Business Context and Reporting Period
This Form 8-K is filed by Petra Acquisition, Inc. (PAIC), a Special Purpose Acquisition Company (SPAC), reporting events occurring on September 17, 2021, with the report dated September 23, 2021. The filing details amendments to financial advisory agreements, corporate bylaws, and a proposed extension of the deadline to consummate a business combination with Revelation Biosciences, Inc.
Key Financial Metrics and Obligations
- Advisory Fee Cap: Maximum fees payable to LifeSci Capital LLC for the business combination are capped at $2,650,000 in cash and $2,650,000 in Company common stock.
- Extension Financing: Pine Valley Investments, LLC (an affiliate of the Sponsor) has agreed to loan approximately $0.034 per public share for each 31-day extension period.
- Total Potential Loan: If all three extension options are exercised (through January 13, 2022), aggregate contributions would be approximately $727,815 (assuming no redemptions).
- Interest Rate: Extension loans bear interest at 2.5% per month.
- Redemption Price Impact: If the full extension is utilized, the redemption price per share would increase from approximately $10.10 to $10.20.
Material Changes and Corporate Actions
- Advisory Agreement Amendment: The Company amended its engagement with LifeSci Capital LLC to delete provisions regarding placement agent services and capital markets advisory fees, replacing them with the capped fee structure noted above.
- Bylaw Amendments: The Company adopted Amended and Restated Bylaws allowing for remote stockholder meetings, setting director removal thresholds at 66-2/3% of voting power, and fixing the board size at seven members.
- Extension Proposal: A special meeting of stockholders is scheduled for October 8, 2021, to vote on extending the business combination deadline from October 13, 2021, to November 13, 2021, with options to extend further to December 13, 2021, and January 13, 2022.
Outlook, Risks, and Contingencies
- Contingent Financing: The extension loans from Pine Valley are contingent upon stockholder approval of the Extension Amendment. If the amendment is not approved, the Company will liquidate and redeem 100% of public shares.
- Loan Forgiveness: Extension loans will be forgiven if the Company fails to consummate a business combination, except for funds held outside the Trust Account.
- Related Party Transactions: David Dobkin, a Company director, is a principal of LifeSci Capital LLC, creating a related party transaction regarding the advisory fees.
- Liquidity Risk: The Company's ability to extend its timeline depends entirely on the Sponsor's willingness to fund the extension loans and stockholder approval.
Investor Verification Checklist
- Verify the outcome of the special stockholder meeting scheduled for October 8, 2021, regarding the Extension Amendment.
- Confirm the number of public shares redeemed at the extension vote to calculate the actual loan amount required from Pine Valley.
- Review the full text of the Promissory Note (Exhibit 99.1) for specific repayment terms and conditions.
- Monitor the status of the business combination with Revelation Biosciences, Inc., as the extension is solely to facilitate this transaction.