NOTES
TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS
OPERATIONS, AND GOING CONCERN
EDOC Acquisition Corp. (“Edoc” or
the “Company”) was incorporated in the Cayman Islands on August 20, 2020. The Company was formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more
businesses (the “Business Combination”). While the Company may pursue an acquisition opportunity in any industry or geographic
region, the Company intends to focus on businesses primarily operating in the healthcare and healthcare provider space in North America
and Asia-Pacific.
As of March 31, 2023, the Company had not yet
commenced any operations. All activity through March 31, 2023, relates to the Company’s organizational activities, those necessary
to prepare for the Initial Public Offering and identifying a target company for the Business Combination. The Company will not generate
any operating revenues until after the completion of its initial business combination, at the earliest. The Company will generate non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.
The Company’s sponsor is American Physicians
LLC (the “Sponsor”).
Financing
The registration statement for the Company’s
initial public offering was declared effective on November 9, 2020 (the “Effective Date”). On November 12, 2020, the Company
consummated the initial public offering of 9,000,000 units (each, a “Unit” and collectively, the “Units”) at
$10.00 per Unit (the “Initial Public Offering” or “IPO”), which is discussed in Note 3.
Simultaneously with the closing of the IPO, the
Company consummated the sale of 479,000 private placement units (“Private Unit)” and collectively, the “Private Units”),
at a price of $10.00 per unit. Of the 479,000 private placement units, 65,000 units, or the “representative units” were purchased
by I-Banker (and/or its designees). In addition, the Company’s sponsor agreed, pursuant to a letter agreement to purchase up to
3,750,000 of the Company’s rights in the open market at a market price not to exceed $0.20 per right. I-Bankers also agreed to
purchase up to 1,250,000 of the Company’s rights in the open market at a market price not to exceed $0.20 per right, which is discussed
in Note 5.
Transaction costs of the IPO amounted to $3,246,381,
consisting of $1,575,000 of cash underwriting fees, the fair value of the representative’s warrants of $424,270, the fair value
of representative’s shares $ 653,250 and $593,861 of other cash offering costs.
Trust Account
Following the closing of the IPO on November
12, 2020, $91,530,000 ($10.17 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Warrants
was placed in a trust account (“Trust Account”). The funds in the Trust Account are 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 meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government
treasury obligations, until the earlier of: (i) the completion of a Business Combination, (ii) the redemption of any public shares properly
submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate of incorporation, and (iii)
the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination by April
12, 2023 (the “Combination Period”), subject to applicable law. The proceeds deposited in the Trust Account could become
subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public
shareholder.
EDOC
ACQUISTION CORP.
NOTES
TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
On November 9, 2021, the Sponsor requested that
the Company extend the date by which the Company has to consummate a Business Combination from November 12, 2021 to February 12, 2022
(the “First Extension”). The Extension was the first of up to two three-month extensions permitted under the Company’s
governing documents. On November 10, 2021, $900,000 ($0.10 per share) was added to the Trust Account for the First Extension of the Company.
On February 9, 2022, the Company held an extraordinary
general meeting pursuant to which the Company’s shareholders approved extending the date by which the Company had to complete a
Business Combination from February 12, 2022 to August 12, 2022 (the “Second Extension”). In connection with the approval of
the extension, shareholders elected to redeem an aggregate of 6,326,758 Class A ordinary shares. As a result, an aggregate of $64,996,858
(or approximately $10.27 per share) was released from the Trust Account to pay such shareholders.
On August 12, 2022, the Company held an extraordinary
general meeting pursuant to which the Company’s shareholders approved extending the date by which the Company had to complete a
Business Combination from August 12, 2022 to February 12, 2023 (the “Third Extension”). In connection with the approval of
the extension, shareholders elected to redeem an aggregate of 646,617 Class A ordinary shares. As a result, an aggregate of $6,660,150
(or approximately $10.30 per share) was released from the Trust Account to pay such shareholders. In connection with this extension of
the Company, $202,460 (approximately $0.10 per share) was added to the Trust Account. In connection with the Second Extension of the Company’s
termination date from August 12, 2022 to February 12, 2023, $303,994 (approximately $0.15 per share), plus $835 of applicable interest
was added to the Trust Account on January 24, 2023.
On February 9, 2023, the Company held an extraordinary
general meeting in lieu of an annual meeting pursuant to which the Company’s shareholders approved extending the date by which the
Company had to complete a Business Combination from February 12, 2023 to August 12, 2023 (the “Fourth Extension”). In connection
with the approval of the extension, shareholders elected to redeem an aggregate of 1,172,247 Class A ordinary shares. As a result, an
aggregate of $12,554,008 (or approximately $10.71 per share) was released from the Trust Account to pay such shareholders. In connection
with the Fourth Extension, $85,438 (approximately $0.10 per share) was added to the Trust Account as of March 31, 2023.
Business Combination
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO and the sale of Private Warrants, although substantially all
of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company
will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having
an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (net of amounts disbursed
to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust) at the time
of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the
post-transaction company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest
in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended
(the “Investment Company Act”). Upon the closing of the IPO, an amount equal to at least $10.00 per Unit sold in the Proposed
Public Offering, including the proceeds from the sale of the Private Warrants to the Sponsor, was placed in a trust account (“Trust
Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, 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 meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act
which invest only in direct U.S. government treasury obligations, until the earlier of: (i) the completion of a Business Combination
and (ii) the distribution of the Trust Account as described below.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The Company will provide holders of the Company’s
outstanding shares of Class A ordinary shares, par value $0.0001 per share, sold in the IPO (the “Public Shareholders”) with
the opportunity to redeem all or a portion of their Public Shares (as defined below) upon the completion of the initial Business Combination
either (i) in connection with a shareholder meeting called to approve the initial Business Combination or (ii) by means of a tender offer.
The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer
will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their shares for a pro rata portion
of the amount then on deposit in the Trust Account (approximately $8.00 per share as of March 31, 2023, plus any pro rata interest earned
on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
The ordinary shares 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 Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case,
the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation
of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted
in favor of the Business Combination.
Unless further extended, the Company will have
until August 12, 2023, to consummate a Business Combination (the “Combination Period”). However, if the Company is unable
to complete a Business Combination within the Combination Period, the Company will redeem 100% of the outstanding public shares for a
pro rata portion of the funds held in the trust account, 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 the Company to pay its income or other tax obligations,
divided by the number of then outstanding public shares, subject to applicable law and as further described in registration statement,
and then seek to dissolve and liquidate.
The Sponsor, officers and directors and Representative
(defined in Note 6) have agreed to (i) waive their redemption rights with respect to their founder shares, private shares, and public
shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their
founder shares, private shares, and public shares in connection with a shareholder vote to approve an amendment to the Company’s
amended and restated certificate of incorporation, and (iii) waive their rights to liquidating distributions from the trust account with
respect to their founder shares and private shares if the Company fails to complete the initial Business Combination within the Combination
Period.
The Company’s Sponsor has agreed that it
will 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 entered into a written letter of intent, confidentiality or similar agreement
or Business Combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.17 per public share
and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less
than $10.17 per 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 the monies held in the trust
account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters
of this offering against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked its Sponsor
to reserve for such indemnification obligations, nor has the Company independently verified whether its Sponsor has sufficient funds to
satisfy its indemnity obligations and believe that the Company’s Sponsor’s only assets are securities of the Company. Therefore,
the Company cannot assure that its Sponsor would be able to satisfy those obligations.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Business Combination Agreement
On December 5, 2022, EDOC Acquisition Corp.,
a Cayman Islands exempted corporation (together with its successors, “Edoc”), entered into a Business Combination
Agreement (the “Business Combination Agreement”) with Australian Oilseeds Investments Pty Ltd., an Australian
proprietary company (the “AOI”), Australian Oilseeds Holdings Limited, upon execution of a joinder agreement to become
party to the Business Combination Agreement (a “Joinder”), a to-be-formed Cayman Islands exempted company
(“Pubco”), AOI Merger Sub, upon execution of a Joinder, a to-be-formed Cayman Islands exempted company and a
wholly-owned subsidiary of Pubco (“Merger Sub”), American Physicians LLC, a Delaware limited liability company
(“Purchaser Representative”), in the capacity as the Purchaser Representative thereunder, Gary Seaton, in his capacity
as the representative for the Sellers (as defined below) in accordance with the terms and conditions of the Business Combination
Agreement (the “Seller Representative”) and each of the holders of AOI’s outstanding capital shares named on Annex
I thereto (the “Primary Sellers”), as amended from time to time to include subsequent parties that execute and deliver
to Edoc, Pubco and AOI a Joinder (the “Joining Sellers”), and the holders of AOI’s outstanding capital shares who
are bound by the provisions of the Business Combination Agreement pursuant the drag-along rights set forth in AOI’s memorandum
and articles of association (the “Drag-Along Sellers”, and collectively with the Joining Sellers, the
“Sellers”).
Pursuant to the Business Combination Agreement,
subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the Business Combination Agreement
(the “Closing”), (a) Edoc will merge with and into Merger Sub, with Edoc continuing as the surviving entity (the “Merger”),
and with holders of Edoc securities receiving substantially identical securities of Pubco, and (b) immediately prior to the Merger, Pubco
will acquire all of the issued and outstanding ordinary shares of AOI (the “Purchased Shares”) from the Sellers in exchange
for ordinary shares of Pubco, with AOI becoming a wholly-owned subsidiary of Pubco (the “Share Exchange”, and together with
the Merger and the other transactions contemplated by the Business Combination Agreement, the “Transactions”).
The total consideration to be paid by Pubco to
the Sellers for the Purchased Shares shall be an aggregate number of Pubco ordinary shares (the “Exchange Shares”) with an
aggregate value (the “Exchange Consideration”) equal to, without duplication, (i) $190,000,000, plus (or minus if negative)
(ii) AOI’s net working capital less a target net working capital of $4,000,000, minus (iii) the aggregate amount of any outstanding
indebtedness, net of cash and cash equivalents, of AOI and its subsidiaries, and minus (iv) the amount of any unpaid transaction expenses
of AOI, with each Pubco ordinary share to be issued to the Sellers valued at $10.00.
On March 31, 2023, the Company, AOI, Pubco, Merger
Sub, and the Purchaser Representative entered into that certain First Amendment to the Business Combination Agreement (the “First
Amendment”), pursuant to which the Business Combination Agreement was amended to add, as a closing condition, that upon the closing
of the transactions contemplated by the Business Combination Agreement, the Company shall have cash and cash equivalents, including funds
remaining in the Company’s trust account (after giving effect to the completion and payment of the redemption) and the proceeds
of any PIPE Investment, prior to giving effect to the payment of the Company’s unpaid expenses or liabilities, of at least equal
to $10,000,000.
Risks and Uncertainties
Management is currently evaluating the impact
of the COVID-19 pandemic and Russia-Ukraine war on the industry and has concluded that while it is reasonably possible that the virus
and the war could have a negative effect on the Company’s financial position, results of its operations and/or search for a target
company, the specific impact is not readily determinable as of the date of these interim unaudited condensed financial statements. The
interim unaudited condensed financial statements do not include any adjustments that might results from the outcome of these uncertainties.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Going Concern
As of March 31, 2023, the Company had $53,610
in the operating bank account and working capital deficit of $5,261,334.
On November 10, 2021, the Company issued an interest-bearing
convertible promissory to the Sponsor in the amount of $900,000. As of March 31, 2023, $900,000 was drawn on the note and the fair value
of the note outstanding, including accrued interest of $50,005, was $872,022.
On February 13, 2022, the Company issued a non-interest-bearing
convertible promissory note in the principal amount of up to $750,000 to the Sponsor. As of March 31, 2023, $750,000 was drawn on the
note and the fair value of the note outstanding was $687,680.
On August 25, 2022, the Company issued a non-interest-bearing
promissory note in the aggregate principal amount of up to $202,460 to the Sponsor. As of March 31, 2023, $202,460 was drawn on the note.
On October 6, 2022, the Company issued a non-interest-bearing
promissory note in the aggregate principal amount of up to $500,000 to the Sponsor. As of March 31, 2023, $500,000 was drawn on the note.
On November 16, 2022, the Company issued a non-interest-bearing
promissory note in the aggregate amount of up to $303,994 to the Sponsor. As of March 31, 2023, $303,994 was drawn on the note.
On January 10, 2023, the Company issued a non-interest-bearing
promissory note in the aggregate amount of up to $450,000 to the Sponsor. As of March 31, 2023, $276,006 was drawn on the note.
On February 14, 2023, the Company issued a non-interest-bearing
promissory note in the aggregate amount of up to $256,313 to the Sponsor. As of March 31, 2023, $85,438 was drawn on the note.
Until the consummation of a Business Combination,
the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates,
performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire,
and structuring, negotiating and consummating the Business Combination. The Company will need to raise additional capital through loans
or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s Sponsor, officers
and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable
in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional
financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity,
which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and
reducing overhead expenses.
In connection with the Company’s
assessment of going concern considerations in accordance with the Financial Accounting Standards Board’s (“FASB’s”)
Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue
as a Going Concern,” management has determined that if the Company is unable to raise additional funds to alleviate liquidity needs
as well as complete a Business Combination by August 12, 2023 then the Company will cease all operations except for the purpose of liquidating.
The liquidity condition and the date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s
ability to continue as a going concern. These interim unaudited condensed financial statements do not include any adjustments relating
to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable
to continue as a going concern.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US
GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of
the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have
been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not
include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash
flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of
a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for
the periods presented.
The accompanying unaudited condensed financial
statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022
as filed with the SEC on January 24, 2023, which contains the audited financial statements and notes thereto.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of 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, 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 shareholder approval of any golden parachute payments not previously approved.
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 an emerging the 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 an 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
unaudited condensed financial statements with another public company that is neither an emerging growth company nor an emerging growth
company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts or mutual fund accounts in a financial institution, which, at times,
may exceed the Federal Depository Insurance Coverage limit of $250,000. As of March 31, 2023 and December 31, 2022, the Company had not
experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Use of Estimates
The preparation of unaudited condensed financial
statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities during the reporting period and the reported amounts
of expenses during the reporting period. One of the more significant accounting estimates included in these unaudited condensed financial
statements is the determination of the fair value of the warrant liabilities as well as the fair value of the convertible notes. Such
estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly
from those estimates.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of March
31, 2023 and December 31, 2022.
Investment Held in Trust Account
As of March 31, 2023, all of the assets held in the
Trust account were held in cash. As of December 31, 2022, substantially all of assets held in the Trust Account were held in money market
funds which are invested primarily in U.S. Treasury securities. During the period January 1, 2021 to December 31, 2021, the Company did
not withdraw any interest income from the Trust Account to pay its tax obligations. On November 9, 2021, the Sponsor requested that the
Company extend the date by which the Company has to consummate a Business Combination from November 12, 2021 to February 12, 2022 (the
“First Extension”). The First Extension was the first of up to two three-month extensions permitted under the Company’s
governing documents. On November 10, 2021, $900,000 ($0.10 per share) was added to the Trust Account for the First Extension of the Company.
On February 9, 2022, the Company held an extraordinary general meeting pursuant to which the Company’s shareholders approved extending
the date by which the Company had to complete a Business Combination from February 12, 2022 to August 12, 2022 (the “Second Extension”).
In connection with the approval of the Second Extension, shareholders elected to redeem an aggregate of 6,326,758 Ordinary Shares. As
a result, an aggregate of $64,996,858 (or approximately ($10.27 per share) was released from the Trust Account to pay such shareholders.
On August 12, 2022, the Company held an extraordinary general meeting pursuant to which the Company’s shareholders approved extending
the date by which the Company has to complete a Business Combination from August 12, 2022 to February 12, 2023 (the “Third Extension”).
In connection with the approval of the Third Extension, shareholders elected to redeem an aggregate of 646,617 Ordinary Shares. As a result,
an aggregate of $6,660,150 (or approximately $10.30 per share) was released from the Trust Account to pay such shareholders and $202,460
(approximately $0.10 per share) was added to the Trust Account. In connection with the Third Extension, $303,994 (approximately $0.15
per share), plus $835 of applicable interest was added to the Trust Account on January 24, 2023. On February 9, 2023, the Company held
an extraordinary general meeting in lieu of an annual meeting pursuant to which the Company’s shareholders approved extending the
date by which the Company had to complete a Business Combination from February 12, 2023 to August 12, 2023 (the “Fourth Extension”).
In connection with the approval of the Fourth Extension, shareholders elected to redeem an aggregate of 1,172,247 Class A ordinary shares.
As a result, an aggregate of $12,554,008 (or approximately $10.71 per share) was released from the Trust Account to pay such shareholders.
In connection with the Fourth Extension, $85,438 (approximately $0.10 per share) was added to the Trust Account as of March 31, 2023.
Fair Value Measurements
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820,
“Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheets.
Convertible Promissory Note
The Company accounts for its convertible promissory
note under ASC 815, Derivatives and Hedging (“ASC 815”). Under 815-15-25, the election can be at the inception of a financial
instrument to account for the instrument under the fair value option under ASC 825. The Company has made such election for its convertible
promissory note. Using fair value option, the convertible promissory note is required to be recorded at its initial fair value on the
date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the note are recognized as non-cash
change in the fair value of the convertible promissory note in the statements of operations. The fair value of the conversion feature
of the note was valued utilizing the Monte Carlo model.
Derivative warrant liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded
as liabilities or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its 479,000 Private
Warrants and 450,000 Representative’s Warrants issued in connection with its Initial Public Offering as derivative warrant liabilities
in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the
instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised,
and any change in fair value is recognized in the Company’s statements of operations. The fair value of warrants issued by the
Company in connection with the Public Offering and Private Placement has been estimated using Monte-Carlo simulations at each measurement
date.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Offering Costs Associated with IPO
The Company complies with the requirements of
the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Offering costs
consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering
and that were charged to shareholders’ equity upon the completion of the IPO. Accordingly, on December 31, 2020, offering costs
totaling $3,246,381 have been charged to shareholders’ equity (consisting of $1,575,000 of underwriting fee, the fair value of
the representative’s warrants of $424,270, the fair value of representative’s shares $653,250 and $593,861 of other cash
offering costs).
Class A Ordinary Shares Subject to Possible
Redemption
The Company accounts for its Class A
ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities
from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and
are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that
are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the
Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as
shareholders’ deficit. The Company’s ordinary shares feature certain redemption rights that are considered to be outside
of the Company’s control and subject to the occurrence of uncertain future events. On February 9, 2022, the Company held an
extraordinary general meeting pursuant to which the Company’s shareholders approved extending the date by which the Company
had to complete a Business Combination from February 12, 2022 to August 12, 2022. In connection with the approval of the extension,
shareholders elected to redeem an aggregate of 6,326,758 Ordinary Shares. As a result, an aggregate of $64,996,858 (or approximately
$10.27 per share) was released from the Trust Account to pay such shareholders. On August 12, 2022, the Company held an
extraordinary general meeting pursuant to which the Company’s shareholders approved extending the date by which the Company
has to complete a Business Combination from August 12, 2022 to February 12, 2023. In connection with the approval of the extension,
shareholders elected to redeem an aggregate of 646,617 Ordinary Shares. As a result, an aggregate of $6,660,150 (or approximately
$10.30 per share) was released from the Trust Account to pay such shareholders. On February 9, 2023, the Company held an
extraordinary general meeting in lieu of an annual meeting pursuant to which the Company’s shareholders approved extending the
date by which the Company had to complete a Business Combination from February 12, 2023 to August 12, 2023. In connection with the
approval of the extension, shareholders elected to redeem an aggregate of 1,172,247 Class A ordinary shares. As a result, an
aggregate of $12,554,008 (or approximately $10.71 per share) was released from the Trust Account to pay such shareholders.
Accordingly, as of March 31, 2023 and December 31, 2022, 854,378 and 2,026,625 shares of Class A ordinary shares subject to possible
redemption, respectively, are presented at redemption value as temporary equity outside of the shareholders’ deficit section
of the Company’s balance sheets.
As of March 31, 2023 and December 31, 2022, the
Class A ordinary shares reflected in the balance sheets are reconciled in the following table:
Gross proceeds | |
$ | 90,000,000 | |
Less: | |
| | |
Ordinary share issuance costs | |
| (3,246,381 | ) |
Plus: | |
| | |
Fair value adjustment of carrying value to redemption value | |
| 5,705,929 | |
Contingently redeemable ordinary shares at December 31, 2021 | |
$ | 92,459,548 | |
Less: | |
| | |
Redemption of 6,326,758 shares | |
| (64,996,858 | ) |
Redemption of 646,617 shares | |
| (6,660,150 | ) |
Plus: | |
| | |
Fair value adjustment of carrying value to redemption value | |
| 516,615 | |
Contingently redeemable ordinary shares at December 31, 2022 | |
| 21,319,155 | |
Less: | |
| | |
Redemption of 1,172,247 shares | |
| (12,554,008 | ) |
Plus: | |
| | |
Fair value adjustment of carrying value to redemption value | |
| 537,589 | |
Contingently redeemable ordinary shares at March 31, 2023 | |
$ | 9,302,736 | |
Net Loss Per Ordinary Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per ordinary share is computed by dividing the net loss
by the weighted average number of ordinary shares outstanding for each of the periods. Accretion associated with the redeemable shares
of Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Changes in fair value are not considered a dividend
of the purposes of the numerator in the earnings per share calculation. The calculation of diluted loss per ordinary share does not consider
the effect of the warrants and rights issued in connection with the IPO since the exercise of the warrants and rights are contingent
upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants and rights are exercisable
for 6,137,400 shares of Class A ordinary shares in the aggregate.
| |
For the Three Months Ended March 31, | |
| |
2023 | | |
2022 | |
Ordinary shares subject to possible redemption | |
| | |
| |
Numerator: | |
| | |
| |
Net loss allocable to Class A ordinary shares subject to possible redemption | |
$ | (144,531 | ) | |
$ | (3,007,218 | ) |
Denominator: | |
| | | |
| | |
Weighted Average Redeemable Class A ordinary shares, Basic and Diluted | |
| 1,414,452 | | |
| 5,414,837 | |
Basic and Diluted net loss per share, Redeemable Class A ordinary shares | |
$ | (0.10 | ) | |
$ | (0.56 | ) |
Non-Redeemable Ordinary shares | |
| | | |
| | |
Numerator: | |
| | | |
| | |
Net loss allocable to Non-Redeemable Class A and Class B ordinary shares not subject to redemption | |
$ | (286,517 | ) | |
$ | (1,557,247 | ) |
Denominator: | |
| | | |
| | |
Weighted Average Non-Redeemable Ordinary shares, Basic and Diluted | |
| 2,804,000 | | |
| 2,804,000 | |
Basic and diluted net loss per share, ordinary shares | |
$ | (0.10 | ) | |
$ | (0.56 | ) |
Income Taxes
The Company accounts for income taxes under ASC
740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s unaudited condensed financial statements and prescribes a recognition threshold and
measurement process for financial statement recognition and measurement of a tax position 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.
ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and
transition.
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest
and penalties as of March 31, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income
by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the
Company. Consequently, income taxes are not reflected in the Company’s interim condensed financial statements. The Company’s
management does not expect the total amount of unrecognized tax benefits will materially change over the next twelve months.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Recently Adopted Accounting Standards
In August 2020, the FASB issued Accounting Standards
Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts
in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments.
ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible
instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s
own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed
to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement
to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024,
for fiscal years beginning after December 15, 2023, and should be applied on a full or modified retrospective basis, with early adoption
permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s
financial position, results of operations or cash flows.
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the
accompanying unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the IPO, the Company sold 9,000,000
Units at a purchase price of $10.00 per unit. Each unit consists of one share of Class A ordinary shares, one-half warrant to purchase
one share of Class A ordinary shares (“Public Warrants”), and one right (“Rights”). Each Public Warrant will
entitle the holder to purchase one share of Class A ordinary shares at a price of $11.50 per share, subject to adjustment. Each Public
Warrant will become exercisable on the later of the completion of the initial Business Combination or 12 months from the closing of the
IPO and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation (see
Note 7). Each right entitles the holder to receive one-tenth (1/10) of one share of Class A ordinary shares upon the consummation of
an initial Business Combination (see Note 7).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the IPO, the
Sponsor and I-Bankers purchased an aggregate of 414,000 Private Units and 65,000 Private Units, respectively, for an aggregate of 479,000
Private Units at a price of $10.00 per Private Unit, for an aggregate purchase price of $4,790,000, in a private placement. A portion
of the proceeds from the private placement was added to the proceeds from the IPO held in the Trust Account.
Each Private Unit is identical to the Units sold
in the IPO, except that warrants that are part of the Private Placement Units (“Private Warrants”) are not redeemable by
the Company so long as they are held by the original holders or their permitted transferees. In addition, for as long as the warrants
that are part of the Private Placement Units are held by I-Bankers or its designees or affiliates, they may not be exercised after five
years from the effective date of the Registration Statement.
The Company’s Sponsor, officers, and directors
have agreed to (i) waive their redemption rights with respect to their founder shares, private shares, and public shares in connection
with the completion of the Company’s initial Business Combination, (ii) waive their redemption rights with respect to the founder
shares, private shares, and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended
and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of its
public shares if the Company does not complete its initial Business Combination within the Combination Period or (B) with respect to
any other provision relating to shareholders’ rights or pre-initial Business Combination activity and (iii) waive their rights
to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete its initial
Business Combination the Combination Period. In addition, the Company’s Sponsor, officers, and directors have agreed to vote any
founder shares, private shares, and public shares held by them and any public shares purchased during or after the IPO (including in
open market and privately negotiated transactions) in favor of the Company’s initial business combination.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In September 2020, the Sponsor subscribed
2,875,000 shares of the Company’s Class B ordinary shares for $25,000, or approximately $0.01 per share, in connection with
formation. On November 9, 2020, the Sponsor surrendered an aggregate of 287,500 founder shares, which were cancelled, resulting in
an aggregate of 2,587,500 founder shares outstanding and held by the Sponsor. The founder shares included an aggregate of up to
337,500 shares subject to forfeiture if the over-allotment option was not exercised by the underwriters in full. On December 24,
2020, 337,500 shares were forfeited as the over-allotment option was not exercised by the underwriters. On March 7, 2023, the
Company issued an aggregate of 1,685,152 of the Company’s Class A ordinary shares to the Sponsor upon the conversion of an
equal number of the Company’s Class B ordinary shares held by the Sponsor. On March 7, 2023, the Company also issued an
aggregate of 564,847 of the Company’s Class A ordinary shares to Sea Otter Securities, Stitching Juridisch Eigendom Mint Tower
Arbitrage Fund, Feis Equities, LLC, Yakira Capital Management, Inc., Yakira Enhanced Offshore Fund, Yakira Partners LP, MAP 136
Segregated Portfolio, and Meteora Capital Partners, LP (collectively, “the Backstop Investors) upon the conversion of an equal
number of the Company’s Class B ordinary shares held by the Backstop Investors. As a result, as of March 31, 2023, there was 1
Class B ordinary share issued and outstanding.
Promissory Note—Related Party
In September 2020, the Company issued an unsecured
promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 to be used for
a portion of the expenses of the IPO. This loan is non-interest bearing, unsecured and due at the earlier of September 30, 2021, or the
closing of the IPO. As of November 12, 2020, the Sponsor had loaned to the Company an aggregate of $177,591 under the promissory note
to pay for formation costs and a portion of the expenses of the IPO. The note was repaid in full in connection with the closing of the
initial public offering, and as of March 31, 2023 and December 31, 2022 respectively, no amounts were outstanding. Borrowings under this
note are no longer available.
On August 25, 2022, the Company issued a promissory
note (the “August 2022 Note”) in the aggregate principal amount of up to $202,460 to the Sponsor, pursuant to which the Extension
Funds will be deposited into the Company’s trust account for each Class A ordinary share of the Company that was not redeemed in
connection with the extension of the Company’s termination date from August 12, 2022 to February 12, 2023. The principal amount
of the August 2022 Note may be drawn down in three equal amounts and the balance of the August 2022 Note is payable by the Company on
the earlier of the consummation of the Business Combination or the date of the liquidation of the Company. As of March 31, 2023, $202,460
was outstanding under the August 2022 Note.
On October 6, 2022, the Company issued a promissory
note in the principal amount of up to $500,000 to the Sponsor (the “October 2022 Note”). The Note was issued in connection
with advances the Sponsor may make in the future to the Company for working capital expenses. The note bears no interest and is due and
payable upon the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date
that the winding up of the Company is effective. As of March 31, 2023, $500,000 was outstanding under the October 2022 Note.
On November 16, 2022, the Company issued a promissory
note in the principal amount of up to $303,994 to the Sponsor (the “November 2022 Note”), pursuant to which the Extension
Funds will be deposited into the Company’s trust account for each unredeemed Class A ordinary share of the Company that was not
redeemed in connection with the extension of the Company’s termination date from August 12, 2022 to February 12, 2023. The principal
amount of the November 2022 Note may be drawn down in three equal payments of $101,331 per withdrawal between the 12th and 19th of each
November and December 2022 and January 2023 and the balance of the November 2022 Note is payable by the Company on the earlier of the
consummation of the Business Combination or the date of the liquidation of the Company. As of March 31, 2023, there was $303,994 outstanding
under the November 2022 Note.
On January 10, 2023, the Company issued a promissory
note (the “January 2023 Note”) in the principal amount of up to $450,000 to the Sponsor for working capital purposes. The
Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial
business combination and (ii) the date that the winding up of the Company is effective. As of March 31, 2023 there was $276,006 outstanding
on the January 2023 Note.
On February 14, 2023, the Company issued a non-interest-bearing
promissory note in the aggregate amount of up to $256,313 to the Sponsor (the “February 2023 Note”), pursuant to which the
Extension Funds will be deposited into the Company’s trust account for each unredeemed Class A ordinary share of the Company that
was not redeemed in connection with the extension of the Company’s termination date from February 12, 2023 to August 12, 2023.
As of March 31, 2023, $85,438 was drawn on the note.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Convertible Promissory Notes - Related
Party Extension Loans and Working Capital Loans
On November 9, 2021, the Company’s board
of directors approved the first extension of the date by which the Company has to consummate a Business Combination from November 12,
2021, to February 12, 2022. In connection with the extension, the Sponsor deposited into the Trust Account $0.10 for each of the 9,000,000
shares issued in the Initial Public Offering, for a total of $900,000. The Company issued the Sponsor an interest bearing unsecured promissory
note (the “November 2021 Note”) in the principal amount of $900,000 which is payable by the Company upon the earlier of the
consummation of the Business Combination or the liquidation of the Company on or before February 12, 2023 (unless such date is extended
by the Company’s board of directors). Simple interest will accrue on the unpaid principal balance of the November 2021 Note at
the rate of 4% per annum based on 365 days a year. The November 2021 Note may be repaid in cash or convertible into units consisting
of one ordinary share, one right exchangeable into one-tenth of one ordinary share, and one warrant exercisable for one-half of one ordinary
share at $11.50 per share equal to (x) the portion of the principal amount of and accrued interest under the November 2021 Note being
converted divided by (y) $10.00 rounded up to the nearest whole number of units. As of March 31, 2023 and December 31, 2022, $900,000
was outstanding under the November 2021 Note. For the period ended March 31, 2023 and December 31, 2022, $50,005 and $41,129 of interest
was accrued on the November 2021 Note, respectively.
On February 13, 2022, the Company issued a promissory
note (the “February 2022 Note”) in the principal amount of up to $750,000 to American Physicians LLC. The February 2022 Note
was issued in connection with advances the Sponsor has made to the Company for working capital expenses. The February 2022 Note bears
no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial Business Combination
and (ii) the date that the winding up of the Company is effective. At the election of the Sponsor, up to $600,000 of the unpaid principal
amount of the February 2022 Note may be converted into units of the Company, each unit consisting of one Class A share of the Company,
one right exchangeable into one-tenth of one Class A ordinary share and one warrant exercisable for one-half of one Class A ordinary
share of the Company upon the consummation of an initial Business Combination (the “Conversion Units”), equal to (x) the
portion of the principal amount of the February 2022 Note being converted, divided by (y) $10.00 rounded up to the nearest whole number
of units. The Conversion Units are identical to the units issued by the Company to the Sponsor in a private placement in connection with
the Company’s initial public offering. The Conversion Units and their underlying securities are entitled to the registration rights
set forth in the February 2022 Note. As of March 31, 2023, $750,000 was outstanding under the February 2022 Note.
Changes in the estimated fair value of the November
2021 Note and the February 2022 Note were recognized as non-cash change in the fair value of the convertible promissory note in the statements
of operations (See Note 9).
Administrative Support Agreement
The Company agreed, for a period commencing
on November 9, 2020, and ending upon completion of the Company’s Business Combination or its liquidation, to pay the
Company’s Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. Since the
initial public offering, the Company has not made any payments under the agreement and has paid for services rendered and expenses
advanced by the Sponsor on an as-needed basis. Effective March 31, 2021, the Company and Sponsor terminated the agreement and agreed
to waive any accrued fees from inception. As of March 31, 2023 and December 31, 2022, no fees were due to the Sponsor.
The Sponsor, executive officers and directors,
or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the
Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations.
The Company’s audit committee will review on a quarterly basis expenses incurred and all payments that were made to the Sponsor,
officers, directors or their affiliates.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the founder shares, private placement
warrants, and warrants that may be issued upon conversion of Working Capital Loans will have registration rights to require the Company
to register a sale of any of its securities held by them pursuant to a registration rights agreement to be signed prior to or on the
effective date of the IPO. These holders will be entitled to make up to three demands, excluding short form registration demands, that
the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggy-back”
registration rights to include their securities in other registration statements filed by the Company.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Underwriting Agreement
On November 12, 2020, the Company issued to the
underwriter (and/or its designees) (the “Representative”) 75,000 shares of Class A ordinary shares for $0.01 per share (the
“Representative Shares”). The fair value of the Representative Shares was estimated to $653,250 and were treated as underwriters’
compensation and charged directly to shareholders’ equity.
The underwriter (and/or its designees) agreed
(i) to waive its redemption rights with respect to such shares in connection with the completion of the initial Business Combination
and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to
complete its initial Business Combination within the Combination Period.
In addition, the Company issued to the Representative
a warrant (“Representative’s Warrant) to purchase up to 450,000 Class A ordinary shares. Such warrants will not be redeemable
for as long as they are held by the Representative, and they may not be exercised after five years from the Effective Date of the registration
statement. Except as described above, the warrants are identical to those underlying the units offered by in the IPO.
The Company initially estimated the fair value
of the Representative’s Warrants at $424,270 using the Monte Carlo simulation model. As of December 31, 2021, the fair value of
the Representative’s Warrant granted to the underwriters is estimated to be $107,779 using the following assumptions: (1) expected
volatility of 6.5%, (2) risk-free interest rate of 1.29% and (3) expected life of 5.39 years. The expected volatility was determined
by the Company based on the historical volatilities of a set of comparative special purpose acquisition companies (“SPAC”),
and the risk-fee interest rate was determined by reference to the U.S. Treasury yield curve in effect for time period equals to the expected
life of the Representative’s Warrant.
On November 12, 2020, the underwriters were paid
a cash underwriting discount of 1.75% of the gross proceeds of the Initial Public Offering, or $1,575,000.
Business Combination Marketing Agreement
The Company engaged the Representative as an
advisor in connection with its Business Combination to (i) assist the Company in preparing presentations for each potential Business
Combination; (ii) assist the Company in arranging meetings with its shareholders, including making calls directly to shareholders, to
discuss each potential Business Combination and each potential target’s attributes and providing regular market feedback, including
written status reports, from these meetings and participate in direct interaction with shareholders, in all cases to the extent legally
permissible; (iii) introduce the Company to potential investors to purchase the Company’s securities in connection with each potential
Business Combination; and assist the Company with the preparation of any press releases and filings related to each potential Business
Combination or target. Pursuant to the business combination marketing agreement, the Representative is not obligated to assist the Company
in identifying or evaluating possible acquisition candidates. Pursuant to the Company’s agreement with the Representative, an advisory
fee of 2.75% of the gross proceeds of the IPO, or $2,475,000 will be payable to the Representative at the closing of the Company’s
Business Combination.
Open Market Purchases
Our sponsor entered into an agreement in
accordance with the guidelines of Rule 10b5-1 under the Exchange Act, to place limit orders, through ED&F Man Capital Markets
Inc., an independent broker-dealer registered under Section 15 of the Exchange Act which is not affiliated with us nor part of the
underwriting or selling group, to purchase an aggregate of up to 3,750,000 of our rights in the open market at market prices, and
not to exceed $0.20 per right during the period commencing on the later of (i) December 10, 2020, the date separate trading of the
rights commenced or (ii) sixty calendar days after the end of the “restricted period” under Regulation M, continuing
until the date that was the earlier of (a) November 9, 2021 and (b) the date that we announced that we had entered into a definitive
agreement in connection with our initial Business Combination, or earlier in certain circumstances as described in the limit order
agreement. The limit orders required such members of our sponsor to purchase any rights offered for sale (and not purchased by
another investor) at or below a price of $0.20, until the earlier of (x) the expiration of the buyback period or (y) the date such
purchases reach 3,750,000 rights in total. Our sponsor would not have any discretion or influence with respect to such purchases and
will not be able to sell or transfer any rights purchased in the open market pursuant to such agreements until following the
consummation of a Business Combination. It was intended that the broker’s purchase obligation would be subject to applicable
law, including Regulation M under the Exchange Act, which may prohibit or limit purchases pursuant to the limit order agreement in
certain circumstances. I-Bankers also agreed to purchase up to 1,250,000 of our rights in the open market at market prices not to
exceed $0.20 per right, on substantially similar terms as our sponsor. The obligations to make any such purchases expired on
November 9, 2021, and as of March 31, 2023, no limit orders were placed by our sponsor or I-Bankers.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
Business Combination Agreement
On December 5, 2022, EDOC Acquisition Corp.,
a Cayman Islands exempted corporation (together with its successors, “Edoc”), entered into a Business Combination Agreement
(the “Business Combination Agreement”) with Australian Oilseeds Investments Pty Ltd., an Australian proprietary company (the
“AOI”), Australian Oilseeds Holdings Limited, upon execution of a joinder agreement to become party to the Business Combination
Agreement (a “Joinder”), a to-be-formed Cayman Islands exempted company (“Pubco”), AOI Merger Sub, upon execution
of a Joinder, a to-be-formed Cayman Islands exempted company and a wholly-owned subsidiary of Pubco (“Merger Sub”), American
Physicians LLC, a Delaware limited liability company (“Purchaser Representative”), in the capacity as the Purchaser Representative
thereunder, Gary Seaton, in his capacity as the representative for the Sellers (as defined below) in accordance with the terms and conditions
of the Business Combination Agreement (the “Seller Representative”) and each of the holders of AOI’s outstanding capital
shares named on Annex I thereto (the “Primary Sellers”), as amended from time to time to include subsequent parties that
execute and deliver to Edoc, Pubco and AOI a Joinder (the “Joining Sellers”), and the holders of AOI’s outstanding
capital shares who are bound by the provisions of the Business Combination Agreement pursuant the drag-along rights set forth in AOI’s
memorandum and articles of association (the “Drag-Along Sellers”, and collectively with the Joining Sellers, the “Sellers”).
Pursuant to the Business Combination Agreement,
subject to the terms and conditions set forth therein, at the closing of the transactions contemplated by the Business Combination Agreement
(the “Closing”), (a) Edoc will merge with and into Merger Sub, with Edoc continuing as the surviving entity (the “Merger”),
and with holders of Edoc securities receiving substantially identical securities of Pubco, and (b) immediately prior to the Merger, Pubco
will acquire all of the issued and outstanding ordinary shares of AOI (the “Purchased Shares”) from the Sellers in exchange
for ordinary shares of Pubco, with AOI becoming a wholly-owned subsidiary of Pubco (the “Share Exchange”, and together with
the Merger and the other transactions contemplated by the Business Combination Agreement, the “Transactions”).
On March 31, 2023, the Company, AOI, Pubco, Merger
Sub, and the Purchaser Representative entered into that certain First Amendment to the Business Combination Agreement (the “First
Amendment”), pursuant to which the Business Combination Agreement was amended to add, as a closing condition, that upon the closing
of the transactions contemplated by the Business Combination Agreement, the Company shall have cash and cash equivalents, including fund
remaining in the Company’s trust account (after giving effect to the completion and payment of the redemption) and the proceeds
of any PIPE Investment, prior to giving effect to the payment of the Company’s unpaid expenses or liabilities, of at least equal
to $10,000,000.
NOTE 7. WARRANTS AND RIGHTS
Warrants — Each whole warrant
entitles the holder to purchase one share of the Company’s Class A ordinary shares at a price of $11.50 per share, subject to adjustment
as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares 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 $9.50 per share of Class A ordinary shares (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 Company’s Sponsor or its affiliates, without taking
into account any founder shares held by the Company’s Sponsor or its affiliates, 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 the initial Business Combination on the date of the consummation of the initial Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading
day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price,
the “Market Value”) is below $9.50 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to
be equal to 115% of the Market Value, and the $18.00 per share redemption trigger price described below under “Redemption of warrants”
will be adjusted (to the nearest cent) to be equal to 180% of the Market Value.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The warrants will become exercisable on the later
of 12 months from the closing of the IPO or upon completion of its initial Business Combination and will expire five years after the
completion of the Company’s initial Business Combination, at 5:00 p.m., Eastern Time, or earlier upon redemption or liquidation.
In no event will the Company be required to net
cash settle any warrant. 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 warrants will not receive any of such funds with respect to their warrants, nor will
they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
The Company will not be obligated to deliver
any Class A ordinary shares 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 with respect to the Class A ordinary shares underlying the warrants is then effective
and a prospectus is current. No warrant will be exercisable, and the Company will not be obligated to issue Class A ordinary shares upon
exercise of a warrant unless Class A ordinary shares issuable upon such warrant exercise has been registered, qualified or deemed to
be exempt under the securities laws of the state of residence of the registered holder of the warrants. In no event will the Company
be required to net cash settle any warrant. 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 ordinary
shares underlying such unit.
The Company may call the warrants for redemption
(excluding the private warrants, and any outstanding Representative’s Warrants, and any warrants underlying units issued to the
Sponsor, initial shareholders, officers, directors or their affiliates in payment of Working Capital Loans made to the Company), in whole
and not in part, at a price of $0.01 per warrant:
| ● | at any time while the warrants are exercisable, |
| | |
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder, |
| | |
| ● | if, and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-trading day period ending on the third trading 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 issuance of the Class A ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day until the date of redemption. |
If the Company calls the warrants for redemption
as described above, the management will have the option to require any holder that wishes to exercise its warrant to do so on a “cashless
basis.” If the management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering
their warrants for that number of shares of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the
number of shares of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value”
(defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean
the average reported last sale price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to
the date on which the notice of redemption is sent to the holders of warrants.
Rights — Except in cases
where the Company is not the surviving company in a Business Combination, each holder of a right will automatically receive one-tenth
(1/10) of a share of Class A ordinary shares upon consummation of the initial Business Combination, even if the holder of a right converted
all shares held by him, her or it in connection with the initial Business Combination or an amendment to the Company’s memorandum
and articles of association with respect to its pre-business combination activities. In the event that the Company will not be the surviving
company upon completion of the initial Business Combination, each holder of a right will be required to affirmatively convert his, her
or its rights in order to receive the one-tenth (1/10) of a share of Class A ordinary shares underlying each right upon consummation
of the Business Combination. No additional consideration will be required to be paid by a holder of rights in order to receive his, her
or its additional share of Class A ordinary shares upon consummation of an initial Business Combination. The shares issuable upon exchange
of the rights will be freely tradable (except to the extent held by affiliates of the Company). If the Company enters into a definitive
agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for
the holders of rights to receive the same per share consideration the holders of share of Class A ordinary shares will receive in the
transaction on an as-converted into Class A ordinary shares basis.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The Company will not issue fractional shares
in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed
in accordance with the applicable provisions of the Cayman Islands law. As a result, the holders of the rights must hold rights in multiples
of 10 in order to receive shares for all of the holders’ rights upon closing of a Business Combination. If the Company is unable
to complete an initial Business Combination within the required time period and the Company liquidates the funds held in the Trust Account,
holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s
assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual
penalties for failure to deliver securities to the holders of the rights upon consummation of an initial Business Combination. Additionally,
in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.
NOTE 8. SHAREHOLDERS’ DEFICIT
Preferred Shares — The Company
is authorized to issue a total of 5,000,000 preferred shares at par value of $0.0001 each. On March 31, 2023 and December 31, 2022, there
were no preferred shares issued or outstanding.
Class A Ordinary Shares —
The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $0.0001 each. On March 7, 2023, the
Company issued an aggregate of 1,685,152 of the Company’s Class A ordinary shares to the Sponsor upon the conversion of an equal
number of the Company’s Class B ordinary shares held by the Sponsor. On March 7, 2023, the Company also issued an aggregate of
564,847 of the Company’s Class A ordinary shares to Sea Otter Securities, Stitching Juridisch Eigendom Mint Tower Arbitrage Fund,
Feis Equities, LLC, Yakira Capital Management, Inc., Yakira Enhanced Offshore Fund, Yakira Partners LP, MAP 136 Segregated Portfolio,
and Meteora Capital Partners, LP (collectively, “the Backstop Investors) upon the conversion of an equal number of the Company’s
Class B ordinary shares held by the Backstop Investors. As a result, as of March 31, 2023 and December 31, 2022, there were 2,803,999
and 554,000 Class A ordinary shares issued and outstanding, excluding 854,378 and 2,026,625 Class A ordinary shares subject to possible
redemption which are presented as temporary equity, respectively.
Class B Ordinary Shares — The
Company is authorized to issue a total of 50,000,000 Class B ordinary shares at par value of $0.0001 each. In September 2020, the Sponsor
subscribed 2,875,000 shares of the Company’s Class B ordinary shares for $25,000, or approximately $0.01 per share, in connection
with formation. On November 9, 2020, the founders surrendered an aggregate of 287,500 Class B ordinary shares for no consideration, resulting
in an aggregate of 2,587,500 Class B ordinary shares issued and outstanding. On December 24, 2020, 337,500 shares were forfeited as the
over-allotment option was not exercised by the underwriters, resulting in an aggregate 2,250,000 Class B ordinary shares issued and outstanding
at December 31, 2022. On March 7, 2023, the Company issued an aggregate of 1,685,152 of the Company’s Class A ordinary shares to
the Sponsor upon the conversion of an equal number of the Company’s Class B ordinary shares held by the Sponsor. On March 7, 2023,
the Company also issued an aggregate of 564,847 of the Company’s Class A ordinary shares to Sea Otter Securities, Stitching Juridisch
Eigendom Mint Tower Arbitrage Fund, Feis Equities, LLC, Yakira Capital Management, Inc., Yakira Enhanced Offshore Fund, Yakira Partners
LP, MAP 136 Segregated Portfolio, and Meteora Capital Partners, LP (collectively, “the Backstop Investors”) upon the conversion
of an equal number of the Company’s Class B ordinary shares held by the Backstop Investors. As a result, as of March 31, 2023, there
was 1 Class B ordinary share issued and outstanding.
The Company’s initial shareholders have
agreed not to transfer, assign or sell 50% its founder shares until the earlier to occur of (i) six months after the date of the consummation
of the initial Business Combination or (ii) the date on which the closing price of the Company’s Class A ordinary shares equals
or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading
days within any 30-trading day period commencing after the initial Business Combination and the remaining 50% of the founder shares may
not be transferred, assigned or sold until six months after the date of the consummation of the initial Business Combination, or earlier,
in either case, if, subsequent to the initial Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange
or other similar transaction which results in all of the shareholders having the right to exchange their shares for cash, securities
or other property.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The Class B ordinary share will automatically
convert into the Company’s Class A ordinary shares at the time of its initial Business Combination 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 Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess
of the amounts offered in the IPO and related to the closing of the initial Business Combination, the ratio at which the Class B ordinary
share shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary
shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares
issuable upon conversion of the Class B ordinary share will equal, in the aggregate, on an as-converted basis, 20% of the sum of the
total number of ordinary shares outstanding upon the completion of the IPO plus all Class A ordinary shares 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 or any private placement-equivalent units issued to the Sponsor or
its affiliates upon conversion of loans made to the Company).
Holders of the Class A ordinary shares and the
holder of the Class B ordinary share will vote together as a single class on all matters submitted to a vote of the Company’s shareholders,
with each share of ordinary shares entitling the holder to one vote.
NOTE 9. FAIR VALUE MEASUREMENTS
Financial Accounting Standards Board’s
(“FASB”) Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurements and Disclosures”
(“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the
buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach,
income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent
the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable
inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from
sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller
would use in pricing the asset or liability developed based on the best information available in the circumstances.
The fair value hierarchy is categorized into three levels based on
the inputs as follows:
Level 1 – Valuations based on unadjusted quoted prices in active
markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are
not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation
of these securities does not entail a significant degree of judgment.
Level 2 – Valuations based on (i) quoted prices in active markets
for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other
than quoted prices for the assets and liabilities, or (iv) inputs that are derived principally from or corroborated by market through
correlation or other means.
Level 3 – Valuations based on inputs that are unobservable and
significant to the overall fair value measurement.
The fair value of the Company’s certain
assets and liabilities, which qualify as financial instruments under ASC 820, approximates the carrying amounts represented in the balance
sheets as of March 31, 2023 and December 31, 2022. The fair values of cash and cash equivalents, prepaid assets, accounts payable
and accrued expenses are estimated to approximate the carrying values as of March 31, 2023 and December 31, 2022, due to the short maturities
of such instruments.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022,
and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description: | |
Level | | |
March 31, 2023 | | |
Level | | |
December 31, 2022 | |
Assets: | |
| | |
| | |
| | |
| |
U.S. Money Market Funds Held in Trust Account | |
| 1 | | |
$ | — | | |
| 1 | | |
$ | 21,319,155 | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Warrant liability—Private Warrants | |
| 3 | | |
| 10,966 | | |
| 3 | | |
| 20,623 | |
Warrant liability—Representative’s Warrants | |
| 3 | | |
| — | | |
| 3 | | |
| 2,634 | |
Convertible Promissory Notes | |
| 3 | | |
| 1,559,702 | | |
| 3 | | |
| 1,512,412 | |
Investment Held in Trust Account
As of March 31, 2023 and December 31, 2022, investments
in the Company’s Trust Account consisted of $9,302,736 and $21,319,155 in cash and U.S. Money Market funds, respectively.
There were no transfers between Levels 1, 2 or
3 during the period ended March 31, 2023 and December 31, 2022. Level 1 instruments include investments in money markets and Treasury
securities. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other
similar sources to determine the fair value of its investments.
Warrant Liability
The Private Warrants and Representative’s
Warrants are accounted for as liabilities pursuant to ASC 815-40 and are measured at fair value as of each reporting period. Changes
in the fair value of the Warrants are recorded in the statements of operations each period.
The Private Warrants and Representative’s
Warrants were valued using a Montel Carlo simulation model, which is considered to be a Level 3 fair value measurement. Inherent in an
options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend
yield. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining
life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity
similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining
contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
There were no transfers between Levels 1, 2 or
3 during the period ended March 31, 2023 and December 31, 2022.
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The following table provides quantitative information
regarding Level 3 fair value measurements for Private Warrants as of March 31, 2023 and December 31, 2022. The Representative’s
Warrants were valued using similar information, except for strike price which is at $12.
| |
March 31, 2023 | | |
December 31, 2022 | |
Exercise price | |
$ | 11.50 | | |
$ | 11.50 | |
Share price | |
$ | 10.78 | | |
$ | 10.50 | |
Volatility | |
| 3.7 | % | |
| 8.0 | % |
Expected life | |
| 0.75 | | |
| 0.70 | |
Risk-free rate | |
| 4.79 | % | |
| 4.75 | % |
Dividend yield | |
| - | % | |
| - | % |
The following table presents a summary of the
changes in the fair value of the Private Warrants and Representative’s Warrants, a Level 3 liability, measured on a recurring basis.
| |
Private Warrants | | |
Representative’s Warrants | | |
Warrant Liability | |
Fair value as of December 31, 2022 | |
$ | 20,623 | | |
$ | 2,634 | | |
$ | 23,257 | |
Change in fair value (1) | |
| (9,657 | ) | |
| (2,634 | ) | |
| (12,291 | ) |
Fair value as of March 31, 2023 | |
$ | 10,966 | | |
$ | - | | |
$ | 10,966 | |
(1) | Represents the non-cash gain on change in valuation of the Private Warrants and Representative’s Warrants and is included in Change in fair value of warrant liability on the statements of operations. |
Convertible Promissory Notes
The convertible promissory notes were valued
using a Monte Carlo simulation model, which is considered to be a Level 3 fair value measurement. The estimated fair value of the Convertible
Promissory Notes was based on the following significant inputs:
| |
March 31, 2023 | | |
December 31, 2022 | |
Risk-free interest rate | |
| 4.38 | % | |
| 4.43 | % |
Time to Expiration (in years) | |
| 0.20 | | |
| 0.26 | |
Expected volatility | |
| 4.4 | % | |
| 4.0 | % |
Dividend yield | |
| 0.00 | % | |
| 0.00 | % |
Stock Price | |
$ | 10.95 | | |
$ | 10.63 | |
Probability of transaction | |
| 85.0 | % | |
| 85.0 | % |
EDOC ACQUISTION CORP.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
Unaudited
The following table presents the changes in the
fair value of the Level 3 Convertible Promissory Note:
Fair value as of December 31, 2021 | |
$ | 975,324 | |
Proceeds received through Convertible Promissory Note | |
| 750,000 | |
Interest accrued | |
| 36,102 | |
Proceeds in excess of fair value | |
| (109,078 | ) |
Change in fair value | |
| (139,936 | ) |
Fair value as of December 31, 2022 | |
| 1,512,412 | |
Interest accrued at 4% per annum based on 365 in a year | |
| 8,876 | |
Change in fair value | |
| 38,414 | |
Fair value as of March 31, 2023 | |
$ | 1,559,702 | |
There were no transfers in or out of Level 3
from other levels in the fair value hierarchy during the period ended March 31, 2023 for the Convertible Promissory Note.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheet date up to the date that the interim unaudited condensed financial statements were issued. Based
upon this review, other than stated below, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the interim unaudited condensed financial statements.
On April 25, 2023, the Company issued a promissory
note (the “Note”) in the principal amount of up to $175,000 to the Sponsor. The Note was issued in connection with advances
the Sponsor may make in the future to the Company for working capital expenses. The Note bears no interest and is due and payable upon
the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date that the winding
up of the Company is effective.