Business Context and Reporting Period
This Form 8-K is filed by Petra Acquisition, Inc. (not Revelation Biosciences, Inc.) on October 19, 2021, reporting events occurring on October 13, 2021. Petra is a Special Purpose Acquisition Company (SPAC) listed on The Nasdaq Stock Market LLC. The filing details the restructuring of working capital loans intended to fund contributions for shares of common stock not redeemed in connection with a vote to extend the deadline for completing an initial business combination.
Key Financial Metrics
The filing does not provide standard financial statements, revenue, profit, or cash flow data. Key financial terms disclosed relate to new debt instruments:
- New Debt Facility: Petra issued promissory notes ("Replacement Notes") to three new lenders (T3 Investments, LLC, Miro Kesic, and Jared Solomon).
- Aggregate Loan Amount: Up to $750,000.
- Interest Rate: 2% per month on outstanding loan amounts.
- Repayment Terms: Repayable upon consummation of an initial business combination.
- Forgiveness Clause: Outstanding amounts will be forgiven if Petra fails to consummate a business combination, except for funds held outside the trust account.
Material Changes
The primary material change is the cancellation of a previous promissory note and the issuance of new notes:
- Cancellation: A promissory note dated September 17, 2021, issued to Pine Valley Investments, LLC (an affiliate of Petra's sponsor), was terminated and cancelled effective October 13, 2021. No advances had been made under this prior note.
- New Obligations: Replacement notes were issued to new lenders to replace the cancelled facility, maintaining the ability to fund the extension of the business combination deadline.
Outlook, Risks, and Contingencies
Management Commentary and Purpose: The new loans are specifically designated to fund cash contributions for shares of common stock issued in the IPO that were not redeemed during the stockholder vote to extend the company's deadline for an initial business combination.
Risks and Contingencies:
- Business Combination Failure: If Petra is unable to consummate an initial business combination, the loan amounts are subject to forgiveness, contingent on funds held outside the trust account.
- Interest Accrual: The 2% monthly interest rate represents a significant cost of capital if the funds are utilized and the business combination is delayed.
Investor Verification Checklist
- Verify the exact amount of the $750,000 facility that has actually been drawn down by the new lenders.
- Confirm the status of the stockholder vote regarding the extension of the business combination deadline referenced in the filing.
- Review the definitive proxy statement (Schedule 14A) filed on September 24, 2021, for details on the redemption process and trust account status.
- Examine the attached Exhibits 10.1 through 10.4 for specific covenants and conditions regarding the forgiveness of the debt.