GREENLIGHT BIOSCIENCES HOLDINGS PBC References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
that are not historical facts and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
completion of the Proposed Business Combination (as defined below), the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements, including that the conditions of
the Proposed Business Combination are not satisfied. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus for its Initial Public
Offering filed with the
Overview
We are a blank check company formed under the laws of the
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Proposed Business Combination and Related Agreements
On
The Business Combination Agreement provides for, among other things, the following transactions on the closing date (collectively, the "Business Combination"):
• The stockholders of GreenLight that have agreed to participate in the
transaction will exchange (the "Exchange") their interests in GreenLight
for shares of common stock, par value $0.0001 per share, of the Company
(the "ENVI Class A Common Stock");
• ENVI Merger Sub will merge with and into GreenLight (the "Merger"), with
GreenLight as the surviving company (the "Surviving Company") in the
merger and, after giving effect to such merger, becoming a wholly owned
subsidiary of the Company;
• In connection with the Merger, each issued and outstanding share of
capital stock of GreenLight (other than treasury stock and any dissenting
shares) (a "Greenlight Share") will be converted into a number of shares
of ENVI Class A Common Stock equal to the product of (x) the conversion
ratio applicable to such Greenlight Share multiplied by (y) the quotient
obtained by dividing (a) 120,000,000, by (b) the number of Fully-Diluted
Shares (as defined in the Business Combination Agreement) (such ratio,
the "Exchange Ratio");
• Each option to purchase shares of capital stock of GreenLight
("GreenLight Option") that is outstanding and unexercised immediately
prior to the effective time of the Merger shall be converted into an
option issued under the Company's incentive equity plan to purchase a
number of common shares of the Company (each, a "Rollover Option") equal
to the product (rounded down to the nearest whole number) of (x) the
number of Greenlight Shares subject to such GreenLight Option immediately
prior to the effective time of the Merger, multiplied by (y) the Exchange
Ratio, at an exercise price per share (rounded up to the nearest whole
cent) equal to the quotient of (i) the exercise price per share of such
GreenLight Option immediately prior to the effective time of the Merger
divided by (ii) the Exchange Ratio. Each Rollover Option shall be subject
to the same terms and conditions (including applicable vesting,
expiration and forfeiture provisions) that applied to the corresponding
GreenLight Option immediately prior to the effective time of the Merger,
except (I) as specifically provided above, or (II) as to (1) terms
rendered inoperative by reason of the transactions contemplated by the
Business Combination Agreement (including any anti-dilution or other
similar provisions that may have adjusted or may adjust the number of
underlying shares that are subject to any such option until the effective
time of the Merger), or (2) such other immaterial administrative or
ministerial changes as the Company board of directors (or the
compensation committee of the Company board of directors) may determine
in good faith are appropriate to effectuate the administration of the
Rollover Options;
• Shares of ENVI Class A Common Stock issued in respect of shares of
Greenlight common stock that are subject to vesting or forfeiture
("Greenlight Restricted Shares"), shall be subject to the same terms and
conditions (including applicable vesting, expiration and forfeiture
provisions) that applied to the corresponding Greenlight Restricted Share
immediately prior to the effective time of the Merger; and
• Each warrant of GreenLight ("GreenLight Warrant"), to the extent
outstanding and unexercised, shall automatically, without any action of
any party or any other person (including the holder thereof), be assumed
by GreenLight and converted into a warrant to acquire shares of ENVI
Class A Common Stock equal to the product (rounded down to the nearest
whole number) of (x) the number of common shares of GreenLight (on an as
converted basis) subject to such GreenLight Warrant immediately prior to
the effective time of the Merger, multiplied by (y) the Exchange Ratio,
at an exercise price per share (rounded up to the nearest whole cent)
equal to the quotient of (i) the exercise price per share of such
GreenLight Warrant immediately prior to the effective time of the Merger,
divided by (ii) the Exchange Ratio.
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Private Placement
Concurrently with the execution of the Business Combination Agreement, the
Company entered into Subscription Agreements with certain investors
(collectively, the "
Registration Rights and Transfer Restrictions
Concurrently with the execution of the Business Combination Agreement, the Company entered into an Investor Rights Agreement (the "Investor Rights Agreement") with certain stockholders of GreenLight, ENVI Sponsor, HB Strategies and the other holders of Class B Common Stock, pursuant to which the Company agreed, following the consummation of the Merger, to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of common stock of the Company, as well as other equity securities that are held by the parties thereto from time to time.
Additionally, the Investor Rights Agreements and the Bylaws that will be
effective following the consummation of the Business Combination, contain
certain restrictions on transfer with respect to the ENVI Class A Common Stock
received as consideration for the Merger. Such restrictions begin at the
consummation of the Business Combination and end at the date that is 180 days
after the consummation of the Business Combination (the "Lock-Up Period"),
except that the Lock-Up Period may shorten to 120 days if, following the
consummation of the Business Combination, the last sale price of the ENVI Class
A Common Stock equals or exceeds
Transaction Support Agreement
Concurrently with the execution of the Business Combination Agreement, the
Company entered into Transaction Support Agreement (the "Transaction Support
Agreement") with certain stockholders of GreenLight (the "Supporting
Stockholders"). Under the Transaction Support Agreements, the Supporting
Stockholders agreed, within five business days following the declaration by the
staff of the
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from
For the three months ended
For the six months ended
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Liquidity and Capital Resources
On
Following the Initial Public Offering, the full exercise of the over-allotment
option, and the sale of the Private Placement Warrants, a total of
For the six months ended
As of
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the Sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may
use a portion of the working capital held outside the Trust Account to repay
such loaned amounts but no proceeds from our Trust Account would be used for
such repayment. Up to
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
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Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
The Company engaged Canaccord as advisors in connection with its Business Combination to assist the Company in arranging meetings with its stockholders to discuss the potential Business Combination and the target business' attributes, introduce the Company to potential investors that may be interested in purchasing the Company's securities, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with the preparation of its press releases and public filings in connection with the Business Combination. The Company will pay Canaccord for such services upon the consummation of a Business Combination a cash fee in an amount equal to 3.76% of the gross proceeds of the Initial Public Offering. Pursuant to the terms of the business combination marketing agreement, no fee will be due if the Company does not complete a Business Combination.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in
Warrant Liability
We account for the Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the Warrants as liabilities at their fair value and adjust the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Private Warrants and the Public Warrants for periods where no observable traded price was available are valued using a Monte Carlo simulation. For periods subsequent to the detachment of the Public Warrants from the Units, the Public Warrant quoted market price was used as the fair value as of each relevant date.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders' equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders' equity section of our balance sheets.
Net Income (Loss) Per Common Share
We apply the two-class method in calculating earnings per share. Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding for the period. Net loss per common share, basic and diluted for Class B non-redeemable common stock is calculated by dividing the net income, less income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period presented.
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Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
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