our corporate governance guidelines;Board is informed oversight of our risk management process. Our Board administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight.

•        coordinatingIn particular, our Board is responsible for monitoring and overseeingassessing strategic risk exposure, and our audit committee has the annual self-evaluation ofresponsibility to consider and discuss our major financial risk exposures and the board of directors, its committees, individual directorssteps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management inis undertaken. The audit committee also has the governanceresponsibility to review with management the process by which risk assessment and management is undertaken, monitor compliance with legal and regulatory requirements, and review the adequacy and effectiveness of the company; and

•        reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.

The charter will also provide that theinternal controls over financial reporting. Our nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directlyis responsible for approvingperiodically evaluating our corporate governance policies and systems in light of the search firm’s feesgovernance risks that we face and other retention terms.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledgeadequacy of our business, integrity, professional reputation, independence, wisdom,policies and the abilityprocedures designed to represent the best interestsaddress such risks. Our compensation committee assesses and monitors whether any of our stockholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors.compensation plans, policies and programs comply with applicable legal and regulatory requirements.

Code of Business Conduct and Ethics for Employees, Executive Officers, and Directors

Prior to the closingOur Board has adopted a Code of this offering, we will adopt a code of ethicsBusiness Conduct and business conduct (ourEthics (the “Code of Ethics”Conduct”), applicable to our directors, officers and employees. We will file a copyall of our form of our Code of Ethics as an exhibit to the registration statement of which this prospectus forms a part. You will be able to review this document by accessing our public filings at the SEC’s website at www.sec.gov and on our website. In addition, a copy of our Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. See “Where You Can Find Additional Information.”

Conflicts of Interest

Each of ouremployees, executive officers and directors, presently has,including our Chief Executive Officer, Chief Financial Officer and other executive and senior financial officers. The Code of Conduct is available on our website. Any amendments to the Code of Conduct, or any waivers of themits requirements, are expected to be disclosed on its website to the extent required by applicable rules and exchange requirements.

Corporate Governance Guidelines

We have adopted a set of corporate governance guidelines to provide the framework for the governance of our Board and to assist our Board in the future may have additional, fiduciary or contractual obligationsexercise of its responsibilities. These guidelines reflect our Board’s commitment to other entities pursuantmonitoring the effectiveness of policy and decision-making both at the board and management levels, with a view to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any ofenhancing stockholder value over the long term. The corporate governance guidelines are available on our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is anwebsite.

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opportunity that we are able to complete on a reasonable basis. Our directorsCompensation of the Company’s Executive Officers and officers are also not required to commit any specified amount of time to our affairs, and, accordingly, willDirectors

Employment Agreements

We have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. See “Risk Factors — Certainentered into employment agreements with certain of our directorsexecutive officers that govern certain terms and officers are now, and allconditions of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”

In addition, oursuch executive officers’ employment as executive officers or directors may be investors, or have other direct or indirect interests, in a business with which we may enter into a business combination agreement and/or in certain funds or other persons that may purchase shares in this offering or that may otherwise purchase shares of our Class A common stock in the public market.

Our officers, directors and any of their respective affiliates may sponsor or form, or, in the case of individuals, serve as a director or officer of, other blank check companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target.

We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to identify and pursue business combination opportunities or complete our initial business combination.

Our directors and officers may become involved with subsequent special purpose acquisition companies similar to our company. Potential investors should also be aware of the following potential conflictsCompany. The employment agreements with each of interest:

•        None of our directors or officers is required to commit his or her full time to our affairsWensheng Fan, Nils Windler and accordingly, may have conflicts of interest in allocating his or her time among various business activities.

Dr. Niko Pagoloutus are described under “•        In the course of their other business activities, our directorsExecutive Officer and officers may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management’s other affiliations, see “— Directors, Director Nominees and Officers.Compensation — Employment Agreements.

•        Overview of Anticipated Executive Compensation ProgramOur initial stockholders, directors and officers have agreed to waive their redemption rights

Decisions with respect to any founder sharesthe compensation of the Company’s executive officers, including our named executive officers, are made by the compensation committee of our Board. The following discussion is based on the current and public shares heldexpected compensation of our named executive officers and directors. The actual compensation of our named executive officers will depend on the judgment of the members of the compensation committee and may differ from that set forth in the following discussion. Such compensation will also generally be governed by themour executive officers’ employment agreements, as in connectioneffect from time to time, including as described above.

Compensation for our executive officers has the following components: base salary, cash bonus opportunities, equity compensation, employee benefits, executive perquisites and severance benefits. Base salaries, employee benefits, executive perquisites and severance benefits are designed to attract and retain senior management talent. We also use annual cash bonuses and equity awards to promote performance-based pay that aligns the interests of our named executive officers with the consummationlong-term interests of our initial business combination. Additionally, our initial stockholders have agreedits equity-owners and to waive their redemption rights with respectenhance executive retention.

Annual Bonuses

We expect to their founder shares if we fail to consummate our initial business combination within 24 months after the closing of this offering or during any Extension Period. However, if our initial stockholders (or any of our directors, officers or affiliates) acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to consummate our initial business combination within the prescribed time frame. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. Pursuant to a letter agreement that our initial stockholders, directors and officers have entered into with us, with certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until the earlier of: (1) one year after the completion of our initial business combination; and (2) subsequent to our initial business combination (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20-trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock foruse annual cash securities or other property. With certain limited exceptions, the private placement warrants and the shares of Class A common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor and directors and officers may directly

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or indirectly own our securities following this offering, our directors and officers may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.

•        Our directors and officers may negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination.

•        Our directors and officers may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial business combination.

The conflicts described above may not be resolved in our favor.

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

•        the corporation could financially undertake the opportunity;

•        the opportunity is within the corporation’s line of business; and

•        it would not be fair to the corporation and its stockholdersincentive bonuses for the opportunity notnamed executive officers to be broughtmotivate their achievement of short-term performance goals and tie a portion of their cash compensation to performance. We expect that, near the attentionbeginning of each year, the corporation.

Accordingly, as a resultcompensation committee will select the performance targets, target amounts, target award opportunities and other terms and conditions of multiple business affiliations, our directors andannual cash bonuses for the named executive officers, have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation will provide that the doctrine of corporate opportunity will not apply with respect to any of our directors or officers in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, and there will not be any expectancy that any of our directors or officers will offer any such corporate opportunity of which he or she may become aware to us. Below is a table summarizing the entities to which our directors, officers and director nominees currently have fiduciary duties or contractual obligations:

Individual

Entity

Entity’s Business

Affiliation

Michael Murphy

Rosecliff Venture Management, LLC

Venture Capital

Founder and Managing Partner

Cargo Systems, Inc.

Rideshare Advertising

Director

Squarefoot

Commercial Real Estate

Director

ForDays

Fashion

Director

Agile Stacks

Technology

Director

Jordan Zimmerman

Zimmerman Advertising

Advertising

Founder & Chairman

Kieran Goodwin

Zoomi, Inc.

Education/Artificial Intelligence

Director

Tradewell Technologies

Financial Technology

Director

Voya Prime Rate Loan Trust

Closed-End Fund

Director

Brian Radecki

Rapa Therapeutics, LLC

Biotechnology

Founder, Chief Executive Officer and Director

Wheels Up Partners Holdings LLC

Transportation/Aviation

Director

Frank S. Edmonds

Panning Capital Management, L.P.

Financial Services

Co-Managing Partner

Shane’s Rib Shack

Fast-Casual Restaurant

Director

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Accordingly, if any of the above directors or officers become aware of a business combination opportunity which is suitable for any of the above entities to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is an opportunity that we are able to complete on a reasonable basis. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to identify and pursue business combination opportunities or complete our initial business combination.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers.

In addition, our sponsor or any of its affiliates may make additional investments in the company in connection with the initial business combination, although our sponsor and its affiliates have no obligation or current intention to do so. If our sponsor or any of its affiliates elects to make additional investments, such proposed investments could influence our sponsor’s motivation to complete an initial business combination.

In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders, directors and officers have agreed, pursuantsubject to the terms of a letter agreement entered intotheir employment agreements. Following the end of each year, the compensation committee will determine the extent to which the performance targets were achieved and the amount of the award that is payable to the named executive officers.

Equity-Based Awards

We expect to use equity-based awards in future years to promote our interest by providing these executives with us,the opportunity to vote any founder shares (andacquire equity interests as an incentive for their permitted transferees will agree)remaining in our service and public shares heldaligning the executives’ interests with those of its equity holders.

Other Compensation

We offer various employee benefit plans to employees and other benefits to named executive officers of the Company, which are the same or similar to those currently offered by them in favor ofthe Company. For more information, see “Executive Officer and Director Compensation — Narrative Disclosure to Summary Compensation Table.” We may also provide our initial business combination.named executive officers with perquisites and personal benefits that are not generally available to all employees.

Limitation on Liability and Indemnification of Directors and OfficersDirector Compensation

Our amended and restated certificate of incorporation will provide that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation will provide that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the DGCL.

We will enter into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also permit us to maintain insurance on behalf of any officer,Board has approved a non-employee director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will obtain a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our directors and officers.

A stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

compensation program. We believe that these provisions, the insurancedirector compensation is in accordance with industry practice and the indemnity agreements are necessary to attract and retain talented and experienced directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.standards.

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PRINCIPAL STOCKHOLDERSEXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Throughout this section, unless otherwise noted, “the Company,” “we,” “us,” “our,” “Spectral” and similar terms refer to Legacy Spectral prior to the Business Combination and Spectral after the consummation of the Business Combination. Upon the consummation of the Business Combination, the executive officers of Legacy Spectral became the executive officers of Spectral.

Overview

As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and Analysis section and have opted to comply with the scaled disclosure requirements applicable to emerging growth companies.

The named executive officer and director compensation described in this section discusses our 2022 compensation programs. This discussion may contain forward-looking statements that are based on the Company’s current plans, considerations, expectations and determinations regarding future compensation programs.

Executive and Director Compensation

The Spectral Board of Directors, with input from our Chief Executive Officer, has historically determined the compensation for our named executive officers. Our named executive officers for the fiscal year ended December 31, 2022, which consist of our principal executive officer and the next two most highly compensated executive officers who were serving as executive officers as of December 31, 2022, are:

•        Wensheng Fan, Chief Executive Officer;

•        Nils Windler; and

•        Jeffrey Thatcher.

Summary Compensation Table

The following table sets forthsummarizes the compensation earned by each of our named executive officers for the fiscal year ended December 31, 2022.

Name and Principal Position

 

Year

 

Salary
($)

 

Bonus
($)

 

Stock Awards
($)

 

Option Awards(1)
($)

 

All Other Compensation(2)
($)

 

Total
($)

Wensheng Fan

 

2022

 

500,000

 

425,000

   

232,000

 

44,412

 

1,201,412

Chief Executive Officer

              

Nils Windler

 

2022

 

350,000

 

110,000

   

 

19,814

 

479,814

Chief Financial Officer

              

Dr. Jeffrey Thatcher

 

2022

 

225,000

 

   

72,500

 

34,717

 

332,217

Chief Scientist

              

____________

(1)      The amounts shown in this column represent the grant date fair values of option awards granted in 2022 as computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 718. See Note 12 to the consolidated financial statements for a discussion of the assumptions used in the calculation of these amounts.

(2)      For Mr. Fan, the amount included in this column consists of $48,392 for his participation as an executive member of our board of directors; $25,896 representing matching contributions to Mr. Fan’s 401(K) plan and $18,516 for health benefits provided to him.

For Mr. Windler, the amount included in this column consists of $19,814 for health benefits provided to him.

For Dr. Thatcher, the amount in this column consists of $13,552 in matching contributions to Dr. Thatcher’s 401(K) plan and $21,165 for health benefits provided to him.

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Narrative Disclosure to Summary Compensation Table

Base Salary

We provide each named executive officer with a base salary for the services that the executive officer performs for us. This compensation component constitutes a stable element of compensation while other compensation elements are variable. Base salaries are reviewed annually and may be increased based on the individual performance of the named executive officer, company performance, any change in the executive’s position within our business, the scope of their responsibilities and market data.

Equity Incentive Awards

We previously maintained the Spectral MD Holdings, Ltd. 2018 Long Term Incentive Plan (the “2018 Plan”), which provided for the discretionary grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance units, incentive bonus awards and other cash-based or stock-based awards to our eligible employees, directors and consultants, including the named executive officers.

In September 2022, we adopted the Spectral MD Holdings, Ltd. 2022 Long Term Incentive Plan (the “2022 Plan”). The 2022 Plan provides for the discretionary grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance units, incentive bonus awards and other cash-based or stock-based awards to our employees, directors and consultants.

In 2022, we awarded options to key employees (including our named executive officers) for retention, engagement and bonus compensation awards. These awards are designed to align a portion of our named executive officers’ compensation with the interests of our existing stockholders and to build retention value by incentivizing our named executive officers to remain in our service. For information on the grant dates, vesting terms and expiration terms, as applicable, of these equity awards, as well as other outstanding stock options under the 2018 Plan and 2022 Plan. See the Outstanding Equity Awards at 2022 Fiscal Year-End Table.

Health and Retirement Benefits

We provide medical, dental, vision, life insurance and disability benefits to all eligible employees. Our named executive officers are eligible to participate in these benefits on the same basis as all other employees. We maintain a 401(k) savings plan that allows participants, including our named executive officers, to defer cash compensation into the plan up to the maximum annual deferral limit under applicable IRS guidelines. Eligible employees begin to receive benefits on their first day of employment and are fully vested in their salary deferrals. We provide fully vested safe-harbor employer matching contributions equal to 100% of the first 6% of cash compensation deferred into the 401(k) plan by participants for each year.

Outstanding Equity Awards at 2022 Fiscal Year-End

The following table provides information regarding the beneficial ownershipoutstanding equity awards held by each of our commonnamed executive officers as of December 31, 2022

 

Option Awards(1)

Name

 

Grant
Date

 

Number of Securities Underlying Unexercised Options (#) Exercisable

 

Number of Securities Underlying Unexercised Options (#) Unexercisable

 

Option
Exercise
Price
($)

 

Option Expiration
Date

Wensheng Fan(2)

 

5/1/2019

 

9,000,000

 

 

0.10

 

5/1/2029

  

6/25/2020

 

2,700,000

 

900,000

 

0.21

 

6/25/2030

  

6/25/2020

 

900,000

 

 

0.21

 

6/25/2030

  

11/20/2020

 

358,572

 

 

0.20

 

11/20/2023

  

1/15/2021

 

3,528,000

 

1,176,000

 

0.21

 

1/15/2031

  

10/8/2021

 

100,000

 

66,667

 

0.53

 

10/8/2031

  

2/3/2022

 

800,000

 

533,334

 

0.48

 

2/3/2032

           

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Option Awards(1)

Name

 

Grant
Date

 

Number of Securities Underlying Unexercised Options (#) Exercisable

 

Number of Securities Underlying Unexercised Options (#) Unexercisable

 

Option
Exercise
Price
($)

 

Option Expiration
Date

Nils Windler(3)

 

12/17/2021

 

1,000,000

 

555,556

 

0.51

 

12/17/2031

           

Dr. Jeffrey Thatcher(4)

 

5/1/2019

 

6,000,000

 

 

0.10

 

5/1/2029

  

6/25/2020

 

2,400,000

 

800,000

 

0.21

 

6/25/2030

  

2/3/2022

 

250,000

 

166,667

 

0.48

 

2/3/2032

____________

(1)      Each of the options granted were incentive stock options and were issued at their then current fair market value.

(2)      The options awarded to Mr. Fan vest in three equal annual installments beginning on the grant date, subject to his continued provision of service to us on each vesting date.

(3)      The option awarded to Mr. Windler vests over approximately 36-months, with 6/36th vesting occurring on the last day of the month following the 180-day anniversary of the commencement of his provision of service to us and thereafter, the remaining unvested options vest in 30 equal tranches on the last day of each calendar month during the continued period of service such that the entire option will be fully vested as of the 36 month anniversary of the date of this prospectus,grant.

(4)      The options awarded to Dr. Thatcher vest in three equal annual installments beginning on the grant date, subject to his continued provision of service to us on each vesting date.

Retirement Benefits, Termination and Change in Control Provisions at December 31, 2022

During fiscal 2022, our executive officers (including our named executive officers) were eligible to participate in our 401(k) plan, as adjusteddescribed above under “Executive Officer and Director Compensation — Health and Retirement Benefits.” There were no other pension or retirement benefits pursuant to any existing plan provided or contributed to by us.

The 2018 Plan provides that upon a “Change in Control” (as defined therein), our remuneration committee may accelerate the vesting of options granted pursuant to the 2018 Plan or make such adjustments to the existing grants as the committee deems appropriate to reflect the salesuch Change in Control transaction. Upon a termination of employment of our Class A common stockexecutive officers, all options granted under the 2018 Plan are required to be exercised within 90 days of termination of such executive’s employment with us or such options will be forfeited and included back in the units offered by this prospectus,2018 Plan.

Non-Employee Director Compensation

In 2022, Spectral paid its non-executive and assuming no purchaseexecutive directors cash compensation for their contributions to the operations of units in this offering, by:

•        each person known by us to be the beneficial owner of more than 5% of our issued and outstanding shares of common stock;

•        each of our directors, officers and director nominees; and

•        all our directors, officers and director nominees as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.business. The following table does not reflect record or beneficial ownershipprovides the compensation amounts for each executive and non-executive member of the private placement warrantsBoard of Directors for 2022:

Name

 

Fees Earned
or Paid in
Cash
($)

 

Option
Awards
($)

 

All Other
Compensation
($)

 

Total
($)

Martin Mellish

 

92,098

     

92,098

Gerry Beaney

 

79,816

     

79,816

Richard Cotton

 

79,816

     

79,816

Cynthia Cai

 

79,816

     

79,816

Erich Spangenberg

 

37,021

     

37,021

____________

(1)      Mr. Spangenberg resigned from the Board of Directors effective as these warrants are not exercisable within 60 daysof October 31, 2022.

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Executive Officer and Director Compensation Arrangements to be Adopted in Connection with the Business Combination

Equity

In connection with the Business Combination, the equity-based awards for Spectral’s named executive officers will be treated in accordance with the terms of the dateBusiness Combination Agreement and converted into equity-based awards that settle in shares of this prospectus.the Company’s Common Stock.

RCLF and Spectral waived the requirement in the Business Combination Agreement that RCLF approve and adopt the Equity Incentive Plan to be effective in connection with the Business Combination. Instead, the Company will seek to approve and adopt a new equity incentive plan at its first annual meeting following the Business Combination, pursuant to the terms of the Business Combination Agreement, which shall provide for an aggregate share reserve thereunder equal to (a) such number of shares of Common Stock sufficient to satisfy all Legacy Spectral Options plus (b) no more than 15% of RCLF’s fully-diluted outstanding stock immediately after the Business Combination. The Equity Incentive Plan shall also include a customary 5% evergreen provision.

Employment Arrangements

We entered into employment agreements (the “Executive Employment Agreements”) with each of Wensheng Fan, Nils Windler and Dr. Niko Pagoloutus, that govern certain terms and conditions of such executive officers’ employment with us. The Executive Employment Agreements provide for base salary, eligibility to receive an annual bonus, eligibility to receive certain severance benefits upon involuntary terminations of employment, as well as customary confidentiality, assignment of intellectual property provisions, and certain restrictive covenants, including post-employment non-solicitation provisions.

Non-Employee Director Compensation

The postCompany’s Board expects to review director compensation periodically to ensure that director compensation remains competitive such that we are able to recruit and retain qualified directors. The Company has adopted a director compensation program that is designed to align compensation with its business objectives and the creation of stockholder value, while enabling the Company to attract, retain, incentivize and reward directors who contribute to the long-offering-term ownership percentage column below assumes thatsuccess of the underwriters do not exercise their overCompany.

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-allotmentCERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS option, that our sponsor forfeits 750,000 founder shares,

Certain Relationships and that there are 25,000,000Related Person Transactions — Company

Registration Rights Agreement

Pursuant to the Business Combination Agreement, at the Closing, the Company, Sponsor and certain stockholders of Spectral entered into the Registration Rights Agreement, pursuant to which, among other things, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of our common stock issuedCommon Stock and outstanding after this offering.

Name and Address of Beneficial Owner(1)

 

Number of
Shares
Beneficially
Owned
(2)

 

Approximate Percentage of Issued
and Outstanding Common Stock

Before
Offering

 

After
Offering
(2)

Rosecliff Acquisition Sponsor I LLC (our sponsor)(3)

 

5,620,000

 

97.74

%

 

19.55

%

Michael Murphy(3)

 

5,620,000

 

97.74

%

 

19.55

%

Brian Radecki

 

50,000

 

*

 

 

*

 

Jordan Zimmerman

 

  

 

  

 

Kieran Goodwin

 

  

 

  

 

Frank S. Edmonds

 

40,000

 

*

 

 

*

 

All directors, officers and director nominees as a group (five individuals)

 

90,000

 

1.57

%

 

*

 

____________

*        Less than one percent.

(1)      Unless otherwise noted, the business address of eachother equity securities of the following entities or individuals is c/o Rosecliff Acquisition Corp I, 767 5th Avenue 34th Floor, New York, New York 10153.Company that are held by the parties thereto from time to time.

(2)      Interests shown consist solelyCertain Relationships and Related Person Transactions — RCLF

Founder Shares

During the period ended December 31, 2020, the Sponsor paid $25,000 to cover certain of founder shares, classified as sharesRCLF’s offering costs in exchange for 5,750,000 Founder Shares. On February 11, 2021, RCLF effected a 1:1.1 stock split of Class B common stock. Such founder shares will convert into shares of Class A common stock on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.”

(3)      Rosecliff Acquisition Sponsor I LLC, our sponsor, is the record holder of 5,750,000 shares ofits Class B common stock, 750,000resulting in an aggregate of which are6,325,000 shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock split. The Founder Shares included an aggregate of up to 825,000 shares subject to forfeiture depending onto the extent to whichthat the underwriters’ over-allotment option is exercised. Michael Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, which is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our sponsor. By virtue of his control over the managing member our sponsor, Mr. Murphy may be deemed to beneficially own shares held by our sponsor.

Immediately after this offering, our initial stockholders will beneficially own 20% of the then issued and outstanding shares of common stock (assuming our initial stockholders dowas not purchase any unitsexercised in this offering) and will have the right to elect all of our directors prior to our initial business combination as a result of holding all of the founder shares. Holders of our public shares will not have the right to elect any directors to our board of directors prior to our initial business combination. In addition, because of their ownership block, our initial stockholders may be able to effectively influence the outcome of all other matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions. If we increasefull or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of this offering in such amount as to maintainpart, so that the number of founder shares atFounder Shares would equal, on an as-converted basis, approximately 20% of ourRCLF’s issued and outstanding shares of our common stock upon the consummation of this offering.

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Tablethe Initial Public Offering. As a result of Contents

Our sponsor has committed,the underwriter’s election to fully exercise its over-allotment option, no Founder Shares were subject to forfeiture. In connection with the Business Combination and pursuant to the Sponsor Letter Agreement, the Sponsor agreed to forfeit a written agreement,certain number of Founder Shares.

Amount Due to purchaseSponsor

At December 31, 2022 and 2021, RCLF had advances owed to the Sponsor in the amount of $16,152 and $0, respectively.

Private Placement Warrants

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised4,706,667 warrants in full)a private placement warrants(the “Private Placement Warrants”) at a price of $1.50 per warrantPrivate Placement Warrant ($6,000,0007,060,000 in the aggregate (or $6,600,000 if the underwriters’ over-allotment option is exercised in full)aggregate) from RCLF in a private placement that will occur simultaneously with the closing of this offering.placement. Each private placement warrant entitles the holderwhole Private Placement Warrant was exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. If we do not complete our initial business combination within 24 months from the closingadjustment. A portion of this offering or during any Extension Period, the proceeds offrom the sale of the private placement warrantsPrivate Placement Warrants were added to the net proceeds from the Initial Public Offering held in the trust account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us (except as described below under “Description of Securities — Redeemable Warrants — Public Redeemable Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”); (2) they (including the shares of Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, as described below; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the shares of Class A common stock issuable upon exercise of these warrants) are entitled to registration rights, as described below.

Our sponsor and our directors and officers are deemed to be our “promoters” as such term is defined under the federal securities laws. See “Certain Relationships and Related Party Transactions” for additional information regarding our relationships with our promoters.

Transfers of Founder Shares and Private Placement Warrants

The founder shares, private placement warrants and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in the letter agreement with us to be entered into by our initial stockholders, directors and officers. Those lock-up provisions provide that such securities are not transferable or salable (1) in the case of the founder shares, until the earlier of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20-trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and (2) in the case of the private placement warrants and the respective shares of Class A common stock underlying such warrants, until 30 days after the completion of our initial business combination, except in each case (a) to our directors or officers, any affiliates or family members of any of our directors or officers, any members of our sponsor, or any affiliates of our sponsor, (b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) in the case of a trust, by distribution to one or more of the permissible beneficiaries of such trust; (f) by private sales or transfers made inTrust Account. In connection with the consummation of a business combination at prices no greater thanBusiness Combination and pursuant to the price at whichSponsor Letter Agreement, the securities were originally purchased; (g) in the event of our liquidation priorSponsor agreed to our completion of our initial business combination; (h) by virtueforfeit all of the laws of Delaware or our sponsor’s limited liability company agreement, as amended, upon dissolution of our sponsor; or (i) in the event of our completion of a liquidation, merger, stock exchange, reorganization or other similar transaction which results in all of our public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.Private Placement Warrants.

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Registration Rights

ThePursuant to a registration rights agreement entered into on February 11, 2021, the holders of the founder shares, private placement warrantsFounder Shares, Private Placement Warrants and any warrants that may be issued onupon conversion of working capital loansWorking Capital Loans (and any shares of Class A common stock issuable upon the exercise of the private placementPrivate Placement Warrants or warrants or warrantsthat may be issued upon conversion of the working capital loansWorking Capital Loans and upon conversion of the founder shares)Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring us to register such securities for resale (in the case of the founder shares,Founder Shares, only after conversion to shares of our Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to ourthe completion of our initial business combinationa Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement will provideprovides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described under “Principal Stockholders — Transfersperiod. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting

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Table of Founder Shares and Private Placement Warrants.”Contents

from delays in registering our securities. We will bear the expenses incurred in connection with the filing of any such registration statements.

125 In connection with the Business Combination, the registration rights agreement was amended and restated.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONSSponsor Letter Agreement

On December 10, 2020, our sponsor paid $25,000,Concurrently with the execution of the Business Combination Agreement, the Sponsor, RCLF and Legacy Spectral entered into the Sponsor Letter Agreement, pursuant to which, among other things, the Sponsor agreed to: (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby; (ii) vote against an arrangement, merger, amalgamation, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution or approximately $0.004 per share,winding up of RCLF; (iii) vote against any changes in the business, management or RCLF’s board other than as required to cover certaineffect the Business Combination; and (iv) vote against any action, agreement or transaction or proposal that would reasonably be expected to result in a breach of our offering costsany covenant, representation or warranty or any other obligation or agreement of RCLF, Merger Sub I or Merger Sub II under the Business Combination Agreement or that would reasonably be expected to result in consideration for 5,750,000 founder shares.the failure of the Business Combination from being consummated in each case, on the terms and subject to the conditions set forth of the Sponsor Letter Agreement. In January 2021, our sponsor transferredaddition, the Sponsor agreed to (i) not redeem or elect to redeem or tender or submit any of its Subject Parent Equity Securities (as defined in the Sponsor Letter Agreement) and (ii) not, directly or indirectly, (a) sell, assign, transfer, pledge, dispose of or otherwise encumber any of the Subject Parent Equity Securities held by the Sponsor, (b) deposit any Subject Parent Equity Securities held by the Sponsor into a totalvoting trust or enter into a voting agreement or arrangement or grant any proxy or power of 130,000 founder shares to our independent director, our director nominee and certain other individuals at their original per-share purchase price. Our initial stockholders will collectively own 20% of our issued and outstanding shares of common stock after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable,attorney with respect to our Class B common stock immediatelyany Subject Parent Equity Securities held by the Sponsor that is inconsistent with the Sponsor Letter Agreement, or (c) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer or other disposition of any Subject Parent Equity Securities held by the Sponsor.

The Sponsor agreed to surrender and forfeit to RCLF the Private Placement Warrants. In addition, the Sponsor and RCLF, was required to notify Legacy Spectral if the accrued and unpaid Parent Expenses (as defined in the Sponsor Letter Agreement) then outstanding were expected to exceed $3,250,000 (the “Excess Expense Amount”). At Closing, the Sponsor took necessary actions such that the Sponsor Credit (as defined in the Sponsor Letter Agreement) equaled or exceeded the Excess Expense Amount; provided that Sponsor was not required to invest in the Sponsor PIPE (as defined below) if Sponsor elected to forfeit 750,000 Sponsor Shares (as defined below). The Sponsor was entitled to a $5.00 credit against the Excess Expense Amount for each Sponsor Share that the Sponsor forfeited and surrendered prior to the consummationClosing. The Sponsor did not need to forfeit any Sponsor Shares.

Administrative Services Agreement

Commencing on February 11, 2021 through the earlier of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering. Upan initial Business Combination and the liquidation of RCLF, RCLF agreed to 750,000 founder shares are subject to forfeiture by our sponsor depending onpay the extent to which the underwriters’ over-allotment option is exercised.

Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants for a purchase price of $1.50 per warrant ($6,000,000 in the aggregate or $6,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant may be exercised for one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion of our initial business combination.

As more fully discussed in “Management — Conflicts of Interest,” if any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our directors and officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

We will enter into a support services agreement pursuant to which we will pay our sponsorSponsor a total of $10,000 per month for office space, support and administrative services. See “CertainFor the three months ended March 31, 2023 and 2022, we accrued $30,000 and $30,000 in fees for these services, of which such amount is included in accrued expenses in the accompanying balance sheet.

Certain Relationships and Related PartyPerson Transactions — Support Services Agreement.” Legacy Spectral

Legacy Spectral Related Party Transactions

Since January 1, 2020, Legacy Spectral did not have any transactions with related parties.

Policies and Procedures for Related Party Transactions

Upon the earlier of consummation of our initial business combinationthe Business Combination, it is anticipated the Company adopted a written related person transaction policy that sets forth the following policies and our liquidation, we will cease paying these monthly fees. Accordingly,procedures for the review and approval or ratification of related person transactions.

A “Related Person Transaction” is a transaction, arrangement or relationship in which the event the consummation of our initial business combination takes 24 months, our sponsor will be paid a total of $240,000 ($10,000 per month) for these services.

Our sponsor, directors and officers,Company or any of their respective affiliates,its subsidiaries was, is or will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, directors, officers or our or any of their respective affiliates and will determine which expenses andparticipant, the amount of expenses thatwhich involved exceeds $120,000, and in which any related person had, has or will be reimbursed. There is no caphave a direct or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

Our sponsor has agreed to loan us up to $300,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of December 31, 2020, we had borrowed $40,000 under such promissory note. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2021 or the closing of this offering. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust account. The value of our sponsor’s interest in this loan transaction corresponds to the principal amount outstanding under any such loan.

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds heldindirect material interest.

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outsideA “Related Person” means:

•        any person who is, or at any time during the applicable period was, one of the Company’s executive officers or a member of the Board of the Company;

•        any person who is known by the Company to be the beneficial owner of more than 5% of its voting stock;

•        any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than 5% of the Company’s voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of the Company’s voting stock; and

•        any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

It is also anticipated that the Company will have policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time.

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Beneficial Ownership of Securities

The following table sets forth information regarding the beneficial ownership of shares of our Common Stock as of October 24, 2023 by:

•        each person known by us to be the beneficial owner of more than 5% of our Common Stock;

•        each person who is a named executive officer or director of the Company; and

•        all executive officers and directors of the Company, as a group.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. A person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security, or has the right to acquire such powers within 60 days.

The beneficial ownership of shares of common stock is calculated based on 15,688,268 shares of Common Stock outstanding as of October 24, 2023.

Unless otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the persons and entities named in the table have sole voting and investment power with respect to their beneficially owned common stock.

Name and Address of Beneficial Owner(1)(2)

 

Number of
Shares
Beneficially
Owned

 

%

Directors and Named Executive Officers of the Company

    

 

Wensheng Fan(5)

 

519,733

 

3.31

%

Cynthia Cai

 

  

 

Richard Cotton

 

32,879

 

*

 

Martin Mellish

 

  

 

Michael P. Murphy(3)(4)

 

848,333

 

5.41

%

Deepak Sadagopan

 

 

*

 

Niko Pagoulatos, Ph.D.(6)

 

32,007

 

*

 

Nils Windler(7)

 

32,007

 

*

 

Jeffrey Thatcher, Ph.D.(8)

 

833,413

 

5.31

%

Vincent Capone(9)

 

32,104

 

*

 

All Directors and Executive Officers of the Company as a Group (10 Individuals)(10)

 

1,810,743

 

11.54

%

     

 

Five Percent Holders

    

 

Erich Spangenberg(11)

 

5,313,705

 

33.87

%

John Michael DiMaio(12)

 

2,479,053

 

15.79

%

Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center(13)

 

862,269

 

5.50

%

Octopus Investments plc(14)

 

960,211

 

6.12

%

____________

*        Less than one percent.

(1)      Unless otherwise noted, the business address of each of the following individuals is c/o Spectral AI, Inc., 2515 McKinney Avenue, Suite 1000, Dallas, Texas 75201.

(2)      Excludes shares issuable pursuant to warrants issued in connection with the IPO, as such warrants are not exercisable until 30 days after the Closing.

(3)      Shares of Common Stock following the conversion of Class B common stock upon the Closing on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities” in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-252478).

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(4)      Rosecliff Acquisition Sponsor I LLC, the Sponsor, is the record holder of 848,333 shares of Common Stock following the conversion of Class B common stock upon the Closing and has a principal place of business in New York. Michael P. Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, which is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our Sponsor. Each of Rosecliff Credit Opportunity Fund I GP, LLC and Rosecliff Credit Opportunity Fund I, L.P. has a principal place of business in New York. Mr. Murphy is a U.S. person living in New York.

(5)      Includes 519,733 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(6)      Consists of 32,007 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(7)      Consists of 32,007 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(8)      Includes 810,135 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(9)      Includes 22,405 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(10)    Includes 1,416,287 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(11)    Includes 577,574 shares held by Erich Spangenberg and 4,158,557 owned by ELS 1960 Family, L.P. The business address of ELS 1960 Family, L.P. is 241 Navajo Street, Miami, Florida 33166. ELS 1960 Family, L.P. is a limited partnership that was established in 2017 for the benefit of Mr. Erich Spangenberg and his heirs. Mr. Spangenberg is currently the majority limited partner of ELS 1960 Family, L.P. and the co-managing partner of ELS 1960 Family GP, LLC which also holds an interest in ELS 1960 Family, L.P.

(12)    The business address for Mr. Dimaio is 4708 Alliance Blvd., Pavilion I, Suite 540, Plano, Texas 75093.

(13)    The business address for Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center is UT Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, Texas 75390

(14)    The business address for Octopus Investments plc is PO Box 10847, Chelmsford CM99 2BU. Octopus Investments is a United Kingdom based financial services company managing more than £12.9 billion on behalf of over 63,000 investors while employing over 750 employees. It is the United Kingdom’s largest provider of venture capital trust account. In(VCT), Enterprise Investment Scheme (EIS) and Business Property Relief (BPR)-qualified investments. VCT, EIS and BPR programs are large UK government-sponsored programs to provide tax and other incentives for institutional and individual investments in areas such as venture capital and commercial real estate transactions.

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SELLING STOCKHOLDERS

This prospectus relates to the eventpossible resale from time to time by the selling stockholders listed in the table below of any or all of the shares of Common Stock or Warrants set forth below pursuant to this prospectus. We are registering such shares of Common Stock and Warrants pursuant to the provisions of the Registration Rights Agreement in order to permit such selling stockholders to offer the Common Stock or Warrants for resale from time to time. When we refer to the “selling stockholders” in this prospectus, we refer to the persons listed in the table below, and the pledgees, donees, transferees, assignees, successors and other permitted transferees that our initial business combination doeshold any of the selling stockholders’ interest in the shares of Common Stock and Warrants after the date of this prospectus.

The table below presents information relating to the selling stockholders concerning the Common Stock and Warrants that may be offered from time to time by each selling stockholder pursuant to this prospectus. This table is prepared based on information supplied to us by or on behalf of the selling stockholders, and reflects holdings as of October 24, 2023. The number of shares of Common Stock and Warrants in the column titled “Securities to be Offered Pursuant to this Prospectus” represents all of the shares of Common Stock and Warrants that the selling stockholders may offer and sell under this prospectus. The selling stockholders may sell some, all or none of their respective shares of Common Stock and Warrants, as applicable, in this offering. We do not close,know how long the selling stockholders will hold their shares of Common Stock and Warrants before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares of Common Stock or Warrants.

The selling stockholders identified below may usehave sold, transferred or otherwise disposed of all or a portion of their securities after the working capitaldate on which they provided us with information regarding their securities. Any changed or new information given to us by the selling stockholders, including regarding the identity of, and the securities held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third partiesby, each selling stockholder, will be willing to loan such funds and provideset forth in a waiver of any and all rights to seek access to funds in our trust account.

After our initial business combination, members of our management team who remain with us may be paid consulting, managementprospectus supplement or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive officer and director compensation.

We have entered into a registration rights agreement with respect to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any), which is described under the heading “Principal Stockholders — Registration Rights.”

Support Services Agreement

We will enter into a support services agreement with our sponsor pursuant to which we will pay a total of $10,000 per month to our sponsor for office space, support and administrative services. Upon the earlier of consummation of our initial business combination and our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes 24 months, our sponsor will be paid a total of $240,000 ($10,000 per month) for these services.

Related Party Policy

We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.

Prior to the closing of this offering, we will adopt our Code of Ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board of directors) or as disclosed in our public filings with the SEC. Under our Code of Ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. A form of the Code of Ethics that we plan to adopt prior to the consummation of this offering is filed as an exhibitamendments to the registration statement of which this prospectus formsis a part.part, if and when necessary. See “Plan of Distribution.”

In addition, our audit committee, pursuant toBeneficial ownership is determined in accordance with the rules and regulations of the SEC. A person is a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote“beneficial owner” of a majoritysecurity if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the memberssecurity, or “investment power,” which includes the power to dispose of or to direct the disposition of the audit committee present at a meeting at which a quorumsecurity, or has the right to acquire such powers within 60 days. The applicable percentage of shares of Common Stock beneficially owned by the selling stockholders shown in the table below is present will be required in order to approve a related party transaction. A majoritybased on an aggregate of 15,688,268 shares of our Common Stock.

Unless otherwise noted, the address of each selling stockholder c/o Spectral AI, Inc., 2515 McKinney Avenue, Suite 1000, Dallas, Texas 75201.

 

Securities
Beneficially
Owned prior
to this
Offering

 

Securities to
be Offered
in this
Offering

 

Securities Beneficially
Owned after this
Offering
(1)

Names and Addresses

 

Shares of
Common
Stock

 

Shares of
Common Stock
(2)

 

Shares of
Common Stock

 



Percentage

Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center(3)

 

862,269

 

862,269

 

 

 

Brian Radecki(4)

 

50,000

 

50,000

 

 

 

ELS 1960 Family, L.P.(5)

 

4,158,557

 

4,158,557

   

 

Frank S. Edmunds(6)

 

40,000

 

40,000

   

 

Heather Bellini(7)

 

40,000

 

40,000

   

 

Jeffrey Thatcher, Ph.D.(8)

 

833,413

 

23,278

 

810,135

 

5.16

%

John Michael DiMaio(9)

 

2,477,855

 

2,477,855

   

 

Michael P. Murphy(10)

 

848,333

 

848,333

 

 

 

Octopus Investments plc(11)

 

960,211

 

960,211

 

 

 

Richard Cotton(12)

 

52,277

 

32,879

 

19,398

 

 

Vincent Capone(13)

 

32,104

 

9,699

 

22,405

 

*

 

BTIG, LLC(14)

 

 

166,667

    

 

Cantor Fitzgerald & Co.(15)

 

 

400,000

    

 

____________

*        Represents beneficial ownership of less than 1% of the membersoutstanding shares of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, directors or officers, or our or any of their respective affiliates.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.Common Stock.

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Furthermore, there will(1)      Assumes the sale of all shares being offered pursuant to this prospectus.

(2)      The amounts set forth in this column are the number of shares of Common Stock that may be no finder’s fees, reimbursementsoffered by such selling stockholder using this prospectus. These amounts do not represent any other shares of our Common Stock that the selling stockholder may own beneficially or cash payments made by usotherwise.

(3)      The business address for Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center is UT Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, Texas 75390.

(4)      Consists of 50,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Brian Radecki is 767 5th Avenue, 34th Floor, New York, New York 10153.

(5)      The business address of ELS 1960 Family, L.P. is 241 Navajo Street, Miami, Florida 33166. ELS 1960 Family, L.P. is a limited partnership that was established in 2017 for the benefit of Mr. Erich Spangenberg and his heirs. Mr. Spangenberg is currently the majority limited partner of ELS 1960 Family, L.P. and the co-managing partner of ELS 1960 Family GP, LLC which also holds an interest in ELS 1960 Family, L.P.

(6)      Consists of 40,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Frank S. Edmunds is 767 5th Avenue, 34th Floor, New York, New York 10153.

(7)      Consists of 40,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Heather Bellini is 767 5th Avenue, 34th Floor, New York, New York 10153.

(8)      Consists of (i) 23,278 shares of Common Stock and (ii) 810,135 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(9)      The business address for Mr. Dimaio is 4708 Alliance Blvd., Pavilion I, Suite 540, Plano, Texas 75093.

(10)    Rosecliff Acquisition Sponsor I LLC, the Sponsor, is the record holder of 848,333 shares of Common Stock following the conversion of Class B common stock upon the Closing and has a principal place of business in New York. Michael P. Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, which is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our Sponsor. Each of Rosecliff Credit Opportunity Fund I GP, LLC and Rosecliff Credit Opportunity Fund I, L.P. has a principal place of business in New York. Mr. Murphy is a U.S. person living in New York.

(11)    The business address for Octopus Investments plc is PO Box 10847, Chelmsford CM99 2BU. Octopus Investments is a United Kingdom based financial services company managing more than £12.9 billion on behalf of over 63,000 investors while employing over 750 employees. It is the United Kingdom’s largest provider of venture capital trust (VCT), Enterprise Investment Scheme (EIS) and Business Property Relief (BPR)-qualified investments. VCT, EIS and BPR programs are large UK government-sponsored programs to our sponsor, directors or officers, or our or anyprovide tax and other incentives for institutional and individual investments in areas such as venture capital and commercial real estate transactions.

(12)    Consists of their respective affiliates,(i) 32,879 shares of Common Stock and (ii) 19,398 shares issuable upon exercise of restricted stock units of the Company, which are exercisable within 60 days of the Closing Date.

(13)    Consists of (i) 9,699 shares of Common Stock and (ii) 22,405 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(14)    The business address for BTIG, LLC is 600 Montgomery Street, 5th Floor, San Francisco, CA 94111. BTIG, LLC provided services rendered to us prior to orthe Company in connection with the completionBusiness Combination and their fees were satisfied through the issuance of our initial business combination,shares of Common Stock. BTIG, LLC is not subject to any lock-up or other restrictions on transfer.

(15)    Cantor Fitzgerald & Co. is the record owner of the securities. CF Group Management, Inc. (“CFGM”) is the managing general partner of Cantor Fitzgerald, L.P. (“CFLP”) and directly or indirectly controls the managing general partner of CF&CO. Howard Lutnick is Chairman and Chief Executive of CFGM and trustee of CFGM’s sole stockholder. CFLP, indirectly, holds a majority of the ownership interests in CF&CO. As such, each of CFLP, CFGM, and Mr. Lutnick may be deemed to have beneficial ownership of the securities directly held by CF&CO. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the following payments, noneextent of which willany pecuniary interest they may have therein, directly or indirectly. The foregoing should not be made from the proceedsconstrued in and of this offering and the saleitself as an admission by any of CFLP, CFGM, or Mr. Lutnick as to beneficial ownership of the private placement warrants held in the trust account prior to the completionsecurities beneficially owned, directly, by CF&CO. The business address of our initial business combination:

CF&CO is 110 East 59•        Repayment of an aggregate of up to $300,000 in loans made to us by our sponsor to cover offering-relatedth and organizational expenses;

•        payment to our sponsor of a total of $10,000 per month for office space, support and administrative services (see “Certain Relationships and Related Party Transactions — Support Services Agreement.”);

•        Payment of customary fees for financial advisory services;

•        Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and

•        Repayment of loans which may be made by our sponsor or an affiliate of our sponsor or certain of our directors and officers to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant at the option of the lender.

The above payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.Street, New York, NY 10022.

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DESCRIPTION OF SECURITIES

Pursuant to our amended and restated certificate of incorporation, our authorized capital stock will consist of 80,000,000 shares of Class A common stock, $0.0001 par value per share, 20,000,000 shares of Class B common stock, $0.0001 par value per share, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value per share. The following description summarizes the materialcertain important terms of our capital stock. Because itstock, including the provisions included in our Charter, Bylaws and the Warrant Agreement. This description is onlynot complete and is qualified by reference to the full text of our Charter, Bylaws and the Warrant Agreement, which are included as exhibits to the registration statement of which this prospectus is a summary, it may not contain allpart, as well as the information that is important to you.applicable provisions of the DGCL.

UnitsAuthorized and Outstanding Capital Stock

Each unit has an offering priceThe Charter authorizes the issuance of $10.00 and consists81,000,000 shares of one sharecapital stock of Class Athe Company, consisting of (i) 80,000,000 shares of common stock, and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50par value $0.0001 per share subject to adjustment as described in this prospectus. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of the company’s(the “Common Stock”), and (ii) 1,000,000 shares of Class A common stock. This means only a whole warrant may be exercised at any given time by a warrant holder.

The shares of Class A commonpreferred stock, and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus (or, if such date is not a business day, the following business day) unless BTIG, LLC informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants. Additionally, the units will automatically separate into their component parts and will not be traded after completion of our initial business combination. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least three units, you will not be able to receive or trade a whole warrant.par value $0.0001 per share (the “Preferred Stock”).

In no event will the shares of Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet of the company reflecting our receipt of the gross proceeds at the closing of this offering. We will file the Current Report on Form 8-K promptly after the closing of this offering which will include this audited balance sheet. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

Common StockFounder Shares

UponDuring the closingperiod ended December 31, 2020, the Sponsor paid $25,000 to cover certain of thisRCLF’s offering 25,000,000 sharescosts in exchange for 5,750,000 Founder Shares. On February 11, 2021, RCLF effected a 1:1.1 stock split of ourits Class B common stock, will be issuedresulting in an aggregate of 6,325,000 shares outstanding. All share and outstanding (assuming no exerciseper-share amounts have been retroactively restated to reflect the stock split. The Founder Shares included an aggregate of up to 825,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of RCLF’s issued and outstanding common stock upon the consummation of the Initial Public Offering. As a result of the underwriter’s election to fully exercise its over-allotmentoption, no Founder Shares were subject to forfeiture. In connection with the Business Combination and pursuant to the corresponding forfeitureSponsor Letter Agreement, the Sponsor agreed to forfeit a certain number of 750,000 founder shares by our sponsor), including:Founder Shares.

•        Amount Due to Sponsor20,000,000

At December 31, 2022 and 2021, RCLF had advances owed to the Sponsor in the amount of $16,152 and $0, respectively.

Private Placement Warrants

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,706,667 warrants in a private placement (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant ($7,060,000 in the aggregate) from RCLF in a private placement. Each whole Private Placement Warrant was exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. A portion of the proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. In connection with the Business Combination and pursuant to the Sponsor Letter Agreement, the Sponsor agreed to forfeit all of the Private Placement Warrants.

Registration Rights

Pursuant to a registration rights agreement entered into on February 11, 2021, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock underlyingissuable upon the units being offered in this offering;exercise of the Private Placement Warrants or warrants that may be issued upon conversion of Working Capital Loans and

•        5,000,000 upon conversion of the Founder Shares) will be entitled to registration rights requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class BA common stock held by our initial stockholders.

Ifstock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we increase or decreaseregister such securities. In addition, the size of this offering, we will effect a stock dividend or share contribution back to capital or other appropriate mechanism, as applicable,holders have certain “piggy-back” registration rights with respect to our Class B common stock immediately priorregistration statements filed subsequent to the consummationcompletion of this offering ina Business Combination and rights to require us to register for resale such amount assecurities pursuant to maintainRule 415 under the number of founder shares at 20% of our issued and outstanding shares of our common stock uponSecurities Act. However, the consummation of this offering.

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders and vote together as a single class, except as required by law; provided,registration rights agreement provides that prior to our initial business combination, holders of our Class B common stock will have the right to elect all of our directors and remove members of the board of directors for any reason, and holders of our Class A common stockwe will not be entitledrequired to vote on the election of directors during such time. These provisions of our amended and restated certificate of incorporation may only be amended if approved by holders of a majority of at least 90%effect or permit any registration or cause any registration statement to become effective until termination of the outstanding sharesapplicable lock-up period. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting

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from delays in registering our securities. We will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Business Combination, the registration rights agreement was amended and restated.

Sponsor Letter Agreement

Concurrently with the execution of the Business Combination Agreement, the Sponsor, RCLF and Legacy Spectral entered into the Sponsor Letter Agreement, pursuant to which, among other things, the Sponsor agreed to: (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby; (ii) vote against an arrangement, merger, amalgamation, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution or winding up of RCLF; (iii) vote against any changes in the business, management or RCLF’s board other than as required to effect the Business Combination; and (iv) vote against any action, agreement or transaction or proposal that would reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of RCLF, Merger Sub I or Merger Sub II under the Business Combination Agreement or that would reasonably be expected to result in the failure of the Business Combination from being consummated in each case, on the terms and subject to the conditions set forth of the Sponsor Letter Agreement. In addition, the Sponsor agreed to (i) not redeem or elect to redeem or tender or submit any of its Subject Parent Equity Securities (as defined in the Sponsor Letter Agreement) and (ii) not, directly or indirectly, (a) sell, assign, transfer, pledge, dispose of or otherwise encumber any of the Subject Parent Equity Securities held by the Sponsor, (b) deposit any Subject Parent Equity Securities held by the Sponsor into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect to any Subject Parent Equity Securities held by the Sponsor that is inconsistent with the Sponsor Letter Agreement, or (c) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer or other disposition of any Subject Parent Equity Securities held by the Sponsor.

The Sponsor agreed to surrender and forfeit to RCLF the Private Placement Warrants. In addition, the Sponsor and RCLF, was required to notify Legacy Spectral if the accrued and unpaid Parent Expenses (as defined in the Sponsor Letter Agreement) then outstanding were expected to exceed $3,250,000 (the “Excess Expense Amount”). At Closing, the Sponsor took necessary actions such that the Sponsor Credit (as defined in the Sponsor Letter Agreement) equaled or exceeded the Excess Expense Amount; provided that Sponsor was not required to invest in the Sponsor PIPE (as defined below) if Sponsor elected to forfeit 750,000 Sponsor Shares (as defined below). The Sponsor was entitled to a $5.00 credit against the Excess Expense Amount for each Sponsor Share that the Sponsor forfeited and surrendered prior to the Closing. The Sponsor did not need to forfeit any Sponsor Shares.

Administrative Services Agreement

Commencing on February 11, 2021 through the earlier of the consummation of an initial Business Combination and the liquidation of RCLF, RCLF agreed to pay the Sponsor a total of $10,000 per month for office space, support and administrative services. For the three months ended March 31, 2023 and 2022, we accrued $30,000 and $30,000 in fees for these services, of which such amount is included in accrued expenses in the accompanying balance sheet.

Certain Relationships and Related Person Transactions — Legacy Spectral

Legacy Spectral Related Party Transactions

Since January 1, 2020, Legacy Spectral did not have any transactions with related parties.

Policies and Procedures for Related Party Transactions

Upon consummation of the Business Combination, it is anticipated the Company adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.

A “Related Person Transaction” is a transaction, arrangement or relationship in which the Company or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest.

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A “Related Person” means:

•        any person who is, or at any time during the applicable period was, one of the Company’s executive officers or a member of the Board of the Company;

•        any person who is known by the Company to be the beneficial owner of more than 5% of its voting stock;

•        any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than 5% of the Company’s voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of the Company’s voting stock; and

•        any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

It is also anticipated that the Company will have policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time.

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Beneficial Ownership of Securities

The following table sets forth information regarding the beneficial ownership of shares of our Common Stock as of October 24, 2023 by:

•        each person known by us to be the beneficial owner of more than 5% of our Common Stock;

•        each person who is a named executive officer or director of the Company; and

•        all executive officers and directors of the Company, as a group.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. A person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security, or has the right to acquire such powers within 60 days.

The beneficial ownership of shares of common stock is calculated based on 15,688,268 shares of Common Stock outstanding as of October 24, 2023.

Unless otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the persons and entities named in the table have sole voting at a stockholder meeting. On any other matter submittedand investment power with respect to a votetheir beneficially owned common stock.

Name and Address of Beneficial Owner(1)(2)

 

Number of
Shares
Beneficially
Owned

 

%

Directors and Named Executive Officers of the Company

    

 

Wensheng Fan(5)

 

519,733

 

3.31

%

Cynthia Cai

 

  

 

Richard Cotton

 

32,879

 

*

 

Martin Mellish

 

  

 

Michael P. Murphy(3)(4)

 

848,333

 

5.41

%

Deepak Sadagopan

 

 

*

 

Niko Pagoulatos, Ph.D.(6)

 

32,007

 

*

 

Nils Windler(7)

 

32,007

 

*

 

Jeffrey Thatcher, Ph.D.(8)

 

833,413

 

5.31

%

Vincent Capone(9)

 

32,104

 

*

 

All Directors and Executive Officers of the Company as a Group (10 Individuals)(10)

 

1,810,743

 

11.54

%

     

 

Five Percent Holders

    

 

Erich Spangenberg(11)

 

5,313,705

 

33.87

%

John Michael DiMaio(12)

 

2,479,053

 

15.79

%

Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center(13)

 

862,269

 

5.50

%

Octopus Investments plc(14)

 

960,211

 

6.12

%

____________

*        Less than one percent.

(1)      Unless otherwise noted, the business address of our stockholders, holderseach of ourthe following individuals is c/o Spectral AI, Inc., 2515 McKinney Avenue, Suite 1000, Dallas, Texas 75201.

(2)      Excludes shares issuable pursuant to warrants issued in connection with the IPO, as such warrants are not exercisable until 30 days after the Closing.

(3)      Shares of Common Stock following the conversion of Class B common stock upon the Closing on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities” in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-252478).

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(4)      Rosecliff Acquisition Sponsor I LLC, the Sponsor, is the record holder of 848,333 shares of Common Stock following the conversion of Class B common stock upon the Closing and holdershas a principal place of business in New York. Michael P. Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, which is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our ClassSponsor. Each of Rosecliff Credit Opportunity Fund I GP, LLC and Rosecliff Credit Opportunity Fund I, L.P. has a principal place of business in New York. Mr. Murphy is a U.S. person living in New York.

(5)      Includes 519,733 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(6)      Consists of 32,007 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(7)      Consists of 32,007 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(8)      Includes 810,135 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(9)      Includes 22,405 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(10)    Includes 1,416,287 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(11)    Includes 577,574 shares held by Erich Spangenberg and 4,158,557 owned by ELS 1960 Family, L.P. The business address of ELS 1960 Family, L.P. is 241 Navajo Street, Miami, Florida 33166. ELS 1960 Family, L.P. is a limited partnership that was established in 2017 for the benefit of Mr. Erich Spangenberg and his heirs. Mr. Spangenberg is currently the majority limited partner of ELS 1960 Family, L.P. and the co-managing partner of ELS 1960 Family GP, LLC which also holds an interest in ELS 1960 Family, L.P.

(12)    The business address for Mr. Dimaio is 4708 Alliance Blvd., Pavilion I, Suite 540, Plano, Texas 75093.

(13)    The business address for Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center is UT Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, Texas 75390

(14)    The business address for Octopus Investments plc is PO Box 10847, Chelmsford CM99 2BU. Octopus Investments is a United Kingdom based financial services company managing more than £12.9 billion on behalf of over 63,000 investors while employing over 750 employees. It is the United Kingdom’s largest provider of venture capital trust (VCT), Enterprise Investment Scheme (EIS) and Business Property Relief (BPR)-qualified investments. VCT, EIS and BPR programs are large UK government-sponsored programs to provide tax and other incentives for institutional and individual investments in areas such as venture capital and commercial real estate transactions.

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SELLING STOCKHOLDERS

This prospectus relates to the possible resale from time to time by the selling stockholders listed in the table below of any or all of the shares of Common Stock or Warrants set forth below pursuant to this prospectus. We are registering such shares of Common Stock and Warrants pursuant to the provisions of the Registration Rights Agreement in order to permit such selling stockholders to offer the Common Stock or Warrants for resale from time to time. When we refer to the “selling stockholders” in this prospectus, we refer to the persons listed in the table below, and the pledgees, donees, transferees, assignees, successors and other permitted transferees that hold any of the selling stockholders’ interest in the shares of Common Stock and Warrants after the date of this prospectus.

The table below presents information relating to the selling stockholders concerning the Common Stock and Warrants that may be offered from time to time by each selling stockholder pursuant to this prospectus. This table is prepared based on information supplied to us by or on behalf of the selling stockholders, and reflects holdings as of October 24, 2023. The number of shares of Common Stock and Warrants in the column titled “Securities to be Offered Pursuant to this Prospectus” represents all of the shares of Common Stock and Warrants that the selling stockholders may offer and sell under this prospectus. The selling stockholders may sell some, all or none of their respective shares of Common Stock and Warrants, as applicable, in this offering. We do not know how long the selling stockholders will hold their shares of Common Stock and Warrants before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares of Common Stock or Warrants.

The selling stockholders identified below may have sold, transferred or otherwise disposed of all or a portion of their securities after the date on which they provided us with information regarding their securities. Any changed or new information given to us by the selling stockholders, including regarding the identity of, and the securities held by, each selling stockholder, will be set forth in a prospectus supplement or amendments to the registration statement of which this prospectus is a part, if and when necessary. See “Plan of Distribution.”

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. A common stock willperson is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote together as a single class, except as requiredor to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security, or has the right to acquire such powers within 60 days. The applicable percentage of shares of Common Stock beneficially owned by applicable law or stock exchange rule.the selling stockholders shown in the table below is based on an aggregate of 15,688,268 shares of our Common Stock.

Unless specified in our amended and restated certificateotherwise noted, the address of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative voteeach selling stockholder c/o Spectral AI, Inc., 2515 McKinney Avenue, Suite 1000, Dallas, Texas 75201.

 

Securities
Beneficially
Owned prior
to this
Offering

 

Securities to
be Offered
in this
Offering

 

Securities Beneficially
Owned after this
Offering
(1)

Names and Addresses

 

Shares of
Common
Stock

 

Shares of
Common Stock
(2)

 

Shares of
Common Stock

 



Percentage

Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center(3)

 

862,269

 

862,269

 

 

 

Brian Radecki(4)

 

50,000

 

50,000

 

 

 

ELS 1960 Family, L.P.(5)

 

4,158,557

 

4,158,557

   

 

Frank S. Edmunds(6)

 

40,000

 

40,000

   

 

Heather Bellini(7)

 

40,000

 

40,000

   

 

Jeffrey Thatcher, Ph.D.(8)

 

833,413

 

23,278

 

810,135

 

5.16

%

John Michael DiMaio(9)

 

2,477,855

 

2,477,855

   

 

Michael P. Murphy(10)

 

848,333

 

848,333

 

 

 

Octopus Investments plc(11)

 

960,211

 

960,211

 

 

 

Richard Cotton(12)

 

52,277

 

32,879

 

19,398

 

 

Vincent Capone(13)

 

32,104

 

9,699

 

22,405

 

*

 

BTIG, LLC(14)

 

 

166,667

    

 

Cantor Fitzgerald & Co.(15)

 

 

400,000

    

 

____________

*        Represents beneficial ownership of holders of a majorityless than 1% of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Class B common stock is required to approve the election or removal of directors. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the Class B common stock voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.

Because our amended and restated certificate of incorporation authorize the issuance of up to 80,000,000 shares of Class A common stock, if we were to enter into a business combination, we may (depending on the terms of such a business combination) be required to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the business combination to the extent we seek stockholder approval in connection with our initial business combination.

In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. We may not hold an annual meeting of stockholders until after we consummate our initial business combination and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial owner must identify itself in order to validly redeem its shares. Our initial stockholders, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in connection with the completion of our initial business combination or certain amendments to our amended and restated certificate of incorporation as described elsewhere in this prospectus. Permitted transferees of our initial stockholders, directors or officers will be subject to the same obligations.

Unlike some blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by applicable law or stock exchange listing requirements, if a stockholder vote is not required by applicable law or stock exchange listing requirements and we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation will require these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain stockholder approval for business or other reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of our common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present inCommon Stock.

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person or by proxy(1)      Assumes the sale of all shares being offered pursuant to this prospectus.

(2)      The amounts set forth in this column are the number of shares of outstanding capital stockCommon Stock that may be offered by such selling stockholder using this prospectus. These amounts do not represent any other shares of our Common Stock that the selling stockholder may own beneficially or otherwise.

(3)      The business address for Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center is UT Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, Texas 75390.

(4)      Consists of 50,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Brian Radecki is 767 5th Avenue, 34th Floor, New York, New York 10153.

(5)      The business address of ELS 1960 Family, L.P. is 241 Navajo Street, Miami, Florida 33166. ELS 1960 Family, L.P. is a limited partnership that was established in 2017 for the benefit of Mr. Erich Spangenberg and his heirs. Mr. Spangenberg is currently the majority limited partner of ELS 1960 Family, L.P. and the co-managing partner of ELS 1960 Family GP, LLC which also holds an interest in ELS 1960 Family, L.P.

(6)      Consists of 40,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Frank S. Edmunds is 767 5th Avenue, 34th Floor, New York, New York 10153.

(7)      Consists of 40,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Heather Bellini is 767 5th Avenue, 34th Floor, New York, New York 10153.

(8)      Consists of (i) 23,278 shares of Common Stock and (ii) 810,135 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(9)      The business address for Mr. Dimaio is 4708 Alliance Blvd., Pavilion I, Suite 540, Plano, Texas 75093.

(10)    Rosecliff Acquisition Sponsor I LLC, the Sponsor, is the record holder of 848,333 shares of Common Stock following the conversion of Class B common stock upon the Closing and has a principal place of business in New York. Michael P. Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, representingwhich is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our Sponsor. Each of Rosecliff Credit Opportunity Fund I GP, LLC and Rosecliff Credit Opportunity Fund I, L.P. has a principal place of business in New York. Mr. Murphy is a U.S. person living in New York.

(11)    The business address for Octopus Investments plc is PO Box 10847, Chelmsford CM99 2BU. Octopus Investments is a United Kingdom based financial services company managing more than £12.9 billion on behalf of over 63,000 investors while employing over 750 employees. It is the United Kingdom’s largest provider of venture capital trust (VCT), Enterprise Investment Scheme (EIS) and Business Property Relief (BPR)-qualified investments. VCT, EIS and BPR programs are large UK government-sponsored programs to provide tax and other incentives for institutional and individual investments in areas such as venture capital and commercial real estate transactions.

(12)    Consists of (i) 32,879 shares of Common Stock and (ii) 19,398 shares issuable upon exercise of restricted stock units of the Company, which are exercisable within 60 days of the Closing Date.

(13)    Consists of (i) 9,699 shares of Common Stock and (ii) 22,405 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(14)    The business address for BTIG, LLC is 600 Montgomery Street, 5th Floor, San Francisco, CA 94111. BTIG, LLC provided services to the Company in connection with the Business Combination and their fees were satisfied through the issuance of shares of Common Stock. BTIG, LLC is not subject to any lock-up or other restrictions on transfer.

(15)    Cantor Fitzgerald & Co. is the record owner of the securities. CF Group Management, Inc. (“CFGM”) is the managing general partner of Cantor Fitzgerald, L.P. (“CFLP”) and directly or indirectly controls the managing general partner of CF&CO. Howard Lutnick is Chairman and Chief Executive of CFGM and trustee of CFGM’s sole stockholder. CFLP, indirectly, holds a majority of the voting powerownership interests in CF&CO. As such, each of all outstandingCFLP, CFGM, and Mr. Lutnick may be deemed to have beneficial ownership of the securities directly held by CF&CO. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The foregoing should not be construed in and of itself as an admission by any of CFLP, CFGM, or Mr. Lutnick as to beneficial ownership of the securities beneficially owned, directly, by CF&CO. The business address of CF&CO is 110 East 59th Street, New York, NY 10022.

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DESCRIPTION OF SECURITIES

The following description summarizes certain important terms of our capital stock, including the provisions included in our Charter, Bylaws and the Warrant Agreement. This description is not complete and is qualified by reference to the full text of our Charter, Bylaws and the Warrant Agreement, which are included as exhibits to the registration statement of which this prospectus is a part, as well as the applicable provisions of the DGCL.

Authorized and Outstanding Capital Stock

The Charter authorizes the issuance of 81,000,000 shares of capital stock of the company entitled to vote at such meeting. However, the participationCompany, consisting of our sponsor, directors, officers, advisors or any of their respective affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our issued and outstanding(i) 80,000,000 shares of common stock, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. We intend to give not less than ten days nor more than 60 days prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorumpar value $0.0001 per share (the “Common Stock”), and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the(ii) 1,000,000 shares of commonpreferred stock, sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the business combination. As a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially at a loss.

If we seek stockholder approval in connection with our initial business combination, our initial stockholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 7,500,001, or 37.5% (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), or 1,250,001, or 6.25% (assuming only the minimum number of shares representing a quorum are voted and the over-allotment option is not exercised), of the 20,000,000 public shares sold in this offering to be voted in favor of an initial business combination in order to have such initial business combination approved. Our directors and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any. Additionally, each public stockholder may elect to redeem its public shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed transaction.

Pursuant to our amended and restated certificate of incorporation, if we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at apar value $0.0001 per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our initial stockholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period. However, if our initial stockholders, directors acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time period.

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In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders at such time will be entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), upon the completion of our initial business combination, subject to the limitations described herein.(the “Preferred Stock”).

Founder Shares

The founder shares are designated as sharesDuring the period ended December 31, 2020, the Sponsor paid $25,000 to cover certain of RCLF’s offering costs in exchange for 5,750,000 Founder Shares. On February 11, 2021, RCLF effected a 1:1.1 stock split of its Class B common stock, resulting in an aggregate of 6,325,000 shares outstanding. All share and are identicalper-share amounts have been retroactively restated to reflect the stock split. The Founder Shares included an aggregate of up to 825,000 shares subject to forfeiture to the shares of Class A common stock includedextent that the underwriters’ over-allotment was not exercised in the units being soldfull or in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that: (1) prior to our initial business combination, only holders of our Class B common stock have the right to vote on the election of directors and holders of a majority of our outstanding shares of Class B common stock may remove a member of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions contained in a letter agreement that our initial stockholders, directors and officers have entered into with us; (3) pursuant to such letter agreement, our initial stockholders, directors and officers have agreed to waive: (i) their redemption rights with respect to any founder shares and public shares held by them, as applicable, in connection with the completion of our initial business combination; (ii) their redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering or during any Extension Period (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame); (4) the founder shares will automatically convert into shares of our Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described in more detail below; and (5) the founder shares are entitled to registration rights directors and officers. If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them purchased during or after this offering in favor of our initial business combination.

The shares of Class B common stock will automatically convert into Class A common stock at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which the shares of Class B common stock will convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance)part, so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock willFounder Shares would equal, in the aggregate, on an as-converted basis, approximately 20% of the sum of all common stockRCLF’s issued and outstanding common stock upon the completionconsummation of this offering plus all sharesthe Initial Public Offering. As a result of Class A common stock and equitythe underwriter’s election to fully exercise its over-linked-allotment securities issued or deemed issued inoption, no Founder Shares were subject to forfeiture. In connection with our initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination.

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Pursuant to a letter agreement that our initial stockholders, directorsthe Business Combination and officers have entered into with us, with certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our directors and officers and other persons or entities affiliated with our sponsor, each of whom will be subjectpursuant to the same transfer restrictions) untilSponsor Letter Agreement, the earlier of: (A) one year afterSponsor agreed to forfeit a certain number of Founder Shares.

Amount Due to Sponsor

At December 31, 2022 and 2021, RCLF had advances owed to the completionSponsor in the amount of our initial business combination;$16,152 and (B) subsequent to our initial business combination (x) if$0, respectively.

Private Placement Warrants

Simultaneously with the last reported saleclosing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,706,667 warrants in a private placement (the “Private Placement Warrants”) at a price of our Class A common stock equals or exceeds $12.00$1.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20-trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property.

Preferred Stock

Our amended and restated certificate of incorporation will authorize 1,000,000 shares of preferred stock and provide that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue shares of preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no shares of preferred stock issued and outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do soPrivate Placement Warrant ($7,060,000 in the future. No shares of preferred stock are being issued or registeredaggregate) from RCLF in this offering.

Redeemable Warrants

Public Stockholders’ Warrants

a private placement. Each whole warrant entitles the registered holderPrivate Placement Warrant was exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. A portion of the proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. In connection with the Business Combination and pursuant to the Sponsor Letter Agreement, the Sponsor agreed to forfeit all of the Private Placement Warrants.

Registration Rights

Pursuant to a registration rights agreement entered into on February 11, 2021, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting

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from delays in registering our securities. We will bear the expenses incurred in connection with the filing of any such registration statements. In connection with the Business Combination, the registration rights agreement was amended and restated.

Sponsor Letter Agreement

Concurrently with the execution of the Business Combination Agreement, the Sponsor, RCLF and Legacy Spectral entered into the Sponsor Letter Agreement, pursuant to which, among other things, the Sponsor agreed to: (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby; (ii) vote against an arrangement, merger, amalgamation, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution or winding up of RCLF; (iii) vote against any changes in the business, management or RCLF’s board other than as required to effect the Business Combination; and (iv) vote against any action, agreement or transaction or proposal that would reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of RCLF, Merger Sub I or Merger Sub II under the Business Combination Agreement or that would reasonably be expected to result in the failure of the Business Combination from being consummated in each case, on the terms and subject to the conditions set forth of the Sponsor Letter Agreement. In addition, the Sponsor agreed to (i) not redeem or elect to redeem or tender or submit any of its Subject Parent Equity Securities (as defined in the Sponsor Letter Agreement) and (ii) not, directly or indirectly, (a) sell, assign, transfer, pledge, dispose of or otherwise encumber any of the Subject Parent Equity Securities held by the Sponsor, (b) deposit any Subject Parent Equity Securities held by the Sponsor into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect to any Subject Parent Equity Securities held by the Sponsor that is inconsistent with the Sponsor Letter Agreement, or (c) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer or other disposition of any Subject Parent Equity Securities held by the Sponsor.

The Sponsor agreed to surrender and forfeit to RCLF the Private Placement Warrants. In addition, the Sponsor and RCLF, was required to notify Legacy Spectral if the accrued and unpaid Parent Expenses (as defined in the Sponsor Letter Agreement) then outstanding were expected to exceed $3,250,000 (the “Excess Expense Amount”). At Closing, the Sponsor took necessary actions such that the Sponsor Credit (as defined in the Sponsor Letter Agreement) equaled or exceeded the Excess Expense Amount; provided that Sponsor was not required to invest in the Sponsor PIPE (as defined below) if Sponsor elected to forfeit 750,000 Sponsor Shares (as defined below). The Sponsor was entitled to a $5.00 credit against the Excess Expense Amount for each Sponsor Share that the Sponsor forfeited and surrendered prior to the Closing. The Sponsor did not need to forfeit any Sponsor Shares.

Administrative Services Agreement

Commencing on February 11, 2021 through the earlier of the consummation of an initial Business Combination and the liquidation of RCLF, RCLF agreed to pay the Sponsor a total of $10,000 per month for office space, support and administrative services. For the three months ended March 31, 2023 and 2022, we accrued $30,000 and $30,000 in fees for these services, of which such amount is included in accrued expenses in the accompanying balance sheet.

Certain Relationships and Related Person Transactions — Legacy Spectral

Legacy Spectral Related Party Transactions

Since January 1, 2020, Legacy Spectral did not have any transactions with related parties.

Policies and Procedures for Related Party Transactions

Upon consummation of the Business Combination, it is anticipated the Company adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.

A “Related Person Transaction” is a transaction, arrangement or relationship in which the Company or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest.

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A “Related Person” means:

•        any person who is, or at any time during the applicable period was, one of the Company’s executive officers or a member of the Board of the Company;

•        any person who is known by the Company to be the beneficial owner of more than 5% of its voting stock;

•        any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than 5% of the Company’s voting stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of the Company’s voting stock; and

•        any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

It is also anticipated that the Company will have policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time.

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Beneficial Ownership of Securities

The following table sets forth information regarding the beneficial ownership of shares of our Common Stock as of October 24, 2023 by:

•        each person known by us to be the beneficial owner of more than 5% of our Common Stock;

•        each person who is a named executive officer or director of the Company; and

•        all executive officers and directors of the Company, as a group.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. A person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security, or has the right to acquire such powers within 60 days.

The beneficial ownership of shares of common stock is calculated based on 15,688,268 shares of Common Stock outstanding as of October 24, 2023.

Unless otherwise noted in the footnotes to the following table, and subject to applicable community property laws, the persons and entities named in the table have sole voting and investment power with respect to their beneficially owned common stock.

Name and Address of Beneficial Owner(1)(2)

 

Number of
Shares
Beneficially
Owned

 

%

Directors and Named Executive Officers of the Company

    

 

Wensheng Fan(5)

 

519,733

 

3.31

%

Cynthia Cai

 

  

 

Richard Cotton

 

32,879

 

*

 

Martin Mellish

 

  

 

Michael P. Murphy(3)(4)

 

848,333

 

5.41

%

Deepak Sadagopan

 

 

*

 

Niko Pagoulatos, Ph.D.(6)

 

32,007

 

*

 

Nils Windler(7)

 

32,007

 

*

 

Jeffrey Thatcher, Ph.D.(8)

 

833,413

 

5.31

%

Vincent Capone(9)

 

32,104

 

*

 

All Directors and Executive Officers of the Company as a Group (10 Individuals)(10)

 

1,810,743

 

11.54

%

     

 

Five Percent Holders

    

 

Erich Spangenberg(11)

 

5,313,705

 

33.87

%

John Michael DiMaio(12)

 

2,479,053

 

15.79

%

Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center(13)

 

862,269

 

5.50

%

Octopus Investments plc(14)

 

960,211

 

6.12

%

____________

*        Less than one percent.

(1)      Unless otherwise noted, the business address of each of the following individuals is c/o Spectral AI, Inc., 2515 McKinney Avenue, Suite 1000, Dallas, Texas 75201.

(2)      Excludes shares issuable pursuant to warrants issued in connection with the IPO, as such warrants are not exercisable until 30 days after the Closing.

(3)      Shares of Common Stock following the conversion of Class B common stock upon the Closing on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities” in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-252478).

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(4)      Rosecliff Acquisition Sponsor I LLC, the Sponsor, is the record holder of 848,333 shares of Common Stock following the conversion of Class B common stock upon the Closing and has a principal place of business in New York. Michael P. Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, which is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our Sponsor. Each of Rosecliff Credit Opportunity Fund I GP, LLC and Rosecliff Credit Opportunity Fund I, L.P. has a principal place of business in New York. Mr. Murphy is a U.S. person living in New York.

(5)      Includes 519,733 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(6)      Consists of 32,007 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(7)      Consists of 32,007 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(8)      Includes 810,135 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(9)      Includes 22,405 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(10)    Includes 1,416,287 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(11)    Includes 577,574 shares held by Erich Spangenberg and 4,158,557 owned by ELS 1960 Family, L.P. The business address of ELS 1960 Family, L.P. is 241 Navajo Street, Miami, Florida 33166. ELS 1960 Family, L.P. is a limited partnership that was established in 2017 for the benefit of Mr. Erich Spangenberg and his heirs. Mr. Spangenberg is currently the majority limited partner of ELS 1960 Family, L.P. and the co-managing partner of ELS 1960 Family GP, LLC which also holds an interest in ELS 1960 Family, L.P.

(12)    The business address for Mr. Dimaio is 4708 Alliance Blvd., Pavilion I, Suite 540, Plano, Texas 75093.

(13)    The business address for Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center is UT Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, Texas 75390

(14)    The business address for Octopus Investments plc is PO Box 10847, Chelmsford CM99 2BU. Octopus Investments is a United Kingdom based financial services company managing more than £12.9 billion on behalf of over 63,000 investors while employing over 750 employees. It is the United Kingdom’s largest provider of venture capital trust (VCT), Enterprise Investment Scheme (EIS) and Business Property Relief (BPR)-qualified investments. VCT, EIS and BPR programs are large UK government-sponsored programs to provide tax and other incentives for institutional and individual investments in areas such as venture capital and commercial real estate transactions.

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SELLING STOCKHOLDERS

This prospectus relates to the possible resale from time to time by the selling stockholders listed in the table below of any or all of the shares of Common Stock or Warrants set forth below pursuant to this prospectus. We are registering such shares of Common Stock and Warrants pursuant to the provisions of the Registration Rights Agreement in order to permit such selling stockholders to offer the Common Stock or Warrants for resale from time to time. When we refer to the “selling stockholders” in this prospectus, we refer to the persons listed in the table below, and the pledgees, donees, transferees, assignees, successors and other permitted transferees that hold any of the selling stockholders’ interest in the shares of Common Stock and Warrants after the date of this prospectus.

The table below presents information relating to the selling stockholders concerning the Common Stock and Warrants that may be offered from time to time by each selling stockholder pursuant to this prospectus. This table is prepared based on information supplied to us by or on behalf of the selling stockholders, and reflects holdings as of October 24, 2023. The number of shares of Common Stock and Warrants in the column titled “Securities to be Offered Pursuant to this Prospectus” represents all of the shares of Common Stock and Warrants that the selling stockholders may offer and sell under this prospectus. The selling stockholders may sell some, all or none of their respective shares of Common Stock and Warrants, as applicable, in this offering. We do not know how long the selling stockholders will hold their shares of Common Stock and Warrants before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale of any of the shares of Common Stock or Warrants.

The selling stockholders identified below may have sold, transferred or otherwise disposed of all or a portion of their securities after the date on which they provided us with information regarding their securities. Any changed or new information given to us by the selling stockholders, including regarding the identity of, and the securities held by, each selling stockholder, will be set forth in a prospectus supplement or amendments to the registration statement of which this prospectus is a part, if and when necessary. See “Plan of Distribution.”

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. A person is a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of the security, or “investment power,” which includes the power to dispose of or to direct the disposition of the security, or has the right to acquire such powers within 60 days. The applicable percentage of shares of Common Stock beneficially owned by the selling stockholders shown in the table below is based on an aggregate of 15,688,268 shares of our Common Stock.

Unless otherwise noted, the address of each selling stockholder c/o Spectral AI, Inc., 2515 McKinney Avenue, Suite 1000, Dallas, Texas 75201.

 

Securities
Beneficially
Owned prior
to this
Offering

 

Securities to
be Offered
in this
Offering

 

Securities Beneficially
Owned after this
Offering
(1)

Names and Addresses

 

Shares of
Common
Stock

 

Shares of
Common Stock
(2)

 

Shares of
Common Stock

 



Percentage

Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center(3)

 

862,269

 

862,269

 

 

 

Brian Radecki(4)

 

50,000

 

50,000

 

 

 

ELS 1960 Family, L.P.(5)

 

4,158,557

 

4,158,557

   

 

Frank S. Edmunds(6)

 

40,000

 

40,000

   

 

Heather Bellini(7)

 

40,000

 

40,000

   

 

Jeffrey Thatcher, Ph.D.(8)

 

833,413

 

23,278

 

810,135

 

5.16

%

John Michael DiMaio(9)

 

2,477,855

 

2,477,855

   

 

Michael P. Murphy(10)

 

848,333

 

848,333

 

 

 

Octopus Investments plc(11)

 

960,211

 

960,211

 

 

 

Richard Cotton(12)

 

52,277

 

32,879

 

19,398

 

 

Vincent Capone(13)

 

32,104

 

9,699

 

22,405

 

*

 

BTIG, LLC(14)

 

 

166,667

    

 

Cantor Fitzgerald & Co.(15)

 

 

400,000

    

 

____________

*        Represents beneficial ownership of less than 1% of the outstanding shares of our Common Stock.

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(1)      Assumes the sale of all shares being offered pursuant to this prospectus.

(2)      The amounts set forth in this column are the number of shares of Common Stock that may be offered by such selling stockholder using this prospectus. These amounts do not represent any other shares of our Common Stock that the selling stockholder may own beneficially or otherwise.

(3)      The business address for Board of Regents of the University of Texas System for the Benefit of the University of Texas Southwestern Medical Center is UT Southwestern Medical Center, 5323 Harry Hines Blvd., Dallas, Texas 75390.

(4)      Consists of 50,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Brian Radecki is 767 5th Avenue, 34th Floor, New York, New York 10153.

(5)      The business address of ELS 1960 Family, L.P. is 241 Navajo Street, Miami, Florida 33166. ELS 1960 Family, L.P. is a limited partnership that was established in 2017 for the benefit of Mr. Erich Spangenberg and his heirs. Mr. Spangenberg is currently the majority limited partner of ELS 1960 Family, L.P. and the co-managing partner of ELS 1960 Family GP, LLC which also holds an interest in ELS 1960 Family, L.P.

(6)      Consists of 40,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Frank S. Edmunds is 767 5th Avenue, 34th Floor, New York, New York 10153.

(7)      Consists of 40,0000 shares of Common Stock following the conversion of Class B common stock upon the Closing. The business address for Heather Bellini is 767 5th Avenue, 34th Floor, New York, New York 10153.

(8)      Consists of (i) 23,278 shares of Common Stock and (ii) 810,135 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(9)      The business address for Mr. Dimaio is 4708 Alliance Blvd., Pavilion I, Suite 540, Plano, Texas 75093.

(10)    Rosecliff Acquisition Sponsor I LLC, the Sponsor, is the record holder of 848,333 shares of Common Stock following the conversion of Class B common stock upon the Closing and has a principal place of business in New York. Michael P. Murphy is the managing member of Rosecliff Credit Opportunity Fund I GP, LLC, a Delaware limited liability company, which is the general partner of Rosecliff Credit Opportunity Fund I, L.P., a Delaware limited partnership, which is the managing member of our Sponsor. Each of Rosecliff Credit Opportunity Fund I GP, LLC and Rosecliff Credit Opportunity Fund I, L.P. has a principal place of business in New York. Mr. Murphy is a U.S. person living in New York.

(11)    The business address for Octopus Investments plc is PO Box 10847, Chelmsford CM99 2BU. Octopus Investments is a United Kingdom based financial services company managing more than £12.9 billion on behalf of over 63,000 investors while employing over 750 employees. It is the United Kingdom’s largest provider of venture capital trust (VCT), Enterprise Investment Scheme (EIS) and Business Property Relief (BPR)-qualified investments. VCT, EIS and BPR programs are large UK government-sponsored programs to provide tax and other incentives for institutional and individual investments in areas such as venture capital and commercial real estate transactions.

(12)    Consists of (i) 32,879 shares of Common Stock and (ii) 19,398 shares issuable upon exercise of restricted stock units of the Company, which are exercisable within 60 days of the Closing Date.

(13)    Consists of (i) 9,699 shares of Common Stock and (ii) 22,405 shares issuable upon exercise of stock options of the Company which are exercisable within 60 days of the Closing Date.

(14)    The business address for BTIG, LLC is 600 Montgomery Street, 5th Floor, San Francisco, CA 94111. BTIG, LLC provided services to the Company in connection with the Business Combination and their fees were satisfied through the issuance of shares of Common Stock. BTIG, LLC is not subject to any lock-up or other restrictions on transfer.

(15)    Cantor Fitzgerald & Co. is the record owner of the securities. CF Group Management, Inc. (“CFGM”) is the managing general partner of Cantor Fitzgerald, L.P. (“CFLP”) and directly or indirectly controls the managing general partner of CF&CO. Howard Lutnick is Chairman and Chief Executive of CFGM and trustee of CFGM’s sole stockholder. CFLP, indirectly, holds a majority of the ownership interests in CF&CO. As such, each of CFLP, CFGM, and Mr. Lutnick may be deemed to have beneficial ownership of the securities directly held by CF&CO. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The foregoing should not be construed in and of itself as an admission by any of CFLP, CFGM, or Mr. Lutnick as to beneficial ownership of the securities beneficially owned, directly, by CF&CO. The business address of CF&CO is 110 East 59th Street, New York, NY 10022.

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DESCRIPTION OF SECURITIES

The following description summarizes certain important terms of our capital stock, including the provisions included in our Charter, Bylaws and the Warrant Agreement. This description is not complete and is qualified by reference to the full text of our Charter, Bylaws and the Warrant Agreement, which are included as exhibits to the registration statement of which this prospectus is a part, as well as the applicable provisions of the DGCL.

Authorized and Outstanding Capital Stock

The Charter authorizes the issuance of 81,000,000 shares of capital stock of the Company, consisting of (i) 80,000,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”).

Common Stock

Voting Rights

Holders of Common Stock are entitled to cast one vote per share of Common Stock on all matters to be voted on by stockholders. Holders of Common Stock will vote together as a single class, and an action will be approved by stockholders if the number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, while directors will be elected by a plurality of the votes cast. Holders of Common Stock are not entitled to cumulate their votes in the election of directors.

When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting will be decided by a majority vote of the holders of shares of capital stock present or represented at the meeting and voting affirmatively or negatively on such matter. At all meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast will be sufficient to elect such directors.

Dividend Rights

Subject to preferences that may apply to any Preferred Stock, holders of Common Stock will be entitled to the payment of dividends at the times and in the amounts as the Board in its discretion may determine.

Liquidation, Dissolution and Winding Up

On the liquidation, dissolution, distribution of assets or winding up of the Company, each holder of Common Stock will be entitled, pro rata on a per share basis, to all assets of the Company of whatever kind available for distribution to the holders of Common Stock, subject to the designations, preferences, limitations, restrictions and relative rights of any Preferred Stock then outstanding.

Other Matters

The holders of Common Stock will not have redemption, conversion, preemptive or other subscription rights and there will be no sinking fund provisions applicable to Common Stock. All of the outstanding shares of Common Stock are validly issued, fully paid and non-assessable.

Preferred Stock

General

The Charter provides that the Board has the authority, without action by the stockholders, to designate and issue shares of Preferred Stock in one or more series, and the number of shares constituting any such series, and to fix the voting powers, designations, preferences, limitations, restrictions and relative rights of each series of Preferred Stock, including, without limitation, dividend rights, conversion rights, rights and terms of redemption, and liquidation preferences, which rights may be greater than the rights of the holders of Common Stock.

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The purpose of authorizing the Board to issue Preferred Stock and determine the rights and preferences of any series of Preferred Stock is to eliminate delays associated with a stockholder vote on specific issuances. The simplified issuance of Preferred Stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Additionally, the issuance of Preferred Stock may adversely affect the holders of Common Stock by restricting dividends on Common Stock, diluting the voting power of Common Stock or subordinating the dividend or liquidation rights of Common Stock. As a result of these or other factors, the issuance of preferred stock could have an adverse impact on the market price of Common Stock.

Warrants

Each whole Warrant entitles the registered holder to purchase one share of our Common Stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, except as described below.Business Combination. Pursuant to the warrant agreement,Warrant Agreement, a warrantWarrant holder may exercise its warrantsWarrants only for a whole number of shares of Class A common stock.Common Stock. This means that only a whole warrantWarrant may be exercised at aany given time by a warrant holder. No fractional warrantsWarrants will be issued upon separation of the units and only whole warrantsWarrants will trade. Accordingly,trade on Nasdaq.

No Warrant will be exercisable for cash unless you purchase at least three units, you will not be able to receive or trade a whole warrant. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

We will not be obligated to deliver any Class A common stock pursuant to the exercise of a warrantwe have an effective and will have no obligation to settle such warrant exercise unless acurrent registration statement under the Securities Act covering the issuance of the shares of Class A common stockCommon Stock issuable upon exercise of the warrants is then effectiveWarrants and a current prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration, or a valid exemption from registration is available, including in connection with a cashless exercise permitted as a resultsuch shares of a notice of redemption described below under “Redemption of warrants whenCommon Stock. Notwithstanding the price per share of Class A common stock equals or exceeds $10.00.” No warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unlessforegoing, if the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.

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We are not registeringcovering the shares of Class A common stockCommon Stock issuable upon exercise of the warrants at this time. However, we have agreed thatWarrants is not effective within 60 days from the Closing, warrant holders may, until such time as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file with the SEC athere is an effective registration statement covering the issuance,and during any period when we shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act, of the Class A common stock issuable upon exercise of the warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

Notwithstanding the above, if our shares of Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but will use our commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.Act. In such event, each holder would pay the exercise price by surrendering the warrantswhole Warrant for that number of shares of Class A common stockCommon Stock equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of shares of Class A common stockCommon Stock underlying the warrants, Warrants, multiplied by the excess of the “fair market value” (defined below) lessdifference between the exercise price of the warrantsWarrant and the “fair market value” by (y) the fair market value and (B) 0.361.value. The “fair market value” as used in the preceding sentence shall mean the volume weighted average reported trading price of the shares of Class A common stockCommon Stock for the ten (10) trading days ending on the trading day prior to the date on whichof exercise. The Warrants will expire five years from the notice of exercise is received byClosing at 5:00 p.m., New York City time.

The outstanding Warrants (excluding the warrant agent.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00.    Once the warrants become exercisable, we may redeem the warrants (except as described herein with respect toWarrants issued in the private placement warrants):

•        placements contemporaneously with the IPO) may be called for redemption, in whole and not in part;

•        part, at a price of $0.01 per warrant;warrant:

•        at any time after the Warrants become exercisable;

•        upon not less than 30 days’ prior written notice of redemption to each warrant holder;

•        if, and only if, the reported last reported sale price of our Class A common stockthe shares of Common Stock equals or exceeds $18.00 per share, for any 20-trading trading days within a 30-trading-day trading period commencing after the Warrants become exercisable and ending on the third business day prior to the notice of redemption to Warrant holders; and

•        if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying such Warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

The right to exercise will be forfeited unless the Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a Warrant will have no further rights except to receive the redemption price for such holder’s Warrants upon surrender of such Warrants.

The redemption criteria for the Warrants have been established at a price which is intended to provide Warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the Warrant exercise price so that if the share price declines as a result of a redemption call, the redemption will not cause the share price to drop below the exercise price of the Warrant.

If the Warrants are called for redemption as described above, management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained

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by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the exercise price of the Warrant and the “fair market value” by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported closing price of the shares of Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (which we refer to as the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”).

We will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.

We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.

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Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00.    Once the warrants become exercisable, we may redeem the outstanding warrants:

•        in whole and not in part;

•        at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A common stock (as defined below) except as otherwise described below;

•        if, and only if, the Reference Value (as defined above under “Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00”) equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”); and

•        if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Redeemable Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.

During the period beginning on the date the notice of redemption is given, holders may elect to exercise their warrants on a cashless basis. The numbers in the table below represent the number of shares of Class A common stock that a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature, based on the “fair market value” of our Class A common stock on the corresponding redemption date (assuming holders elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based on volume weighted average price of our Class A common stock during the ten trading days immediately following the date on which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with the final fair market value no later than one business day after the ten-trading day period described above ends.

Pursuant to the warrant agreement, references above to Class A common stock shall include a security other than Class A common stock into which the Class A common stock have been converted or exchanged for in the event we are not the surviving company in our initial business combination. The numbers in the table below will not be adjusted when determining the number of shares of Class A common stock to be issued upon exercise of the warrants if we are not the surviving entity following our initial business combination.

The share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares issuable upon exercise of a warrant or the exercise price of a warrant is adjusted as set forth under the heading “— Anti-dilution Adjustments” below. If the number of shares issuable upon exercise of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the number of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number of shares deliverable upon exercise of a warrant as so adjusted. The number of shares in the table below shall be adjusted in the same manner and at the same time as the number of shares issuable upon exercise of a warrant. If the exercise price of a warrant is adjusted, (a) in the case of an adjustment pursuant to the fifth paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the Newly Issued Price as set forth under the heading “— Anti-dilution Adjustments” and the denominator of which is $10.00 and (b) in the

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case of an adjustment pursuant to the second paragraph under the heading “— Anti-dilution Adjustments” below, the adjusted share prices in the column headings will equal the unadjusted share price less the decrease in the exercise price of a warrant pursuant to such exercise price adjustment.

Redemption Date (period to
expiration of warrants)

 

Fair Market Value of Class A Common Stock

≤10.00

 

11.00

 

12.00

 

13.00

 

14.00

 

15.00

 

16.00

 

17.00

 

≥18.00

60 months

 

0.261

 

0.281

 

0.297

 

0.311

 

0.324

 

0.337

 

0.348

 

0.358

 

0.361

57 months

 

0.257

 

0.277

 

0.294

 

0.310

 

0.324

 

0.337

 

0.348

 

0.358

 

0.361

54 months

 

0.252

 

0.272

 

0.291

 

0.307

 

0.322

 

0.335

 

0.347

 

0.357

 

0.361

51 months

 

0.246

 

0.268

 

0.287

 

0.304

 

0.320

 

0.333

 

0.346

 

0.357

 

0.361

48 months

 

0.241

 

0.263

 

0.283

 

0.301

 

0.317

 

0.332

 

0.344

 

0.356

 

0.361

45 months

 

0.235

 

0.258

 

0.279

 

0.298

 

0.315

 

0.330

 

0.343

 

0.356

 

0.361

42 months

 

0.228

 

0.252

 

0.274

 

0.294

 

0.312

 

0.328

 

0.342

 

0.355

 

0.361

39 months

 

0.221

 

0.246

 

0.269

 

0.290

 

0.309

 

0.325

 

0.340

 

0.354

 

0.361

36 months

 

0.213

 

0.239

 

0.263

 

0.285

 

0.305

 

0.323

 

0.339

 

0.353

 

0.361

33 months

 

0.205

 

0.232

 

0.257

 

0.280

 

0.301

 

0.320

 

0.337

 

0.352

 

0.361

30 months

 

0.196

 

0.224

 

0.250

 

0.274

 

0.297

 

0.316

 

0.335

 

0.351

 

0.361

27 months

 

0.185

 

0.214

 

0.242

 

0.268

 

0.291

 

0.313

 

0.332

 

0.350

 

0.361

24 months

 

0.173

 

0.204

 

0.233

 

0.260

 

0.285

 

0.308

 

0.329

 

0.348

 

0.361

21 months

 

0.161

 

0.193

 

0.223

 

0.252

 

0.279

 

0.304

 

0.326

 

0.347

 

0.361

18 months

 

0.146

 

0.179

 

0.211

 

0.242

 

0.271

 

0.298

 

0.322

 

0.345

 

0.361

15 months

 

0.130

 

0.164

 

0.197

 

0.230

 

0.262

 

0.291

 

0.317

 

0.342

 

0.361

12 months

 

0.111

 

0.146

 

0.181

 

0.216

 

0.250

 

0.282

 

0.312

 

0.339

 

0.361

9 months

 

0.090

 

0.125

 

0.162

 

0.199

 

0.237

 

0.272

 

0.305

 

0.336

 

0.361

6 months

 

0.065

 

0.099

 

0.137

 

0.178

 

0.219

 

0.259

 

0.296

 

0.331

 

0.361

3 months

 

0.034

 

0.065

 

0.104

 

0.150

 

0.197

 

0.243

 

0.286

 

0.326

 

0.361

0 months

 

 

 

0.042

 

0.115

 

0.179

 

0.233

 

0.281

 

0.323

 

0.361

The exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Class A common stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of our Class A common stock during the ten trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $11.00 per share, andWarrants. Whether we will exercise our option to require all holders to exercise their Warrants on a “cashless basis” will depend on a variety of factors including the price of the Common Stock at the time the Warrants are called for redemption, our cash needs at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.277 shares of Class A common stock for each whole warrant. For an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted average price of our Class A common stock during the ten trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is $13.50 perconcerns regarding dilutive share and at such time there are 38 months until the expiration of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 shares of Class A common stock for each whole warrant. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment). Finally, as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any shares of Class A common stock.issuances.

This redemption feature differs from the typical warrant redemption features used in some other blank check offerings, which typically only provide for a redemption of warrants for cash (other than the private placement warrants) when the trading price for the Class A common stock exceeds $18.00 per share for a specified period of time. This redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the shares of Class A common stock are trading at or above $10.00 per share, which may be at a time when the trading price of our Class A common stock is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to redeem the warrants without the warrants having to reach the $18.00 per share threshold set forth above under “— Redemption of warrants when the price per share of Class A common

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stock equals or exceeds $18.00.” Holders choosing to exercise their warrants in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based on an option pricing model with a fixed volatility input as of the date of this prospectus. This redemption right provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to our capital structure as the warrants would no longer be outstanding and wouldThe Warrants have been exercised or redeemed. We will be required to pay the applicable redemption price to warrant holders if we choose to exercise this redemption right and it will allow us to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants and pay the redemption price to the warrant holders.

As stated above, we can redeem the warrants when the shares of Class A common stock are trading at a price starting at $10.00, which is below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number of shares. If we choose to redeem the warrants when the shares of Class A common stock are trading at a price below the exercise price of the warrants, this could result in the warrant holders receiving fewer shares of Class A common stock than they would have received if they had chosen to exercise their warrants for shares of Class A common stock if and when such shares of Class A common stock were trading at a price higher than the exercise price of $11.50.

No fractional shares of Class A common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A common stock to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than the shares of Class A common stock pursuant to the warrant agreement (for instance, if we are not the surviving company in our initial business combination), the warrants may be exercised for such security. At such time as the warrants become exercisable for a security other than the shares of Class A common stock, the Company (or surviving company) will use its commercially reasonable efforts to register under the Securities Act the security issuable upon the exercise of the warrants.

Redemption Procedures.    A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of Class A common stock issued and outstanding immediately after giving effect to such exercise.

Anti-dilution Adjustments.    If the number of issued and outstanding shares of Class A common stock is increased by a stock dividend payable in shares of Class A common stock, or by a split-up of shares of Class A common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the issued and outstanding shares of Class A common stock. A rights offering made to all or substantially all holders of Class A common stock entitling holders to purchase shares of Class A common stock at a price less than the “historical fair market value” (as defined below) will be deemed a share dividend of a number of shares of Class A common stock equal to the product of (1) the number of shares of Class A common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for shares of Class A common stock) and (2) one minus the quotient of (x) the price per share of Class A common stock paid in such rights offering and (y) the historical fair market value. For these purposes, (1) if the rights offering is for securities convertible into or exercisable for shares of Class A common stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (2) “historical fair market value” means the volume weighted average price of Class A common stock during the ten-trading day period ending on the trading day prior to the first date on which the shares of Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if we, at any time while the warrants are outstanding and unexpired, pay to all or substantially all of the holders of Class A common stock a dividend or make a distribution in cash, securities or other assets to the holders of Class A common stock on account of such shares of Class A common stock (or other securities into which the warrants are convertible), other than (a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash distributions paid on the Class A

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common stock during the 365-day period ending on the date of declaration of such dividend or distribution does not exceed $0.50 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less than $0.50 per share, (c) to satisfy the redemption rights of the holders of Class A common stock in connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each shares of Class A common stock in respect of such event.

If the number of issued and outstanding shares of Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in issued and outstanding shares of Class A common stock.

Whenever the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the number of shares of Class A common stock so purchasable immediately thereafter.

In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20-trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 and $10.00 per share redemption trigger prices described above under “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00” and “— Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 180% and 100%, respectively, of the higher of the Market Value and the Newly Issued Price.

In case of any reclassification or reorganization of the issued and outstanding shares of Class A common stock (other than those described above or that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a merger or consolidation in which we are the continuing corporation and that does not result in any reclassification or reorganization of our issued and outstanding shares of Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares, stock or other equity securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of

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securities, cash or other assets receivable upon such merger or consolidation, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such merger or consolidation that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or as a result of the redemption of shares of Class A common stock by the company if a proposed initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding shares of Class A common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the shares of Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Class A common stock in such a transaction is payable in the form of Class A common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within 30 days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant.

The warrants will be issued in registered form under a warrant agreementWarrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us.RCLF. The warrant agreementWarrant Agreement provides that (a) the terms of the warrantsWarrants may be amended without the consent of any holder for the purpose of (i) curingto cure any ambiguity or correct any mistake, including to conformdefective provision, but requires the provisionsapproval, by written consent or vote, of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision or (ii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered holders of the warrants and (b) all other modifications or amendments require the vote or written consent of at least 65% of the then outstanding public warrants and, solely with respectWarrants in order to make any amendment tochange that adversely affects the termsinterests of the private placement warrantsregistered holders.

The exercise price and number of shares of Common Stock issuable on exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or any provisionour recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuances of shares of Common Stock at a price below their respective exercise prices.

The Warrants may be exercised upon surrender of the warrant agreement with respectcertificate on or prior to the private placement warrants,expiration date at least 65% of the then outstanding private placement warrants. You should review a copyoffices of the warrant agreement, which will be filed as an exhibit toagent, with the registration statement of which this prospectus is a part, for a complete descriptionexercise form on the reverse side of the termsWarrant certificate completed and conditions applicableexecuted as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to us, for the warrants.

number of Warrants being exercised. The warrantWarrant holders do not have the rights or privileges of holders of common stockshares of Common Stock and any voting rights until they exercise their warrantsWarrants and receive shares of Class A common stock.Common Stock. After the issuance of shares of Class A common stockCommon Stock upon exercise of the warrants,Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

Except as described above, no Warrants will be exercisable for cash and we will not be obligated to issue shares of Common Stock unless at the time a holder seeks to exercise such warrants, a prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants is current and the shares of Common Stock have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants. Under the terms of the Warrant Agreement, we have agreed to use commercially reasonable efforts to meet these conditions and to maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants until the expiration of the Warrants. However, we cannot assure you that we will be able to do so and, if we do not maintain a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants, holders will be unable to exercise their Warrants, and we will not be required to settle any such warrant exercise. If the prospectus relating to the shares of Common Stock issuable upon the exercise of the Warrants is not current or if the Common Stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the Warrants reside, we will not be required to net cash settle or cash settle the warrant exercise, the Warrants may have no value, the market for the Warrants may be limited and the Warrants may expire worthless.

Warrant holders may elect to be subject to a restriction on the exercise of their Warrants such that an electing Warrant holder would not be able to exercise their Warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of Common Stock outstanding.

No fractional warrantsshares will be issued upon separationexercise of the units and onlyWarrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole warrants will trade.number the number of shares of Common Stock to be issued to the Warrant holder.

We have agreedThe Warrant Agreement provides that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreementWarrant Agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors — Our warrant agreement will designateNotwithstanding the courtsforegoing, these provisions of the State of New YorkWarrant Agreement will not apply to suits brought to enforce any liability or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiatedduty created by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under the Securities Act but does not apply to claims underor the Exchange Act (or the rules and regulations thereunder) or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.

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Private Placement WarrantsRegistration Rights and Lock-up Agreement

At the Closing, the Company, the Sponsor and certain stockholders of Legacy Spectral and RCLF entered into the Registration Rights/Lock-Up Agreement, pursuant to which, among other things, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, shares of Common Stock that are held by the parties thereto from time to time. Pursuant to the Registration Rights/Lock-Up Agreement, the Company will agree to file a shelf registration statement registering the resale of the Common Stock within 45 days of the Closing. Up to twice in any 12-month period, certain Legacy Spectral stockholders and the Sponsor may request to sell all or any portion of their Registrable Securities (as defined in the Registration Rights/Lock-Up Agreement) in an underwritten offering so long as the total offering price is reasonably expected to exceed $10 million. The private placement warrantsCompany also agreed to provide customary “piggyback” registration rights, subject to certain requirements and customary conditions. The Registration Rights/Lock-Up Agreement will provides that the Company will pay certain expenses relating to such registrations and indemnify the stockholders against certain liabilities.

In addition, pursuant to the Registration Rights/Lock-up Agreements, Legacy Spectral stockholders party to the agreement agreed, among other things and subject to limited exceptions, that their shares received as consideration in the First Merger (including New Awards and shares issuable upon exercise or conversion of New Awards) may not be transferred until the date that is six months following Closing, and the Sponsor and other holders of Founder Shares agreed, among other things, that the shares of Class A common stock issuable upon exerciseCommon Stock held by the Sponsor (other than shares acquired in any potential Private Placement or shares acquired in the public market) may not be transferred until the date that is six months following the Closing.

Exclusive Forum

The Charter provides that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the private placement warrants) will notState of Delaware (the “Chancery Court”) shall be transferable, assignablethe sole and exclusive forum for any stockholder (including a beneficial owner) to bring: (i) any derivative action or salable until 30 days afterproceeding brought on the completionCompany’s behalf; (ii) any action, suit or proceeding asserting a claim of our initial business combination (except, amongbreach of fiduciary duty owed by any current or former director, officer or other limited exceptions as described under “Principal Stockholders — Transfersemployee, agent or stockholder of Founder Shares and Private Placement Warrants,”the Company to our directors and officers and other persons or entities affiliated with our sponsor) and they will not be redeemable by us (except as described below under “Description of Securities — Redeemable Warrants — Public Redeemable Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00”) so long as they are held by our sponsorCompany or its permitted transferees. Our sponsor,stockholders; (iii) any action, suit or proceeding asserting a claim against the Company, its permitted transferees, has the optioncurrent or former directors, officers, or employees, agents or stockholders arising pursuant to exercise the private placement warrants on a cashless basis and have certain registration rights described herein. Otherwise, the private placement warrants have terms and provisions that are identical to thoseany provision of the warrants being sold as partDGCL, the Charter or the Bylaws or (iv) any action, suit or proceeding asserting a claim against the Company, its current or former directors, officers, or employees, agents or stockholders governed by the internal affairs doctrine, and, if such action is filed in a court other than the Chancery Court (a “Foreign Action”) by any stockholder (including any beneficial owner), to the fullest extent permitted by law, such stockholder shall be deemed to have consented to (a) the personal jurisdiction of the units in this offering. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.

Except as described under “— Description of Securities — Redeemable Warrants — Public Redeemable Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00,” if holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “historical fair market value” (defined below) less the exercise price of the warrants by (y) the historical fair market value. For these purposes, the “historical fair market value” shall mean the average last reported sale price of the Class A common stock for the ten trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that restrict insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of Class A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.

In order to fund working capital deficiencies or finance transaction costsChancery Court in connection with an intended initial business combination, our sponsor or an affiliateany action brought in any such court; and (b) having service of our sponsor or certain of our officers and directors may loan us funds as may be required, although they are under no obligation to advance funds or investprocess made upon such stockholder in us. Up to $1,500,000 ofany such loans may be convertible into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.

Dividends

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividendsaction by service upon such stockholder’s counsel in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequentForeign Action as agent for such stockholder.

The exclusive forum provision set forth above does not apply to, completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends inpreclude or contract the foreseeable future, except if we increase the sizescope of, this offering, in which case we will effect a stock dividend or other appropriate mechanism immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding shares of common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

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Our Transfer Agent and Warrant Agent

The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.

Our Amended and Restated Certificate of Incorporation

Our amended and restated certificate of incorporation contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions (other than amendments relating to provisions governing the election or removal of directors prior to our initial business combination, which require the approval of a majority of at least 90% of the outstanding shares of our common stock voting in a stockholder meeting) cannot be amended without the approval of the holders of at least 65% of our outstanding common stock. Our initial stockholders, who collectively will beneficially own 20% of our shares of common stock upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority of the outstanding shares of our common stock that are voted is required to approve any such matter voted on by our stockholders, and, prior to our initial business combination, the affirmative vote of holders of a majority of the outstanding shares of our Class B common stock is required to approve the election or removal of directors. Specifically, our amended and restated certificate of incorporation will provide, among other things, that:

•        if we have not completed our initial business combination within 24 months from the closing of this offering or during any Extension Period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;

•        prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) voteeither (i) exclusive federal jurisdiction pursuant to our amended and restated certificate of incorporation on any initial business combination;

•        although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our officers, we are not prohibited from doing so;

•        if a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14ESection 27 of the Exchange Act for claims seeking to enforce any liability or duty created by the Exchange Act or the rules and will file tender offer documents withregulations thereunder, or any other claim for which the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is requiredU.S. federal courts have exclusive jurisdiction, or (ii) concurrent jurisdiction under Regulation 14ASection 22 of the Exchange Act;

•        as long as our securities are listed on Nasdaq, our initial business combination must be with oneSecurities Act for federal and state courts over all claims seeking to enforce any liability or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in trust (excluding any deferred underwriting commissions and taxes payable on the income earned on the trust account);

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•        if our stockholders approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), dividedduty created by the number of then issuedSecurities Act or the rules and outstanding public shares; and

•        we will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.

In addition, our amended and restated certificate of incorporation will provide that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions.regulations thereunder.

Certain Anti-Takeover Effects of Provisions of Delawarethe Proposed Charter, Proposed Bylaws and Applicable Law and our Amended and Restated Certificate of Incorporation

We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute preventsaffords us certain Delaware corporations, under certain circumstances,protections, such as prohibiting us from engaging in any business combination with any stockholder for a “business combination” with:

•        aperiod of three years following the time that such stockholder who owns(the “interested stockholder”) came to own at least 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”(the “acquisition”);

•        an affiliate of an interested stockholder; or

•        an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply, except if:

•        our board of directors approvesapproved the transaction that made the stockholder an “interested stockholder,”acquisition prior to the date of the transaction;its consummation;

•        after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of ourthe outstanding voting stock outstanding atupon consummation of the time the transaction commenced, other than statutorily excluded shares of common stock;acquisition; or

•        on or subsequent to the date of the transaction, the business combination is approved by our board of directors, and authorized atby a meetingtwo-thirds vote of the other stockholders in a meeting.

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Generally, a “business combination” includes any merger, consolidation, asset or stock sale, or certain other transactions resulting in a financial benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our stockholders, and not by written consent, byvoting stock.

Under certain circumstances, these anti-takeover provisions will make it more difficult for a person who would be an affirmative vote“interested stockholder” to effect various business combinations with us for a three-year period. This may encourage companies interested in acquiring us to negotiate in advance with our board of at least two-thirdsdirectors because the stockholder approval requirement would be avoided if our board of directors approves the outstanding voting stock not owned byacquisition that results in the stockholder becoming an interested stockholder.

OurThis may also have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Authorized but Unissued Shares

The Charter provides that certain shares of authorized but unissued common stockCommon Stock and preferred stock arePreferred Stock will be available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future public offerings, to raise additional capital, acquisitions and employee benefit plans.or to facilitate acquisitions. The existence of authorized but unissued and unreserved common stock and preferred stock could rendermake more difficult or discourage an attempt to obtain control of usthe Company by means of a proxy contest, tender offer, merger, or otherwise.

Our amended and restated certificate of incorporation will provide that prior to our initial business combination, holders of our Class B common stock will have the right to elect all of our directors and may remove members of our board of directors for any reason.

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Exclusive Forum for Certain Lawsuits

Our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of our company, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of our company to our company or our stockholders, or any claim for aiding and abetting any such alleged breach, (3) action asserting a claim against our company or any director, officer or employee of our company arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or our bylaws, or (4) action asserting a claim against us or any director, officer or employee of our company governed by the internal affairs doctrine except for, as to each of (1) through (4) above, any claim (a) as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (c) for which the Court of Chancery does not have subject matter jurisdiction. In addition, our amended and restated certificate of incorporation will provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act against us or our directors, officers, other employees or agents. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

Notwithstanding the foregoing, our amended and restated certificate of incorporation will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us and may have the effect of discouraging lawsuits against our directors and officers. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation. If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent for such stockholder.

Special MeetingMeetings of Stockholders

Our bylaws provideThe Charter provides that special meetings of ourthe stockholders of the Company may be called, onlyfor any purpose or purposes, at any time by the chairperson of the Board or a majorityresolution adopted by the affirmative vote of our boardthe majority of directors,the then-serving members of the Board, in accordance with the Bylaws, and shall not be called by our chief executive officerstockholders or by our chairman, if any.any other Person or Persons.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our bylaws will provide forThe Bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directorsthe Board or a committee of our board of directors.the Board. In order for any matter to be “properly brought” before a meeting, a stockholder will have to comply with advance notice requirements and provide usthe Company with certain information. Generally, to be timely, a stockholder’s notice must be received at ourthe Company’s principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws willThe Bylaws also specify requirements as to

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the form and content of a stockholder’s notice. Our bylaws willThe Bylaws allow the chairmanBoard and/or the chairperson of the meeting at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may also defer, delay, or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to influence or obtain control of us.the Company.

Securities Eligible for Future SaleLimitation on Stockholder Action by Written Consent

Immediately after this offering weThe Charter provides that any action required or permitted to be taken by the stockholders of the Company must be effected at an annual or special meeting of the stockholders and may not be taken by written consent of the stockholders in lieu of a meeting.

Dissenter’s Rights of Appraisal and Payment

Under the DGCL, with certain exceptions, the Company’s stockholders will have 25,000,000 (or 28,750,000 if the underwriters’ over-allotment option is exercisedappraisal rights in full) shares of common stock issued and outstanding. Of these shares, the 20,000,000 shares of Class A common stock (or 23,000,000 shares if the underwriters’ over-allotment option is exercised in full) sold in this offering will be freely tradable without restrictionconnection with a merger or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. Allconsolidation of the remaining 5,000,000 (or 5,750,000 if the underwriters’ over-allotment option is exercised in full) founder shares and all 4,000,000 (or 4,400,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and are subject to transfer restrictions as set forth elsewhere in this prospectus.

Rule 144

Company. Pursuant to Rule 144, a personthe DGCL, stockholders who has beneficially owned restricted shares of our common stockproperly request and perfect appraisal rights in connection with such merger or warrants for at least six months would be entitledconsolidation will have the right to sell their securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (2) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d)receive payment of the Exchange Act duringfair value of their shares as determined by the 12 months (or such shorter period as we were required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

•        1% of the total number of shares of common stock then issued and outstanding, which will equal 250,000 shares immediately after this offering (or 287,500 if the underwriters exercise their over-allotment option in full); or

•        the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

•        the issuer of the securities that was formerly a shell company has ceased to be a shell company;

•        the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

•        the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current Reports on Form 8-K; and

•        at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.Court.

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AsStockholders’ Derivative Actions

Under the DGCL, any of the Company’s stockholders may bring an action in the Company’s name to procure a result, our initialjudgment in the Company’s favor, also known as a derivative action; provided that the stockholder bringing the action is a holder of the Company’s shares at the time of the transaction to which the action relates or such stockholder’s shares thereafter devolved by operation of law.

Limitations on Liability and Indemnification of Officers and Directors

The DGCL authorizes corporations to limit or eliminate the personal liability of directors or officers of corporations and their stockholders willfor monetary damages for breaches of directors’ or officers’ fiduciary duties, subject to certain exceptions. The Charter includes a provision that eliminates the personal liability of directors or officers for monetary damages for any breach of fiduciary duty as a director or officer except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be ableamended.

The Bylaws provide that the Company must indemnify and hold harmless the directors and officers of the Company to sellthe fullest extent authorized by the DGCL. The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust enterprise or non-profit entity against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Company would have the power to indemnify him or her against such liability under the provisions of the DGCL.

The limitation of liability, advancement and indemnification provisions in the Charter and Bylaws may discourage stockholders from bringing lawsuits against directors or officers for breach of their founder sharesfiduciary duties. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and our sponsor willofficers, even though such an action, if successful, might otherwise benefit the Company and its stockholders. In addition, your investment may be ableadversely affected to sell its private placement warrants,the extent the Company pays the costs of settlement and damage awards against directors and officer pursuant to Rule 144 without registration, one year after we have completed our initial business combination.these indemnification provisions.

Registration RightsTransfer Agent, Warrant Agent and Registrar

The holderstransfer agent for Common Stock is Continental Stock Transfer & Trust Company. The Company will agree to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence or intentional misconduct of the founder shares, private placement warrants and any warrants that may be issued on conversion of working capital loans (and any shares of Class A common stock issuable upon the exercise of the private placement warrantsindemnified person or warrants issued upon conversion of the working capital loans and upon conversion of the founder shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring us to register such securities for resale (in the case of the founder shares, only after conversion to shares of our Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration 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 our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants.” We will bear the expenses incurred in connection with the filing of any such registration statements.entity.

Listing of Securities

We intend to apply to list our units, Class A common stockOur Common Stock and warrantsWarrants are listed on Nasdaq under the symbols “RCLF.U,” “RCLF,”“MDAI” and “RCLF WS,“MDAIW,” respectively. We expect that our units will be listed on Nasdaq promptly on or after the effective date of the registration statement. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of Class A common stock and warrants will be listed separately and as a unit on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq.

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UNITED STATESRESTRICTIONS ON RESALE OF SECURITIES

Rule 144

Pursuant to Rule 144 under the Securities Act (“Rule 144”), a person who has beneficially owned restricted shares of our Common Stock or Warrants for at least six months would be entitled to sell their securities; provided, that (i) such person is not deemed to have been an affiliate of the Company at the time of, or at any time during the three months preceding, a sale and (ii) the Company is subject to the Exchange Act periodic reporting requirements for at least three months before the sale and has filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as it was required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of Common Stock or Warrants for at least six months but who are affiliates of the Company at the time of, or at any time during the three months preceding, a sale would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

•        1% of the total number of shares of Common Stock then outstanding; or

•        the average weekly reported trading volume our Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by affiliates of the Company under Rule 144 are also limited by manner of sale provisions and notice requirements and by the availability of current public information about the Company.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business-combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

•        the issuer of the securities that was formerly a shell company has ceased to be a shell company;

•        the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

•        the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials) other than Form 8-K reports; and

•        at least one year has elapsed from the time that the issuer filed current Form 10-type information with the SEC reflecting its status as an entity that is not a shell company.

As a result of the consummation of the Business Combination, we are no longer a shell company, and so, once the conditions listed above are satisfied, Rule 144 will become available for the resale of the above-noted restricted securities.

Lock-Up Provisions

On September 11, 2023, in connection with the consummation of the Business Combination and as contemplated by the Business Combination Agreement, the Company entered into the Registration Rights Agreement with the Holders. The Registration Rights Agreement contained lock-up provisions, pursuant to which the Holders agreed, among other things, that their shares received as merger consideration may not be transferred until the date on which the last reported sale price of the Common Stock equals or exceeds $12.50 per share for any ten (10) trading days within any thirty (30)-trading day period commencing after the Closing Date or, if earlier, the date that is 180 days after the Closing Date.

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PLAN OF DISTRIBUTION

We are registering the issuance by us of up to 8,433,231 shares Common Stock that may be issued upon exercise of Warrants to purchase Common Stock. We are also registering the resale by the selling stockholders or their permitted transferees of up to 10,069,748 shares of Common Stock. We will not receive any of the proceeds from the sale of the Common Stock by the selling stockholders. We will receive proceeds from Warrants exercised in the event that such Warrants are exercised for cash. The aggregate proceeds to the selling stockholders will be the purchase price of the securities less any discounts and commissions borne by the selling stockholders.

The Common Stock beneficially owned by the selling stockholders covered by this prospectus may be offered and sold from time to time by the selling stockholders. The term “selling stockholders” includes donees, pledgees, transferees or other successors in interest selling securities received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer so long as we are required to provide such transferees with registration rights under the Registration Rights Agreement. The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related to the then current market price or in negotiated transactions. The selling stockholders may sell their Common Stock by one or more of, or a combination of, the following methods:

•        purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;

•        ordinary brokerage transactions and transactions in which the broker solicits purchasers;

•        block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

•        an over-the-counter distribution in accordance with the rules of Nasdaq;

•        through trading plans entered into by a selling stockholder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans;

•        to or through underwriters or broker-dealers;

•        in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;

•        in privately negotiated transactions;

•        in options transactions;

•        through a combination of any of the above methods of sale; or

•        any other method permitted pursuant to applicable law.

In addition, any shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus.

To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution. In connection with distributions of the shares or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions, broker-dealers or other financial institutions may engage in short sales of Common Stock in the course of hedging transactions, and broker-dealers or other financial institutions may engage in short sales of Common Stock in the course of hedging the positions they assume with selling stockholders. The selling stockholders may also sell Common Stock short and redeliver the shares to close out such short positions. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer

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or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). The selling stockholders may also pledge shares to a broker-dealer or other financial institution, and, upon a default, such broker-dealer or other financial institution may effect sales of the pledged shares pursuant to this prospectus (as supplemented or amended to reflect such transaction).

A selling stockholder may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by any selling stockholder or borrowed from any selling stockholder or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from any selling stockholder in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement (or a post-effective amendment). In addition, any selling stockholder may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.

In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts or concessions from the selling stockholders in amounts to be negotiated immediately prior to the sale.

In offering the shares covered by this prospectus, the selling stockholders and any broker-dealers who execute sales for the selling stockholders may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any profits realized by the selling stockholders and the compensation of any broker-dealer may be deemed to be underwriting discounts and commissions.

In order to comply with the securities laws of certain states, if applicable, the shares must be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

At the time a particular offer of shares is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.

A holder of Warrants may exercise its Warrants in accordance with the Warrant Agreement on or before the expiration date set forth therein by surrendering, at the office of the warrant agent, Continental Stock Transfer & Trust Company, the certificate evidencing such Warrant, if any, with the form of election to purchase set forth thereon, properly completed and duly executed, accompanied by full payment of the exercise price and any and all applicable taxes due in connection with the exercise of the Warrant, subject to any applicable provisions relating to cashless exercises in accordance with the Warrant Agreement.

The selling stockholders may agree, to indemnify the underwriters, their officers, directors and each person who controls such underwriters (within the meaning of the Securities Act), against certain liabilities related to the sale of the securities, including liabilities under the Securities Act.

Restrictions to Sell

Refer to the section titled “Restrictions on Resale of Securities — Lock-up Provisions.”

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONSCONSEQUENCES

The following is a discussion of certain material U.S. federal income tax considerations generally applicableconsequences to U.S. holders (as defined below) and Non-U.S. holders (as defined below) of the ownership and disposition of our units, shares of Class A common stockour Common Stock and warrants,Warrants that are being offered pursuant to this prospectus (such offered Warrants, the “Offered Warrants”, which we refer to collectively with such Offered Common Stock as our securities. Because the components of a unit are separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying Class A common stock and one-third of one redeemable warrant components of the unit, as the case may be. As a result, the discussion below with respect to actual holders of Class A common stock and warrants should also apply to holders of units (as the deemed owners of the underlying Class A common stock and warrants that comprise the units)“Offered Securities”). This discussion applies only to securitiesholders that are heldhold our Offered Securities as capital assets within the meaning of Section 1221 of the Code (the “Code”) (generally, property held for investment).

This discussion does not address the U.S. federal income tax purposes (generally, property held for investment)consequences of the exercise of Warrants by existing holders of such Warrants or the ownership or disposition of shares of our Common Stock received in connection with any such exercise, and is applicable onlysuch holders should consult their own tax advisors regarding the U.S. federal income tax consequences to holders who purchased unitsthem of their receipt of Common Stock in this offering.

connection with an exercise of such Warrants and the ownership or disposition of any such Common Stock. This discussion is a summary only and does not describe all of the tax consequences that may be relevant to youa particular holder in light of yoursuch holder’s particular circumstances, including but not limited to the alternative minimum tax, the Medicare tax on certain net investment income and the different consequences that may apply if you are subject to special rules under U.S. federal income tax laws that apply to certain types of investors, including but not limited to:

•        banks, financial institutions or financial services entities;

•        broker,-dealers; dealers or traders in securities;

•        governments or agencies or instrumentalities thereof;

•        regulated investment companies;companies or mutual funds;

•        real estate investment trusts;

•        expatriates or former citizens or long-term residents of the United States;

•        except as specifically provided below, persons that actually or constructively own five percent or more (by vote or value) of our voting shares;Common Stock;

•        persons that acquired our Offered Securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;

•        insurance companies;

•        dealers or traderspersons subject to a mark-to-market method of accounting with respect to the securities;our Offered Securities;

•        persons holding the securitiesour Offered Securities as part of a “straddle,” constructive sale, hedge, wash sale, conversion or other integrated transaction or similar transaction;

•        U.S. holders (as defined below) whose functional currency is not the U.S. dollar;

•        partnerships or other pass-through entities or arrangements for U.S. federal income tax purposes and any beneficial ownersholders of such entities; andinterests therein;

•        tax-exempt entities.entities;

•        controlled foreign corporations; and

•        passive foreign investment companies.

If a partnership (including an entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes) holds our securities,Offered Securities, the tax treatment of a partner member or other beneficial owner in such partnership or other pass-through entity will generally depend upon the status of the partner, member or other beneficial owner, the activities of the partnership or other pass-through entity and certain determinations made at the partner member or other beneficial owner level. If you are a partner, memberpartnership or other beneficial ownera partner of a partnership or other pass-through entity holding our securities,Offered Securities, you are urged to consult your tax advisor regarding the tax consequences of the ownership and disposition of our securities.Offered Securities.

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This discussion is based on the Internal Revenue Code, of 1986, as amended (the “Code”), and administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, which are subject to change, possibly on a retroactive basis, and changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of U.S. state or local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and estate taxes).

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We have not sought, and willdo not expect to seek, a ruling from the IRSU.S. Internal Revenue Service (the “IRS”) as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular situation, as well as any tax consequences arising under the laws of any U.S. state or local or foreignnon-U.S. jurisdiction.

THIS DISCUSSION IS ONLY A SUMMARY OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. WE URGE PROSPECTIVE HOLDERS TO CONSULT THEIR TAX ADVISORS CONCERNING THECERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF OWNINGASSOCIATED WITH THE OWNERSHIP AND DISPOSINGDISPOSITION OF OUR OFFERED SECURITIES. EACH PROSPECTIVE INVESTOR IN OUR OFFERED SECURITIES AS WELL ASIS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE APPLICATIONPARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE OWNERSHIP AND DISPOSITION OF OUR OFFERED SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY U.S. FEDERAL, STATE AND LOCAL, AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.LAWS.

Personal Holding Company StatusU.S. Holders

We could be subjectThis section applies to you if you are a second level of“U.S. holder.” A U.S. federal income tax onholder is a portionbeneficial owner of our income if we are determined to be a personal holding company,Offered Securities who or PHC,that is, for U.S. federal income tax purposes. A U.S. corporation will generally be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (1) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds, and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (2) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).

Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds, and charitable trusts, it is possible that more than 50% of our stock will be owned or deemed owned (pursuant to the constructive ownership rules) by five or fewer such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.

General Treatment of Units

There is no authority directly addressing the treatment, for U.S. federal income tax purposes, of instruments with terms substantially the same as the units and, therefore, their treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A common stock and one-third of one redeemable warrant to acquire one share of our Class A common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you agree to adopt such treatment for tax purposes. Each holder of a unit must allocate the purchase price paid by such holder for such unit between the share of Class A common stock and the one-third of one redeemable warrant based on their respective relative fair market values (as determined by such holder based on all the relevant facts and circumstances) at the time of issuance. Under U.S. federal income tax law, each investor must make his or her own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult his or her tax advisor regarding the determination of value for these purposes. A holder’s initial tax basis in the Class A common stock and the one-third of one redeemable warrant included in each unit should equal the portion of the purchase price of the unit allocated thereto. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the share of Class A common stock and one-third of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the share of Class A common stock and the one-third of one warrant based on their respective relative fair market values (as determined by each such unit holder based on all the relevant facts and circumstances) at the time of disposition. The separation of the Class A common stock and warrant constituting a unit should not be a taxable event for U.S. federal income tax purposes.

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The foregoing treatment of the units and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there is no authority that directly addresses instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Each prospective investor is urged to consult its tax advisors regarding the U.S. federal, state, local and any foreign tax consequences of an investment in a unit (including alternative characterizations of a unit and its components). The following discussion is based on the assumption that the characterization of the Class A common stock and warrants and the allocation described above are respected for U.S. federal income tax purposes.

U.S. Holders

For purposes of this summary, a “U.S. Holder” is a beneficial holder of our securities who or that, for U.S. federal income tax purposes is:purposes:

•        an individual who is a citizen or resident of the United States;

•        a corporation or(or other entity treatedtaxable as a corporation for U.S. federal income tax purposes createdcorporation) organized in or organized under the lawlaws of the United States, or any state thereof or political subdivision thereof;the District of Columbia;

•        an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

•        a trust, (A)if (i) a court within the United States is able to exercise primary supervision over the administration of which is subject to the primary supervision of a U.S. courttrust and which has one or more U.S.United States persons (within the meaning of(as defined in the Code) who have the authority to control all substantial decisions of the trust or (B) that(ii) it has in effect a valid election in effect under applicable Treasury regulationsRegulations to be treated as a U.S.United States person.

A “non-U.S. Holder” is a beneficial holder of our securities who or that is neither a U.S. Holder nor a partnership or other pass-through entity for U.S. federal income tax purposes.

Taxation of DistributionsDistributions.

If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. Holdersholders of shares of our Class A common stock,Common Stock, such distributions generally will generally constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’sholder’s adjusted tax basis in our Class A common stock.Common Stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Class A common stockCommon Stock and will be treated as described under “— U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants”Offered Securities below.

Dividends we pay to a U.S. Holderholder that is treated as a taxable corporation For U.S. federal income tax purposes generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder will generallyholder may constitute “qualified dividends”dividend income” that willwould be subject to tax at the maximumpreferential tax rate accorded to long-term capital gains. It is unclear whetherIf the redemption rights with respect to the Class A common stock described in this prospectus may prevent a U.S. Holder from satisfying the applicable holding period requirements with respectare not satisfied, then a U.S. holder that is treated as a corporation for U.S. federal income tax purposes may not be able to qualify for the dividends received deduction orand would have taxable income equal to the entire dividend amount, and a non-corporate U.S. holder may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential tax rate onthat applies to qualified dividend income, as the case may be.

Possible Constructive Distributions

The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a U.S. Holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through anincome.

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increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrants) as a result of a distribution of cash or other property, such as other securities, to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case which is taxable to such U.S. Holders as described under “— U.S. Holders — Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if such U.S. Holder received a cash distribution from us equal to the fair market value of such increased interest. Generally, a U.S. Holder’s adjusted tax basis in its warrant would be increased to the extent any such constructive distribution is treated as a dividend.

Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and WarrantsOffered Securities.

A U.S. Holder will recognize gain or loss on theUpon a sale taxable exchange or other taxable disposition of our Class A common stock and warrants which, in general, would includeOffered Securities, a redemption of Class A common stock or warrants that is treated as a sale of such securities as described below, and including as a result of a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering. Any such gain or lossU.S. holder generally will berecognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the Offered Securities. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’sholder’s holding period for the Class A common stock or warrantsOffered Securities so disposed of exceeds one year. ItLong-term capital gains recognized by non-corporate U.S. holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is unclear, however, whethersubject to limitations.

Generally, the redemption rights with respect to the Class A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. The amount of gain or loss recognized will generally beby a U.S. holder is an amount equal to the difference between (1)(i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A common stock or warrant is held as part of a unit at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the Class A common stock or warrant based upon the then fair market values of the Class A common stock and the warrant included in the unit) and (2)(ii) the U.S. Holder’sholder’s adjusted tax basis in its Class A common stock or warrantOffered Securities so disposed of. A U.S. Holder’sholder’s adjusted tax basis in its Class A common stock or warrantCommon Stock generally will generally equal the U.S. Holder’sholder’s acquisition cost (that is, as discussed above,(or, in the portioncase of the purchase price of a unit allocated to a share of Class A common stock or warrant or, as discussed below, the U.S. Holder’s initial basis for Class A common stockCommon Stock received upon exercise of a warrant)an Offered Warrant, the U.S. holder’s initial basis for such Common Stock, as discussed below under “U.S. Holders — Exercise, Lapse or Redemption of an Offered Warrant”), less any prior distributions treated as a return of capital. The deductibility of capital losses is subject to limitations.

Redemption of Class A Common Stock

In the event that a U.S. Holder’s Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock” or if we purchase a U.S. Holder’s Class A common stock in an open market transaction (each of which we refer to as a “redemption”), the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale of Class A common stock under the tests described below, the tax consequences to the U.S. Holder will be the same as described under “— U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” above. If the redemption does not qualify as a sale of Class A common stock, the U.S. Holder will be treated as receiving a corporate distribution, the tax consequences of which are described above under “— U.S. Holders — Taxation of Distributions”. Whether the redemption qualifies for sale treatment will depend primarily on the total number of shares of our stock treated as held by the U.S. Holder (including any stock constructively owned by the U.S. Holder as a result of owning warrants) relative to all of our shares outstanding both before and after the redemption. The redemption of Class A common stock will generally be treated as a sale of the Class A common stock (rather than as a corporate distribution) if the redemption (1) is “substantially disproportionate” with respect to the U.S. Holder, (2) results in a “complete termination” of the U.S. Holder’s interest in us or (3) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.

In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any stock the U.S. Holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant to the exercise of the warrants. A redemption of a U.S. Holder’s stock will be substantially

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disproportionate with respect to the U.S. Holder if the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of common stock is, among other requirements, less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to our initial business combination, the shares of our Class A common stock may not be treated as voting shares for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a complete termination of a U.S. Holder’s interest if either (1) all of the shares of our stock actually and constructively owned by the U.S. Holder are redeemed or (2) all of the shares of our stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other stock (including any stock constructively owned by the U.S. Holder as a result of owning warrants). The redemption of the Class A common stock will not be essentially equivalent to a dividend if the redemption results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. The IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder is urged to consult its tax advisors as to the tax consequences of a redemption, including the application of the constructive ownership rules described above.

If none of the foregoing tests is satisfied, the redemption will be treated as a corporate distribution, the tax consequences of which are described under “— U.S. Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A common stock should be added to the U.S. Holder’sholder’s adjusted tax basis in its remaining stock, or, if it has none, toOffered Warrants generally will equal the U.S. Holder’s adjusted tax basisholder’s acquisition cost, increased by the amount of any constructive distributions included in its warrantsincome by such U.S. holder, as described below under “U.S. Holders — Possible Constructive Distributions.” The amount and character of gain or possibly in other stock constructively ownedloss generally will be computed separately for each block of Common Stock or Offered Warrant so disposed by it.the U.S. holder on the same day at the same price.

Exercise, Lapse or Redemption of a Warrantan Offered Warrant.

Except as discussed below with respect to the cashless exercise of a warrant, aA U.S. Holderholder generally will not recognize taxable gain or loss on the acquisition of our Common Stock upon the exercise of a warrant.an Offered Warrant for cash. The U.S. Holder’sholder’s tax basis in the share of our Class A common stockCommon Stock received upon exercise of the warrantOffered Warrant generally will generally be an amount equal to the sum of the U.S. Holder’sholder’s initial investment in the warrant (i.e., the portion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “— General Treatment of Units”)Offered Warrant and the exercise price of such warrant.price. It is unclear whether athe U.S. Holder’sholder’s holding period for the Class A common stockCommon Stock received upon exercise of the warrant would commenceOffered Warrants will begin on the date following the date of exercise or on the date of exercise of the warrant or the day following the date of exercise of the warrant;Offered Warrants; however, in either case, the holding period will not include the period during which the U.S. Holderholder held the warrants.Offered Warrants. If a warrantan Offered Warrant is allowed to lapse unexercised, a U.S. Holderholder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.Offered Warrant. The deductibility of capital losses is subject to certain limitations.

The tax consequences of a cashless exercise of a warrantan Offered Warrant are not clear under current tax law. A cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s taxholder’s basis in the Class A common stockCommon Stock received would generally equal the holder’s tax basis in the warrant exercised.Offered Warrants exercised therefor. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’sholder’s holding period forin the Class A common stockCommon Stock would commencebe treated as commencing on the date following the date of exercise or on the date of exercise of the warrant orOffered Warrants; however, in either case, the day followingholding period would not include the date of exercise ofperiod during which the warrant.U.S. holder held the Offered Warrants. If however, the cashless exercise were treated as a recapitalization, the holding period of the Class A common stockCommon Stock would include the holding period of the warrant.Offered Warrants exercised therefor.

It is also possible that a cashless exercise could be treated in whole or in part as a taxable exchange in which gain or loss iswould be recognized. In such event, a U.S. Holderholder could be deemed to have surrendered a number of warrantsOffered Warrants equal to the number of shares of Common Stock having an aggregate fair marketa value equal to the exercise price for the total number of warrantsOffered Warrants to be exercised. TheIn such case, the U.S. Holderholder would recognize capital gain or loss with respect to the Offered Warrants deemed surrendered in an amount equal to the difference between the fair market value of the warrantsCommon Stock that would have been received in a regular exercise of the Offered Warrants deemed surrendered and the U.S. Holder’sholder’s tax basis in such warrants. Such gain or loss would be long-term or short-term depending on the U.S. Holder’s holding period in the warrantsOffered Warrants deemed surrenderedsurrendered. In this case, a U.S. Holder’sholder’s aggregate tax basis in the Class A common stockCommon Stock received would equal the sum of the U.S. Holder’sholder’s initial investment in the warrantsOffered Warrants deemed exercised (i.e.,and the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under ‘‘— General Treatment of Units’’) and theaggregate exercise price of such

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warrants. Offered Warrants. It is unclear whether a U.S. Holder’sholder’s holding period for the Class A common stockCommon Stock would commence on the date following the date of exercise or on the date of exercise of the warrant or the day following the date of exercise of the warrant;Offered Warrants; however, in either case, the holding period willwould not include the period during which the U.S. Holderholder held the warrant.Offered Warrants.

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Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’sholder’s holding period would commence with respect to the Class A common stockCommon Stock received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders are urged toholders should consult their tax advisors regarding the tax consequences of a cashless exercise.

If we give notice of an intention to redeem warrants for $0.10 as described in the section of this prospectus entitled “Description of Securities — RedeemableOffered Warrants — Public Stockholders’ Warrants — Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00,” and a U.S. Holder exercises its warrant on a cashless basis and receives the amount of Class A common stock as determined by reference to the table set forth thereunder, we intend to treat such exercise as a redemption of warrants for Class A common stock for U.S. federal income tax purposes. Such redemption should be treated as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code. Accordingly, a U.S. Holder should not recognize any gain or loss on the redemption of warrants for shares of our Class A common stock. A U.S. Holder’s aggregate tax basis in the shares of Class A common stock received in the redemption generally should equal the U.S. Holder’s aggregate tax basis in the warrants redeemed and the holding period for the shares of Class A common stock received in redemption of the warrants should include the U.S. Holder’s holding period for the surrendered warrants. However, there is some uncertainty regarding this tax treatment and it is possible such a redemption could be treated in part as a taxable exchange in which gain or loss would be recognized in a manner similar to that discussed above for a cashless exercise of warrants, or otherwise characterized. Accordingly, a U.S. Holder is urged to consult its tax advisor regarding the tax consequences of a redemption of warrants for shares of Class A common stock.

If we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “DescriptionDescription of Securities — Redeemable Warrants — Public Stockholders’ Warrants” or if we purchase warrantsOffered Warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. holder, taxed as described above under “—U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class AOffered Securities.”

Possible Constructive Distributions.

The terms of each Offered Warrant provide for an adjustment to the number of shares of Common Stock for which the Offered Warrant may be exercised or to the exercise price of the Offered Warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities — Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. holder of the Offered Warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the Offered Warrant holder’s proportionate interest in our assets or earnings and Warrants.profits (for example, through an increase in the number of shares of Common Stock that would be obtained upon exercise or through a decrease in the exercise price of the Offered Warrant as a result of a distribution of cash or other property to holders of shares of Common Stock which is taxable to the holders of such shares as a distribution as described under “U.S. Holders — Taxation of Distributions above). Such constructive distribution would be subject to tax as described under that section in the same manner as if such U.S. holder of the Offered Warrants received a cash distribution from us equal to the fair market value of such increased interest. The rules governing constructive distributions as a result of certain adjustments with respect to an Offered Warrant are complex, and U.S. holders are urged to consult their tax advisors on the tax consequences any such constructive distribution with respect to an Offered Warrant.

Information Reporting and Backup Withholding.

In general, information reporting requirements may apply to distributions paid to a U.S. holder and to the proceeds of the sale or other disposition of our Offered Securities, unless the U.S. holder is an exempt recipient. Backup withholding (currently at a 24% rate) may apply to such payments if the U.S. holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a credit against a U.S. holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided the required information is timely furnished to the IRS. U.S. holders should consult their tax advisors regarding the application of information reporting and backup withholding to them.

Non-U.S. Holders

This section applies to you if you are a “Non-U.S. holder.” As used herein, the term “Non-U.S. holder” means a beneficial owner of our Offered Securities who or that (i) is for U.S. federal income tax purposes, an individual, a corporation (or other entity taxable as a corporation), an estate or a trust, and (ii) is not a U.S. holder.

Taxation of DistributionsDistributions.

In general, any distributions (including constructive distributions) we make to a nonNon-U.S. Holderholder of shares of our Class A common stock,Common Stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the nonNon-U.S. Holder’sholder’s conduct of a trade or business within the United States we(or, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. holder in the United States), us or the applicable withholding agent will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such nonNon-U.S. Holderholder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an

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IRS Form W-8BEN or W-8BEN-E, as applicable)). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a non-U.S. Holder by the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the nonNon-U.S. Holder’sholder’s adjusted tax basis in its shares of our Class A common stockCommon Stock and, to the extent such distribution exceeds the nonNon-U.S. Holder’sholder’s adjusted tax basis, as gain realized from the sale or other disposition of the Class A common stock,Common Stock, which will be treated as described under “— Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants”Offered Securities below. In addition, if we determine that we are classified as

The withholding tax generally does not apply to dividends paid to a “United States real property holding corporation” (see “— Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below)holder who provides a Form W-8ECI, we will withhold 15% of any distributioncertifying that exceeds our current and accumulated earnings and profits.

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Dividends we pay to a non-U.S. Holder thatthe dividends are effectively connected with such nonthe Non-U.S. Holder’sholder’s conduct of a trade or business within the United States (or(and, if a tax treaty applies, are attributable to a U.S. permanent establishment or fixed base maintained by the nonNon-U.S. Holder)holder in the United States). Instead, the effectively connected dividends generally will generally not be subject to U.S. withholding tax, provided such non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends will generally be subject toregular U.S. federal income tax net of certain deductions, atas if the same graduated individual or corporate rates applicable to U.S. Holders. If the nonNon-U.S. Holder isholder were a corporation, dividends that areU.S. resident. A corporate Non-U.S. holder receiving effectively connected incomedividends may also be subject to aan additional “branch profits tax” imposed at a rate of 30% (or sucha lower rate as may be specified by an applicable income tax treaty)treaty rate).

Possible Constructive Distributions

The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a non-U.S. Holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the warrants), including as a result of a distribution of cash or other property, such as securities, to the holders of shares of our Class A common stock, or as a result of the issuance of a stock dividend to holders of shares of our Class A common stock, in each case which is taxable to such non-U.S. Holders as described under “— Non-U.S. Holders — Taxation of Distributions” above. A non-U.S. Holder would be subject to U.S. federal income tax withholding under that section in the same manner as if such non-U.S. Holder received a cash distribution from us equal to the fair market value of such increased interest without any corresponding receipt of cash.

Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common StockOffered Securities.

Subject to the discussion below regarding backup withholding and Warrants

A nonFATCA, a Non-U.S. Holderholder generally will generally not be subject to U.S. federal income or withholding tax in respect of gain recognizedrealized on a sale, taxable exchange or other taxable disposition of our Class A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering, or warrants (including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit,Offered Securities, unless:

•        the gain is effectively connected with the conduct by the Non-U.S. holder of a trade or business by the non-U.S. Holder within the United States (and, if an applicable income tax treaty so requires, is attributable to a U.S. permanent establishment or fixed base maintained by the nonNon-U.S. Holder)holder in the United States);

•        the nonNon-U.S. Holderholder is an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in the taxable year ofwhich such disposition occurs and certain other conditions are met; or

•        we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the nonNon-U.S. Holder held our Class A common stock,holder’s holding period for the applicable security and, in the case where shares of our Class A common stockCommon Stock are regularly“regularly traded on an established securities market,market” (within the nonmeaning of applicable Treasury Regulations, referred to herein as “regularly traded”), (i) the Non-U.S. Holderholder is disposing of Common Stock and has owned, directlywhether actually or constructively,based on the application of constructive ownership rules, more than 5% of our Class A common stockCommon Stock at any timeall times within the shorter of the five-year period preceding thesuch disposition of Common Stock or such nonNon-U.S. Holder’sholder’s holding period for such Common Stock or (ii) the sharesNon-U.S. holder is disposing of Offered Warrants and has owned, whether actually or based on the application of constructive ownership rules, more than 5% of the total fair market value of our Class A common stock.Warrants (provided our Warrants are considered to be regularly traded) at all times within the shorter of the five-year period preceding such disposition of Offered Warrants or such Non-U.S. holder’s holding period for such Offered Warrants. There can be no assurance that our Class A common stockCommon Stock will be treated as regularly traded on an established securities market for this purpose. It is unclear how the rules for determining the 5% threshold for this purpose would be applied with respect to our Common Stock and Offered Warrants, including how a Non-U.S. holder’s ownership of Offered Warrants impacts the 5% threshold determination with respect to its Common Stock. In addition, special rules may apply in the case of a disposition of Offered Warrants if our Common Stock is considered to be regularly traded, but the Offered Warrants are not considered to be regularly traded. Non-U.S. holders should consult their own tax advisors regarding the application of the foregoing rules in light of their particular facts and circumstances.

GainUnless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates.rates as if the Non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a nonNon-U.S. Holderholder that is treated as a foreign corporation for U.S. federal income tax purposes may also be subject to an additional “branch profits tax” imposed at a 30% rate (or lower applicable treaty rate). Gain described inIf the second bullet point aboveapplies to a Non-U.S. holder, such Non-U.S. holder will generally be subject to a flat 30% U.S. federal income tax.tax on such Non-U.S. Holders are urged to consult theirholder’s net capital gain for such year (including any gain realized in connection with the redemption) at a tax advisors regarding possible eligibility for benefits under income tax treaties.rate of 30%.

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If the third bullet point above applies to a nonNon-U.S. Holder,holder, gain recognized by such Non-U.S. holder on the sale, exchange or other disposition of our Class A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Class A common stock or warrants from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we willwould be classified as a United“United States real property holding corporation in the future until we complete an initial business combination. We will be classified as a United States real property holding corporationcorporation” if the fair market value of our “United States real property interests” (as defined in the Code) equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes. IfWe believe that we are or have beennot and do not anticipate becoming a “United States real property holding corporation,corporation;you are urgedhowever, such determination is factual in nature and subject to consult your own tax advisors regardingchange and no assurance can be provided as to whether we will become a “United States real property holding corporation” in the application of these rules.future.

Exercise, Lapse or Redemption of Class A Common Stockan Offered Warrant.

The U.S. federal income tax treatment of a Non-U.S. holder’s exercise of an Offered Warrant, or the lapse of an Offered Warrant held by a Non-U.S. holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of an Offered Warrant by a U.S. holder, as described under “U.S. Holders — Exercise, Lapse or Redemption of an Offered Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below in “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Offered Securities”.

The characterization for U.S. federal income tax purposes of the redemption of a nonthe Non-U.S. Holder’s Class A common stock pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock”holder’s Offered Warrants generally will generally correspond to the U.S. federal income tax characterizationtreatment of such a redemption of a U.S. Holder’s Class A common stock,holder’s Offered Warrants, as described under “— U.S. Holders — Exercise, Lapse or Redemption of Class A Common Stock”an Offered Warrant above, and the consequences of the redemption to the nonNon-U.S. Holderholder will be as described abovebelow under “— the heading “Non-U.S. Holders — Taxation of Distributions” and “— Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class AOffered Securities” depending on such characterization.

Possible Constructive Distributions.

The terms of each Offered Warrant provide for an adjustment to the number of shares of Common Stock for which the Offered Warrant may be exercised or to the exercise price of the Offered Warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities — Warrants.” An adjustment which has the effect of preventing dilution generally is not a taxable event. Nevertheless, a Non-U.S. holder of Offered Warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (for example, through an increase in the number of shares of Common Stock that would be obtained upon exercise or through a decrease in the exercise price of the Offered Warrants as applicable.

Exercise, Lapse or Redemptiona result of a Warrantdistribution of cash or other property to holders of shares of our Common Stock which is taxable to such holders as a distribution as described under “Non

The characterization for-U.S. Holders — Taxation of Distributions” above). Any constructive distribution received by a Non-U.S. holder would be subject to U.S. federal income tax purposes(including any applicable withholding) in the same manner as if such Non-U.S. holder received a cash distribution from us equal to the fair market value of such increased interest without any corresponding receipt of cash. This withholding tax will be imposed even though there is no corresponding cash distribution, and it is possible that any such withholding tax might be satisfied by us or the applicable withholding agent through a sale of a portion of the exercise, lapseNon-U.S. holder’s shares of Common Stock, Warrants or redemptionother property held or controlled by us or the applicable withholding agent on behalf of the Non-U.S. holder or might be withheld from distributions or proceeds subsequently paid or credited to the Non-U.S. holder. The rules governing constructive distributions as a result of certain adjustments with respect to an Offered Warrant are complex, and non-U.S. Holder’s warrant will generally correspondholders are urged to the characterization described under “— U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise or redemption results in a taxable exchange,consult their tax advisors on the tax consequences any such constructive distribution with respect to an Offered Warrant.

Information Reporting and Backup Withholding.

Information returns generally will be filed with the non-U.S. Holder would be similar to those described aboveIRS in “—connection with payments of distributions and the proceeds from a sale or other disposition of our Offered Securities. A Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Dispositionholder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of Class A Common Stockwithholding

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under a treaty generally will satisfy the certification requirements necessary to avoid the backup withholding as well. Backup withholding (currently at a 24% rate) is not an additional tax. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and Warrants.”may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

Foreign Account Tax Compliance ActFATCA Withholding Taxes.

Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative guidance promulgated thereunder (commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA”) generally impose withholding at a rate of 30% in certain circumstances on payments of dividends (including constructive dividends) on our Offered Securities to “foreign financial institutions” (which is broadly defined for this purpose and in respect of our securities which are held by or throughgeneral includes investment vehicles) and certain foreign financial institutions (including investment funds), unless any such institution (1) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons and by certainother non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by United States persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). Foreign financial institutions located in jurisdictions that are whollyhave an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain circumstances, a Non-U.S. holder might be eligible for refunds or partially owned bycredits of such withholding taxes, and a Non-U.S. holder might be required to file a U.S. persons andfederal income tax return to claim such refunds or credits. Withholding under FATCA was scheduled to apply to payments of gross proceeds from the sale or other disposition of property that produces U.S.-source interest or dividends beginning on January 1, 2019, but the IRS has released proposed regulations that, if finalized in their proposed form, generally would eliminate the obligation to withhold on gross proceeds. Such proposed regulations also delayed withholding on certain other payments received from other foreign financial institutions that are allocable, as provided for under final Treasury Regulations, to payments of U.S.-source dividends, and other fixed or (2) if required under an intergovernmental agreement between the United States and an applicable foreign country, reports such information to its local tax authority, which will exchange such information with the U.S. authorities. An intergovernmental agreement between the United States and an applicable foreign countrydeterminable annual or periodic income. Although these proposed Treasury Regulations are not final, taxpayers generally may modify these requirements. Accordingly, the entity through which our securitiesrely on them until final Treasury Regulations are held will affect the determination of whether such withholding is required. Similarly, dividends (including constructive dividends) in respect of our securities held by an investor that is a non-financial nonissued. Non-U.S. entity that does not qualify under certain exceptions will generally be subject to withholding at a rate of 30%, unless such entity either (1) certifies to us or the applicable withholding agent that such entity does not have any “substantial United States owners” or (2) provides certain information regarding the entity’s “substantial United States owners,” which will in turn be provided to the U.S. Department of Treasury. Prospective investorsholders should consult their tax advisors regarding the possible implicationseffects of FATCA on their investment inownership and disposition of our securities.Offered Securities.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated             , 2021 we have agreed to sell to the underwriters named below, for whom BTIG, LLC is acting as representative, the following respective numbers of units:

Underwriter

Number of
Units

BTIG, LLC

20,000,000

The underwriting agreement provides that the underwriters are obligated to purchase all the units in this offering if any are purchased, other than those units covered by the over-allotment option described below.

We have granted to the underwriters a 45-day option to purchase on a pro rata basis up to 3,000,000 additional units at the initial public offering price, less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of units.

The underwriters propose to offer the units initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $             per unit.

The following table summarizes the compensation and estimated expenses we will pay:

 

Per Unit(1)

 

Total(1)

  

Without
Over-allotment

 

With
Over-allotment

 

Without
Over-allotment

 

With
Over-allotment

Underwriting Discounts and Commissions paid by us

 

$

0.55

 

$

0.55

 

$

11,000,000

 

$

12,650,000

____________

(1)      Includes $0.35 per unit, or $7,000,000 (or $8,050,000 if the over-allotment option is exercised in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, in an amount equal to $0.35 multiplied by the number of shares of Class A common stock sold as part of the units in this offering, as described in this prospectus. Of such amount, at our sole and absolute discretion, up to $0.105 per unit, or up to $2,100,000 (or $2,415,000 if the over-allotment option is exercised in full), may be paid to third parties not participating in this offering that assist us in consummating our initial business combination.

We estimate that our non-reimbursed out-of-pocket expenses for this offering will be approximately $1,000,000. We have agreed to pay for the FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $25,000.

The representative has informed us that the underwriters do not intend to make sales to discretionary accounts.

We, our sponsor and our directors and officers have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, without the prior written consent of BTIG, LLC for a period of 180 days after the date of this prospectus, any units, warrants, shares of common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of Class A common stock; provided, however, that we may (1) issue and sell the private placement warrants; (2) issue and sell the additional units to cover our underwriters’ over-allotment option (if any); (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the private placement warrants and the shares of Class A common stock issuable upon exercise of the warrants and the founder shares; and (4) issue securities in connection with our initial business combination. However, the foregoing shall not apply to the forfeiture by our sponsor of any founder shares pursuant to their terms or any transfer of founder shares to any current or future independent director of the company (as long as such current or future independent director transferee is subject to the letter agreement, filed herewith, or executes an agreement substantially identical to the letter agreement, as applicable to directors and officers at the time of such transfer; and as long as, to the extent any Section 16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation as to the nature of the transfer). BTIG, LLC in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.

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Pursuant to a letter agreement with us, our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination; and (B) subsequent to our initial business combination (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20-trading days within any 30-trading day period commencing at least 150 days after our initial business combination or (y) the date on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except with respect to permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares.

The private placement warrants (including the shares of Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except with respect to permitted transferees as described herein under “Principal Stockholders — Transfers of Founder Shares and Private Placement Warrants”).

We have agreed to indemnify the underwriters against certain liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We expect our units to be listed on Nasdaq, under the symbol “RCLF.U” and, once the shares of Class A common stock and warrants begin separate trading, to have our shares of Class A common stock and warrants listed on Nasdaq under the symbols “RCLF,” and “RCLF WS,” respectively.

Prior to this offering, there has been no public market for our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the representative.

The determination of our per unit offering price was more arbitrary than would typically be the case if we were an operating company. Among the factors considered in determining the initial public offering price were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the units, Class A common stock or warrants will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our units, Class A common stock or warrants will develop and continue after this offering.

If we do not complete our initial business combination within the allotted time frame, the trustee and the underwriters have agreed that: (1) they will forfeit any rights or claims to their deferred underwriting discounts and commissions, including any accrued interest thereon, then in the trust account; and (2) the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public stockholders.

In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act.

•        Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

•        Over-allotment involves sales by the underwriters of units in excess of the number of units the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of units over-allotted by the underwriters is not greater than the number of units that they may purchase in the over-allotment option. In a naked short position, the number of units involved is greater than the number of units in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing units in the open market.

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•        Syndicate covering transactions involve purchases of the units in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of units to close out the short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the over-allotment option. If the underwriters sell more units than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in this offering.

•        Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the units originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of the units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. These transactions may be effected on Nasdaq or otherwise and, if commenced, may be discontinued at any time.

We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 60 days from the date of this prospectus, unless such payment would not be deemed underwriters’ compensation in connection with this offering. We may pay the underwriters of this offering or any entity with which they are affiliated, a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination.

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically. The representative may agree to allocate a number of units to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make Internet distributions on the same basis as other allocations.

The units are offered for sale in the United States, Europe, Asia and other jurisdictions where it is lawful to make such offers.

Each of the underwriters has represented and agreed that it has not offered, sold or delivered and will not offer, sell or deliver any of the units directly or indirectly, or distribute this prospectus or any other offering material relating to the units, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on us except as set forth in the underwriting agreement.

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Notice to Prospective Investors in the European Economic Area

In relation to each Member State of the European Economic Area (each a “Relevant State”), no units have been offered or will be offered pursuant to this offering to the public in that Relevant State prior to the publication of a prospectus in relation to the units which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that offers of units may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:

(a)     to any legal entity which is a qualified investor as defined under the Prospectus Regulation;

(b)    to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or

(c)     in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any units in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any units to be offered so as to enable an investor to decide to purchase or subscribe for any units, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

Notice to Prospective Investors in the United Kingdom

In relation to the United Kingdom, no units have been offered or will be offered pursuant to this offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the units that either (i) has been approved by the Financial Conduct Authority, or (ii) is to be treated as if it had been approved by the Financial Conduct Authority in accordance with the transitional provision in Regulation 74 of the Prospectus (Amendment etc.) (EU Exit) Regulations 2019, except that offers of units may be made to the public in the United Kingdom at any time under the following exemptions under the UK Prospectus Regulation:

(a)     to any legal entity which is a qualified investor as defined in Article 2 of the UK Prospectus Regulation;

(b)    to fewer than 150 natural or legal persons (other than qualified investors as defined in Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the Representative for any such offer; or

(c)     in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000, as amended (the “FSMA”),

provided that no such offer of units shall require the issuer or any underwriter to publish a prospectus pursuant to section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to any units in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any units to be offered so as to enable an investor to decide to purchase or subscribe for any units, and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

Each underwriter has represented and agreed that:

(a)     it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any units in circumstances in which Section 21(1) of the FSMA does not apply to the issuer; and

(b)    it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any units in, from or otherwise involving the United Kingdom.

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Notice to Residents of Japan

The underwriters will not offer or sell any of our units directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

Notice to Residents of Hong Kong

The underwriters and each of their affiliates have not (1) offered or sold, and will not offer or sell, in Hong Kong, by means of any document, our units other than (A) to “professional investors” as defined in the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made under that Ordinance or (B) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32 of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance or (2) issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere any advertisement, invitation or document relating to our units which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

Notice to Residents of Singapore

This prospectus or any other offering material relating to our units has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the units will be offered in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). Accordingly our units may not be offered or sold, or be the subject of an invitation for subscription or purchase, nor may this prospectus or any other offering material relating to our units be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act, (b) to a sophisticated investor, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.

Notice to Residents of Germany

Each person who is in possession of this prospectus is aware that no German sales prospectus (Verkaufsprospekt) within the meaning of the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz, the “Act”) of the Federal Republic of Germany has been or will be published with respect to our units. In particular, each underwriter has represented that it has not engaged and has agreed that it will not engage in a public offering (offentliches Angebot) within the meaning of the Act with respect to any of our units otherwise then in accordance with the Act and all other applicable legal and regulatory requirements.

Notice to Residents of France

The units are being issued and sold outside the Republic of France and that, in connection with their initial distribution, it has not offered or sold and will not offer or sell, directly or indirectly, any units to the public in the Republic of France, and that it has not distributed and will not distribute or cause to be distributed to the public in the Republic of France this prospectus or any other offering material relating to the units, and that such offers, sales and distributions have been and will be made in the Republic of France only to qualified investors (investisseurs qualifiés) in accordance with Article L.411-2 of the Monetary and Financial Code and decrét no. 98-880 dated October 1, 1998.

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Notice to Residents of the Netherlands

Our units may not be offered, sold, transferred or delivered in or from the Netherlands as part of their initial distribution or at any time thereafter, directly or indirectly, other than to, individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business or profession (which includes banks, securities intermediaries (including dealers and brokers), insurance companies, pension funds, collective investment institution, central governments, large international and supranational organizations, other institutional investors and other parties, including treasury departments of commercial enterprises, which as an ancillary activity regularly invest in securities; hereinafter, “Professional Investors”); provided that in the offer, prospectus and in any other documents or advertisements in which a forthcoming offering of our units is publicly announced (whether electronically or otherwise) in The Netherlands it is stated that such offer is and will be exclusively made to such Professional Investors. Individual or legal entities who are not Professional Investors may not participate in the offering of our units, and this prospectus or any other offering material relating to our units may not be considered an offer or the prospect of an offer to sell or exchange our units.

Notice to Prospective Investors in Switzerland

This prospectus is not intended to constitute an offer or solicitation to purchase or invest in the securities. The securities may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act (“FinSA”) and no application has or will be made to admit the securities shares to trading on any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the securities constitutes a prospectus pursuant to the FinSA, and neither this prospectus nor any other offering or marketing material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Notice to Prospective Investors in the Cayman Islands

No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.

Notice to Canadian Residents

Resale Restrictions

The distribution of units in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the units in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.

Representations of Canadian Purchasers

By purchasing units in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:

•        the purchaser is entitled under applicable provincial securities laws to purchase the units without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106 — Prospectus Exemptions, or Section 73.3 of the Securities Act (Ontario), as applicable;

•        the purchaser is a “permitted client” as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations;

•        where required by law, the purchaser is purchasing as principal and not as agent; and

•        the purchaser has reviewed the text above under Resale Restrictions.

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Conflicts of Interest

Canadian purchasers are hereby notified that BTIG, LLC is relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.

Statutory Rights of Action

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment

Canadian purchasers of units should consult their own legal and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about the eligibility of the units for investment by the purchaser under relevant Canadian legislation.

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LEGAL MATTERS

Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California, is acting as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity of the securities offered in this prospectus with respect to units, Class A common stock and warrants. In connection with this offering, Ellenoff Grossman & Schole LLP, New York, New York, is acting as counsel to the underwriters.

EXPERTS

The consolidated financial statements of Rosecliff Acquisition Corp ISpectral MD Holdings, Ltd. as of December 31, 20202022 and 2021, and for each of the years in the two-yearperiod from November 17, 2020 (inception) throughended December 31, 2020 appearing2022, included in this prospectus, have been audited by WithumSmith+Brown, PC,KPMG LLP, an independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere in this prospectus, andprospectus. Such financial statements are included in reliance on suchupon the report given on the authority of such firm given their authority as experts in auditingaccounting and accounting.auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATIONLEGAL MATTERS

The legality of the securities offered hereby will be passed upon for us by Reed Smith LLP.

Where you can find more information

We have filedfile annual, quarterly and current reports, proxy statements and other information with the SECSEC. We have also filed a registration statement on Form S-1, including exhibits, under the Securities Act with respect to the securities we are offeringshares of Common Stock and Warrants offered by this prospectus. This prospectus is part of the registration statement, but does not contain all of the information included in the registration statement. For further information about us and our securities, you should referstatement or the exhibits. Our SEC filings are available to the registration statement of which this prospectus formspublic on the internet at a website maintained by the SEC located at http://www.sec.gov. Those filings are also available to the public on, or accessible through, our website under the heading “Investors Relations” at https://www.spectral-ai.com/. The information on our web site, however, is not, and should not be deemed to be, a part and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.prospectus.

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Index toSpectral MD Holdings, Ltd.
Unaudited Condensed Consolidated Financial Statements
As of and for the Six Months Ended June 30, 2023 and 2022

 

Page

Audited Financial Statements of Rosecliff Acquisition Corp I:

Report of Independent Registered Public Accounting Firm

F-2

Unaudited Condensed Balance SheetSheets as of June 30, 2023 and December 31, 20202022

 

F-3

StatementUnaudited Condensed Statements of Operations for the period from November 17, 2020 (inception) through December 31, 2020three and six months ended June 30, 2023 and 2022

 

F-4

StatementUnaudited Condensed Statements of Changes in Stockholder’sStockholders’ Equity for the period from November 17, 2020 (inception) through December 31, 2020three and six months ended June 30, 2023 and 2022

 

F-5

StatementUnaudited Condensed Statements of Cash Flows for the period from November 17, 2020 (inception) through December 31, 2020six months ended June 30, 2023 and 2022

 

F-6

Notes to Unaudited Condensed Consolidated Financial Statements

 

F-7

Unaudited Pro Forma Condensed Combined Financial Information

Page

Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2023

F-22

Unaudited Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2023

F-23

Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2022

F-24

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

F-25

F-1

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholder and the Board of Directors of
Rosecliff Acquisition Corp IUNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Opinion onUnless otherwise indicated or the Financial Statements

We have auditedcontext otherwise requires, references in this section to “we,” “our,” “us” or other similar terms refer to the accompanying balance sheetbusiness and operations of Legacy Spectral MD Holdings, Ltd., and its subsidiaries prior to the business combination with Rosecliff Acquisition Corp I (the “Company”(“Rosecliff”). The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited quarterly condensed financial statements and related notes included elsewhere in this prospectus, as well as our audited annual consolidated financial statements and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of December 31, 2020, the related statements of operations, changes in stockholder’s equity and cash flows for the period from November 17, 2020 (inception) throughyears ended December31, 2020,2022 and the related notes (collectively referred to2021 included in Rosecliff’s final prospectus, as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the period from November 17, 2020 (inception) through December 31, 2020, in conformityamended, on form S-4/A filed with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) on August10, 2023 (the ‘Prospectus”). In addition to historical data, this discussion contains forward-looking statements about our business, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the PCAOB.

We conductedsections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included in the Prospectus. Additionally, our audit in accordance with the standardshistorical results are not necessarily indicative of the PCAOB and in accordance with auditing standards generally acceptedresults that may be expected for any period in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

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

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor since 2020.

New York, New York

January 27, 2021future.

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Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
BALANCE SHEETUnaudited Condensed Consolidated Balance Sheets
DECEMBER
31, 2020(in thousands, except share and per share data)

ASSETS

 

 

 

 

Deferred offering costs

 

$

164,899

 

Total Assets

 

$

164,899

 

  

 

 

 

LIABILITIES AND STOCKHOLDER’S EQUITY

 

 

 

 

Current Liabilities:

 

 

 

 

Accrued expenses

 

$

675

 

Accrued offering costs

 

 

99,899

 

Promissory note – related party

 

 

40,000

 

Total Current Liabilities

 

 

140,574

 

  

 

 

 

Commitments and contingencies

 

 

 

 

  

 

 

 

Stockholder’s Equity:

 

 

 

 

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

 

 

 

Class A common stock, $0.0001 par value; 80,000,000 shares authorized; none issued and outstanding

 

 

 

Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding(1)

 

 

575

 

Additional paid-in capital

 

 

24,425

 

Accumulated deficit

 

 

(675

)

Total Stockholder’s Equity

 

 

24,325

 

Total Liabilities and Stockholder’s Equity

 

$

164,899

 

 

June 30,
2023

 

December 31,
2022

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

8,166

 

 

$

14,174

 

Accounts receivable, net

 

 

1,520

 

 

 

2,294

 

Unbilled revenue

 

 

91

 

 

 

618

 

Prepaid expenses

 

 

342

 

 

 

331

 

Deferred offering costs

 

 

1,124

 

 

 

 

Other current assets

 

 

598

 

 

 

270

 

Total current assets

 

 

11,841

 

 

 

17,687

 

  

 

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

16

 

 

 

21

 

Right-of-use assets

 

 

1,141

 

 

 

1,008

 

Total Assets

 

$

12,998

 

 

$

18,716

 

  

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,657

 

 

$

2,759

 

Accrued expenses

 

 

2,394

 

 

 

2,631

 

Deferred revenue

 

 

509

 

 

 

 

Lease liabilities, short-term

 

 

773

 

 

 

680

 

Notes payable

 

 

 

 

 

175

 

Warrant liability

 

 

194

 

 

 

129

 

Total current liabilities

 

 

6,527

 

 

 

6,374

 

Lease liabilities, long-term

 

 

452

 

 

 

346

 

Total Liabilities

 

 

6,979

 

 

 

6,720

 

  

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Common stock ($0.001 par value); 400,000,000 shares authorized; 136,261,515 and 135,409,564 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

136

 

 

 

135

 

Additional paid-in capital

 

 

24,496

 

 

 

23,795

 

Accumulated deficit

 

 

(18,613

)

 

 

(11,934

)

Total stockholders’ equity

 

 

6,019

 

 

 

11,996

 

Total Liabilities and Stockholders’ Equity

 

$

12,998

 

 

$

18,716

 

____________

(1)      Includes an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).

TheSee accompanying notes are an integral part of theseto the condensed consolidated financial statements.statements

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Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
STATEMENT OF OPERATIONSUnaudited Condensed Consolidated Statements of Operations
FOR THE PERIOD FROM NOVEMBER 17, 2020 (INCEPTION) THROUGH DECEMBER
31, 2020(in thousands, except share and per share data)

Formation costs

 

$

675

 

Net loss

 

$

(675

)

  

 

 

 

Weighted average shares outstanding, basic and diluted(1)

 

 

5,000,000

 

  

 

 

 

Basic and diluted net loss per common share

 

$

(0.00

)

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

Research and development revenue

 

$

4,251

 

 

$

6,390

 

 

$

9,329

 

 

$

12,234

 

Cost of revenue

 

 

(2,460

)

 

 

(3,678

)

 

 

(5,357

)

 

 

(7,132

)

Gross profit

 

 

1,791

 

 

 

2,712

 

 

 

3,972

 

 

 

5,102

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

4,781

 

 

 

2,718

 

 

 

9,861

 

 

 

5,729

 

Total operating costs and expenses

 

 

4,781

 

 

 

2,718

 

 

 

9,861

 

 

 

5,729

 

Operating loss

 

 

(2,990

)

 

 

(6

)

 

 

(5,889

)

 

 

(627

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income (expense)

 

 

41

 

 

 

3

 

 

 

86

 

 

 

(1

)

Change in fair value of warrant liability

 

 

(81

)

 

 

(38

)

 

 

(65

)

 

 

28

 

Foreign exchange transaction gain (loss)

 

 

 

 

 

(232

)

 

 

13

 

 

 

(204

)

Transaction costs

 

 

 

 

 

 

 

 

(738

)

 

 

 

Other income

 

 

 

 

 

19

 

 

 

 

 

 

17

 

Total other income (expense)

 

 

(40

)

 

 

(248

)

 

 

(704

)

 

 

(160

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(3,030

)

 

 

(254

)

 

 

(6,593

)

 

 

(787

)

Provision for income taxes

 

 

(40

)

 

 

(11

)

 

 

(86

)

 

 

(6

)

Net loss

 

$

(3,070

)

 

$

(265

)

 

$

(6,679

)

 

$

(793

)

Net loss per share of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

$

(0.02

)

 

$

(0.00

)

 

$

(0.05

)

 

$

(0.01

)

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

136,198,713

 

 

 

135,347,064

 

 

 

136,097,641

 

 

 

135,323,279

 

____________

(1)      Excludes an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).

TheSee accompanying notes are an integral part of theseto the condensed consolidated financial statements.statements

F-4

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITYUnaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
FOR THE PERIOD FROM NOVEMBER 17, 2020 (INCEPTION) THROUGH DECEMBER
31, 2020(In thousands, except share data)

 

Class B
Common Stock

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total
Stockholder’s
Equity

  

Shares

 

Amount

 

Balance, November 17,
2020 (inception)

 

 

$

 

$

 

$

 

 

$

 

    

 

  

 

  

 

 

 

 

 

 

 

Issuance of Class B common stock to Sponsor(1)

 

5,750,000

 

 

575

 

 

24,425

 

 

 

 

 

25,000

 

    

 

  

 

  

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

(675

)

 

 

(675

)

Balance, December 31, 2020

 

5,750,000

 

$

575

 

$

24,425

 

$

(675

)

 

$

24,325

 

 

Common Stock

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

  

Shares

 

Amount

 

Balance at December 31, 2022

 

135,409,564

 

$

135

 

$

23,795

 

$

(11,934

)

 

$

11,996

 

Stock-based compensation

 

562,500

 

 

1

 

 

299

 

 

 

 

 

300

 

Stock option exercises

 

104,451

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

(3,609

)

 

 

(3,609

)

Balance at March 31, 2023

 

136,076,515

 

$

136

 

$

24,094

 

$

(15,543

)

 

$

8,687

 

Stock-based compensation

 

125,000

 

 

 

 

396

 

 

 

 

 

396

 

Stock options exercise

 

60,000

 

 

 

 

6

 

 

 

 

 

6

 

Net loss

 

 

 

 

 

 

 

(3,070

)

 

 

(3,070

)

Balance at June 30, 2023

 

136,261,515

 

$

136

 

$

24,496

 

$

(18,613

)

 

$

6,019

 

 

Common Stock

 

Additional
Paid-in
Capital

 

Accumulated
Deficit

 

Total
Stockholders’
Equity

  

Shares

 

Amount

 

Balance at December 31, 2021

 

135,034,564

 

$

135

 

$

22,640

 

$

(9,022

)

 

$

13,753

 

Stock-based compensation

 

187,500

 

 

 

 

333

 

 

 

 

 

333

 

Net loss

 

 

 

 

 

 

 

(528

)

 

 

(528

)

Balance at March 31, 2022

 

135,222,064

 

$

135

 

$

22,973

 

$

(9,550

)

 

$

13,558

 

Stock option exercises

 

150,000

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

187,500

 

 

1

 

 

293

 

 

 

 

 

294

 

Net loss

 

 

 

 

 

 

 

(265

)

 

 

(265

)

Balance at June 30, 2022

 

135,559,564

 

$

136

 

$

23,266

 

$

(9,815

)

 

$

13,587

 

____________

(1)      Includes an aggregate of up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 5).

TheSee accompanying notes are an integral part of theseto the condensed consolidated financial statements.statements

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Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
STATEMENT OF CASH FLOWSUnaudited Condensed Consolidated Statements of Cash Flows
FOR THE PERIOD FROM NOVEMBER 17, 2020 (INCEPTION) THROUGH DECEMBER
31, 2020(in thousands)

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(675

)

Changes in operating assets and liabilities:

 

 

 

 

Accrued expenses

 

 

675

 

Net cash used in operating activities

 

 

 

  

 

 

 

Net change in cash

 

 

 

Cash at beginning of period

 

 

 

Cash at end of period

 

$

 

  

 

 

 

Non-cash financing activities:

 

 

 

 

Deferred offering costs included in accrued offering costs

 

$

99,899

 

Deferred offering costs paid by Sponsor in exchange for the issuance of Class B common stock

 

$

25,000

 

Deferred offering costs paid through promissory note – related party

 

$

40,000

 

 

Six Months Ended
June 30,

  

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(6,679

)

 

$

(793

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

5

 

 

 

6

 

Stock-based compensation

 

 

696

 

 

 

627

 

Amortization of right-of-use assets

 

 

350

 

 

 

251

 

Change in fair value of warrant liability

 

 

65

 

 

 

(28

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

774

 

 

 

(431

)

Unbilled revenue

 

 

527

 

 

 

(681

)

Prepaid expenses

 

 

(11

)

 

 

415

 

Other current assets

 

 

(322

)

 

 

(107

)

Other assets

 

 

 

 

 

40

 

Accounts payable

 

 

(752

)

 

 

1,587

 

Accrued expenses

 

 

(405

)

 

 

(548

)

Deferred revenue

 

 

509

 

 

 

 

Lease liabilities

 

 

(284

)

 

 

(300

)

Net cash (used in) provided by operating activities

 

 

(5,527

)

 

 

38

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payments of deferred offering costs

 

 

(306

)

 

 

 

Payments for notes payable

 

 

(175

)

 

 

(583

)

Net cash used in financing activities

 

 

(481

)

 

 

(583

)

Net decrease in cash and cash equivalents

 

 

(6,008

)

 

 

(545

)

Cash and cash equivalents, beginning of period

 

 

14,174

 

 

 

16,121

 

Cash and cash equivalents, end of period

 

$

8,166

 

 

$

15,576

 

  

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

3

 

 

$

11

 

  

 

 

 

 

 

 

 

Noncash operating and financing activities disclosure:

 

 

 

 

 

 

 

 

Recognition of Right-of-use assets and related lease liabilities upon adoption of ASC 842

 

$

 

 

$

624

 

Recognition of Right-of-use assets and related lease liabilities upon lease amendment

 

$

483

 

 

$

 

Unpaid deferred offering costs

 

$

818

 

 

$

 

Broker receivable for stock option exercises

 

$

6

 

 

$

 

TheSee accompanying notes are an integral part of theseto the condensed consolidated financial statements.statements

F-6

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 1 — DESCRIPTION1. ORGANIZATION, NATURE OF ORGANIZATIONBUSINESS AND BUSINESS OPERATIONSLIQUIDITY

Rosecliff Acquisition Corp ISpectral MD Holdings, Ltd, (the “Company”), headquartered in Dallas, Texas, was incorporated in Delaware on November 17, 2020.March 9, 2009. The Company was formedcurrently trades on the AIM market of the London Stock Exchange (the “AIM”).

The Company is devoting substantially all of its efforts towards research and development of its DeepView® Wound Imaging System. The Company has not generated any product revenue to date. The Company currently generates revenue from contract development and research services by providing such services to governmental agencies, primarily to the Biomedical Advanced Research and Development Authority (“BARDA”). The Company operates in one segment.

On April 11, 2023, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time), by and among Rosecliff Acquisition Corp I (“Rosecliff”), Rosecliff Ghost Merger Sub I Inc. and Ghost Merger Sub II LLC, whereby all of the Company’s shares were exchanged with Rosecliff for the purpose17,000,000 ordinary shares of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combinationRosecliff with one or more businessesan aggregate equity value of $170.0 million (the “Business Combination”).

The Company is not limitedPursuant to a particular industry or sector for purposes of consummating athe Business Combination. The Company is an early stageCombination Agreement, on the Closing, in sequential order: (a) Ghost Merger Sub I will merge with and emerging growth company and, as such,into the Company, is subject to allwith the Company continuing as the surviving company as a wholly owned subsidiary of Rosecliff (the “Spectral Merger”) and then, (b) the risks associatedCompany will merge with early stage and emerging growth companies.into Ghost Merger Sub II (the “SPAC Merger”, together with the Spectral Merger (the “Merger”)), with Ghost Merger Sub II surviving the SPAC Merger as a direct wholly-owned subsidiary of Rosecliff. Ghost Merger Sub II will be renamed Spectral AI, Inc. (the “Combined Company”).

Liquidity

As of June 30, 2023 and December 31, 2020,2022, the Company had not commenced any operations. All activity for the period from November 17, 2020 (inception) through December 31, 2020 relates to the Company’s formationapproximately $8.2 million and the proposed initial public offering (“Proposed Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion$14.2 million, respectively, in cash, and an accumulated deficit of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Proposed Public Offering.$18.6 million and $11.9 million, respectively. The Company has selected December 31 ashistorically funded its fiscal year end.

The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through the Proposed Public Offeringissuance of 20,000,000 units (each, a “Unit” and collectively, the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”) at $10.00 per Unit (or 23,000,000 Units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3,notes and the sale of 4,000,000 warrants (or 4,400,000 warrants ifpreferred stock and common stock. During 2022, the underwriters’ over-allotmentCompany was awarded additional funding of $8.2 million associated with option is exercised on full) (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to Rosecliff Acquisition Sponsor I LLC (the “Sponsor”), that will close simultaneously with the Proposed Public Offering.

The Company’s management has broad discretion with respect to the specific application1B of the net proceedscontract with BARDA. During 2021, the Company executed Options 1A and 1B of the Proposed Public Offeringcontract with BARDA for funding of $39.4 million and during 2022 was awarded additional funding of $8.2 million associated with option 1B, resulting in aggregated funding for Options 1A and 1B of $47.6 million, of which $4.1 million is remaining as of June 30, 2023. The BARDA contract funding is to execute the clinical training study of DeepView® Wound Imaging System (“DeepView System”) for burn wound healing assessment. In April, 2023, the Company received a $4.0 million grant from Medical Technology Enterprise Consortium (“MTEC”) for a project that is expected to be completed by April 2024. The MTEC project is for the development of a handheld device for the DeepView System. See Research and Development Revenue below. In September 2023, the Company issued 7,679,198 shares of common stock for $3.4 million (the “Equity Raise”). With the remaining funding under the BARDA contract, the MTEC funding and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance thatEquity Raise, the Company believes it will be ablehave sufficient working capital to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations with one or more operating businesses or assets that together have a fair market value equal tofund operations for at least 80% ofone year beyond the assets held in the Trust Account (as defined below) (excluding any deferred underwriting commissions and taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing of the Proposed Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Proposed Public Offering, including proceeds of the Private Placement Warrants, will be held in a trust account (“Trust Account”), located in the United States and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below.

The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Public Shares

F-7

Table of Contents

ROSECLIFF ACQUISITION CORP I
NOTES TO FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)

subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Public Offering in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”

The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 following any related redemptions and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Proposed Public Offering in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.

Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Certificate of Incorporation will provide that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent of the Company.

The Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have 24 months from the closing of the Proposed Public Offering to complete a Business Combination (the “Combination Period”). If the Company has 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 pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

F-8

Table of Contents

ROSECLIFF ACQUISITION CORP I
NOTES TO FINANCIAL STATEMENTS

NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)

The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Proposed Public Offering price per Unit ($10.00).

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of therelease date of the liquidationcondensed consolidated financial statements. Additionally, the contract with BARDA has a potential funding of the Trust Account,up to $96.9 million, in aggregate for Option 1A, 1B and 2, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Company’s independent registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.future options are executed.

NOTE 2 —2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying auditedCompany’s condensed consolidated financial statements are presentedhave been prepared in conformity with U.S. generally accepted accounting principles generally accepted in the United States of America (“GAAP”) and pursuant toas determined by the rules and regulations of the SEC.Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

The Company does notaccompanying condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and statements of cash flows for the six months ended June 30, 2023 and 2022 are unaudited. The interim condensed consolidated financial statements have sufficient liquidity to meet its anticipated obligations overbeen prepared on the next year fromsame basis as the date of issuance of theseaudited annual consolidated financial statements. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until the earlier of the consummation of the Proposed Public Offering or one year from the date of issuance of these financial statements.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

F-9F-7

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 2 —2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

Further, Section 102(b)(1)statements and, in management’s opinion, include all adjustments consisting of only normal recurring adjustments necessary for the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registrationfair statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted outposition as of usingJune 30, 2023 and its results of operations and cash flows for the extended transition period difficult or impossible becausethree and six months ended June 30, 2023 and 2022. The results of operations for the three and six months ended June 30, 2023 and 2022 are not necessarily indicative of the potential differencesresults to be expected for the full fiscal year or any other period.

These interim condensed consolidated financial statements should be read in accounting standards used.conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2022.

Certain reclassifications have been made to prior year financial statements to conform with current year presentation.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Spectral MD, Inc. and Spectral MD UK. Significant inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of these condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities and disclosure of contingent assets and liabilities atreported in the date of the financial statementsCompany’s balance sheets and the reported amounts of expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimatereported for each of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements,periods presented are affected by estimates and assumptions, which management considered in formulating its estimate, could change in the near term dueare used for, but not limited to, one or more future confirming events. Accordingly, the actualrevenue recognition, warrant liability, stock-based compensation expense, and income tax valuation allowances. Actual results could differ significantly from thosethese estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. All cash and cash equivalents are held in US financial institutions.

Accounts Receivable, Net and Unbilled Revenue

Accounts receivable represent amounts due from US government agencies pursuant to research and development contracts associated with the Company’s DeepView® Wound Imaging System. Accounts receivable amounted to approximately $1.5 million and $2.3 million as of June 30, 2023 and December 31, 2022, respectively.

The Company evaluates the collectability of its receivables based on a variety of factors, including the length of time the receivables are past due, the financial health of its customers and historical experience. Based upon the review of these factors, the Company recorded no allowance for doubtful accounts as of June 30, 2023 and December 31, 2022.

The Company records unbilled revenue when revenue is recognized prior to billing customers. Unbilled revenue amounted to approximately $0.1 million and $0.6 million as of June 30, 2023 and December 31, 2022, respectively.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to credit risk consist principally of cash and cash equivalents and accounts receivable. Primarily all cash and cash equivalents are held in US financial institutions which, at times, exceed federally insured limits. The Company has not recognized any losses from credit risks on such accounts. The Company believes it is not exposed to significant credit risk on cash and cash equivalents.

F-8

Table of Contents

Spectral MD Holdings, Ltd.
Notes to Unaudited Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Additional credit risk is related to the Company’s concentration of receivables. As of June 30, 2023 and December 31, 2022, receivables were concentrated from one customer (which is a US. government agency) representing 71% and 96% of total net receivables, respectively. No allowance for doubtful accounts were recorded as of June 30, 2023 and December 31, 2022.

One customer (which is a U.S. government agency) accounted for 95% and 96% for the three and six months ended June 30, 2023, respectively, and 87% and 92%, for the three and six months ended June 30, 2022, respectively, of the recognized research and development revenue.

Deferred Offering Costsoffering costs

Deferred offering costs consist of legal, accounting and other costsdirect expenses incurred through the balance sheet date that are directly related to the Proposed Public OfferingBusiness Combination and that will be charged to stockholder’sstockholders’ equity upon the completion of the Proposed Public Offering.Business Combination. Should the Proposed Public OfferingBusiness Combination prove to be unsuccessful these deferred costs, as well as additional expenses to be incurred, will be charged to operations.other expense. Offering costs in excess of proceeds from the Business Combination, if any, will be charged to other expense. As of June 30, 2023, the Company recorded $1.1 million of deferred offering costs, of which $0.8 million are unpaid.

Income TaxesFair Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 —

Unadjusted quoted prices in active markets that are assessable at the measurement date for identical, unrestricted assets or liabilities.

Level 2 —

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 —

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Fair Value of Financial Instruments

Financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments.

Foreign Currency

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognizedreporting currency for the estimated future tax consequences attributable to differences between thecondensed consolidated financial statements carrying amounts of existing assetsthe Company is the US dollar. The functional currency of the Company and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income inits wholly owned subsidiary Spectral MD, Inc. is the years in which those temporary differences are expected to be recovered or settled.US dollar. The effect on deferred taxfunctional currency of Spectral MD UK is its local currency, the British pound. The assets and liabilities of Spectral MD UK is translated into US. dollars at exchange rates in effect at the end of each reporting period, and the revenues and expenses are translated at average exchange rates in effect during the applicable period. Translation adjustments are included in accumulated other comprehensive income as a component of stockholders’ equity. As of June 30, 2023 and December 31, 2022, the Company’s translation adjustments are not material.

F-9

Table of Contents

Spectral MD Holdings, Ltd.
Notes to Unaudited Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Monetary assets and liabilities denominated in currencies other than the functional currency are translated at exchange rates in effect at the balance sheet date. Resulting unrealized gains and losses are included in other income, net in the condensed consolidated statements of operations. For the three and six months ended June 30, 2023 the Company recorded approximately $0 and $13,000, respectively, of foreign exchange transaction gain. For the three and six months ended June 30, 2022, the Company recorded approximately $0.2 million foreign exchange transaction loss for both periods, primarily related to the Company’s bank account denominated in British Pounds and accounts payable denominated in British Pounds, included in foreign exchange transaction loss in the condensed consolidated statements of operations.

Leases

The Company accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded in the condensed consolidated balance sheets as both a right of use asset and a lease liability, calculated by discounting fixed lease payments at the rate implicit in the lease or the Company’s incremental borrowing rate factoring the term of the lease. The incremental borrowing rate used by the Company is an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Because the Company does not generally borrow on a collateralized basis, it uses the interest rate it pays on its noncollateralized borrowings as an input to deriving an appropriate incremental borrowing rate, adjusted for the amount of lease payments, the lease term and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset results in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. In calculating the right of use assets and lease liabilities, the Company elects to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the requirement to capitalize right of use assets and liabilities as an accounting policy election.

For the three and six months ended June 30, 2023 and 2022, the Company did not have any finance leases.

Warrant Liability

On June 22, 2021, in conjunction with the closing of the Company’s IPO, the Company issued 762,712 warrants, with strike price of $0.89 and a five-year life, to SP Angel Corporate Finance LLP (“SP Angel”), who acts as nominated adviser and broker to the Company for the purposes of the AIM Rules. As of June 30, 2023, there are 762,712 warrants outstanding with an exchange rate adjusted exercise price of $0.75.

The Company accounts for its warrants issued to SP Angel as derivative liabilities in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). Accordingly, the Company recognizes the instruments as liabilities at fair value, determined using the Black-Scholes option-pricing model, and adjusts the instruments to fair value at the end of each reporting pferiod. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in tax ratesfair value is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.Company’s condensed consolidated statements of operations.

ASC 740 prescribes a recognition thresholdResearch and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. Development Revenue

The Company recognizes accrued interestrevenue when the Company’s customers obtain control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services by analyzing the following five steps: (1) identify the contract with a customer(s); (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and penalties related(5) recognize revenue when (or as) the Company satisfies a performance obligation. In order to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefitstransfer control to the customer for contract development and no amounts accrued for interestmanufacturing services, the Company must have a present right to payment, legal title must have passed to the customer, and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result inthe customer must have the significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

F-10

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 2 —2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(cont.)

risks and rewards of ownership. Research and development revenue contracts are generally recognized based upon the cost-to-cost measure of progress, provided that the Company meets the criteria associated with transferring control of the good or service over time.

The provision for income taxes was deemedCompany generates research and development revenue primarily from cost-plus-fee contracts associated with development of certain product candidates. Revenues from reimbursable contracts are recognized as costs are incurred, generally based on allowable costs incurred during the period, plus any recognizable earned fee. The Company uses this input method to measure progress as the customer has the benefit of access to the development research under these projects and therefore benefits from the Company’s performance incrementally as research and development activities occur under each project. We consider fixed fees under cost-plus-fee contracts to be de minimisearned in proportion to the allowable costs incurred in performance of the contract. Revenue for long-term development contracts is considered variable consideration because the deliverable is dependent on the successful completion of development and is generally recognized based upon the cost-to-cost measure of progress, provided that the Company meets the criteria associated with satisfying the performance obligation over time. The Company was awarded multiyear contracts in 2019 and 2021 (modified for additional funding in 2022) by BARDA for the development of the Company’s DeepView® Wound Imaging Solution. BARDA may award contracts that are less than 12 months depending on the scope of work and deliverables.

Payments from customers are generally received within 30 days of when the invoice is sent.

Because the Company’s contracts have an expected duration of one year or less, the Company has elected the practical expedient in ASC 606-10-50-14(a) to not disclose information about its remaining performance obligations.

Research and Development Expense

The Company expenses research and development costs as operating expenses as incurred. These expenses include salaries for research and development personnel, consulting fees, product development, pre-clinical studies, clinical trial costs, and other fees and costs related to the development of the technology. For the three months ended June 30, 2023 and 2022, research and development expense was $3.7 million and $4.0 million, respectively, of which $2.5 million and $3.7 million, respectively, is related to the BARDA contract and included in cost of revenue and $1.2 million and $0.3 million, respectively, is included in general and administrative expenses. For the six months ended June 30, 2023 and 2022, research and development expense was $7.7 million and $7.9 million, respectively, of which $5.4 million and $7.1 million, respectively, is related to the BARDA contract and included in cost of revenue and $2.3 million and $0.8 million, respectively, is included in general and administrative expenses.

Stock-Based Compensation

The Company accounts for all stock-based payments to employees and non-employees, including grants of stock options, restricted stock units (“RSUs”), restricted stock awards (“RSAs”) and stock options with non-market performance conditions (“PSOs”) to be recognized in the condensed consolidated financial statements, based on their respective grant date fair values. The Company estimates the fair value of stock option grants and PSOs using the Black-Scholes option pricing model. The RSUs and RSAs are valued based on the fair value of the Company’s common stock on the date of grant. The assumptions used in calculating the fair value of the Company’s stock and stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. The Company expenses stock-based compensation related to stock options, RSUs and RSAs over the requisite service period. As the PSOs have performance conditions, compensation expense is recognized for each award if and when the Company’s management deems it probable that the performance conditions will be satisfied. Forfeitures are recorded as they occur. Compensation previously recorded for unvested equity awards that are forfeited is reversed upon forfeiture. The Company expenses stock-based compensation to employees over the requisite service period, from November 17, 2020 (inception) through December 31, 2020.on a straight-line basis, based on the estimated grant-date fair value of the awards.

F-11

Table of Contents

Spectral MD Holdings, Ltd.
Notes to Unaudited Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Income Taxes

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company’sCompany recognizes deferred tax assets were deemedand liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be de minimisrealized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company has no uncertain tax positions as of June 30, 2023 and December 31, 2020.2022 that qualify for either recognition or disclosure in the condensed consolidated financial statements under this guidance.

The Company’s policy is to classify assessments, if any, for tax related interest as interest expense and penalties as general and administrative expenses in the condensed consolidated statements of operations. There were no amounts accrued for interest or penalties for the three and six months ended June 30, 2023 and 2022.

Comprehensive Loss

Comprehensive loss is equal to net loss as presented in the condensed consolidated statements of operations, as the Company did not have any material other comprehensive income or loss for the periods presented.

Net Loss per Share of Common ShareStock

NetBasic net loss per share of common stock is computed by dividing the net loss attributable to common stockholders by the weighted average-average number of shares of common stock outstanding during the period, excluding sharesperiod. Diluted net loss per share of common stock subject to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of 750,000 shares of Class B common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriters (see Note 5). At December 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of common stock and then share in theadjusts basic earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the potentially dilutive impact of unvested restricted stock, stock options and warrants. Dilutive securities having an anti-dilutive effect on diluted net earnings per share are excluded from the calculation. The dilutive effect of the unvested restricted stock and stock options is calculated using the treasury stock method. For warrants that are liability-classified, during periods when the impact is dilutive, the Company assumes share settlement of the instruments as of the beginning of the reporting period presented.

Fair Value of Financial Instruments

Theand adjusts the numerator to remove the change in fair value of the Company’s assetswarrant liability and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximatesadjusts the carrying amounts represented indenominator to include the balance sheet, primarily due to their short-term nature.dilutive shares calculated using the treasury stock method.

RecentRecently Adopted Accounting Standards

Management does not believe that any recentlyIn June 2016, the FASB issued but not yet effective, accounting standards, if currently adopted, would have a material effectASU No. 2016-13, Financial Instruments — Credit Losses, which was subsequently amended by ASU 2018-19 and ASU 2019-10. This standard requires the measurement of expected credit losses for financial instruments carried at amortized cost held at the reporting date based on historical experience, current conditions and reasonable forecasts. The updated guidance also amends the Company’s financial statements.

current otherNOTE 3 — PROPOSED PUBLIC OFFERING-than-temporary

Pursuant impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the Proposed Public Offering,difference between a security’s amortized cost basis and its fair value. In addition, the Company intendslength of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The main objective of this ASU is to offer for sale 20,000,000 Units (or 23,000,000 Units ifprovide financial statement users with more decision-useful information about the underwriters’ over-allotment option is exercised in full)expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at a price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-third of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7).

NOTE 4 — PRIVATE PLACEMENT

The Sponsor has agreed to purchase an aggregate of 4,000,000 Private Placement Warrants (or 4,400,000 Private Placement Warrants if the underwriters’ over-allotment is exercised in full) at a price of $1.50 per Private Placement Warrant ($6,000,000, or an aggregate of $6,600,000 if the underwriters’ over-allotment is exercised in full) from the Company in a private placement that will occur simultaneously with the closing of the Proposed Public Offering. Each whole Private Placement Warrant will be exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the sale of the Private Placement Warrants will be added to the net proceeds from the Proposed Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

F-11

Table of Contents

ROSECLIFF ACQUISITION CORP I
NOTES TO FINANCIAL STATEMENTS

NOTE 5 — RELATED PARTIES

Founder Shares

During the period ended December 31, 2020, the Sponsor paid $25,000 to cover certain of the Company’s offering costs in exchange for 5,750,000 shares of the Company’s Class B common stock (the “Founder Shares”). The Founder Shares include an aggregate of up to 750,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding common stock upon the consummation of the Proposed Public Offering.

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Administrative Support Agreement

each reporting date. The Company intends to enter into an agreement, commencingadopted this standard on the effective date of the Proposed Public Offering through the earlier of the Company’s consummation of a Business CombinationJanuary 1, 2023, with no impact on its condensed consolidated financial statements and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, support and administrative services.

Promissory Note — Related Party

On December 10, 2020, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) June 30, 2021 or (ii) the consummation of the Proposed Public Offering. As of December 31, 2020, there was $40,000 outstanding under the Promissory Note.

Related Party Loans

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. At December 31, 2020, there were no Working Capital Loans outstanding.related disclosures.

F-12

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 6 — COMMITMENTS AND CONTINGENCIES2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

RisksRecently Issued Accounting Standards

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and Uncertainties

Management(3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The amendments in this update are effective for the Company on January 1, 2025. Early adoption is currentlypermitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the COVIDcondensed consolidated financial statements.

-193. FAIR VALUE MEASUREMENTS pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on

The following table presents information about the Company’s financial position, results of its operations, close of the Proposed Public Offering and/or search forliabilities that are measured at fair value on a target company, the specific impact is not readily determinablerecurring basis as of June 30, 2023 and December 31, 2022, by level within the date of these financial statements. The financial statements do not include any adjustments that might result fromfair value hierarchy (in thousands):

 

Fair value measured as of June 30, 2023

  

Fair value at
June 30,
2023

 

Quoted
prices in
active markets
(Level 1)

 

Significant
other
observable
inputs
(Level 2)

 

Significant
unobservable
inputs
(Level 3)

Warrant liability

 

$

194

 

$

 

$

 

$

194

 

Fair value measured as of December 31, 2022

  

Fair value at
December 31,
2022

 

Quoted
prices in
active markets
(Level 1)

 

Significant
other
observable
inputs
(Level 2)

 

Significant
unobservable
inputs
(Level 3)

Warrant liability

 

$

129

 

$

 

$

 

$

129

There were no transfers between Level 1, 2 or 3 during the outcome of this uncertainty.

Registration Rightsthree and six months ended June 30, 2023 and 2022.

The holdersfollowing table presents changes in Level 3 liabilities measured at fair value for the three and six months ended June 30, 2023 and 2022 (in thousands).

Balance – January 1, 2023

 

$

129

 

Change in fair value

 

 

(16

)

Balance – March 31, 2023

 

$

113

 

Change in fair value

 

 

81

 

Balance – June 30, 2023

 

$

194

 

  

 

 

 

Balance – January 1, 2022

 

$

186

 

Change in fair value

 

 

(66

)

Balance – March 31, 2022

 

$

120

 

Change in fair value

 

 

38

 

Balance – June 30, 2022

 

$

158

 

Both observable and unobservable inputs were used to determine the fair value of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants or warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Proposed Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands,positions that the Company register such securities. In addition,has classified within the holders have certain “piggy-back” registration rightsLevel 3 category. Unrealized gains and losses associated with respectliabilities within the Level 3 category include changes in fair value that were attributable to registration statements filed subsequent to the completion of a Business Combinationboth observable (e.g., changes in market interest rates) and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidated damages or other cash settlement provisions resulting from delaysunobservable (e.g., changes in registering our securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company will grant the underwriters a 45-day option from the date of Proposed Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Proposed Public Offering price less the underwriting discounts and commissions.

The underwriters will be entitled to a cash underwriting discount of $0.20 per Unit, or $4,000,000 in the aggregate (or $4,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Public Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full). The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

NOTE 7 — STOCKHOLDER’S EQUITY

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2020, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 80,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At December 31, 2020, there were no shares of Class A common stock issued or outstanding.unobservable long- dated volatilities) inputs.

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Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 7 — STOCKHOLDER’S EQUITY 3. FAIR VALUE MEASUREMENTS(cont.)

The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement:

 

June 30,
2023

 

December 31,
2022

Strike price (per share)

 

$

0.75

 

 

$

0.71

 

Contractual term (years)

 

 

4.0

 

 

 

4.5

 

Volatility (annual)

 

 

71.2

%

 

 

72.6

%

Risk-free rate

 

 

4.1

%

 

 

4.0

%

Dividend yield (per share)

 

 

0.0

%

 

 

0.0

%

Class B Common Stock 4. RESEARCH AND DEVELOPMENT REVENUE

For the three and six months ended June 30, 2023 and 2022, the Company’s revenues disaggregated by the major sources was as follows (in thousands):

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

BARDA

 

$

4,020

 

$

6,255

 

$

8,963

 

$

11,963

Other U.S governmental authorities

 

 

231

 

 

135

 

 

366

 

 

271

Total revenue

 

$

4,251

 

$

6,390

 

$

9,329

 

$

12,234

5. ACCRUED EXPENSES

Accrued expenses consist of the following as of June 30, 2023 and December 31, 2022 (in thousands):

 

June 30,
2023

 

December 31,
2022

Salary and wages

 

$

1,106

 

$

1,135

Provision operating expenses

 

 

414

 

 

736

Benefits

 

 

790

 

 

650

Franchise tax

 

 

84

 

 

110

Total accrued expenses

 

$

2,394

 

$

2,631

6. NOTES PAYABLE

Insurance Note

In June 2022 and 2021, the Company entered into financing agreements for a portion of its insurance premium for approximately $0.4 million (the “2022 Insurance Note”) and $0.5 million (the “2021 Insurance Note”), respectively. The 2022 Insurance Note and 2021 Insurance Note bear interest at 6.7% per annum and 5.7% per annum, respectively, and are each payable in equal monthly payments of principal and interest maturing in May 2023 and February 2022, respectively. The Company is authorizeddetermined that the carrying amounts of the 2022 Insurance Note and 2021 Insurance Note approximate fair value due to issue 20,000,000 sharesthe short-term nature of Class B common stock with a par valueborrowings and current market rates interest rates.

During the six months ended June 30, 2023, the Company repaid the remaining balance of $0.0001 per share. Holdersapproximately $0.2 million of Class B common stock are entitled to one voteprincipal and interest for each share. Atthe 2022 Insurance Note. As of December 31, 2020, there were 5,750,000 shares of Class B common stock issued and outstanding, of which an aggregate of up to 750,000 shares of Class B common stock are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding common stock after the Proposed Public Offering.

Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our shareholders, except as otherwise required by law.

The shares of Class B common stock will automatically convert into Class A common stock at the time of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Proposed Public Offering and related to the closing of a Business Combination, the ratio at which the shares of Class B common stock will convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the issued and outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of all shares of common stock issued and outstanding upon the completion of the Proposed Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination.

Warrants — Public Warrants may only be exercised in whole and only for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Proposed Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to2022, the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisablehad an outstanding balance of $0.2 million, respectively, for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

Notwithstanding the above, if the shares of Class A common stock are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act2022 Insurance Note.

F-14

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 7 — STOCKHOLDER’S EQUITY 6. NOTES PAYABLE(cont.)

and, inDuring the eventsix months ended June 30, 2022, the Company so elects,repaid the remaining balance of approximately $0.2 million, respectively, for the 2021 Insurance Note. There was no outstanding balance for the 2021 Insurance Note as of December 31, 2022.

PPP Loan

On April 13, 2020, the Company will notentered into a promissory note with JPMorgan Chase Bank, N.A., as lender, pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) for $768,575 (the “PPP Loan”). The PPP Loan, which matured on April 13, 2022 and bears interest at 1% per annum, can be prepaid at any time prior to maturity with no prepayment penalties. The Company could defer interest and principal payments until September 13, 2021. Beginning on September 13, 2021, the Company was required to file or maintain in effect a registration statement, but will use its commercially reasonable effortsmake equal monthly payments of principal and interest until the loan maturity on April 13, 2022. The PPP Loan is subject to register or qualifycustomary terms for payment defaults and breaches of representations and warranties. The Company did not request the shares under applicable blue sky lawsPPP Loan to be forgiven. During the extent an exemptionsix months ended June 30, 2022, the Company repaid the remaining $0.4 million of principal and interest for the PPP Loan. There was no outstanding balance for the PPP Loan as of December 31, 2022.

7. Commitments and Contingencies

Legal Matters

The Company is not available.

Redemptiona party to any material legal proceedings and is not aware of Warrants When the Price per share of Class A common stock Equalsany pending or Exceeds $18.00 — Once the warrants become exercisable,threatened claims. From time to time, the Company may redeembe subject to various legal proceedings and claims that arise in the warrants (except as described herein with respectordinary course of its business activities.

8. Leases

The Company leases office space for its principal office in Dallas, Texas, which was extended during 2022 to the Private Placement Warrants):

•        expire in whole and notMay 2024. This lease was extended again in part;

•        at a price of $0.01 per warrant;

•        upon not less than 30 days’ prior written notice of redemption2023 to each warrant holder; and

•        if, and only if, the last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on whichexpire in December 2024. During 2022, the Company sendsentered into a lease for office space in the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted).United Kingdom under a lease that expires in May 2023.

If and when the warrants become redeemable byDuring 2023, the Company entered into a lease for office space in the Company may exercise its redemption right even if it is unable to register or qualifyUnited Kingdom for annual payments of $0.1 million under a lease that expires in March 2024. The lease has been excluded from the underlying securities for sale under all applicable state securities laws.

Redemption of Warrants When the Price per share of Class A common stock Equals or Exceeds $10.00 — Once the warrants become exercisable, the Company may redeem the outstanding warrants:

•        in whole and not in part;

•        at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the shares of Class A common stock;

•        if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and

•        if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same termstables below as the outstanding Public Warrants, as described above.term is twelve months.

The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution fromfollowing table summarizes quantitative information about the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, availableoperating leases for the funding ofthree and six months ended June 30, 2023 and 2022 (dollars in thousands):

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

Operating cash flows from operating leases

 

$

212

 

 

$

158

 

 

$

327

 

 

$

313

 

Right-of-use assets exchanged for operating lease liabilities

 

$

483

 

 

$

15

 

 

$

483

 

 

$

624

 

Weighted average remaining lease term – operating leases (in years)

 

 

1.5

 

 

 

0.7

 

 

 

1.5

 

 

 

0.7

 

Weighted average discount rate – operating leases

 

 

8.5

%

 

 

6.7

%

 

 

8.5

%

 

 

6.7

%

F-15

Table of Contents

ROSECLIFF ACQUISITION CORP ISpectral MD Holdings, Ltd.
NOTES TO FINANCIAL STATEMENTSNotes to Unaudited Financial Statements

NOTE 7 — STOCKHOLDER’S EQUITY 8. Leases(cont.)

The following table provides the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading pricecomponents of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Valuelease cost included in general and the Newly Issued Price, the $18.00 and $10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% and 100%, respectively, of the higher of the Market Value and the Newly Issued Price.

The Private Placement Warrants will be identical to the Public Warrants underlying the Units being soldadministrative expense in the Proposed Public Offering, except thatcondensed consolidated statement of operations (in thousands):

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

  

2023

 

2022

 

2023

 

2022

Operating leases

 

 

  

 

  

 

  

 

 

Operating lease cost

 

$

198

 

$

132

 

$

392

 

$

264

Variable lease cost

 

 

133

 

 

49

 

 

192

 

 

93

Total rent expense

 

$

331

 

$

181

 

$

584

 

$

357

Variable lease cost is primarily attributable to amounts paid to lessors for utility charges and property taxes under an office space lease.

As of June 30, 2023, future minimum payments under the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable-cancelable, except operating leases under ASC 842 were as described above, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.follows (in thousands):

Six months ending December 31, 2023

 

$

417

 

Year ending December 31, 2024

 

 

894

 

Total

 

 

1,311

 

Less: imputed interest

 

 

(86

)

Operating lease liabilities

 

$

1,225

 

NOTE 8 — SUBSEQUENT EVENTS9. Stockholders’ Equity

The Company evaluated subsequent eventswas authorized to issue 400,000,000 shares of common stock, par value $0.001 per share as of June 30, 2023 and transactionsDecember 31, 2022. The Company had 136,261,515 and 135,409,564 shares of common stock issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

10. Stock-based Compensation

2018 Long Term Incentive Plan

On July 24, 2018, the Company’s Board adopted the 2018 Long Term Incentive Plan (the “2018 Plan”) which permits granting of incentive stock options (they must meet all statutory requirements), non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance units, incentive bonus awards, and other cash-based or stock-based awards. In June 2021, in connection with the IPO, the 2018 Plan was amended so that occurred afterstock issued pursuant to the balance sheet2018 Plan would be the common stock of the Company. Pursuant to the 2018 Plan, stock options must expire within 10 years and must be granted with exercise prices of no less than the fair value of the common stock on the grant date, upas determined by the Board of Directors. As of June 30, 2023, 38,354,118 shares of common stock were authorized for issuance under the 2018 Plan, of which 584,952 remain available for issuance.

2022 Long Term Incentive Plan

On September 27, 2022, the Company’s stockholders approved the adoption of the 2022 Long Term Incentive Plan (the “2022 Plan”) which permits granting of incentive stock options (they must meet all statutory requirements), non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance units, incentive bonus awards, and other cash-based or stock-based awards. Pursuant to January 27, 2021, the 2022 Plan, stock options must expire within 10 years and must be granted with exercise prices of no less than the fair value of the common stock on the grant date, thatas determined by the financial statementsBoard of Directors. As of June 30, 2023, 20,000,000 shares of common stock were authorized for issuance under the 2022 Plan, of which 18,485,000 remain available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.for issuance.

F-16

Table of Contents

20,000,000Spectral MD Holdings, Ltd.
Notes to Unaudited Financial Statements

10. Stock-based Compensation (cont.)

Restricted Stock Awards

The RSAs generally vest over four years. A summary of RSA activities for the six months ended June 30, 2023 are presented below:

 

Number of
Shares

 

Weighted
Average
Grant Date
Fair Value
per Share
US$

Nonvested as of January 1, 2023

 

312,502

 

 

$

0.10

Vested

 

(312,502

)

 

$

0.10

Nonvested as of June 30, 2023

 

 

 

$

Restricted Stock Units

The RSUs generally vest over three years. A summary of RSU activities for the six months ended June 30, 2023 are presented below:

 

Number of
Shares

 

Weighted
Average
Grant Date
Fair Value
per Share
US$

Nonvested as of January 1, 2023

 

 

$

Granted

 

600,000

 

$

0.45

Nonvested as of June 30, 2023

 

600,000

 

$

0.45

Rosecliff Acquisition Corp IStock Options

The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company’s common stock became publicly traded on July 22, 2021 and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the simplified method by taking an average of the vesting periods and the original contractual terms for each award. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the US. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

PRELIMINARY PROSPECTUSIn applying the Black Scholes option pricing model, the Company used the following assumptions for stock options granted in the six months ended June 30, 2023:

            , 2021

BTIG

 

Six Months
Ended
June 30,
2023

Exercise price (per share)

 

$

0.44

 

Expected term (years)

 

 

6.0

 

Volatility (annual)

 

 

72

%

Risk-free rate

 

 

3.5

%

Dividend yield (per share)

 

 

0

%

F-17

Table of Contents

PARTSpectral MD Holdings, Ltd.
Notes to Unaudited Financial Statements

10. Stock-based Compensation (cont.)

A summary of stock options activity for the six months ended June 30, 2023 is presented below:

 

Stock
Options

 

Weighted
Average
Exercise Price
US$

 

Weighted
Average
Remaining
Contractual
Life

(in years)

 

Aggregate
Intrinsic
Value
(in thousands)

Outstanding at January 1, 2023

 

36,124,000

 

 

$

0.20

 

7.3

 

$

6,831

Options granted

 

2,511,000

 

 

$

0.44

   

 

 

Options forfeited

 

(163,334

)

 

$

0.35

   

 

 

Options exercised

 

(220,000

)

 

$

0.17

   

 

 

Options cancelled

 

(210,000

)

 

$

0.19

   

 

 

Outstanding as of June 30, 2023

 

38,041,666

 

 

$

0.21

 

7.0

 

$

12,426

Options vested and exercisable as of June 30, 2023

 

30,265,209

 

 

$

0.17

 

6.6

 

$

11,244

The Company recorded stock-based compensation expense for stock options and restricted stock of $0.3 million and $0.7 million for the three and six months ended June 30, 2023, respectively, and $0.3 million and $0.6 million for the three and six months ended June 30, 2022, respectively, in general and administrative expenses in the condensed consolidated statements of operations.

As of June 30, 2023, there was approximately $1.7 million and $0.2 million of unrecognized stock-based compensation related to stock option grants and restricted stock unit grants, respectively, that will be amortized over a weighted average period of 1.2 years and 1.3 years, respectively.

During the year ended December 31, 2018, the Company granted of 10,039,926 stock options to investors (the “Investor Options”) that were approved by the Board of Directors outside of the 2018 Plan. As of June 30, 2023, 9,681,354 Investor Options are outstanding and will expire in November 2023. The Investor Options have an exercise price of $0.20 per share. As of June 30, 2023, there is no unrecognized stock-based compensation expense related to the Investor Options.

As of June 30, 2023, the Company has outstanding stock options, issued to an investor, to purchase 210,000 shares of the Company’s common stock (the “ASC 815 Options”) at a price of $0.19 per share that expire in December 2023. The ASC 815 Options have a grant date fair value of $0.21 per share and are equity-classified stock options in accordance with ASC 815.

11. INCOME TAXES

The Company recorded a provision for income taxes of approximately $40,000 and $86,000 for the three and six months ended June 30, 2023, respectively, and $11,000 and $6,000 for the three and six months ended June 30, 2022, respectively. The effective tax rate was 1.3% for the three and six months ended June 30, 2023, and 4.3% and 0.8% for the three and six months ended June 30, 2022, respectively.

The tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in that quarter. The Company’s effective tax rate differs from the U.S. statutory tax rate in the three and six months ended June 30, 2023 primarily due to changes in valuation allowances on deferred tax assets as it is more likely than not that some or all of the Company’s deferred tax assets will not be realized.

The Company evaluates its tax positions on a quarterly basis and revises its estimate accordingly. The Company recorded immaterial interest and penalties during the three and six months ended June 30, 2023.

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Table of Contents

Spectral MD Holdings, Ltd.
Notes to Unaudited Financial Statements

12. NET LOSS PER COMMON SHARE

Basic and diluted net loss per common share attributable to common stockholders are the same for the three and six months ended June 30, 2023 and 2022, since the inclusion of all potential shares of common stock outstanding would have been anti-dilutive due to the Company’s net loss.

The table below summarizes potentially dilutive securities that were excluded from the computation of net loss per common share as of the periods presented because including them would be anti-dilutive.

 

2023

 

2022

Common stock options

 

47,933,020

 

46,163,926

Common stock warrants

 

762,712

 

762,712

Unvested restricted stock units

 

600,000

 

Unvested restricted stock

 

 

687,502

Potentially dilutive securities

 

49,295,732

 

47,614,140

13. RELATED PARTY TRANSACTIONS

For the three and six months ended June 30, 2023 and 2022, the Company did not have any transactions with related parties.

14. SUBSEQUENT EVENTS

Share Issuances and Business Combination

In September 2023, prior to the closing of the Business Combination, the Company completed the Equity Raise.

On September 11, 2023 (the “Closing”), the Company consummated the Business Combination with Rosecliff, whereby all of the Company’s 137,701,673 shares of common stock and the Equity Issuance common stock were exchanged by Rosecliff for 13,316,464 and 744,667, respectively, ordinary shares of Rosecliff, at an exchange ratio of 10.31.

Pursuant to the Business Combination Agreement, on the Closing, in sequential order: (a) Ghost Merger Sub I merged with and into the Company, with the Company continuing as the surviving company as a wholly owned subsidiary of Rosecliff (the “Spectral Merger”) and then, (b) the Company merged with and into Ghost Merger Sub II (the “SPAC Merger”, together with the Spectral Merger (the “Merger”)), with Ghost Merger Sub II surviving the SPAC Merger as a direct wholly-owned subsidiary of Rosecliff. Rosecliff was renamed Spectral AI, Inc. (“Spectral AI” or the “Combined Company”).

In conjunction with the closing, options to purchase 46,592,862 shares of the Company’s common stock and 600,000 RSUs were exchanged for options to purchase 4,519,191 shares of Spectral AI’s ordinary shares and 58,196 RSUs of Spectral AI. Additionally, the warrants to purchase 762,712 of the Company’s common stock were exchanged for warrants to purchase 73,978 ordinary shares of Spectral AI’s common stock.

On September 12, 2023, Spectral AI began trading its shares on the NASDAQ stock exchange after delisting its shares from the AIM market of the London Stock Exchange on September 7, 2023.

F-19

Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below and not otherwise defined in this Section have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (the “Form 8-K”) filed with the Securities and Exchange Commission (the “SEC”) on September 15, 2023. Unless the context otherwise requires, the “Combined Company” refers to Spectral AI, Inc. (f/k/a Rosecliff Acquisition Corp I, a Delaware corporation) and its consolidated subsidiaries after the Closing, “Spectral” refers to Spectral MD Holdings, Ltd., a Delaware corporation, and “Rosecliff” refers to Rosecliff Acquisition Corp I prior to the Closing.

The following unaudited pro forma condensed combined financial information presents the combination of the financial information of Spectral and Rosecliff adjusted to give effect to the Business Combination and the other events contemplated by the Business Combination Agreement. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

The unaudited pro forma condensed combined balance sheet as of June 30, 2023 combines the historical balance sheet of Rosecliff and the historical balance sheet of Spectral, as adjusted for the Pre-Closing Financing further described in Note 2 to the unaudited pro forma condensed combined financial information, on a pro forma basis as if the Business Combination and the other events contemplated by the Business Combination Agreement had been consummated on June 30, 2023. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2023 and the year ended December 31, 2022, combines the historical statement of operations of Rosecliff and Spectral, as adjusted for the Pre-Closing Financing further described in Note 2 to the unaudited pro forma condensed combined financial information, for such periods on a pro forma basis as if the Business Combination and the other events contemplated by the Business Combination Agreement had been consummated on January 1, 2022, the beginning of the earliest period presented.

The pro forma condensed combined financial information may not be useful in predicting the future financial condition and results of operations of the Combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Prior to the closing of the Business Combination, Rosecliff public shareholders were offered the opportunity to redeem all or a portion of such shareholder’s public shares for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the Rosecliff trust account. The unaudited condensed combined pro forma financial information reflects actual redemptions of 178,231 shares of Rosecliff’s Common Stock at approximately $10.39 per share, or $1.85 million in the aggregate.

The following summarizes the pro forma ownership interest in the Combined Company immediately after the Business Combination on a fully diluted basis:

 

Shares

 

%

RCLF Public shareholders

 

280,485

 

1.0

%

RCLF Founders

 

880,000

 

3.0

%

Spectral common shareholders

 

14,961,131

 

51.2

%

Other Spectral equityholders

 

4,651,365

 

15.9

%

RCLF Public Warrants

 

8,433,333

 

28.9

%

Fully diluted shares outstanding

 

29,206,314

 

100.0

%

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Rosecliff was treated as the acquired company and Spectral was treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the Combined Company will represent a continuation of the financial statements of Spectral, with the Business Combination treated as the equivalent of Spectral issuing stock for the net assets of Rosecliff, accompanied by a recapitalization. The net assets of Rosecliff will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Spectral. Spectral was determined to be the accounting acquirer based on an evaluation of the following facts and circumstances:

•        Spectral’s existing shareholders have a majority of the voting power of the Combined Company;

•        the Combined Company’s board will consist of seven directors, six of whom were designated by Spectral and one of whom was designated by Rosecliff;

F-20

Table of Contents

•        all of Spectral’s existing management will continue in their key positions in the management team of the Combined Company;

•        Spectral’s relative size of assets and operations compared to Rosecliff; and

•        Spectral’s operations prior to the Business Combination comprise the ongoing operations.

Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed combined financial information are described in the accompanying notes. The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated, and does not reflect adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Further, the unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of the Combined Company following the consummation of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of the unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analyses are performed. Rosecliff and Spectral have not had any historical relationship prior to the transactions discussed in this Form 8-K. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

F-21

Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF JUNE 30, 2023
(In Thousands)

 

Spectral
(Historical)

 

Transaction
Accounting
Adjustments:
Pre-Closing
Financing
(Note 2)

 

Spectral
(Adjusted)

 

RCLF
(Historical)

 

Transaction
Accounting
Adjustments:
Business
Combination
(Note 3)

   

Pro Forma
Combined

ASSETS

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Current assets

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Cash and cash equivalents

 

$

8,166

 

 

$

3,351

 

$

11,517

 

 

$

409

 

 

$

2,874

 

 

(a)

 

$

7,855

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(750

)

 

(c)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(3,614

)

 

(d)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(2,581

)

 

(d)

 

 

 

 

Accounts receivable, net

 

 

1,520

 

 

 

 

 

1,520

 

 

 

 

 

 

 

   

 

1,520

 

Unbilled revenue

 

 

91

 

 

 

 

 

91

 

 

 

 

 

 

 

   

 

91

 

Deferred offering costs

 

 

1,124

 

 

 

 

 

1,124

 

 

 

 

 

 

(1,124

)

 

(d)

 

 

 

Prepaid expenses and other current assets

 

 

940

 

 

 

 

 

940

 

 

 

170

 

 

 

 

   

 

1,110

 

Total current assets

 

 

11,841

 

 

 

3,351

 

 

15,192

 

 

 

579

 

 

 

(5,195

)

   

 

10,576

 

Property and equipment, net

 

 

16

 

 

 

 

 

16

 

 

 

 

 

 

 

   

 

16

 

Right-of-use assets

 

 

1,141

 

 

 

 

 

1,141

 

 

 

 

 

 

 

   

 

1,141

 

Investments held in Trust Account

 

 

 

 

 

 

 

 

 

 

4,725

 

 

 

(1,851

)

 

(i)

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,874

)

 

(a)

 

 

 

 

Total assets

 

$

12,998

 

 

$

3,351

 

$

16,349

 

 

$

5,304

 

 

$

(9,920

)

   

$

11,733

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Current liabilities

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Accounts payable

 

$

2,657

 

 

$

 

$

2,657

 

 

$

 

 

$

(650

)

 

(d)

 

$

2,007

 

Accrued expenses

 

 

2,394

 

 

 

 

 

2,394

 

 

 

4,995

 

 

 

(168

)

 

(d)

 

 

4,307

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(2,914

)

 

(d)

 

 

 

 

Deferred revenue

 

 

509

 

 

 

 

 

509

 

 

 

 

 

 

 

   

 

509

 

Lease liabilities, short-term

 

 

773

 

 

 

 

 

773

 

 

 

 

 

 

 

   

 

773

 

Income taxes payable

 

 

 

 

 

 

 

 

 

 

273

 

 

 

 

   

 

273

 

Due to Sponsor

 

 

 

 

 

 

 

 

 

 

16

 

 

 

 

   

 

16

 

Warrant liability

 

 

194

 

 

 

 

 

194

 

 

 

 

 

 

 

   

 

194

 

Total current liabilities

 

 

6,527

 

 

 

 

 

6,527

 

 

 

5,284

 

 

 

(3,732

)

   

 

8,079

 

Lease liabilities, long-term

 

 

452

 

 

 

 

 

452

 

 

 

 

 

 

 

   

 

452

 

Deferred underwriting fees payable

 

 

 

 

 

 

 

 

 

 

8,855

 

 

 

(8,105

)

 

(c)

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(750

)

 

(c)

 

 

 

 

Derivative liabilities

 

 

 

 

 

 

 

 

 

 

788

 

 

 

(282

)

 

(g)

 

 

506

 

Total liabilities

 

 

6,979

 

 

 

 

 

6,979

 

 

 

14,927

 

 

 

(12,869

)

   

 

9,037

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Commitments and contingencies

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Class A ordinary shares subject to possible
redemption

 

 

 

 

 

 

 

 

 

 

4,854

 

 

 

(1,851

)

 

(i)

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(3,003

)

 

(b)

 

 

 

 

Stockholders’ equity (deficit)

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b)

 

 

1

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

(d)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

(d)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

(h)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

1

 

 

(f)

 

 

 

 

Class B common stock

 

 

 

 

 

 

 

 

 

 

1

 

 

 

(1

)

 

(h)

 

 

 

Common stock, Spectral

 

 

136

 

 

 

8

 

 

144

 

 

 

 

 

 

(144

)

 

(f)

 

 

 

Additional paid-in capital

 

 

24,496

 

 

 

3,343

 

 

27,839

 

 

 

 

 

 

3,003

 

 

(b)

 

 

31,021

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

8,105

 

 

(c)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(2,874

)

 

(d)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

8,667

 

 

(d)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

333

 

 

(d)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

(14,478

)

 

(e)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

1

 

 

(h)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

143

 

 

(f)

 

 

 

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

282

 

 

(g)

 

 

 

 

Accumulated deficit

 

 

(18,613

)

 

 

 

 

(18,613

)

 

 

(14,478

)

 

 

(9,713

)

 

(d)

 

 

(28,326

)

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,478

 

 

(e)

 

 

 

 

Total stockholders equity (deficit)

 

 

6,019

 

 

 

3,351

 

 

9,370

 

 

 

(14,477

)

 

 

7,803

 

   

 

2,696

 

Total liabilities and stockholders’ equity (deficit)

 

$

12,998

 

 

$

3,351

 

$

16,349

 

 

$

5,304

 

 

$

(9,920

)

   

$

11,733

 

F-22

Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2023
(In Thousands, Except Share and Per Share Amounts)

 

Spectral (Historical)

 

Accounting Adjustments: Pre-Closing Financing (Note 2) (Historical)

 

Spectral (Adjusted)

 

RCLF (Historical)

 

Transaction Accounting Adjustments (Note 3)

   

Pro Forma Combined

Research and development revenue

 

$

9,329

 

 

$

 

$

9,329

 

 

$

 

 

$

 

   

$

9,329

 

Cost of revenue

 

 

(5,357

)

 

 

 

 

(5,357

)

 

 

 

 

 

 

   

 

(5,357

)

Gross Profit

 

 

3,972

 

 

 

 

 

3,972

 

 

 

 

 

 

 

   

 

3,972

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

General and administrative

 

 

9,861

 

 

 

 

 

9,861

 

 

 

2,003

 

 

 

(60

)

 

(aa)

 

 

11,804

 

Total costs and expenses

 

 

9,861

 

 

 

 

 

9,861

 

 

 

2,003

 

 

 

(60

)

   

 

11,804

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Operating loss

 

 

(5,889

)

 

 

 

 

(5,889

)

 

 

(2,003

)

 

 

60

 

   

 

(7,832

)

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Other income (expense)

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Interest income on investments held in Trust Account

 

 

 

 

 

 

 

 

 

 

99

 

 

 

(99

)

 

(bb)

 

 

 

Change in fair value of derivative warrant liabilities

 

 

(65

)

 

 

 

 

(65

)

 

 

(394

)

 

 

141

 

 

(cc)

 

 

(318

)

Interest expense

 

 

86

 

 

 

 

 

86

 

 

 

 

 

 

 

   

 

86

 

Foreign exchange transaction loss

 

 

13

 

 

 

 

 

13

 

 

 

 

 

 

 

   

 

13

 

Transaction costs

 

 

(738

)

 

 

 

 

(738

)

 

 

 

 

 

 

   

 

(738

)

Total other income (expense)

 

 

(704

)

 

 

 

 

(704

)

 

 

(295

)

 

 

42

 

   

 

(957

)

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Income (loss) before provision for income taxes

 

 

(6,593

)

 

 

 

 

(6,593

)

 

 

(2,298

)

 

 

102

 

   

 

(8,789

)

Provision for income taxes

 

 

86

 

 

 

 

 

86

 

 

 

18

 

 

 

 

   

 

104

 

Net income (loss)

 

$

(6,679

)

 

$

 

$

(6,679

)

 

$

(2,316

)

 

$

102

 

   

$

(8,893

)

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Weighted average Spectral common stock outstanding, basic and diluted

 

 

136,097,641

 

 

 

7,679,198

 

 

143,776,839

 

 

 

 

 

 

 

 

 

   

 

 

 

Basic and diluted net loss per Spectral common stock

 

$

(0.05

)

 

 

  

$

(0.05

)

 

 

 

 

 

 

 

 

   

 

 

 

Weighted average Common Stock outstanding, basic and diluted

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

16,121,616

 

Basic and diluted net loss per Common Stock share

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

$

(0.55

)

Weighted average Class A common stock outstanding, basic and diluted

 

 

 

 

 

 

  

 

 

 

 

 

458,716

 

 

 

 

 

   

 

 

 

Basic and diluted net loss per Class A common stock share

 

 

 

 

 

 

  

 

 

 

 

$

(0.34

)

 

 

 

 

   

 

 

 

Weighted average Class B common stock outstanding, basic and diluted

 

 

 

 

 

 

  

 

 

 

 

 

6,325,000

 

 

 

 

 

   

 

 

 

Basic and diluted net loss per Class B common stock share

 

 

 

 

 

 

  

 

 

 

 

$

(0.34

)

 

 

 

 

   

 

 

 

F-23

Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2022
(In Thousands, Except Share and Per Share Amounts)

 

Spectral (Historical)

 

Transaction Accounting Adjustments: Pre-Closing Financing (Note 2) (Historical)

 

Spectral (Adjusted)

 

RCLF (Historical)

 

Transaction Accounting Adjustments (Note 3)

   

Pro Forma Combined

Research and development revenue

 

$

25,368

 

 

$

 

$

25,368

 

 

$

 

 

$

 

   

$

25,368

 

Cost of revenue

 

 

(14,531

)

 

 

 

 

(14,531

)

 

 

 

 

 

 

   

 

(14,531

)

Gross Profit

 

 

10,837

 

 

 

 

 

10,837

 

 

 

 

 

 

 

   

 

10,837

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

General and administrative

 

 

13,484

 

 

 

 

 

13,484

 

 

 

1,251

 

 

 

(120

)

 

(aa)

 

 

14,615

 

Total costs and expenses

 

 

13,484

 

 

 

 

 

13,484

 

 

 

1,251

 

 

 

(120

)

   

 

14,615

 

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Operating loss

 

 

(2,647

)

 

 

 

 

(2,647

)

 

 

(1,251

)

 

 

120

 

   

 

(3,778

)

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Other income (expense)

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Interest income on investments held in Trust Account

 

 

 

 

 

 

 

 

 

 

3,156

 

 

 

(3,156

)

 

(bb)

 

 

 

Change in fair value of derivative warrant liabilities

 

 

57

 

 

 

 

 

57

 

 

 

9,748

 

 

 

(3,508

)

 

(cc)

 

 

6,297

 

Net interest income

 

 

21

 

 

 

 

 

21

 

 

 

 

 

 

 

   

 

21

 

Foreign exchange transaction loss

 

 

(253

)

 

 

 

 

(253

)

 

 

 

 

 

 

   

 

(253

)

Other income (expense)

 

 

16

 

 

 

 

 

16

 

 

 

 

 

 

(9,713

)

 

(dd)

 

 

(9,697

)

Total other income (expense)

 

 

(159

)

 

 

 

 

(159

)

 

 

12,904

 

 

 

(16,377

)

   

 

(3,632

)

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Income (loss) before provision for income taxes

 

 

(2,806

)

 

 

 

 

(2,806

)

 

 

11,653

 

 

 

(16,257

)

   

 

(7,410

)

Provision for income taxes

 

 

106

 

 

 

 

 

106

 

 

 

614

 

 

 

 

   

 

720

 

Net income (loss)

 

$

(2,912

)

 

$

 

$

(2,912

)

 

$

11,039

 

 

$

(16,257

)

   

$

(8,130

)

  

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

 

 

Weighted average Spectral comon stock outstanding, basic and diluted

 

 

135,442,441

 

 

 

7,679,198

 

 

143,121,639

 

 

 

 

 

 

 

 

 

   

 

 

 

Basic and diluted net loss per Spectral common stock

 

$

(0.02

)

 

 

  

$

(0.02

)

 

 

 

 

 

 

 

 

   

 

 

 

Weighted average Class Comon Stock outstanding, basic and diluted

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

 

16,121,616

 

Basic and diluted net loss per Common Stock share

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

   

$

(0.50

)

Weighted average Class A comon stock outstanding, basic and diluted

 

 

 

 

 

 

  

 

 

 

 

 

25,095,264

 

 

 

 

 

   

 

 

 

Basic and diluted net income per Class A common stock share

 

 

 

 

 

 

  

 

 

 

 

$

0.35

 

 

 

 

 

   

 

 

 

Weighted average Class B common stock outstanding, basic and diluted

 

 

 

 

 

 

  

 

 

 

 

 

6,325,000

 

 

 

 

 

   

 

 

 

Basic and diluted net income per Class B common stock share

 

 

 

 

 

 

  

 

 

 

 

$

0.35

 

 

 

 

 

   

 

 

 

F-24

Table of Contents

NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS

1.      Basis of Presentation

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, Rosecliff was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the Combined Company will represent a continuation of the financial statements of Spectral, and the Business Combination was treated as the equivalent of Spectral issuing stock for the net assets of Rosecliff, accompanied by a recapitalization. The net assets of Rosecliff will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Spectral.

The unaudited pro forma condensed combined balance sheet as of June 30, 2023 gives pro forma effect to the Business Combination and other events contemplated by the Business Combination Agreement as if they had been consummated on June 30, 2023. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2023 and for the year ended December 31, 2022, give pro forma effect to the Business Combination and the other events contemplated by the Business Combination Agreement as if they had been consummated on January 1, 2022.

The unaudited pro forma condensed combined financial information and accompanying notes have been derived from and should be read in conjunction with:

•        the historical audited financial statements of Rosecliff as of and for the year ended December 31, 2022 and the related notes, which are included in Rosecliff’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023 (the “Rosecliff 2022 10-K”);

•        the historical unaudited financial statements of Rosecliff as of and for the six months ended June 30, 2023 and the related notes, which are included in Rosecliff’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2023 (the “Rosecliff 2023 10-Q”);

•        the historical audited financial statements of Spectral as of and for the year ended December 31, 2022 and the related notes, which are included in the Proxy Statement/Prospectus; and

•        the historical unaudited financial statements of Spectral as of and for the six months ended June 30, 2023 and the related notes, which are included elsewhere in this Form 8-K.

Management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded when accounting for the Business Combination may differ materially from the information presented.

The unaudited pro forma condensed combined financial information does not give effect to any synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination.

The pro forma adjustments reflecting the consummation of the Business Combination are based on currently available information as of the date of this Form 8-K and certain assumptions and methodologies that management believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in these notes, may be revised when accounting for the Business Combination as additional information becomes available and is evaluated. Therefore, the actual adjustments may materially differ from the pro forma adjustments that appear in this Form 8-K. The unaudited pro forma condensed combined financial information does not reflect the income tax effects of the pro forma adjustments as based on the statutory rate in effect for the historical periods presented, as management believes income tax adjustments to not be meaningful given the combined entity incurred significant losses during the historical periods presented. Management considers this basis of presentation to be reasonable under the circumstances.

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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS

2.      Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Financial Information Related to the Pre-Closing Financing

Prior to the closing of the Business Combination Agreement, Spectral entered into Subscription Agreements (the “Subscription Agreements”) with certain “qualified institutional buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)) and accredited investors (together, the “Spectral Investors”), pursuant to which the Spectral Investors subscribed for and purchased, and Spectral issued and sold to the Spectral Investors, an aggregate of 7,679,198 shares of Spectral common stock that converted into shares of Common Stock at the applicable exchange ratio under the Business Combination Agreement, for aggregate gross proceeds of $3,351,000 (the “Pre-Closing Financing”). The offer and sale of the shares of Spectral common stock issued in the Pre-Closing Financing pursuant to the Subscription Agreements have not been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. Spectral granted the Spectral Investors certain registration rights in connection with the Pre-Closing Financing.

3.      Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Financial Information Related to the Business Combination

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

The transaction accounting adjustments related to the Business Combination included in the unaudited pro forma condensed combined balance sheet as of June 30, 2023 are as follows:

(a)     Reflects the liquidation and reclassification of cash and investments held in the Trust Account.

(b)    Reflects the transfer of Rosecliff’s Class A common shares subject to possible redemptions to permanent equity.

(c)     Reflects the settlement of $0.8 million of deferred underwriting fee payable and the reversal of $8.1 million in deferred underwriting fees as the underwriters have agreed to waive this portion of the fees. The reversal of the deferred underwriting fees was reflected as an increase to additional paid-in capital.

(d)    Represents transaction costs incurred by Spectral and Rosecliff of $12.6 million and $2.9 million, respectively, for legal, financial advisory and other professional fees. Rosecliff’s transaction costs exclude the deferred underwriting fees as described in Note 3(c) above.

For the Spectral transaction costs:

•        $0.7 million and $0.2 million were capitalized in deferred offering costs and accrued in accounts payable and accrued expenses, respectively, as of June 30, 2023;

•        $0.3 million was capitalized in deferred offering costs and paid as of June 30, 2023;

•        $3.6 million was reflected as a reduction of cash, which represents Spectral’s transaction costs less amounts previously paid by Spectral as of June 30, 2023 and amounts settled in Common Stock;

•        $8.7 million was settled through the issuance of 866,667 shares of Common Stock and reflected as an increase of Common Stock and additional paid-in capital;

•        $2.9 million was capitalized and offset against the proceeds of the Business Combination and reflected as a reduction to additional paid in capital; and

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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS

3.      Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Financial Information Related to the Business Combination (cont.)

•        $9.7 million was not capitalized as part of the Business Combination and reflected as an increase in accumulated deficit. The costs expensed through accumulated deficit, which are in excess of the proceeds of the transaction and are included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 as discussed in Note (dd) below.

For the Rosecliff transaction costs:

•        $2.6 million was reflected as a reduction of cash and the settlement of amounts previously expensed and accrued by Rosecliff as of June 30, 2023; and

•        $0.3 million was reflected as an issuance of 33,333 shares of Common stock and the settlement of amounts previously expensed and accrued by Rosecliff as of June 30, 2023.

(e)     Reflects the elimination of Rosecliff’s accumulated deficit after recording the transaction costs incurred by Rosecliff as described in Note 3(d) above.

(f)     Reflects the recapitalization of Spectral’s equity as a result of the Business Combination for the issuance of 14,494,964 shares of Common Stock.

(g)    Reflects the forfeiture of 4,706,667 Private Placement Warrants held by the Sponsor immediately prior to the Business Combination pursuant to the Sponsor Letter Agreement.

(h)    Reflects the forfeiture of 5,445,000 Class B shares, with a par value of $0.0001, held by the Sponsor immediately prior to the Business Combination in accordance with the Sponsor Agreement, and the conversion of the remaining 880,000 Class B common stock to Common Stock.

(i)     Reflects the actual redemptions prior to the Closing of 178,231 shares of Rosecliff’s Common Stock at $10.39 per share, or $1.9 million in the aggregate.

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

The transaction accounting adjustments related to the Business Combination are included in the unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2023 and the year ended December 31, 2022 are as follows:

(aa)   Represents pro forma adjustment to eliminate historical expenses related to Rosecliff’s administrative service agreement with the Sponsor, which was terminated upon consummation of the Business Combination.

(bb)  Reflects an adjustment to eliminate interest and investment income related to the Rosecliff trust account.

(cc)   Reflects the change in fair value of $0.1 million for the six months ended June 30, 2023 and $3.5 million for the year ended December 31, 2022 related to the Private Placement Warrants that were forfeited by the Sponsor upon the consummation of the Business Combination.

(dd)  Represents Spectral transaction costs expensed as part of the Business Combination, which includes transaction costs in excess of the proceeds received in the Business Combination and amounts allocated to the Rosecliff Public Warrants assumed as part of the Business Combination. These costs are reflected as if incurred on January 1, 2022, the date the Business Combination is deemed to have occurred for the purposes of the unaudited pro forma condensed combined statements of operations. This is a non-recurring item.

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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS

4.      Net Tangible Assets

The computation of the pro forma net tangible assets is as follows:

Stockholders’ deficit

 

$

2.696

Proforma net tangible assets

 

$

2,696

Although net tangible assets are less than the $5,000,001 threshold, the Company completed the Business Combination.

5.      Net Loss per Share

Represents the net loss per share calculated using the historical basic and diluted weighted average shares of Spectral exchanged common shares outstanding, and the issuance of additional shares in connection with the Business Combination and other related events, assuming the shares were outstanding since January 1, 2022. As the Business Combination and other related events are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable in connection with the Business Combination have been outstanding for the entire period presented. No warrants stock options or unvested restricted stock units were included in the earnings per share calculation as they would be anti-dilutive.

 

Six Months Ended
June 30,
2023

 

Year Ended
December 31,
2022

Numerator

 

 

 

 

 

 

 

 

Pro forma net loss

 

$

(8,893

)

 

$

(8,130

)

Denominator

 

 

 

 

 

 

 

 

Pro forma weighted-average Common Stock outstanding – basic and diluted

 

 

16,121,616

 

 

 

16,121,616

 

Basic and diluted net loss per share of Common Stock

 

$

(0.55

)

 

$

(0.50

)

Basic and diluted loss per share are the same for both the six months ended June 30, 2023 and the year ended December 31, 2022 as the Combined Company had a loss for those periods.

The following outstanding shares of common stock equivalents are excluded from the computation of pro forma diluted net loss per share for all the periods and scenarios presented because including them would have an anti-dilutive effect.

 

Six Months Ended
June 30,
2023

 

Year Ended
December 31,
2022

Rosecliff public warrants

 

8,433,333

 

8,433,333

Spectral warrants

 

73,978

 

73,978

Spectral stock options

 

4,519,191

 

4,519,191

Spectral unvested restricted stock units

 

58,196

 

58,196

Total

 

13,084,698

 

13,084,698

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Part II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The estimatedfollowing table indicates the expenses payable by usto be incurred in connection with the offering described in this registration statement, (otherother than the underwriting discountdiscounts and commissions) will be as follows:commissions.

Legal fees and expenses

 

$

325,000

Accounting fees and expenses

 

 

40,000

SEC expenses

 

 

25,093

FINRA expenses

 

 

35,000

Directors and officers insurance premiums

 

 

250,000

Nasdaq listing and filing fees

 

 

75,000

Printing and engraving expenses

 

 

35,000

Miscellaneous expenses

 

 

214,907

Total offering expenses

 

$

1,000,000

 

Amount

Securities and Exchange Commission registration fee

 

$

5,444.20

Accountants’ fees and expenses

 

$

5,000

Legal fees and expenses

 

$

25,000

Miscellaneous

 

$

2,500

Total expenses

 

$

37,944.20

Item 14. Indemnification of Directors and Officers.

Section 102 of the DGCL permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our amended and restated certificateCharter provides that no director of incorporation will provide that all of our directors, officers, employees and agentsthe Registrant shall be entitledpersonally liable to be indemnified by usit or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the fullest extent permitted by Section 145that the DGCL prohibits the elimination or limitation of the Delaware General Corporation Law, or the DGCL. liability of directors for breaches of fiduciary duty.

Section 145 of the DGCL concerning indemnification of officers, directors, employees and agents is set forth below.

Section 145. Indemnification of officers, directors, employees and agents; insurance.

(a)     Aprovides that a corporation shall havehas the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation, or is or wasa person serving at the request of the corporation as a director, officer, employee or agent offor another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with suchan action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if thesuch person acted in good faith and in a manner the personhe reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect toin any criminal action or proceeding, had no reasonable cause to believe the person’shis conduct was unlawful. The terminationunlawful, except that, in the case of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.

(b)    A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suitactions brought by or in the right of the corporation, to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made inwith respect ofto any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or theother adjudicating court in which such action or suit was brought shall determine upon applicationdetermines that,

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despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.

(c)     To the extentOur Charter provides that we will indemnify each person who was or is a presentparty or former directorthreatened to be made a party to any threatened, pending or officer of a corporation has been successful on the merits or otherwise in defense of anycompleted action, suit or proceeding referred to in subsections (a) and (b) of this section,(other than an action by or in defensethe right of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurredus) by such person in connection therewith.

(d)    Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnificationreason of the presentfact that he or former director, officer, employeeshe is or agent is proper in the circumstances because the personwas, or has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respectagreed to a person who isbecome, a director or officer, at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

(e)     Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.

(f)     The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.

(g)    A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving, or has agreed to serve, at theour request of the corporation as a director, officer, partner, employee or agenttrustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise against(all such persons being referred to as an “Indemnitee”), or by reason of any liability asserted against such person and incurred by such personaction alleged to have been taken or omitted in any such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or arising out ofproceeding and any appeal therefrom, if such person’s status as such, whetherIndemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful. Our Charter provides that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the corporation would haveright of us to procure a judgment in our favor by reason of the power to indemnify such person against such liability under this section.

(h)    For purposes of this section, references to “the corporation” shall include, in addition tofact that the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a merger or consolidation which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person whoIndemnitee is or was, or has agreed to become, a director officer, employee or agent of such constituent corporation,officer, or is or was serving, or has agreed to serve, at theour request of such constituent corporation as a director, officer, partner, employee or agenttrustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, shall standor by reason of any action alleged to have been taken or omitted in the same position under this section with respectsuch capacity, against all expenses (including attorneys’ fees) and, to the resulting or surviving corporation asextent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such person would have with respect to such constituent corporation if its separate existence had continued.action, suit

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(i)     For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall includeor proceeding, and any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving atappeal therefrom, if the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person whoIndemnitee acted in good faith and in a manner such personhe or she reasonably believed to be in, the interest of the participants and beneficiaries of an employee benefit planor not opposed to, our best interests, except that no indemnification shall be deemedmade with respect to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.

(j)     The indemnification and advancement of expenses provided by,any claim, issue or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continuematter as to awhich such person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

(k)    The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any by law, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submitadjudged to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or anyshe is entitled to indemnification of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, exceptsuch expenses. Notwithstanding the foregoing, to the extent such limitationthat any Indemnitee has been successful, on the merits or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligentotherwise, he or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.

If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by applicable law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.

Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a person eligible for indemnification

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pursuant to our amended and restated certificate of incorporationshe will be indemnified by us against all expenses (including attorneys’ fees) actually and reasonably incurred in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedingstherewith. Expenses must be advanced to enforce rights to indemnification.

The right to indemnification which will be conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expensesIndemnitee under our amended and restated certificate of incorporation or otherwise.

The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.

Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by applicable law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our amended and restated certificate of incorporation.

Our bylaws, which we intend to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent with those which will be set forth in our amended and restated certificate of incorporation. In addition, our bylaws provide for a right of indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by applicable law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.certain circumstances.

We will enterhave entered into indemnification agreements with each of our officersdirectors and directors a form of which is to be filed as an exhibit to this Registration Statement.officers. These indemnification agreements willmay require us, among other things, to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may ariseour directors and officers for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by reasona director or officer in any action or proceeding arising out of theirhis or her service to us, and to advance expenses incurred as a resultone of our directors or officers, or any proceeding against them asof our subsidiaries or any other company or enterprise to which they could be indemnified.the person provides services at our request.

Pursuant to the Underwriting Agreement to be filedWe maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out of claims based on acts or omissions in their capacities as Exhibit 1.1 to this Registration Statement,directors or officers.

In any underwriting agreement we have agreed to indemnify the underwriters and the underwriters have agreed to indemnify us against certain civil liabilities that may be incurredenter into in connection with this offering, includingthe sale of Common Stock being registered hereby, the underwriters will agree to indemnify, under certain liabilities underconditions, us, our directors, our officers and persons who control us within the meaning of the Securities Act.Act against certain liabilities.

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Item 15. Recent Sales of Unregistered Securities.

On December 10, 2020, Rosecliff Acquisition Sponsor I LLC, our sponsor, purchased an aggregateSet forth below is information regarding shares of 5,750,000 foundercapital stock issued by us within the past three years. Also included is the consideration received by us for such shares par value $0.0001 per share, for an aggregate purchase price of $25,000, or approximately $0.004 per share. The number of founder shares issued was determined based onand information relating to the expectation that the founder shares would represent 20%section of the issuedSecurities Act, or rule of the Securities and outstanding shares of common stock upon completion of this offering. In January 2021, our sponsor transferred a total of 130,000 founder shares to our independent director, our director nominee and certain other individuals at their original per-share purchase price. Such securities were issued in connection with our incorporation pursuant to theExchange Commission, under which exemption from registration contained in Section 4(a)(2)was claimed.

(a)    Issuance of Capital Stock.

On February 17, 2021, simultaneously with the consummation of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.

In addition, our sponsor has committed, pursuant toRCLF IPO, RCLF completed a written agreement, to purchase from us an aggregate of 4,000,000 (or 4,400,000 if the underwriter’s over-allotment option is exercised in full) private placement of warrants to the Sponsor at a price of $1.50 per warrant, (for an aggregate purchase priceraising total gross proceeds of $6,000,000 or $6,600,000 if the underwriters’ over-allotment option is exercised in full). This purchase will take place on a private placement basis simultaneously$7.06 million. In connection with the completion of our initial public offering. This issuance will be madeBusiness Combination and pursuant to that certain Sponsor Letter Agreement dated September 11, 2023, the exemption from registration contained in Section 4(a)(2)Sponsor agreed to forfeit all of the Private Placement Warrants for no consideration.

Prior to the Closing, Legacy Spectral entered into Subscription Agreements with certain “qualified institutional buyers” (as defined in Rule 144A under the Securities Act.Act and accredited investors (together, the “Legacy Spectral Investors”), pursuant to which the Legacy Spectral Investors subscribed for and purchased, and Legacy Spectral issued and sold to the Legacy Spectral Investors, shares of Legacy Spectral common stock that converted into shares of Common Stock at the applicable exchange ratio under the Business Combination Agreement, for aggregate gross proceeds of $3,351,000.

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Item 16. Exhibits and Financial Statement Schedules.

(a)     Exhibits and Financial Statement Schedules.    The following exhibits are being filed herewith:

Exhibit Index

Exhibit
Number

 


Description

1.1*

Form of Underwriting Agreement

3.12.1†*

 

CertificateBusiness Combination Agreement, by and among Rosecliff Acquisition Corp I, Merger Sub I, Merger Sub II and Spectral MD Holdings, Ltd., dated as of IncorporationApril 11, 2023 (incorporated by reference to Annex A of the Registration Statement on Form S-4 (File No. 333-271566)).

3.23.1**

 

Form ofSecond Amended and Restated Certificate of Incorporation of Spectral AI, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023).

3.33.2**

 

Amended and Restated Bylaws of Spectral AI, Inc. (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023).

4.14.1**

 

Specimen Unit Certificate

4.2

Specimen Class A Common Stock Certificate

4.3

Specimen Warrant Certificate (included in Exhibit 4.4)

4.4

Form of Warrant Agreement, dated February 11, 2021, between Rosecliff Acquisition Corp I and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2021)

4.2**

Description of the Registrant’s Securities (incorporated by reference to the Registrant’s Annual Report on Form 10-K filed on March 31, 2022)

4.3**

Amended and Restated Registration Rights & Lock-up Agreement (incorporated by reference to the RegistrantRegistrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023).

5.1

 

Opinion of Skadden, Arps, Slate, Meagher & FlomReed Smith LLP

10.1

Promissory Note, dated December 10, 2020, issued to Rosecliff Acquisition Sponsor I LLC

10.210.1**

 

Form of LetterIndemnification Agreement among(incorporated by reference to the Registrant and its directors and officers and Rosecliff Acquisition Sponsor I LLCRegistrant’s Current Report on Form 8-K filed with the SEC on September 15, 2023).

10.310.2**

 

Form of Investment Management TrustSponsor Warrants Purchase Agreement, dated February 11, 2021, between Continental Stock Transfer & Trustthe Company and the RegistrantSponsor (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2021)

10.410.3**

 

BARDA Award/Contract, July 1, 2019, by and between Spectral MD, Inc. and ASPR-BARDA (incorporated by reference to Exhibit 10.14 of the Registration Statement on Form of Registration Rights Agreement between the Registrant and certain security holdersS-4 (File No. 333-271566)).

10.510.4**

 

Securities Subscription Agreement,Amendment of the Solicitation/Modification of the BARDA Contract, dated December 10, 2020,August 26, 2033, by and between Spectral MD, Inc. and ASPR-BARDA (incorporated by reference to Exhibit 10.15 of the Registrant and Rosecliff Acquisition Sponsor I LLCRegistration Statement on Form S-4 (File No. 333-271566)).

10.610.5**

 

Award/Contract for DHA, dated July 1, 2021, by and between Spectral MD, Inc. and U.S. Army Medical Materiel Development Activity (incorporated by reference to Exhibit 10.16 of the Registration Statement on Form of Sponsor Warrants Purchase Agreement between the Registrant and Rosecliff Acquisition Sponsor I LLCS-4 (File No. 333-271566)).

10.710.6**

 

Amendment of the Solicitation/Modification of the DHA Contract, dated July 1, 2021, by and between Spectral MD, Inc. and U.S. Army medical Materiel Development Activity (incorporated by reference to Exhibit 10.17 of the Registration Statement on Form of Indemnity AgreementS-4 (File No. 333-271566)).

10.810.7**

 

Form of Support Services AgreementMTEC Research Project Award, dated April 12, 2023, by and between Spectral. MD, Inc. and Advanced Technology International MTEC Consortium Manager (incorporated by reference to Exhibit 10.18 of the Registrant and Rosecliff Acquisition Sponsor I LLCRegistration Statement on Form S-4 (File No. 333-271566)).

1410.8**

 

Sponsor Letter Agreement, dated April 11, 2023, by and among Rosecliff Acquisition I Sponsor LLC, Spectral MD Holdings, Ltd., and Rosecliff Acquisition Corp I (incorporated by reference to Annex F of the Registration Statement on Form of Code of Ethics and Business ConductS-4 (File No. 333-271566)).

23.1

 

Consent of WithumSmith+Brown, PC

23.2

Consent of Skadden, Arps, Slate, Meagher & FlomReed Smith LLP (included in Exhibit 5.1)

2424.1

 

Power of Attorney (included on signature page to the initial filing of this Registration Statement)registration statement)

99.1107

 

ConsentCalculation of Frank S. EdmondsFiling Fee Table

____________

*        To be filed by amendment.*      Previously filed.

(b)    †        Schedules to this Exhibit have been omitted pursuant to Regulation SFinancial Statements.    See page F-1-K for an indexItem 601(a)(5) promulgated under the Exchange Act. The Registrant agrees to furnish supplementally a copy of any omitted schedule to the financial statements and schedules included in the registration statement.SEC upon request.

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Item 17. Undertakings.

(a)     The undersigned registrant hereby undertakesundertakes:

(1)    to providefile, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and (iii) to include any material information with respect to the underwriterplan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (i), (ii) and (iii) do not apply if the registration statement is on Form S-1 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement;

(2)    that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3)    to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the closing specifiedtermination of the offering;

(4)    that, for the purpose of determining liability under the Securities Act to any purchaser:

Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and

(5)    that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting agreements, certificates inmethod used to sell the securities to the purchaser, if the securities are offered or sold to such denominationspurchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and registered inwill be considered to offer or sell such names assecurities to such purchaser:

(a)     any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

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(b)    any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the underwriterundersigned registrant;

(c)     the portion of any other free writing prospectus relating to permit prompt deliverythe offering containing material information about the undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and

(d)    any other communication that is an offer in the offering made by the undersigned registrant to eachthe purchaser.

(b)    Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

(c)     The undersigned registrant hereby undertakes that:

(1)    For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)    For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)    For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(4)    For the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)     Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii)    Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;

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(iii)   The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv)   Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrantRegistrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New YorkDallas, Texas, on the 30thday of January 27, 2021.October, 2023.

 

ROSECLIFF ACQUISITION CORP ISPECTRAL AI, INC.

  

By:

 

/s/ Michael MurphyWensheng Fan 

  

Name:

 

Name: Michael MurphyWensheng Fan

  

Title:

 

Title:   Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersignedEach person whose signature appears below hereby constitutes and appoints each of Michael MurphyWensheng Fan and Kieran Goodwin, each acting alone,Nils Windler his, her or their true and lawful attorney-in-fact and agent,, with full power of substitution and resubstitution for such person and in his name, place and stead, in any and all capacities to sign this Registration Statement on Form S-1 (includingany and all pre-effective andamendments including post-effective amendments to this registration statement and any and all registration statements filed pursuant to Rule 462 under the Securities Act of 1933),1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that any suchsaid attorney-in-fact and agent, or his substitute, or substitutes,each acting alone, may lawfully do or cause to be done by virtue hereof.thereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following personsperson in the capacities and on the dates indicated.

NameSignature

 

PositionTitle

 

Date

/s/ Michael MurphyWensheng Fan 

 

Director and Chief Executive Officer and Director

 

January 27, 2021October 30, 2023

Michael MurphyWensheng Fan

 

(principal executive officer)Principal Executive Officer)

  

/s/ Kieran Goodwin

Chief Financial Officer

January 27, 2021

Kieran Goodwin

(principal financial officer and principal
accounting officer)

/s/ Jordan Zimmerman

President and Director

January 27, 2021

Jordan Zimmerman

    

/s/ Brian RadeckiNils Windler 

Chief Financial Officer

October 30, 2023

Nils Windler

(Principal Financial Officer and
Principal Accounting Officer
)

Director

October 30, 2023

Michael P. Murphy

/s/ Cynthia Cai 

Director

October 30, 2023

Cynthia Cai

/s/ Richard Cotton 

 

Chairman of the Board of Directors

 

January 27, 2021October 30, 2023

Brian RadeckiRichard Cotton

/s/ Martin Mellish 

Director

October 30, 2023

Martin Mellish

/s/ Deepak Sadagopan 

Director

October 30, 2023

Deepak Sadagopan

    

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