Description of Organization and Business Operations |
Note 1 — Description of Organization and Business Operations
Rose Hill Acquisition Corporation (the “Company”) was incorporated in the Cayman Islands on March 29, 2021. 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 (an “Initial Business Combination”).
The Company is not limited to a particular industry or geographic region for purposes of consummating an Initial Business Combination. The Company is an early stage
and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of June 30, 2023, the Company had not commenced any operations. Activity through June 30, 2023, relates to the Company’s formation and initial public offering
(“IPO”), which is described below and, since the IPO, the search for a prospective Initial Business Combination. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at the earliest.
The Company generates non-operating income in the form of earnings on investments from the proceeds derived from the IPO.
The registration statement for the Company’s IPO was declared effective on October 13, 2021. On October 18, 2021, the Company consummated the IPO
of 12,500,000 units (“Units”) with respect to the Class A ordinary shares included in the units being offered (the “Public Shares”)
at $10.00 per unit generating gross proceeds of $125,000,000.
The Company had until January 18, 2023, 15 months from the closing of the IPO to complete an Initial Business Combination. On January 12, 2023, the
shareholders approved a proposal, as a special resolution, to amend the Company’s amended and restated memorandum and articles of association (“Articles”) to extend the date by which the Company must complete its Initial Business
Combination from January 18, 2023, to July 18, 2023 (“Extension Proposal”). Additionally, the shareholders approved a proposal, as a special resolution, to amend the Articles to acknowledge and clarify that pursuant to the Articles, approval of
the Company’s Initial Business Combination requires an ordinary resolution (“Clarification Proposal”). In connection with the vote to approve the Extension Proposal and Clarification Proposal, the holders of 14,118,106 Class A ordinary shares of the Company exercised their right to redeem their shares for cash at a redemption price of approximately $10.36 per share, for an aggregate redemption amount of approximately $146,000,000 million. Following such redemption, the amount of funds remaining in the Company’s trust account was approximately $2.8 million.
On June 29, 2023, the Company held an extraordinary general meeting of shareholders (the “Meeting”). The Company’s shareholders approved the proposal, as a special
resolution, to amend the Articles to extend the date by which the Company must complete its Initial Business Combination from July 18, 2023, to January 18, 2024. In connection with the vote to approve the Extension Proposal, the holder of one
Class A ordinary share of the Company exercised their right to redeem their share for a total redemption amount of $11.
Following the closing of the IPO, $146,625,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement Warrants, including the amounts generated from the
exercise of the underwriters’ over-allotment option, was placed in a trust account (“Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a
money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of an Initial Business
Combination and (ii) the distribution of the Trust Account, as described below.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating an Initial Business Combination. There is no assurance that the Company will be able to complete an Initial 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
assets held in the Trust Account excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account at the time of the agreement to enter into the Initial Business Combination. However, the Company will only
complete an Initial Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance the Company will be able to
successfully effect an Initial Business Combination.
The Company will provide the holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public
Shares upon the completion of an 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 an Initial Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust
Account. There will be no redemption rights with respect to the Company’s warrants.
All of the Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is
a shareholder vote or tender offer in connection with the Company’s Initial Business Combination and in connection with certain amendments to the Articles. In accordance with the rules of the SEC and its guidance on redeemable equity instruments,
which has been codified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480-10-S99, redemption provisions not solely within the control of a company require ordinary shares subject to redemption to be
classified outside of permanent equity. Given that the Public Shares will be issued with other freestanding instruments (i.e., public warrants), the initial carrying value of Class A ordinary shares classified as temporary equity will be the
allocated proceeds determined in accordance with ASC 470-20. The Class A ordinary shares is subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes
in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the
redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or
remeasurement will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital). While redemptions cannot cause the Company’s net tangible assets to fall below $5,000,001 in connection with approval of an Initial Business Combination, the Public Shares are redeemable and are classified as such on the balance sheet until such date that a redemption event takes place.
Redemptions of the Company’s Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an
agreement relating to the Company’s Initial Business Combination. If the Company seeks shareholder approval of the Initial Business Combination, the Company will proceed with an Initial Business Combination if a majority of the shares voted are
voted in favor of the Initial Business Combination, or such other vote as required by law or stock exchange rule. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold
a shareholder vote for business or other reasons, the Company will, pursuant to its Articles conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing an Initial Business
Combination. If, however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to
redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with an Initial Business Combination, Rose Hill Sponsor LLC (the
“Sponsor”) has agreed to vote its Founder Shares (as defined below) and any Public Shares purchased during or after the IPO in favor of approving an Initial Business Combination. Additionally, each Public Shareholder may elect to redeem their
Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the foregoing, the Articles provides that a Public Shareholder, together with any affiliate of such shareholder or any other person
with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the IPO, without the prior consent of the Company.
The Company’s Sponsor, officers and directors (the “Initial Shareholders”) have agreed not to propose an amendment to the Articles that would affect
the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete an Initial
Business Combination, unless the Company provides the Public Shareholders with the opportunity to redeem their shares of Class A ordinary shares in conjunction with any such amendment.
If the Company is unable to complete an Initial Business Combination during the Combination Period, the Company will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay the Company’s franchise and income taxes
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish Public Shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the
requirements of other applicable law.
On January
24, 2023, the Company received a notice (the “Notice”) from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company was not in compliance with certain requirements of the Nasdaq
Listing Rules set forth in (i) 5450(b)(2)(B), requiring a minimum of 1,100,000 Publicly Held Shares, (ii) Listing Rule 5450(b)(2)(A),
requiring a minimum of $50 million Market Value of Listed Securities, (iii) Listing Rule 5450(b)(2)(C), requiring a minimum of $15 million in Market Value of Publicly Held Shares and (iv) Listing Rule 5450(a)(2), requiring a minimum of 400 Total Holders (collectively, the “Nasdaq Listing Rules”).
On March 24, 2023, Nasdaq granted the
Company an extension until July 24, 2023, by which time the Company must file with the SEC and Nasdaq a public document showing compliance with the Nasdaq Listing Rules. If the Company is unable to regain compliance with the Nasdaq Listing
Rules by July 24, 2023, it may be subject to delisting procedures as set forth in the Nasdaq continued listing rules.
On July 26, 2023, the Company received a delisting determination letter (the
“Determination Letter”) from the Staff notifying the Company that (i) it had not regained compliance with Nasdaq Listing Rule 5550(a)(4) requiring a minimum of 500,000 publicly held shares and (ii) the Company’s Class A ordinary shares, warrants and units would be subject to delisting from The Nasdaq Capital Market. The Determination Letter
further noted that, unless the Company requests an appeal of the Staff’s determination with the Nasdaq Hearings Panel (the “Panel”), trading of the Company’s Class A ordinary shares, warrants and units on The Nasdaq Capital Market would be
suspended at the opening of business on August 4, 2023, and a Form 25-NSE would be filed with the SEC removing the Company’s securities from listing and registration on The Nasdaq Capital Market.
With respect to the Determination Letter, on August 1, 2023, the Company
requested a hearing before the Panel to appeal the Staff’s determination. The hearing before the Panel is expected to occur on October 5, 2023. The hearing request will stay the suspension and delisting of the Company’s securities pending a
decision by the Panel. The Panel may, in its discretion, grant the Company an additional compliance period to regain compliance and maintain its Nasdaq listing; however, there can be no assurance that the Panel will grant such additional time.
Conversion of Class B Ordinary Shares held by the Sponsor
On
February 28, 2023, the Sponsor converted 4,000,000 of its Class B ordinary shares to Class A ordinary shares on a 1:1 basis as part of the Company’s plan to regain compliance with the Nasdaq Listing Rules. The Sponsor’s converted Class A ordinary shares are not
subject to redemptions and have no rights to funds in the Trust Account.
Founder
Shares
Founder Shares refers to the 5,031,250 Class B ordinary shares acquired by the Sponsor prior to the IPO and following the conversion of the Sponsor’s Class B ordinary shares on
February 28, 2023, consists of 1,031,250 Class B ordinary shares and 4,000,000 non-redeemable Class A ordinary shares held by the Sponsor.
The 1,031,250 Class B ordinary shares held by the Sponsor will automatically convert into Class A ordinary shares at the time of the Company’s Initial
Business Combination and are subject to certain transfer restrictions. Holders of Founder Shares may also elect to convert their Class B ordinary shares into an equal number of Class A ordinary shares, subject to adjustment, at any time.
The Initial
Shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of the Initial Business Combination or (B) subsequent to the Initial Business Combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing at least 150 days after the Initial Business Combination, or (y) the date on which the Company completes a
liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their shares of ordinary shares for cash, securities or other property.
The Initial Shareholders have agreed to waive their liquidation rights with respect to the Founder Shares (including the Class A ordinary shares held by the Sponsor)
if the Company fails to complete an Initial Business Combination during the Combination Period. However, if the Initial Shareholders should acquire Public Shares in or after the IPO, they will be entitled to liquidating distributions from the Trust
Account with respect to such Public Shares if the Company fails to complete an Initial Business Combination during the Combination Period. The underwriters have agreed to waive their rights to its deferred underwriting commission (see Note 4) held
in the Trust Account in the event the Company does not complete an Initial Business Combination during the Combination Period, and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available
to fund the redemption of the Public Shares. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the
Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who
executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such
third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent
registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern and Liquidity
As of June 30, 2023, the Company had $3,577 in its
operating bank accounts, $2,917,376 in securities held in the Trust Account to be used for an Initial Business Combination or to
repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $1,167,662.
Until the consummation of an Initial 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 Initial 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 officers, directors and Sponsor 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. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the unaudited condensed financial statements. These 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.
Business Combination
with Prize
Business Combination
Agreement
On October 20, 2022,
the Company entered into a Business Combination Agreement with Inversiones e Inmobilaria GHC Ltda, a limited liability company organized under the laws of Chile (“Prize”) and, for certain limited purposes, Alejandro García Huidobro Empresario
Individual (“AGH”) (as amended on July 17, 2023 and as it may be further amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), pursuant to which, and subject to the terms and conditions set forth
therein, prior to the consummation of the Business Combination (as defined below), (i) Prize caused to be incorporated under the laws of the Cayman Islands, (a) an exempted company with limited liability to serve as “PubCo” for all purposes under
the Business Combination Agreement and (b) an exempted company with limited liability to serve as “Merger Sub” for all purposes under the Business Combination Agreement, (ii) Prize and AGH caused to be incorporated under the laws of Chile, a
simplified stock corporation that will serve as “HoldCo” for all purposes under the Business Combination Agreement, in each case, as a direct wholly owned subsidiary of Prize and (iii) Prize and AGH will consummate a pre-closing restructuring
pursuant to which, among other things, all subsidiaries of Prize will become direct or indirect subsidiaries of HoldCo, HoldCo will become a wholly owned subsidiary of Merger Sub, and Merger Sub will become a wholly owned subsidiary of Prize
(collectively, the “Pre-Closing Restructuring”).
Following the
Pre-Closing Restructuring, at the closing of the Business Combination, (i) the Company will be merged with and into PubCo with PubCo continuing as the surviving entity (the “First Merger”) and (ii) subsequent to the First Merger, Merger Sub will
be merged with and into PubCo with PubCo continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers”) (such transactions and those otherwise contemplated by the Business Combination Agreement,
collectively, the “Business Combination”).
The terms of the
Business Combination Agreement, which contains customary representations and warranties, covenants, closing conditions and other terms relating to the Business Combination, are summarized below. Capitalized terms used in this Quarterly Report for
the quarter ended June 30, 2023 (“Quarterly Report”) but not otherwise defined herein have the meanings given to them in the Business Combination Agreement, which is included as an exhibit to our Annual Report on Form 10-K for the year ended
December 31, 2022.
Consideration
In accordance with
the terms and subject to the conditions of the Business Combination Agreement, by virtue of the First Merger, (i) each Rose Hill ordinary share that is issued and outstanding immediately prior to the First Merger will be converted into one
validly issued, fully paid and non-assessable PubCo ordinary share, and (ii) all outstanding warrants to purchase ordinary shares of Rose Hill will be converted into warrants to purchase the same number of PubCo ordinary shares and all rights
with respect to Rose Hill ordinary shares under such Rose Hill warrants will be converted into rights with respect to the applicable PubCo ordinary shares.
In accordance with
the terms and subject to the conditions of the Business Combination Agreement, by virtue of the Second Merger, each Merger Sub ordinary share that is issued and outstanding immediately prior to the Second Merger will be converted into a number of
PubCo ordinary shares equal to the quotient of (i) the Equity Value, divided by (ii) the number of Merger Sub ordinary shares that are issued and outstanding immediately prior to the Second Merger, divided by (iii) $10.00. The “Equity Value” under the Business Combination Agreement is an amount equal to (i) $328,000,000, minus (ii) the lesser of (a) the aggregate amount of transaction expenses (the “Specified Transaction Expenses”) of Prize and the Company (other than those
expenses incurred in respect of obtaining an equity line of credit or similar financing arrangement to be in place and available to PubCo as of the closing of the Business Combination (“Closing”)) and (b) $10,000,000.
In the event that the
Specified Transaction Expenses exceed $10,000,000, then the number of PubCo ordinary shares otherwise issuable to Rose Hill Sponsor LLC
(the “Sponsor”) under the Business Combination Agreement will be decreased by a number of shares equal to the amount of such excess divided by $10.00.
On July 17, 2023,
Rose Hill, Prize and AGH, entered into Amendment No. 1 to Business Combination Agreement (the “Amendment”), pursuant to which the parties amended the Business Combination Agreement to (i) clarify the amount of shares to be issued by Merger Sub to
Prize in connection with the Pre-Closing Restructuring (ii) permit Prize and AGH to solicit, initiate, enter into or continue discussions, negotiations or transactions with, or encourage or respond to any inquiries or proposals by, or provide any
information to, any Person, concerning any merger, consolidation, sale of ownership interests and/or substantial portion of the assets, recapitalization or similar transaction of, by or involving Prize, HoldCo, PubCo or Merger Sub and terminate
the BCA to enter into a definitive agreement with respect to any such transaction, in each case, until such time as Rose Hill, Prize and applicable investors agree in writing to the key economic terms of subscription agreements with respect to
PIPE investments that, if consummated, would result in the receipt of proceeds of at least $50.0 million in the aggregate to PubCo in
connection with the consummation of the Closing, and (iii) extend the date by which either Rose Hill, Prize or AGH can terminate the Business Combination Agreement, if the transactions contemplated thereby have not been consummated by such date,
from July 18, 2023 to October 18, 2023.
Additionally, Prize
has agreed to pay certain operating costs of the Company. For the three and six months ended June 30, 2023, Prize has reimbursed the Company $35,000
and $105,000, respectively, in operating costs. The Company accounts for these funds as contra-expenses in the statements of
operations.
Earn-Out Shares
If, at any time
following the Closing, the daily volume-weighted average price (“VWAP”) of PubCo ordinary shares is greater than or equal to (a) $18.00,
(b) $22.00, (c) $26.00,
or (d) $30.00 in each case, over any thirty
(30) days on which the PubCo ordinary shares are tradeable on Nasdaq (“Trading Days”) within any consecutive forty-five (45) Trading Day period then
PubCo will issue 2,948,800 PubCo ordinary shares to Prize (“Earn-Out Shares”) after the occurrence of each such consecutive forty-five (45) Trading Day period. For
the avoidance of doubt, Prize may be entitled to receive a maximum of 11,795,200 Earn-Out Shares in the aggregate in respect of the
occurrence of all four Earn-Out Events.
Registration Rights and Lock-up Agreement
In connection with
the Closing of the Business Combination Agreement, PubCo, the Sponsor, Prize and certain other parties thereto will enter into a registration rights and lock-up agreement (the “Registration Rights and Lock-Up Agreement”), which, among other
things, (i) effective as of the Closing, terminates and replaces the current registration rights agreement, dated as of October 13, 2021, by and among Rose Hill, the Sponsor and the other parties thereto, (ii) provides that PubCo will be
obligated to file a registration statement to register the resale of certain PubCo ordinary shares held by Sponsor, Prize and certain other parties thereto, at the consummation of the Business Combination, (iii) provides certain parties thereto
including Prize, certain demand and piggyback registration rights, and (iv) provides for certain restrictions on transfer relating to PubCo ordinary shares and warrants to purchase PubCo ordinary shares held by Sponsor, Prize and certain parties
thereto.
Company Support
Agreement
In connection with
the execution of the Business Combination Agreement, Rose Hill, Prize and AGH have entered into a company support agreement (the “Company Support Agreement”) pursuant to which, among other things, AGH has agreed to (a) vote his Merger Sub
ordinary shares in favor of the approval and adoption of the Business Combination Agreement and the Business Combination and (b) certain transfer restrictions with respect to his Merger Sub ordinary shares and shares of Prize.
Sponsor Support
Agreement
In connection with
the execution of the Business Combination Agreement, the Sponsor entered into a sponsor support agreement (the “Sponsor Support Agreement”) pursuant to which the Sponsor has agreed, among other things, to (i) certain restrictions on transfer
relating to its ordinary shares of Rose Hill prior to the Closing as set forth therein, (ii) not redeem any of its shares of Rose Hill in connection with the vote to approve the Business Combination or any proposal to extend the date by which
Rose Hill must complete an Initial Business Combination, (iii) vote in favor of the Mergers and the other transactions and against any alternative transaction, (iv) waive certain anti-dilution provisions contained in Rose Hill’s Articles in
connection with the Mergers and (v) subject a certain number of its Class B ordinary shares of Rose Hill to vesting.
Sponsor Support Agreement Amendment
On July 31, 2023, Rose Hill, the Sponsor, Prize and Prize SuperFoods (“PubCo”), entered into Amendment No. 1 to the
Sponsor Support Agreement (the “Amendment”), pursuant to which the parties amended the Sponsor Support Agreement to reflect the parties mutual agreement at the time the Business Combination Agreement, dated as of October 19, 2022, by and among
Rose Hill, GHC and, for certain limited purposes, Alejandro García-Huidobro Empresario, an individual (the “Business Combination Agreement”), was executed that the Sponsor will forfeit 3,631,250 Rose Hill ordinary shares immediately prior to the transactions contemplated by the Business Combination Agreement such that the Sponsor will own 1,400,000 Rose Hill ordinary shares immediately following the forfeiture, 700,000 of which are subject to vesting conditions, as described in the Sponsor Support Agreement.
Standby Equity Purchase
Agreement
In connection with
the execution of the Business Combination Agreement and for purposes of obtaining equity financing on behalf of PubCo at Closing, Prize entered into a standby equity purchase agreement with a financial investor and affiliate of Yorkville Advisors
(the “Investor”), pursuant to which, among other things, at the Closing, PubCo will have the right (but not the obligation) to sell to the Investor, and the Investor will purchase from PubCo, up to $150,000,000 of PubCo ordinary shares at a purchase price of 97%
of the Market Price (as defined therein) of the PubCo ordinary shares, subject to the terms and conditions set forth therein.
Risks and Uncertainties
The credit and financial markets have experienced extreme volatility and disruptions due in part to the current conflict between Ukraine and Russia. The conflict is expected to have further global economic consequences, including but not
limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition,
the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the
foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
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