424B3
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Filed Pursuant to Rule 424(b)(3)
File Number 333-268201

European Biotech Acquisition Corp.

EPFL Innovation Park, Bat D

3e Route J-D. Colladon

CH-1015 Lausanne, Switzerland

PROXY STATEMENT FOR EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS OF EUROPEAN BIOTECH ACQUISITION CORP.

AND

PROSPECTUS FOR 44,524,604 ORDINARY SHARES AND 4,403,294 WARRANTS OF

OCULIS HOLDING AG

Dear EBAC Shareholder:

You are cordially invited to attend an extraordinary general meeting of the shareholders of European Biotech Acquisition Corp., a Cayman Islands exempted company (“EBAC”, “we”, “us” or “our”) (the “Extraordinary General Meeting”), which will be held on February 28, 2023 at 9:00 a.m., Eastern Time, at EBAC’s corporate address, located at EPFL Innovation Park, Bat D, 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland and virtually via a live webcast at www.virtualshareholdermeeting.com/EBAC2023SM, or at such other time, on such other date and at such other place to which the meeting may be adjourned. To attend the meeting virtually please visit www.virtualshareholdermeeting.com/EBAC2023SM and use a 12-digit control number assigned by Continental Stock Transfer & Trust Company included on your proxy card or notice of the Extraordinary General Meeting. To register and receive access to the virtual meeting, registered shareholders and beneficial shareholders (i.e., those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement/prospectus.

On October 17, 2022, EBAC and Oculis SA, a stock corporation (Aktiengesellschaft) incorporated and existing under the laws of Switzerland (“Oculis” or the “Company”) entered into a Business Combination Agreement (as it may be amended from time to time, the “Business Combination Agreement”), attached hereto as Annex A, pursuant to which, among other things, shareholders of each of EBAC and Oculis will exchange their securities in those entities for securities of Oculis Holding AG, a stock corporation (Aktiengesellschaft) incorporated and existing under the laws of Switzerland and that is a direct wholly owned subsidiary of EBAC (“New Parent). Following the execution of the Business Combination Agreement, New Parent formed each of Oculis Merger Sub I Company, a Cayman Islands exempted company and a direct wholly owned subsidiary of New Parent (“Merger Sub 1”), Oculis Merger Sub II Company, a Cayman Islands exempted company and a direct wholly owned subsidiary of New Parent (“Merger Sub 2”) and Oculis Operations GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated and existing under the laws of Switzerland and a direct wholly owned subsidiary of New Parent (“Merger Sub 3”) for the purposes of carrying out the transactions therein and in connection therewith. To effectuate the Business Combination and related transactions contemplated by the Business Combination Agreement (and described therein), among other things and subject to the terms and conditions therein, the Business Combination Agreement and the Ancillary Agreements (as defined below) provide that:

 

  i.

the PIPE Investors (as defined below) will transfer $71,188,910 to EBAC in exchange for 7,118,891 shares of EBAC Class A Common Stock (the “PIPE Shares”);

 

  ii.

Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease and EBAC will be the surviving company and a wholly owned subsidiary of New Parent (the “First Merger,” and the time at which the First Merger becomes effective, the “First Merger Effective Time”);

 

  iii.

as part of the First Merger, (i) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into one class of common stock of EBAC, as the surviving company of the First Merger (the “Surviving EBAC Shares”), (ii) each EBAC Warrant (as defined below) outstanding immediately prior to the First Merger Effective time will be automatically converted into warrants of EBAC, as the surviving company of the First Merger (“Surviving EBAC Warrants”) and (iii) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (as defined below) (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants on the terms and subject to the conditions set forth in the Business Combination Agreement and in the Ancillary Agreements (as defined below);


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  iv.

on the day before the Acquisition Closing Date (as defined in the Business Combination Agreement) and following the First Merger Effective Time but prior to the Second Merger Effective Time (as defined below), the Exchange Agent will contribute the Surviving EBAC Shares and Surviving EBAC Warrants to New Parent (the “Exchange Agent Contribution”) in exchange for (i) New Parent ordinary shares, nominal value CHF 0.01 (“New Parent Shares”) and (ii) a right to acquire New Parent Shares (“New Parent Warrants”), in each case of (i) and (ii), to be held by the Exchange Agent solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants (the “New Parent Interests Consideration”);

 

  v.

in connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will undertake to distribute the (i) New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares and (ii) New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants (“Exchange Agent Contribution Actions”);

 

  vi.

on the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will merge with and into Merger Sub 2, the separate corporate existence of EBAC will cease and Merger Sub 2 will be the surviving company and remain a wholly owned subsidiary of New Parent (the “Second Merger” and the time at which the Second Merger becomes effective, the “Second Merger Effective Time”, and the Second Merger, together with the First Merger, the “EBAC Mergers”), and following the Acquisition Closing, Merger Sub 2 shall be liquidated and its assets distributed to New Parent;

 

  vii.

after the Second Merger Effective Time but before the Oculis Share Contribution (as defined below), it is the intention of the parties to the Convertible Loan Agreements (as defined below) that New Parent will assume the Convertible Loan Agreements, pursuant to which certain Oculis Shareholders (as defined below) (the “Lenders”) granted Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $19,670,000, and that immediately after such assumption but before the Oculis Share Contribution, the Lenders will exercise their conversion rights in exchange for New Parent Shares at $10.00 per share, on the same terms as the PIPE Investors;

 

  viii.

at approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing Oculis Shareholders Support Agreements and the exchange notice contemplated by the Business Combination Agreement shall effect the contribution to New Parent of all Company Share Capital held by such Oculis Shareholders free and clear of all liens (other than general restrictions on transfer under applicable securities laws or the articles of association of Oculis) in exchange for New Parent Shares on the terms and subject to the conditions set forth in the Business Combination Agreement and Oculis Shareholders Support Agreement (as defined below); and

 

  ix.

approximately 30 days after the closing of the EBAC Mergers, pursuant to a merger agreement to be entered into in accordance with Section 9.10 of the Business Combination Agreement, Oculis will merge with and into Merger Sub 3, the separate corporate existence of Oculis will cease and Merger Sub 3 will be the surviving company and remain a wholly owned subsidiary of New Parent (the “Third Merger” and together with the EBAC Mergers, the “Mergers”).

In addition, certain Oculis equityholders will receive additional consideration in the form of an earnout of, collectively, 4,000,000 newly issued New Parent Shares and options underlying such New Parent Shares (“Earnout Options”), that will be received pro rata in proportion to their equity interests in Oculis as of the date of the Business Combination Agreement (the “Earnout Consideration”). The Earnout Consideration will be issued to such Oculis equityholders upon the Acquisition Closing but shall initially be unvested and subject to forfeiture in the event of a failure to achieve the performance targets. The Earnout Consideration will consist of three tranches of New Parent Shares (“Earnout Shares”), as follows (in the case of each tranche, minus any Earnout Options granted to replace vested options to purchase shares of Oculis common stock): (i) 1,500,000, (ii) 1,500,000 and (iii) 1,000,000, vesting based on the achievement of post-Acquisition Closing share price targets of New Parent Shares of $15.00, $20.00 and $25.00, respectively, in each case, for any 20 trading days within any consecutive 30 trading day period commencing after the Acquisition Closing Date and ending on or prior to


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the fifth anniversary of the Acquisition Closing Date (the “Earnout Period”). A given share price target described above will also be deemed to be achieved (to the extent such target has not already been achieved) if there is a Change of Control (as defined in the Business Combination Agreement) transaction of New Parent during the Earnout Period. Such Oculis equityholders’ right and entitlement to receive the Earnout Consideration will be forfeited to the extent that the relevant share price targets have not been achieved by the fifth anniversary of the Acquisition Closing Date. The Earnout Shares shall not be entitled to vote on matters submitted to the holders of New Parent Shares for approval or be entitled to receive dividends or distributions in respect of the New Parent Shares, if any, until the achievement of such share price targets specified above.

The Sponsor (as defined below) will forfeit 727,096 of its shares of EBAC Class B Common Stock (as defined below) for no consideration, contingent upon the consummation of the Acquisition Closing. Furthermore, if as of the Acquisition Closing Date (i) the amount of cash available in the Trust Account (as defined below) following the Extraordinary General Meeting (after deducting the EBAC Share Redemption Amount (as defined below) but before payment of any transaction expenses of Oculis or EBAC), plus (ii) the PIPE Investment Amount (as defined below) actually received by New Parent (or other financing, including through a convertible loan, in connection with the Acquisition Transactions) prior to or substantially concurrently with the Acquisition Closing from a PIPE Investor or other investor that in either case has been introduced to Oculis following the date of the Business Combination Agreement by the Sponsor or its affiliates, is less than $25,500,000, then the Sponsor will forfeit for no consideration an additional number of EBAC Class B Common Stock (the “Additional At-Risk Shares”) proportional to the available cash relative to the $25,500,000 threshold (up to a maximum of 1,594,348 Additional At-Risk Shares); provided that such amount may be reduced by the number of Additional At-Risk Shares transferred by the Sponsor to EBAC Shareholders in connection with executing a Non-Redemption Agreement or similar arrangement after the date hereof; provided further that, the number of shares transferred to any such shareholder does not exceed 10% of the number of EBAC Class A Common Stock owned by such shareholder as of the date of such Non-Redemption Agreement or similar arrangement.

In connection with the foregoing and concurrently with the execution of the Business Combination Agreement, EBAC entered into subscription agreements with the Initial PIPE Investors (the “Initial Subscription Agreements”), pursuant to which the Initial PIPE Investors have agreed to purchase from EBAC, severally and not jointly, and EBAC has agreed to issue from treasury and sell to the Initial PIPE Investors, a number of EBAC Class A Common Stock equal to (i) the total subscription amount from the Initial PIPE Investors divided by (ii) $10.00 (the “Initial PIPE Financing”). Subsequent to the Initial PIPE Financing, in January 2023, EBAC entered into subscription agreements (the “Subsequent Subscription Agreements”, and together with the Initial Subscription Agreements, the “Subscription Agreements”) with certain subscribers (the “Subsequent PIPE Investors”, and together with the Initial PIPE Investors, the “PIPE Investors”), pursuant to which the Subsequent PIPE Investors have agreed to subscribe for, and EBAC has agreed to issue to the Subsequent Subscribers, an aggregate of 788,500 shares of EBAC Class A Common Stock at a price of $10.00 per share, for aggregate gross proceeds of $7,885,000 (the “Subsequent PIPE Financing”, and together with the Initial PIPE Financing, the “PIPE Financing”). The aggregate amount of EBAC Class A Common Stock to be issued pursuant to the PIPE Financing is 7,118,891 shares for aggregate gross proceeds of $71,188,910. The shares of EBAC Class A Common Stock to be issued from treasury pursuant to the Subscription Agreements have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act (as defined below). Upon the Acquisition Closing, New Parent will grant the PIPE Investors certain customary registration rights in connection with the PIPE Financing, including demand and piggyback rights, as set forth in the Registration Rights and Lock-Up Agreement (as defined below). The PIPE Financing is contingent upon, among other things, the Acquisition Closing.

Further, the Sponsor and certain EBAC Shareholders have agreed pursuant to the Shareholder Non-Redemption Agreement, dated as of October 17, 2022 (the “Non-Redemption Agreements”) to, among other things, vote in favor of the transactions contemplated in the Business Combination Agreement for which the approval of EBAC Shareholders is required and have agreed not to redeem or exercise any right to redeem any shares, capital stock or any other equity interests, as applicable, of EBAC that the Sponsor or such EBAC shareholder, as applicable, holds of record or beneficially, as of the date of executing such Non-Redemption Agreement, or acquires thereafter.


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Additionally, in connection with their entry into the Business Combination Agreement, Oculis, EBAC, and the Sponsor entered into a Sponsor Support Agreement (the “Sponsor Letter Agreement”), pursuant to which, among other things, the Sponsor has agreed (i) to vote in favor of the Business Combination Agreement and the transactions contemplated thereby, subject to the terms and conditions contemplated by the Sponsor Letter Agreement and (ii) to be bound by certain transfer restrictions with respect to the equity interests of EBAC held by them.

At the Extraordinary General Meeting, EBAC Shareholders will be asked to consider and vote upon a proposal, as an ordinary resolution, to approve the Business Combination Agreement, and the transactions contemplated thereby (the “Business Combination Proposal” or “Proposal No. 1”).

EBAC Shareholders will also be asked to approve and authorize, by special resolution, the form of plan of merger (the “Plan of Merger”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex C, pursuant to which Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease, and EBAC will be the surviving company and a direct wholly owned subsidiary of New Parent (the “Merger Proposal” or “Proposal No. 2”).

EBAC Shareholders are also being asked to consider and vote upon a proposal, as an ordinary resolution, to adjourn the Extraordinary General Meeting to a later date or dates to the extent reasonable (i) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (ii) in order to solicit additional proxies from EBAC Shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (iii) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition (as defined below) would not be satisfied (the “Adjournment Proposal” or “Proposal No. 3”).

Each of Proposal No. 1, Proposal No. 2 and Proposal No. 3 is more fully described in this proxy statement/prospectus, which each shareholder is encouraged to read carefully.

The EBAC Class A Common Stock, EBAC Public Units (as defined below) and EBAC Public Warrants (as defined below) are currently listed on the Nasdaq Capital Market under the symbols “EBAC,” “EBACU” and “EBACW,” respectively. Upon the Acquisition Closing, EBAC’s securities will be delisted from the Nasdaq Capital Market. New Parent has applied to list the New Parent Shares and New Parent Warrants (as defined below) on the Nasdaq Global Market under the symbols “OCS” and “OCSAW,” respectively, upon the Acquisition Closing.

With respect to EBAC and the holders of the EBAC Common Stock, this proxy statement/prospectus serves as a:

 

   

proxy statement for the Extraordinary General Meeting being held on February 28, 2023 where EBAC Shareholders will vote on, among other things, a proposal to approve the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination, and to authorize the Plan of Merger; and

 

   

prospectus for the New Parent Shares and New Parent Warrants that will be issued in connection with the Business Combination.

Pursuant to EBAC’s amended and restated memorandum and articles of association, EBAC is providing its public shareholders with the opportunity to redeem, subject to the Acquisition Closing being completed, any EBAC Class A Common Stock then held by them for the right to receive an amount in cash equal to each EBAC shareholder’s respective pro rata share of the aggregate amount on deposit (as of two business days prior to the Acquisition Closing) in the Trust Account that holds the proceeds (including interest accrued thereon, which shall be net of taxes payable) of EBAC’s initial public offering and certain of the proceeds of the sale of the EBAC Private Placement Units (as defined below). Redemptions referred to herein shall take effect as repurchases into treasury under EBAC’s amended and restated memorandum and articles of association. The EBAC Share Redemption Amount will be distributed, subject to all conditions to the Acquisition Closing being


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met, by New Parent to shareholders who properly redeem their EBAC Class A Common Stock. The EBAC Share Redemption Amount will not be reduced by the aggregate deferred underwriting fee that EBAC will pay to the underwriters of EBAC’s initial public offering or the Transaction Expenses (as defined below), which together are estimated to amount to $7.4 million. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $128.3 million as of September 30, 2022, the estimated redemption price per share of EBAC Class A Common Stock would have been approximately $10.052. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent (as defined below) in order to validly redeem its shares. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposal and the Merger Proposal. A public shareholder, together with any of its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act (as defined below)), will be restricted from redeeming in the aggregate its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding EBAC Class A Common Stock. EBAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of EBAC Class A Common Stock by EBAC’s public shareholders will reduce the amount in the Trust Account.

The conditions to the Acquisition Closing are for the sole benefit of the parties thereto and may be waived by such parties. The Business Combination Agreement provides that the parties’ obligation to consummate the Business Combination is conditioned, among other things, on the amount of cash in the Trust Account (net of the Cash Redemption Amount (as defined below)) together with the proceeds from the PIPE Financing (or other financing in connection with the EBAC Mergers, such as the Convertible Loan Agreement) (after payment of any unpaid transaction expenses of Oculis and EBAC) being equal to or greater than $100 million (such condition, the “Minimum EBAC Cash Condition”). If, as a result of redemptions of EBAC Class A Common Stock by EBAC’s public shareholders, the Minimum EBAC Cash Condition is not met or is not waived by the parties, then either party may elect not to consummate the Business Combination. In addition, in no event will EBAC redeem its EBAC Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in EBAC’s amended and restated memorandum and articles of association. Unless otherwise specified, the information in this proxy statement/prospectus assumes that none of EBAC’s public shareholders exercise their redemption rights with respect to their EBAC Class A Common Stock.

The EBAC Initial Shareholders (as defined below) and certain other officers and directors of EBAC have agreed, for no consideration in return, to waive their redemption rights with respect to any Founder Shares (as defined below) they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. The Sponsor has agreed to vote any EBAC Common Stock (including Founder Shares and any other public shares of EBAC as of the record date) owned by it in favor of the Business Combination and the transactions contemplated thereby (including by voting in favor of the Business Combination Proposal and the Merger Proposal and for any other proposal presented to EBAC Shareholders in this proxy statement/prospectus). The Founder Shares are subject to transfer restrictions. EBAC’s amended and restated memorandum and articles of association includes a conversion adjustment which provides that the Founder Shares will automatically convert, at the time of the Business Combination, into the number of EBAC Class A Common Stock one day after the Acquisition Closing, at a one-to-one conversion rate. However, the Sponsor has agreed to waive such conversion adjustment pursuant to the Sponsor Letter Agreement, and as referenced above, in connection with the transactions contemplated hereby, such Founder Shares ultimately become New Parent Shares in connection with the consummation of the transactions contemplated hereby.

EBAC is providing this proxy statement/prospectus and accompanying proxy card to its shareholders in connection with the solicitation of proxies to be voted at the Extraordinary General Meeting and at any adjournments or postponements of the Extraordinary General Meeting. Information about the Extraordinary General Meeting, the Business Combination and other related business to be considered by EBAC Shareholders at the Extraordinary General Meeting is included in this proxy statement/prospectus. Whether or not you plan to attend the Extraordinary General Meeting, all EBAC Shareholders are urged to read carefully this

proxy statement/prospectus, including the Annexes and the accompanying financial statements of New


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Parent, EBAC and Oculis, carefully and in their entirety. In particular, you are urged to read carefully the section entitled “Risk Factors.”

After careful consideration, the EBAC Board has approved the Business Combination Proposal and the Business Combination, and recommends that EBAC Shareholders vote “FOR” adoption of the Business Combination Agreement and approval of the Business Combination and “FOR” any other proposal presented to EBAC Shareholders in this proxy statement/prospectus. When considering the EBAC Board’s recommendation of these proposals, you should keep in mind that certain EBAC directors and officers have interests in the Business Combination that may conflict with your interests as shareholders. Please see the section entitled “Proposal No. 1—The Business Combination Proposal— Interests of Certain Persons in the Business Combination” for additional information.

Approval of the Business Combination Proposal requires the affirmative vote of holders of at least a majority of the EBAC Common Stock that are entitled to vote and are voted at the Extraordinary General Meeting. Approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the EBAC Common Stock that are entitled to vote and are voted at the Extraordinary General Meeting. Approval of the Merger Proposal requires the affirmative vote of holders of at least two-thirds of the EBAC Common Stock that are entitled to vote and are voted at the Extraordinary General Meeting.

Your vote is very important. Whether or not you plan to attend the Extraordinary General Meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to ensure that your shares are represented at the Extraordinary General Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Extraordinary General Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Business Combination Proposal and the Merger Proposal are approved at the Extraordinary General Meeting. The Acquisition Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. If the Business Combination Proposal and the Merger Proposal are not approved by the shareholders of EBAC, the Business Combination will not be consummated. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Extraordinary General Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and you do not attend the Extraordinary General Meeting in person, your shares will not be counted for purposes of determining whether a quorum is present at the Extraordinary General Meeting. If you are a shareholder of record and you attend the Extraordinary General Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT EBAC REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOUR REDEMPTION RIGHTS INCLUDE THE REQUIREMENT THAT A HOLDER MUST IDENTIFY ITSELF IN WRITING AS A BENEFICIAL HOLDER AND PROVIDE ITS LEGAL NAME, PHONE NUMBER AND ADDRESS TO THE TRANSFER AGENT IN ORDER TO VALIDLY REDEEM ITS SHARES. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S (“DTC”) DEPOSIT WITHDRAWAL AT CUSTODIAN (“DWAC”) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN YOUR SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD YOUR SHARES IN “STREET NAME,” YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.


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On behalf of the EBAC Board, I would like to thank you for your support of EBAC and look forward to a successful completion of the Business Combination.

 

Sincerely,

/s/ Martijn Kleijwegt

Martijn Kleijwegt
Chairman of the EBAC Board

February 3, 2023

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES OR REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED PARTY TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURES IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated February 3, 2023 and is expected to be first mailed or otherwise delivered to EBAC Shareholders on or about February 3, 2023.


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ADDITIONAL INFORMATION

No person is authorized to give any information or to make any representation with respect to the matters that this proxy statement/prospectus describes other than those contained in this proxy statement/prospectus, and, if given or made, such information or representation must not be relied upon as having been authorized by EBAC, Oculis or New Parent. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of this proxy statement/prospectus nor any distribution of securities under this proxy statement/prospectus will, under any circumstances, create an implication that there has been no change in the affairs of EBAC, Oculis or New Parent since the date of this proxy statement/prospectus or that any information contained herein is correct as of any time subsequent to such date.


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NOTICE OF THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

OF EUROPEAN BIOTECH ACQUISITION CORP.,

TO BE HELD ON FEBRUARY 28, 2023

To the Shareholders of EBAC:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders of EBAC (the “Extraordinary General Meeting”) will be held on February 28, 2023 at 9:00 a.m., Eastern Time, at EBAC’s corporate address, located at EPFL Innovation Park, Bat D, 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland, and via a live webcast at www.virtualshareholdermeeting.com/EBAC2023SM, or at such other time, on such other date and at such other place to which the meeting may be adjourned. You are cordially invited to attend the Extraordinary General Meeting to conduct the following items of business and/or consider, and if thought fit, approve the following items:

 

1.

Proposal No. 1 — Business Combination Proposal a proposal to approve, as an ordinary resolution, and adopt the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby, including the Business Combination;

 

2.

Proposal No. 2 — Merger Proposal — a proposal to approve and authorize, by special resolution, the Plan of Merger, a copy of which is attached to the accompanying proxy statement/prospectus as Annex C, pursuant to which Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease, and EBAC will be the surviving company and a direct wholly owned subsidiary of New Parent; and

 

3.

Proposal No. 3 — Adjournment Proposal — a proposal to approve, as an ordinary resolution, to adjourn the Extraordinary General Meeting to a later date or dates to the extent reasonable (i) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (ii) in order to solicit additional proxies from EBAC Shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (iii) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition would not be satisfied.

To attend the meeting virtually please visit www.virtualshareholdermeeting.com/EBAC2023SM and use a 12-digit control number assigned by Continental included on your proxy card or notice of the Extraordinary General Meeting. To register and receive access to the virtual meeting, registered shareholders and beneficial shareholders (i.e., those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement/prospectus.

The record date for the Extraordinary General Meeting that hold their shares in “street name” is January 26, 2023. For EBAC Shareholders holding their shares in “street name,” only shareholders holding such shares at the close of business on that date may vote at the Extraordinary General Meeting or any adjournment thereof. For the avoidance of doubt, the record date does not apply to EBAC Shareholders that hold their shares in registered form and are registered as shareholders in EBAC’s register of members. EBAC Shareholders that hold their shares in registered form are entitled to one vote on each proposal presented at the Extraordinary General Meeting for each share of EBAC Common Stock held on the record date of the Extraordinary General Meeting.

As further described in this proxy statement/prospectus, subject to the terms and conditions of the Business Combination Agreement, in connection with the consummation of the Business Combination, among other things, shareholders of each of EBAC and Oculis will exchange their securities in those entities, as applicable, for securities of New Parent. To effectuate the Business Combination and related transactions contemplated by the Business Combination Agreement (and described therein), among other things and subject to the terms and conditions therein, the Business Combination Agreement and the Ancillary Agreements provide that:

 

  i.

the PIPE Investors will transfer $71,188,910 to EBAC in exchange for 7,118,891 PIPE Shares;

 

  ii.

EBAC will undergo the First Merger; and as part of the First Merger, (i) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into the Surviving EBAC Shares (ii) each EBAC Warrant outstanding immediately prior to the First Merger Effective


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  time will be automatically converted into Surviving EBAC Warrants and (iii) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants on the terms and subject to the conditions set forth in the Business Combination Agreement and in the Ancillary Agreements;

 

  iii.

on the day before the Acquisition Closing Date and following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent, solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants, will undertake the Exchange Agent Contribution Actions in exchange for receipt of the New Parent Interests Consideration;

 

  iv.

in connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will undertake to distribute (i) the New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares and (ii) the New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants;

 

  v.

on the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will undergo the Second Merger, pursuant to which, among other things, the separate corporate existence of EBAC will cease, and following the Acquisition Closing, Merger Sub 2 will be liquidated and its assets distributed to New Parent;

 

  vi.

after the Second Merger Effective Time but before the Oculis Share Contribution, it is the intention of the parties to the Convertible Loan Agreements that New Parent will assume the Convertible Loan Agreements, pursuant to which the Lenders granted Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $19,670,000, and that immediately after such assumption but before the Oculis Share Contribution, the Lenders will exercise their conversion rights in exchange for New Parent Shares at $10.00 per share, on the same terms as the PIPE Investors;

 

  vii.

at approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing the Oculis Shareholders Support Agreements and the exchange notice contemplated by the Business Combination Agreement shall effect the contribution to New Parent of all Company Share Capital held by such Oculis Shareholders free and clear of all liens (other than general restrictions on transfer under applicable securities laws or the articles of association of Oculis) in exchange for New Parent Shares on the terms and subject to the conditions set forth in the Business Combination Agreement and Oculis Shareholders Support Agreement; and

 

  viii.

approximately 30 days after the closing of the EBAC Mergers, Oculis will undergo the Third Merger.

In addition, certain Oculis equityholders will receive additional Earnout Consideration that will be received pro rata in proportion to their equity interests in Oculis as of the date of the Business Combination Agreement. The Earnout Consideration will be issued to such Oculis equityholders upon the Acquisition Closing but shall initially be unvested and subject to forfeiture in the event of a failure to achieve the performance targets. The Earnout Consideration will consist of three tranches of Earnout Shares, as follows (in the case of each tranche, minus any Earnout Options granted to replace vested options to purchase shares of Oculis common stock): (i) 1,500,000, (ii) 1,500,000 and (iii) 1,000,000, vesting based on the achievement of post-Acquisition Closing share price targets of New Parent Shares of $15.00, $20.00 and $25.00, respectively, in each case, for any 20 trading days within any consecutive 30 trading day period commencing after the Acquisition Closing Date and ending on or prior to the fifth anniversary of the Acquisition Closing Date. A given share price target described above will also be deemed to be achieved (to the extent such target has not already been achieved) if there is a Change of Control (as defined in the Business Combination Agreement) transaction of New Parent during the Earnout Period. Such Oculis equityholders’ right and entitlement to receive the Earnout Consideration will be forfeited to the extent that the relevant share price targets have not been achieved by the fifth anniversary of the Acquisition Closing Date. The Earnout Shares shall not be entitled to vote on matters submitted to the holders of New Parent Shares for approval or be entitled to receive dividends or distributions in respect of the New Parent Shares, if any, until the achievement of such share price targets specified above.


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In connection with the foregoing and concurrently with the execution of the Business Combination Agreement, EBAC entered into Initial Subscription Agreements with the Initial PIPE Investors pursuant to which the Initial PIPE Investors have agreed to purchase from EBAC, severally and not jointly, and EBAC has agreed to issue from treasury and sell to the Initial PIPE Investors, a number of EBAC Class A Common Stock equal to (i) the total subscription amount from the Initial PIPE Investors ($63,303,910) divided by (ii) $10.00. Subsequent to the Initial PIPE Financing, in January 2023, EBAC entered into the Subsequent Subscription Agreements with the Subsequent PIPE Investors, pursuant to which the Subsequent PIPE Investors have agreed to subscribe for, and EBAC has agreed to issue to the Subsequent PIPE Investors, a number of EBAC Class A Common Stock equal to (i) the total subscription amount from the Subsequent PIPE Investors ($7,885,000) divided by (ii) $10.00. The aggregate amount of EBAC Class A Common Stock to be issued pursuant to the PIPE Financing is 7,118,891 for aggregate gross proceeds of $71,188,910. The shares of EBAC Class A Common Stock to be issued from treasury to the PIPE Investors pursuant to the Subscription Agreements have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act (as defined below). Upon the Acquisition Closing, New Parent will grant the PIPE Investors certain customary registration rights in connection with the PIPE Financing, including demand and piggyback rights as set forth in the Registration Rights and Lock-Up Agreement. The PIPE Financing is contingent upon, among other things, the Acquisition Closing.

Further, the Sponsor and certain EBAC Shareholders have agreed pursuant to the Non-Redemption Agreement to, among other things, vote in favor of the transactions contemplated in the Business Combination Agreement for which the approval of EBAC Shareholders is required and have agreed not to redeem or exercise any right to redeem any shares, capital stock or any other equity interests, as applicable, of EBAC that Sponsor or such EBAC shareholder, as applicable, holds of record or beneficially, as of the date of executing such Non-Redemption Agreement, or acquires thereafter.

In connection with their entry into the Business Combination Agreement, Oculis, EBAC and the Sponsor entered into the Sponsor Letter Agreement, pursuant to which, among other things, the Sponsor agreed (i) to vote in favor of the Business Combination Agreement and the transactions contemplated thereby, subject to the terms and conditions contemplated by the Sponsor Letter Agreement and (ii) to be bound by certain transfer restrictions with respect to the equity interests of EBAC held by them.

The above matters are more fully described in this proxy statement/prospectus, which also includes, as Annex A, a copy of the Business Combination Agreement. You are urged to read carefully this proxy statement/prospectus in its entirety, including each of the Annexes hereto and the accompanying financial statements provided herein.

Pursuant to EBAC’s amended and restated memorandum and articles of association, EBAC is providing its public shareholders with the opportunity to redeem, subject to the Acquisition Closing being completed, EBAC Class A Common Stock then held by them for the right to receive an amount in cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Acquisition Closing) in the Trust Account that holds the proceeds (including interest accrued thereon, which shall be net of taxes payable) of EBAC’s initial public offering and certain of the proceeds of the sale of the EBAC Private Placement Units. Redemptions referred to herein shall take effect as repurchases into treasury under EBAC’s amended and restated memorandum and articles of association. The EBAC Share Redemption Amount will be distributed, subject to all conditions to the Acquisition Closing being met, by New Parent to EBAC’s shareholders who properly redeem their EBAC Class A Common Stock. The EBAC Share Redemption Amount will not be reduced by the aggregate deferred underwriting fee that EBAC will pay to the underwriters of EBAC’s initial public offering or transaction expenses of Oculis and EBAC incurred in connection with the Business Combination, which together are estimated to amount to $7.4 million. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of approximately $128.3 million as of September 30, 2022, the estimated redemption price per share of EBAC Class A Common Stock would have been approximately $10.052. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Public shareholders may elect to redeem their shares even if they vote for the Business Combination Proposal and


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the Merger Proposal. A public shareholder, together with any of its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act (as defined below)), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the outstanding EBAC Class A Common Stock. EBAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of EBAC Class A Common Stock by EBAC’s public shareholders will reduce the amount in the Trust Account.

The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. The Business Combination Agreement provides that the parties’ obligation to consummate the Business Combination is conditioned, among other things, on satisfying the Minimum EBAC Cash Condition. If, as a result of redemptions of EBAC Class A Common Stock by EBAC’s public shareholders, the Minimum EBAC Cash Condition is not met or is not waived by the parties, then either party may elect not to consummate the Business Combination. In addition, in no event will EBAC redeem its EBAC Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in EBAC’s amended and restated memorandum and articles of association. Unless otherwise specified, the information in this proxy statement/prospectus assumes that none of EBAC’s public shareholders exercise their redemption rights with respect to their EBAC Class A Common Stock.

The Acquisition Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. If the Business Combination Proposal and the Merger Proposal are not approved by the shareholders of EBAC, the Business Combination shall not be consummated. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

Approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Class Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. The EBAC Board recommends that you vote “FOR” each of these proposals.

 

By Order of the EBAC Board

/s/ Martijn Kleijwegt

Martijn Kleijwegt
Chairman of the EBAC Board


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TABLE OF CONTENTS

 

     Page  

About this Proxy Statement/Prospectus

     1  

Important Information About IFRS and Non-IFRS Financial Measures

     2  

Conventions Which Apply to this Proxy Statement/Prospectus and Exchange Rate Presentation

     2  

Trademarks, Trade Names and Service Marks

     4  

Industry and Market Data

     5  

Selected Definitions

     6  

Questions and Answers About the Business Combination and the Extraordinary General Meeting of Shareholders

     11  

Summary of the Proxy Statement/Prospectus

     35  

Selected Unaudited Pro Forma Condensed Combined Financial Information

     56  

Cautionary Note Regarding Forward-Looking Statements

     59  

Risk Factors

     61  

Extraordinary General Meeting of EBAC

     154  

Material Tax Considerations

     165  

Unaudited Pro Forma Condensed Combined Financial Information

     180  

Business of New Parent Before the Business Combination

     195  

Business of Oculis and Certain Information About Oculis

     197  

Oculis Management’s Discussion and Analysis of Financial Condition and Results of Operations

     244  

Business of EBAC and Certain Information About EBAC

     262  

EBAC Management’s Discussion and Analysis of Financial Condition and Results of Operations

     276  

Management of New Parent After the Business Combination

     279  

Management and Executive Officer and Director Compensation of Oculis

     288  

Description of New Parent Securities and Proposed Articles of Association

     296  

Comparison of Shareholder Rights

     314  

Shares Eligible for Future Sale

     327  

Certain Relationships and Related Party Transactions

     330  

Beneficial Ownership of New Parent Securities

     333  

Price Range of Securities and Dividends

     337  

Proposal No. 1 — The Business Combination Proposal

     338  

Proposal No. 2 — The Merger Proposal

     381  

Proposal No. 3 — The Adjournment Proposal

     382  

Legal Matters

     383  

Experts

     383  

Shareholder Communications

     384  

Enforcement of Civil Liabilities

     385  

Householding Information

     386  

Transfer Agent and Registrar

     387  

Future Shareholder Proposals

     387  

Where You Can Find More Information

     388  

Index to Financial Statements

     F-1  

ANNEXES

 

Annex A: Business Combination Agreement

     A-1  

Annex B: Proposed Articles of Association of New Parent

     B-1  

Annex C: Form of Plan of Merger

     C-1  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by New Parent, constitutes a prospectus of New Parent under Section 5 of the Securities Act (as defined below) with respect to the New Parent Shares and New Parent Warrants to be issued to EBAC Shareholders if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Exchange Act (as defined below) with respect to the Extraordinary General Meeting of EBAC, at which such shareholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.

This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

This proxy statement/prospectus incorporates important business and financial information that is not included in or delivered with this proxy statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus or other publicly available information concerning EBAC, free of charge, by written request to European Biotech Acquisition Corp., EPFL Innovation Park, Bat D 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland, Tel.: +41-21-711-3970.

In order for EBAC Shareholders to receive timely delivery of the documents in advance of the Extraordinary General Meeting, you must request the information no later than February 21, 2023, or five business days prior to the date of the Extraordinary General Meeting.


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IMPORTANT INFORMATION ABOUT IFRS AND NON-IFRS FINANCIAL MEASURES

This proxy statement/prospectus contains:

 

  1.

the unaudited financial statements of EBAC as of September 30, 2022, for the three and nine months ended September 30, 2022 and for the period from January 8, 2021 (inception) through September 30, 2021 prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and expressed in U.S. dollars;

 

  2.

the audited financial statements of EBAC as of December 31, 2021 and for the period from January 8, 2021 (inception) through December 31, 2021 prepared in accordance with U.S. GAAP and expressed in U.S. dollars;

 

  3.

the unaudited condensed interim consolidated financial statements of Oculis as of September 30, 2022 and December 31, 2021 and for each of the three- and nine-month periods ended September 30, 2022 and 2021 prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and expressed in thousands of Swiss francs; and

 

  4.

the audited consolidated financial statements of Oculis as of and for the years ended December 31, 2021 and 2020 prepared in accordance with IFRS as issued by the IASB and expressed in thousands of Swiss francs (collectively, the “Historical Financial Information”).

Rounding and Negative Amounts

Certain figures in this proxy statement/prospectus, including financial data, have been rounded. Accordingly, figures shown for the same category presented in different tables may vary slightly, and figures shown as totals in certain tables may not be an exact arithmetic aggregation of the figures which precede them.

In preparing the Historical Financial Information, most numerical figures are presented in U.S. dollars (for EBAC) and thousands of Swiss francs (CHF) for Oculis. For the convenience of the reader of this proxy statement/prospectus, certain numerical figures in this proxy statement/prospectus are rounded to the nearest one million. As a result of this rounding, certain numerical figures presented herein may vary slightly from the corresponding numerical figures presented in our financial statements.

The percentages (as a percentage of costs and period-on-period percentage changes) presented in the textual financial disclosure in this proxy statement/prospectus are derived directly from the financial information contained in our financial statements. Such percentages may be computed using the numerical figures expressed in either U.S. dollars (for EBAC) or thousands of Swiss francs (for Oculis) in the respective financial statements. Therefore, such percentages are not calculated on the basis of the financial information in the textual disclosure that has been subjected to rounding adjustments in this proxy statement/prospectus.

In tables, negative amounts are shown between brackets. Otherwise, negative amounts may also be shown by “–” or “negative” before the amount.

CONVENTIONS WHICH APPLY TO THIS PROXY STATEMENT/PROSPECTUS AND EXCHANGE RATE PRESENTATION

In this proxy statement/prospectus, unless otherwise specified or the context otherwise requires:

 

   

“$,” “USD” and “U.S. dollar” each refer to the United States dollar; and

 

   

“CHF” and “Swiss francs” each refer to the Swiss franc.

Certain amounts described herein have been expressed in U.S. dollars for convenience, and when expressed in U.S. dollars in the future, such amounts may be different from those set forth herein due to intervening exchange

 

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rate fluctuations. The exchange rate used for conversion between U.S. dollars and Swiss francs is based on the historical exchange rate of the Swiss franc released by the Federal Reserve, the central bank of the United States. Unless otherwise indicated, certain Swiss franc amounts contained in this proxy statement/prospectus have been translated into U.S. dollars at the rate of CHF 1.00 to $1.0198, which was the exchange rate as reported by the Federal Reserve on September 30, 2022. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of Swiss francs at the dates indicated.

 

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TRADEMARKS, TRADE NAMES AND SERVICE MARKS

This proxy statement/prospectus includes trademarks, tradenames and service marks, certain of which belong to Oculis and others that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this proxy statement/prospectus appear without the ®, TM and SM symbols, but the absence of those symbols is not intended to indicate, in any way, that the applicable owner will not assert its rights to these trademarks, tradenames and service marks to the fullest extent under applicable law. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

 

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INDUSTRY AND MARKET DATA

This proxy statement/prospectus contains industry and market data which have been obtained from industry publications, market research and other publicly available information. Certain information regarding market size, market share, market position, growth rates and other industry data pertaining to Oculis and its business contained in this proxy statement/prospectus consists of estimates based on data compiled by independent professional organizations and on data from other external sources.

Such information is supplemented, where necessary, with Oculis’ own internal estimates, taking into account publicly available information about other industry participants and Oculis’ management’s judgment where information is not publicly available. The November 2019 market research report discussed in this proxy statement/prospectus was commissioned by and prepared in collaboration with Oculis. This information appears in the sections entitled, among others, “Summary,” “Business of Oculis and Certain Information about Oculis” and “Oculis Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Industry publications and market research generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed and that the projections they contain are based on a number of significant assumptions. In some cases, the sources from which this data is derived is not expressly referred to. While Oculis compiled, extracted and reproduced industry data from these sources, and believes that the information used is reliable, Oculis did not independently verify the data that was extracted or derived from such industry publications or market reports, and cannot guarantee its accuracy or completeness.

The industry and market data that appears in this proxy statement/prospectus is inherently uncertain, involves a number of assumptions and limitations and may not necessarily be reflective of actual market conditions and you are cautioned not to give undue weight to such industry and market data because it may differ from current data, may that be due to material changes in market conditions or otherwise. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this proxy statement/prospectus. These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

New Parent, EBAC and Oculis do not intend, and none of the foregoing assumes any obligation, to update industry or market data set forth in this proxy statement/prospectus. Because market behavior, preferences and trends are subject to change, prospective investors should be aware that market and industry information in this proxy statement/prospectus and estimates based on any data therein may not be reliable indicators of future market performance or Oculis’ future results of operations.

 

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SELECTED DEFINITIONS

In this proxy statement/prospectus unless stated otherwise or the context otherwise requires, a reference to:

 

   

“Acquisition Closing” means the closing of the First Merger, Second Merger and Oculis Share Contribution.

 

   

“Acquisition Transactions” means the transactions contemplated by the First Merger and Second Merger.

 

   

“Acquisition Closing Date” means the date upon which the Acquisition Closing is to occur.

 

   

“Adjournment Proposal” means the proposal to adjourn to a later date or dates to the extent reasonable (i) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (ii) in order to solicit additional proxies from EBAC Shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (iii) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition would not be satisfied.

 

   

“Ancillary Agreements” means the Business Combination Agreement (together with the Oculis Disclosure Letter and the EBAC Disclosure Letter), the Subscription Agreements, the Convertible Loan Agreements, the Sponsor Support Agreement, the Non-Redemption Agreement, the Confidentiality Agreement, dated as of February 22, 2022, by and between Oculis and EBAC, the Oculis Shareholders Support Agreement and when entered into at the Acquisition Closing, the Registration Rights and Lock-Up Agreement and the Warrant Assumption Agreement.

 

   

“Business Combination” means the transactions contemplated by the Business Combination Agreement, including the Mergers and the Oculis Share Contribution.

 

   

“Business Combination Agreement” means the Business Combination Agreement, dated as of October 17, 2022, as may be amended from time to time, by and among EBAC and Oculis.

 

   

“Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.

 

   

“Cayman Companies Act” means the Companies Act of the Cayman Island (As Revised).

 

   

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

 

   

“Combination Period” means the period ending 24 months after the closing of EBAC’s initial public offering (March 18, 2023, or such later date to which such deadline is extended pursuant to a vote of the EBAC Shareholders) during which time EBAC must either complete its initial business combination or redeem all of the outstanding EBAC Class A Common Stock.

 

   

“Company Share Capital” has the meaning ascribed to such term in the Business Combination Agreement.

 

   

“Continental” means Continental Stock Transfer & Trust Company, EBAC’s transfer agent and warrant agent.

 

   

“Convertible Loan Agreements” means the convertible loan agreements, dated as of October 17, 2022 and January 26, 2023, by and among Oculis and certain lenders party thereto.

 

   

“D.F. King” means D.F. King & Co., Inc., our proxy solicitor.

 

   

“Earnout Shares” means the New Parent Shares issued as part of the Earnout Consideration on the terms, and subject to the conditions set forth in the Business Combination Agreement.

 

   

“EBAC” means European Biotech Acquisition Corp., a Cayman Islands exempted company.

 

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“EBAC Board” means the board of directors of EBAC.

 

   

“EBAC Class A Common Stock” means Class A ordinary shares, par value $0.0001 per share, of EBAC.

 

   

“EBAC Class B Common Stock” or “Founder Shares” means Class B ordinary shares, par value $0.0001 per share, of EBAC.

 

   

“EBAC Common Stock” means EBAC Class A Common Stock and EBAC Class B Common Stock.

 

   

“EBAC Disclosure Letter” means that certain disclosure letter delivered to Oculis by EBAC on the date of the Business Combination Agreement.

 

   

“EBAC Initial Shareholders” means the holders of EBAC Class B Common Stock as of the date of the Business Combination Agreement, together with such holders’ ownership of shares of EBAC Class A Common Stock.

 

   

“EBAC Private Placement Warrants” means a warrant to purchase one share of EBAC Class A Common Stock at an exercise price of $11.50 issued to the Sponsor.

 

   

“EBAC Public Warrants” means a warrant to purchase one share of EBAC Class A Common Stock at an exercise price of $11.50 that was included in the units sold as part of EBAC’s initial public offering.

 

   

“EBAC Shareholders” means the shareholders of EBAC as of any applicable determination time prior to the Acquisition Closing.

 

   

“EBAC Share Redemption” means the election of an eligible (as determined in accordance with EBAC’s amended and restated memorandum and articles of association) holder of shares of EBAC Class A Common Stock to redeem all or a portion of the shares of EBAC Class A Common Stock held by such holder in return for the right to receive a per-share price, payable in cash by New Parent, equal to a pro rata share of the aggregate amount on deposit in the Trust Account (including any interest earned on the funds held in the Trust Account) (as determined in accordance with EBAC’s amended and restated memorandum and articles of association) in connection with the Transactions. The redeemed shares of EBAC Class A Common Stock shall be held in treasury for re-issuance to new investors.

 

   

“EBAC Share Redemption Amount” means the aggregate amount payable by New Parent with respect to all EBAC Share Redemptions.

 

   

“EBAC Units” means the units issued in EBAC’s initial public offering consisting of one share of EBAC Class A Common Stock and one-third of an EBAC Public Warrant.

 

   

“EBAC Warrants” means the EBAC Public Warrants and the EBAC Private Placement Warrants.

 

   

“EMA” means the European Medicines Agency.

 

   

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

   

“Exchange Agent” means a person authorized to act as exchange agent in connection with the Business Combination, which shall be selected by New Parent, Oculis and EBAC to act on behalf of EBAC, EBAC Shareholders, Oculis and Oculis Shareholders.

 

   

“Exchange Agent Contribution” means the contribution by the Exchange Agent of Surviving EBAC Shares and Surviving EBAC Warrants to New Parent in exchange for New Parent Shares and New Parent Warrants.

 

   

“Exchange Agent Contribution Actions” means the distribution by the Exchange Agent of New Parent Shares and New Parent Warrants to the holders of Surviving EBAC Shares and Surviving EBAC Warrants, respectively.

 

   

“Existing Warrant Agreement” means the warrant agreement dated as of March 15, 2021, between EBAC and Continental, as warrant agent, as amended.

 

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“FDA” means the U.S. Food and Drug Administration.

 

   

“First Merger” means when Merger Sub 1 merges with and into EBAC, with EBAC as the surviving company.

 

   

“First Merger Effective Time” means the time at which the First Merger becomes effective pursuant to the filing and registration of the plan of merger with the Cayman Islands Registrar of Companies or at such later time as may be agreed by New Parent and Oculis in writing and specified in such plan of merger.

 

   

“GAAP” means United States generally accepted accounting principles.

 

   

“IFRS” means the International Financial Reporting Standards as adopted by the International Accounting Standards Board.

 

   

“Initial PIPE Financing” means the private placement pursuant to which the Initial PIPE Investors subscribed for EBAC Class A Common Stock, for a subscription price of $10.00 per share.

 

   

“Initial PIPE Investors” means the institutional investors that have committed to subscribe for EBAC Class A Common Stock in the Initial PIPE Financing.

 

   

“Initial Subscription Agreements” means the subscription agreements, each dated as of October 17, 2022, by and among EBAC and the Initial PIPE Investors party thereto.

 

   

“Lenders” means those certain Oculis Shareholders party to the Convertible Loan Agreements pursuant to which, among other things, such Oculis Shareholders agreed to grant Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $19,670,000.

 

   

“Merger Proposal” means a proposal to approve and authorize, by special resolution, the form of Plan of Merger, a copy of which is attached to this proxy statement/prospectus as Annex C, pursuant to which Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease, and EBAC will be the surviving company and as a direct wholly owned subsidiary of New Parent.

 

   

“Merger Sub 1” means Oculis Merger Sub I Company, a Cayman Islands exempted company that is a direct wholly owned subsidiary of New Parent.

 

   

“Merger Sub 2” means Oculis Merger Sub II Company, a Cayman Islands exempted company that is a direct wholly owned subsidiary of New Parent.

 

   

“Merger Sub 3” means Oculis Operations GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated and existing under the laws of Switzerland that is a direct wholly owned subsidiary of New Parent.

 

   

“Minimum EBAC Cash Condition” means (i) the amount of cash or cash equivalents available in the Trust Account following the Extraordinary General Meeting (after deducting the EBAC Share Redemption Amount and payment of the Oculis and EBAC expenses in connection with the Business Combination); (ii) plus the aggregate amount of the PIPE Financing actually received by New Parent (or other financing in connection with the Business Combination, including the Convertible Loan) prior to or substantially concurrently with the Acquisition Closing, which must be equal to or greater than $100 million.

 

   

“Nasdaq” means The Nasdaq Stock Market LLC.

 

   

“New Parent” means Oculis Holding AG, a stock corporation (Aktiengesellschaft) incorporated and existing under the laws of Switzerland and that is a direct wholly owned subsidiary of EBAC.

 

   

“New Parent Board” means the board of directors of New Parent following the Acquisition Closing.

 

   

“New Parent Shares” means ordinary shares, nominal value CHF 0.01 per share of New Parent.

 

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“New Parent Interests Consideration” means New Parent Shares, nominal value CHF 0.01 per share and New Parent Warrants held by the Exchange Agent solely on behalf of holders of Surviving EBAC Shares and Surviving EBAC Warrants.

 

   

“New Parent Warrants” means a right to acquire New Parent Shares, on substantially the same terms as the EBAC Warrants.

 

   

“Non-Redemption Agreements” means the Shareholder Non-Redemption Agreements, each dated as of October 17, 2022 by and among EBAC and certain EBAC Shareholders party thereto.

 

   

“Oculis” means Oculis SA, a stock corporation (Aktiengesellschaft) incorporated and existing under the laws of Switzerland.

 

   

“Oculis Disclosure Letter” means that certain disclosure letter delivered to EBAC by Oculis on the date of the Business Combination Agreement.

 

   

“Oculis Shareholders” means, collectively, the holders of shares of Company Share Capital as of any applicable determination time prior to the Acquisition Closing.

 

   

“Oculis Shareholders Support Agreement” means that certain agreement entered into concurrently with the execution of the Business Combination Agreement, dated as of October 17, 2022, by and among Oculis, EBAC and the Oculis Shareholders party thereto.

 

   

“Oculis Share Contribution” means the contribution by the Oculis Shareholders of the full legal and beneficial ownership of the applicable Company Share Capital to New Parent.

 

   

“PIPE Financing” means the Initial PIPE Financing and the Subsequent PIPE Financing, pursuant to which the PIPE Investors subscribed for EBAC Class A Common Stock, for a subscription price of $10.00 per share.

 

   

“PIPE Investment Amount” means the aggregate proceeds actually received by EBAC prior to or substantially concurrently with the Acquisition Closing for the shares in the PIPE Financing.

 

   

“PIPE Investors” means the Initial PIPE Investors and the Subsequent PIPE Investors.

 

   

“PIPE Shares” means the shares of EBAC Class A Common Stock purchased by the PIPE Investors.

 

   

“Private Placement Units” means the units issued to Sponsor in a private placement simultaneously with the closing of EBAC’s initial public offering, which private placement units consists of EBAC Class A Common Stock and EBAC Private Placement Warrants.

 

   

“Proposed Articles of Association” means the amended and restated articles of association of New Parent to be adopted by New Parent, in the form attached as Annex B to this proxy statement/prospectus.

 

   

“Prospectus” means the proxy statement/prospectus included in the Registration Statement on Form F-4 (Registration No. 333-268201) filed with the SEC, as amended from time to time.

 

   

“Registration Rights and Lock-Up Agreement” means the Amended and Restated Registration Rights and Lock-Up Agreement, dated as of the Acquisition Closing Date, by and among New Parent, Sponsor and certain Oculis Shareholders.

 

   

“SEC” means the U.S. Securities and Exchange Commission.

 

   

“Second Merger” means when EBAC will merge with and into Merger Sub 2, with Merger Sub 2 as the surviving company.

 

   

“Second Merger Effective Time” means the time at which the Second Merger becomes effective pursuant to the filing and registration of the plan of merger with the Cayman Islands Registrar of Companies or at such later time as may be agreed by New Parent and Oculis in writing and specified in such plan of merger.

 

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“Securities Act” means the Securities Act of 1933, as amended.

 

   

“Sponsor” means LSP Sponsor EBAC B.V. a Dutch limited liability company.

 

   

“Sponsor Support Agreement” means the Sponsor Support Agreement, dated October 17, 2022, by and among EBAC, Oculis and Sponsor.

 

   

“Subscription Agreements” means the Initial Subscription Agreements and the Subsequent Subscription Agreements.

 

   

“Subsequent PIPE Financing” means the private placement pursuant to which the Subsequent PIPE Investors subscribed for EBAC Class A Common Stock, for a subscription price of $10.00 per share.

 

   

“Subsequent PIPE Investors” means the institutional investors that have committed to subscribe for EBAC Class A Common Stock in the Subsequent PIPE Financing.

 

   

“Subsequent Subscription Agreements” means the subscription agreements, entered into in January 2023, by and among EBAC and the Subsequent PIPE Investors party thereto.

 

   

“Surviving EBAC Shares” means EBAC Common Stock, including those held by the PIPE Investors, automatically converted into one class of common stock of EBAC, as the surviving company of the First Merger.

 

   

“Surviving EBAC Warrants” means EBAC Warrants outstanding immediately prior to the First Merger Effective Time automatically converted into warrants of EBAC, as the surviving company of the First Merger.

 

   

“Swiss Code of Obligations” means the Swiss Federal Act on the Amendment of the Swiss Civil Code of March 30, 1911.

 

   

“Third Merger” means when Oculis will merge with and into Merger Sub 3, with Oculis as the surviving company and wholly owned subsidiary of New Parent.

 

   

“Third Merger Effective Time” means the time at which the Third Merger becomes effective pursuant to the filing and the registration of the plan of merger in accordance with the provisions of the Swiss Code of Obligations or at such later time as may be agreed by New Parent and Oculis in writing and specified in such plan of merger.

 

   

“Transaction Proposals” means the Business Combination Proposal, the Merger Proposal the Adjournment Proposal, and if applicable, the Additional Proposals.

 

   

“Transfer Agent” means Continental.

 

   

“Trust Account” means that certain trust account with Continental, as trustee, containing the cash proceeds of EBAC from its initial public offering and private placement of securities (and all accrued interest earned thereon), deposited therein for the benefit of EBAC and EBAC’s public shareholders.

 

   

“Warrant Assumption Agreement” a Warrant Assignment and Assumption Agreement to be entered into among EBAC, New Parent and the Exchange Agent, in a form to be agreed upon among EBAC, New Parent, Continental, the Exchange Agent and Oculis, to be effective upon the Acquisition Closing.

 

   

“Warrant Conversion” means the right of the EBAC Warrant holders to receive a New Parent Warrant in exchange for EBAC Warrants to be transferred immediately to holders of EBAC Warrants pursuant to the Warrant Assumption Agreement, to be effective upon the Acquisition Closing.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the proposals to be presented at the Extraordinary General Meeting, including the Business Combination Proposal and the Merger Proposal. The following questions and answers do not include all the information that is important to EBAC Shareholders. Shareholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the Extraordinary General Meeting, which will be held on February 28, 2023 at 9:00 a.m., Eastern Time, at EBAC’s corporate address, located at EPFL Innovation Park, Bat D, 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland, and virtually via live webcast. To participate in the Extraordinary General Meeting virtually, visit www.virtualshareholdermeeting.com/EBAC2023SM and enter the 12-digit control number assigned by Continental included on your proxy card or notice of the Extraordinary General Meeting. You may register for the meeting as early as 5:00 p.m., Eastern Time, on February 24, 2023. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to take additional steps to participate in the Extraordinary General Meeting, as described in this proxy statement/prospectus.

 

Q:

Why am I receiving this proxy statement/prospectus?

 

A:

EBAC Shareholders are being asked to consider and vote upon (i) a proposal to approve and adopt the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby, including the Business Combination, (ii) a proposal to approve and authorize, by special resolution, the Plan of Merger, a copy of which is attached to the accompanying proxy statement/prospectus as Annex C, pursuant to which Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease, and EBAC will be the surviving company and a direct wholly owned subsidiary of New Parent and (iii) a proposal to adjourn the Extraordinary General Meeting to a later date or dates to the extent reasonable (a) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (b) in order to solicit additional proxies from EBAC Shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (c) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition would not be satisfied.

The Business Combination Agreement provides, among other things, that: (i) EBAC will undergo the First Merger, pursuant to which, among other things, (a) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into the Surviving EBAC Shares, (b) each EBAC Warrant outstanding immediately prior to the First Merger Effective Time will be automatically converted into Surviving EBAC Warrants and (c) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants; (ii) on the day before the Acquisition Closing Date and following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent, solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants, will undertake the Exchange Agent Contribution Actions in exchange for the New Parent Interests Consideration; (iii) in connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will (a) undertake to distribute the New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares and (b) distribute the New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants; (iv) on the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will undergo the Second Merger, pursuant to which, among other things, the separate corporate existence of EBAC will cease; (v) at approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing Oculis Shareholders Support Agreements and the

 

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exchange notice contemplated by the Business Combination Agreement shall effect the Oculis Share Contribution; and (vi) approximately 30 days after the closing of the EBAC Mergers, Oculis will undergo the Third Merger.

EBAC will hold the Extraordinary General Meeting to consider and vote upon these proposals. This proxy statement/prospectus and its Annexes each contain important information about the proposed Business Combination and the other matters to be acted upon at the Extraordinary General Meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.

The EBAC Board believes that each of the Business Combination Proposal, the Merger Proposal and the Adjournment Proposal to be presented at the Extraordinary General Meeting is in the best interests of EBAC and its shareholders and recommends that its shareholders vote “FOR” each of the proposals.

When considering the EBAC Board’s recommendation that EBAC Shareholders vote in favor of the approval of the Business Combination Proposal and the Merger Proposal, EBAC Shareholders should be aware that, aside from their interests as shareholders, the EBAC Initial Shareholders and EBAC’s other current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other EBAC Shareholders generally. The EBAC Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to EBAC Shareholders that they approve the Business Combination Proposal and the Merger Proposal. EBAC Shareholders should take these interests into account in deciding whether to approve the Business Combination Proposal and the Merger Proposal. Please see the section entitled “Proposal No. 1The Business Combination ProposalInterests of Certain Persons in the Business Combination” for a further discussion of these interests.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its Annexes and the accompanying financial statements of EBAC and Oculis, in each case, carefully and in its entirety.

 

Q:

When and where is the Extraordinary General Meeting?

 

A:

The Extraordinary General Meeting will be held on February 28, 2023 at 9:00 a.m., Eastern Time, at EBAC’s corporate address, located at EPFL Innovation Park, Bat D, 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland, and via a live webcast at www.virtualshareholdermeeting.com/EBAC2023SM, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

 

Q:

Who is entitled to vote at the Extraordinary General Meeting?

 

A:

As a shareholder of EBAC, you have a right to vote on certain matters affecting EBAC. The proposals that will be presented at the Extraordinary General Meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement/prospectus. EBAC Shareholders will be entitled to vote or direct votes to be cast at the Extraordinary General Meeting if they owned EBAC Common Stock at the close of business on January 26, 2023, which is the record date for the Extraordinary General Meeting.

 

Q:

How many votes do I have?

 

A:

EBAC Shareholders are entitled to one vote at the Extraordinary General Meeting for each share of EBAC Common Stock held of record as of the record date. As of the close of business on the record date for the Extraordinary General Meeting, there were 16,398,576 shares of EBAC Common Stock outstanding, of which 13,209,880 are EBAC Class A Common Stock and 3,188,696 are Founder Shares held by the EBAC Initial Shareholders (including Founder Shares transferred by the Sponsor in the amount of 25,000 Founder Shares to certain of the Independent Directors, for a total of 50,000 Founder Shares transferred).

 

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Q:

What are the specific proposals on which I am being asked to vote at the Extraordinary General Meeting?

 

A:

EBAC Shareholders are being asked to approve the following proposals:

 

  1.

Business Combination Proposal — a proposal to approve and adopt the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby (including, for the avoidance of doubt, the Plan of Merger), including the Business Combination;

 

  2.

Merger Proposal — a proposal to approve and authorize, by special resolution, the Plan of Merger, a copy of which is attached to this proxy statement/prospectus as Annex C, pursuant to which Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease, and EBAC will be the surviving company and as a direct wholly owned subsidiary of New Parent; and

 

  3.

Adjournment Proposal — a proposal to adjourn the Extraordinary General Meeting to a later date or dates to the extent reasonable (i) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (ii) in order to solicit additional proxies from EBAC Shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (iii) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition would not be satisfied.

 

Q:

What are the recommendations of the EBAC Board?

 

A:

After careful consideration, the EBAC Board has approved the Business Combination Agreement and the Business Combination, and recommends that EBAC Shareholders vote “FOR” adoption of the Business Combination Agreement and approval of the Business Combination, “FOR” the Merger Proposal, “FOR” the Adjournment Proposal and “FOR” any other proposal presented to EBAC Shareholders in this proxy statement/prospectus. When you consider the EBAC Board’s recommendation of these proposals, you should keep in mind that certain EBAC directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. Please see the section entitled “Proposal No. 1— The Business Combination Proposal — Interests of Certain Persons in the Business Combination” for additional information.

 

Q:

Do the Proposed Articles of Association differ materially from the current constitutional documents of EBAC?

 

A:

The Business Combination Agreement contemplates, among other things, the replacement of EBAC’s amended and restated memorandum and articles of association under the Cayman Companies Act with the Proposed Articles of Association of New Parent, which differ materially from the current constitutional documents of EBAC in the certain respects. Please see the section entitled “Comparison of Shareholder Rights” for more information.

 

Q:

Why is EBAC proposing the Business Combination?

 

A:

EBAC is a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The EBAC Board sought to do this by utilizing the networks and industry experience of both the Sponsor and the EBAC Board to identify, acquire and operate one or more businesses.

In determining to approve entry into the Business Combination Agreement and Ancillary Agreements and the transactions contemplated thereby, the EBAC Board considered, among others, the following factors (although not weighted or in any order of significance):

 

   

Experienced management team and New Parent Board. The EBAC Board believes that Oculis’ management team has extensive experience in the biopharma industry in general and the

 

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ophthalmology market in particular. The EBAC Board is confident in the management team’s deep industry knowledge and strategic vision and believes that the EBAC and Oculis teams (together with the new incoming directors of the New Parent Board who have extensive executive experience working in the biopharma industry) will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. For additional information regarding Oculis’ executive officers, please see the section entitled “Management of New Parent After the Business Combination.”

 

   

Advanced and diversified pipeline. The EBAC Board considered that the current pipeline of Oculis provides multiple product candidates that may be developed in several indications where the existing unmet medical need could provide significant market opportunities and long-term shareholder value. For additional information regarding Oculis’ pipeline, please see the section entitled “Business of Oculis and Certain Information about Oculis.”

 

   

Upcoming milestones. The EBAC Board considered that with the funds that Oculis is expected to receive with the proposed transaction, it may be able to reach significant clinical and regulatory milestones for all three of its product candidates, OCS-01, OCS-02 and OCS-05, in a total of five different indications. These milestones could provide opportunity for potential uplifts in valuation.

 

   

Benefit for Oculis of being U.S. listed. As a result of the proposed transaction, Oculis will become a public company listed on Nasdaq (via New Parent). By having access to the largest biotech capital market, Oculis will be better positioned to have the capacity to raise additional funds in the future if and when needed.

 

   

Investment by Third Parties. The EBAC Board considered that certain sophisticated investors (x) subscribed for the PIPE Financing in the aggregate amount of approximately $71.2 million and (y) agreed to grant Oculis a right to receive a convertible loan with certain conversion rights in the aggregate amount of approximately $19.7 million.

 

   

Terms of the Business Combination Agreement and the Ancillary Agreements. The EBAC Board considered the terms and conditions of the Business Combination Agreement and the Ancillary Agreements, including the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to close and the termination provisions, as well as EBAC’s and Oculis’ strong commitment to complete the Business Combination. The EBAC Board determined that such terms and conditions are reasonable and were the product of extensive arm’s-length negotiations between EBAC and Oculis.

 

   

Continued Ownership of Oculis Shareholders. The EBAC Board considered that the Oculis Shareholders would be receiving a significant amount of New Parent Shares in the proposed Business Combination. Oculis Shareholders have demonstrated confidence in the long-term prospects of New Parent by agreeing not to transfer their New Parent Shares for 180 days following the Acquisition Closing.

 

   

The Role of the Independent Directors. In connection with the Business Combination, EBAC’s Independent Directors evaluated the proposed terms of the Business Combination, including the Business Combination Agreement and the related agreements, and unanimously approved, as members of the EBAC Board, the Business Combination Agreement, the Ancillary Agreements, and the transactions contemplated thereby.

 

   

Other Alternatives. The EBAC Board believes, after a thorough review of other business combination opportunities reasonably available to or explored by EBAC, that the proposed Business Combination represents the optimal potential business combination for EBAC and its shareholders based upon the process utilized to evaluate and assess other potential acquisition targets, and the EBAC Board’s belief that such processes had not presented a better alternative.

Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The EBAC Board’s Reasons for the Business Combination” for additional information.

 

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Although the EBAC Board believes that the Business Combination presents a compelling business combination opportunity and is in the best interests of EBAC and its shareholders, the EBAC Board did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the sections entitled “Proposal No. 1—The Business Combination Proposal—The EBAC Board’s Reasons for the Business Combination” and “Risk Factors—Risks Related to Oculis’ Business.”

 

Q:

Why is EBAC providing shareholders with the opportunity to vote on the Business Combination?

 

A:

The approval of the Business Combination by shareholders is required under EBAC’s amended and restated memorandum and articles of association and under Cayman Islands law. In addition, such approval is also a condition to the Acquisition Closing. Additionally, under EBAC’s amended and restated memorandum and articles of association, EBAC must provide all holders of EBAC Class A Common Stock with the opportunity to have their EBAC Class A Common Stock redeemed upon the consummation of its initial business combination either in conjunction with a tender offer or in conjunction with a shareholder vote. For business and other reasons, EBAC has elected to provide its shareholders with the opportunity to have their EBAC Class A Common Stock redeemed in connection with a shareholder vote rather than a tender offer. Therefore, EBAC is seeking to obtain the approval of its shareholders of the proposals contemplated by this proxy statement/prospectus and also allow its public shareholders to effectuate redemptions of their EBAC Class A Common Stock in connection with the Acquisition Closing in accordance with EBAC’s amended and restated memorandum and articles of association.

 

Q:

What will happen in the Business Combination?

 

A:

Pursuant to the Business Combination Agreement, and upon the terms and subject to the conditions therein, among other things: (i) EBAC will undergo the First Merger, pursuant to which, among other things, (a) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into the Surviving EBAC Shares (b) each EBAC Warrant outstanding immediately prior to the First Merger Effective time will be automatically converted into Surviving EBAC Warrants and (c) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants; (ii) on the day before the Acquisition Closing Date and following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent, solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants, will undertake the Exchange Agent Contribution Actions in exchange for the New Parent Interests Consideration; (iii) in connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will (a) undertake to distribute the New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares and (b) distribute the New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants; (iv) on the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will undergo the Second Merger, pursuant to which, among other things, the separate corporate existence of EBAC will cease; (v) at approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing Oculis Shareholders Support Agreements and the exchange notice contemplated by the Business Combination Agreement shall effect the Oculis Share Contribution; and (vi) approximately 30 days after the closing of the EBAC Mergers, Oculis will undergo the Third Merger. Please see the section entitled “Proposal No. 1—The Business Combination Proposal” for additional information.

 

Q:

How has the announcement of the Business Combination affected the trading price of the EBAC Class A Common Stock?

 

A:

On October 14, 2022, the trading date before the public announcement of the Business Combination, the EBAC Public Units, EBAC Class A Common Stock and EBAC Public Warrants closed at $9.93, $9.92 and

 

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  $0.12, respectively. On February 2, 2023, the trading date immediately prior to the date of this proxy statement/prospectus, the EBAC Public Units, EBAC Class A Common Stock and EBAC Public Warrants closed at $10.26, $10.16 and $0.40, respectively.

 

Q:

Following the Business Combination, will EBAC’s securities continue to trade on a stock exchange?

 

A:

No. EBAC anticipates that, following consummation of the Business Combination, the EBAC Public Units will automatically separate into their component parts, the EBAC Class A Common Stock and the EBAC Public Warrants will be delisted from the Nasdaq Capital Market and EBAC will be deregistered under the Exchange Act. However, New Parent has applied to list the New Parent Shares and New Parent Warrants on the Nasdaq Global Market under the symbols “OCS” and “OCSAW,” respectively, upon the Acquisition Closing. The approval of New Parent’s listing application by the Nasdaq Global Market is a condition to the Acquisition Closing: New Parent’s initial listing application with the Nasdaq Global Market in connection with the transactions contemplated by the Business Combination Agreement shall have been conditionally approved and, immediately following the Acquisition Closing, New Parent shall satisfy any applicable initial and continuing listing requirements of the Nasdaq with regard to the listing of New Parent Shares and New Parent Warrants.

 

Q:

Is the Business Combination the first step in a “going private” transaction?

 

A:

No. EBAC does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Oculis to access the U.S. public markets.

 

Q:

Will the executive management team of Oculis change in the Business Combination?

 

A:

The current executive officers of Oculis are Riad Sherif (Chief Executive Officer), Sylvia Cheung (Chief Financial Officer) and Páll Ragnar Jóhannesson (Chief Strategy Officer). These individuals are expected to continue to serve as New Parent’s executive officers upon consummation of the Business Combination.

Upon the consummation of the transactions contemplated by the Business Combination Agreement, New Parent will initially be governed through a single-tiered board of directors comprised of up to seven members, with each director serving terms of one year. The initial board of directors at the Acquisition Closing will be comprised of (i) two individuals designated as the Sponsor director nominees and (ii) up to five individuals designated by Oculis, one of whom shall be the chief executive of Oculis and at least three of whom, who in each case will be subject to the prior approval of the Sponsor (not to be unreasonably withheld) shall qualify as “independent” under applicable SEC and Nasdaq listing rules.

Please see the section entitled “Management of New Parent After the Business Combination” for additional information.

 

Q:

What will holders of EBAC Common Stock and EBAC Public Warrants and the Oculis Shareholders each receive in the Business Combination?

 

A:

At the Closing, after giving effect to the transactions contemplated by the Business Combination Agreement and as more fully described in the Business Combination Agreement, the Ancillary Agreements and elsewhere in this proxy statement/prospectus:

 

  i.

the PIPE Investors will transfer $71,188,910 to EBAC in exchange for 7,118,891 PIPE Shares;

 

  ii.

EBAC will undergo the First Merger; and as part of the First Merger, (a) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into the Surviving EBAC Shares, (b) each EBAC Warrant outstanding immediately prior to the First Merger Effective time will be automatically converted into Surviving EBAC Warrants and

 

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  (c) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants on the terms, and subject to the conditions set forth in the Business Combination Agreement and in the Ancillary Agreements;

 

  iii.

on the day before the Acquisition Closing Date and following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent, solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants, will undertake the Exchange Agent Contribution Actions in exchange for receipt of the New Parent Interests Consideration;

 

  iv.

in connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will undertake to distribute (a) the New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares and (b) the New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants;

 

  v.

on the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will undergo the Second Merger, pursuant to which, among other things, the separate corporate existence of EBAC will cease, and following the Acquisition Closing, Merger Sub 2 shall be liquidated and its assets distributed to New Parent;

 

  vi.

after the Second Merger Effective Time but before the Oculis Share Contribution, it is the intention of the parties to the Convertible Loan Agreements that New Parent will assume the Convertible Loan Agreements, pursuant to which the Lenders agreed to grant Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $19,670,000, and that immediately after such assumption but before the Oculis Share Contribution, the Lenders will exercise their conversion rights in exchange for New Parent Shares at $10.00 per share, on the same terms as the PIPE Investors;

 

  vii.

at approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing Oculis Shareholders Support Agreements and the exchange notice contemplated by the Business Combination Agreement shall effect the Oculis Share Contribution; and

 

  viii.

approximately 30 days after the closing of the EBAC Mergers, Oculis will undergo the Third Merger.

The following table illustrates varying ownership levels in New Parent immediately following the consummation of the Business Combination, assuming (i) no redemptions by EBAC’s public shareholders and (ii) the maximum number of redemptions by EBAC’s public shareholders such that the Minimum EBAC Cash Condition will still be satisfied. The Earnout Consideration, potential future exercises of New Parent Warrants to purchase New Parent Shares and options to acquire New Parent Shares are excluded from the calculations presented below.

Share Ownership in New Parent

 

    Assuming No Redemptions       Assuming Maximum Redemptions(3)    
    Number of
Shares
    % of Outstanding
Shares
    Number of
Shares
    % of Outstanding
Shares
 

EBAC public shareholders

    12,828,862       28.5     2,465,153       7.1

EBAC Initial Shareholders(1)(2)

    2,842,618       6.3     2,761,649       8.0

PIPE Investors and Lenders under the CLA

    9,085,891       20.2     9,085,891       26.3

Oculis Shareholders

    20,276,208       45.0     20,276,208       58.6

Pro Forma Ordinary Shares Outstanding

    45,033,579       100.0     34,588,901       100.0

 

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(1)

Ownership amounts ascribed to the EBAC Initial Shareholders include New Parent Shares owned by such shareholders as a result of the transactions contemplated by the Business Combination.

(2)

Ownership amounts reflect 727,096 Founder Shares that will be forfeited upon the Acquisition Closing and 74,078 Founder Shares transferred to EBAC Shareholders in connection with executing Non-Redemption Agreements.

(3)

Assumes that EBAC’s public shareholders exercise redemption rights with respect to 10,363,709 of EBAC’s public shares, which represents redemptions of approximately 81% of EBAC’s public shares and which is the maximum number of redemptions which may occur such that the Minimum EBAC Cash Condition would still be satisfied at a redemption price of approximately $10.052 per share, excluding EBAC public shares subject to Non-Redemption Agreements, and assuming total transaction expenses of $15 million. The estimated per-share redemption value of $10.052 was calculated by dividing the Trust Account balance of approximately $128.3 million as of September 30, 2022, by 12,754,784 shares of EBAC Class A Common Stock subject to redemption on the record date. Reflects the additional sponsor forfeiture amount of 80,869 Founder Shares as described elsewhere in this proxy statement/prospectus.

 

Q:

What equity stake will the current holders of public shares of EBAC, the EBAC Initial Shareholders, the PIPE Investors and the Oculis Shareholders hold in New Parent after the consummation of the Business Combination?

 

A:

It is anticipated that, upon completion of the Business Combination: (i) EBAC’s public shareholders will own approximately 29% of New Parent; (ii) the EBAC Initial Shareholders will own approximately 6% of New Parent (as a result of the Business Combination and the PIPE Financing); (iii) the PIPE Investors and Lenders under the Convertible Loan Agreements (excluding the EBAC Initial Shareholders) will own approximately 20% of New Parent; and (iv) the Oculis Shareholders will own approximately 45% of New Parent. These levels of ownership interests assume that (a) no EBAC Class A Common Stock are elected to be redeemed by EBAC’s public shareholders, (b) 7,118,891 shares of EBAC Class A Common Stock are issued to the PIPE Investors in connection with the PIPE Financing and (c) 1,967,000 New Parent Shares are issued to the Lenders in connection with the Convertible Loan Agreements.

The ownership percentages with respect to New Parent following the Business Combination do not take into account the Earnout Consideration or warrants to purchase New Parent Shares that will be outstanding immediately following the Business Combination, but do include Founder Shares, which will ultimately become New Parent Shares in connection with the consummation of the transactions contemplated hereby, including effecting the Exchange Agent Contribution and the Exchange Agent Contribution Actions. If the actual facts are different than these assumptions (which they are likely to be), the ownership percentages in New Parent will be different. For more information, please see the sections entitled “Beneficial Ownership of New Parent Securities” and “Unaudited Pro Forma Condensed Combined Financial Information—Redemption Scenarios.

Alternatively, assuming (i) the maximum number of redemptions by EBAC’s public shareholders such that the Minimum EBAC Cash Condition will still be satisfied, (ii) that 7,118,891 shares of EBAC Class A Common Stock are issued to the PIPE Investors in connection with the PIPE Financing and (iii) 1,967,000 New Parent Shares are issued to the Lenders in connection with the Convertible Loan Agreements, the levels of ownership will be as follows: (a) the EBAC public shareholders will own approximately 7% of New Parent; (b) the EBAC Initial Shareholders will own approximately 8% of New Parent (as a result of the Business Combination and the PIPE Financing); (c) the PIPE Investors and Lenders under the Convertible Loan Agreements (excluding the EBAC Initial Shareholders) will own approximately 26% of New Parent; and (d) the Oculis Shareholders will own approximately 59% of New Parent, resulting in an amount of 34,588,901 total New Parent Shares outstanding, of which all will be New Parent Shares.

The below sensitivity table shows the potential impact of redemptions on the pro forma book value per share of the shares owned by non-redeeming shareholders in a no redemption scenario, a 50% of maximum redemption scenario and a maximum redemption scenario. The sensitivity table below also sets forth the potential additional dilutive impact of each of the below additional dilution sources in each redemption

 

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scenario, and the effective underwriting fee incurred in connection with the Business Combination in each redemption scenario.

 

    Assuming No
Redemptions (4)
          Assuming 50% of the
Maximum
Redemptions (4)
          Assuming
Maximum
Redemptions (4)
       
    Shares     Equity % (3)     Shares     Equity % (3)     Shares     Equity % (3)  

Public shares

    12,828,862       28.5     7,647,008       19.2     2,465,153       7.1

Shares issued to Oculis shareholders

    20,276,208       45.0     20,276,208       50.9     20,276,208       58.6

Shares issued to EBAC’s initial stockholder

    2,842,618       6.3     2,842,618       7.1     2,761,649       8.0

Shares issued to PIPE investors

    7,118,891       15.8     7,118,891       17.9     7,118,891       20.6

Shares issued in connection with closing of the Convertible Loan Agreement

    1,967,000       4.4     1,967,000       4.9     1,967,000       5.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total shares outstanding excluding Additional Dilution Sources

    45,033,579       100.0     39,851,724       100.0     34,588,901       100.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total pro forma book value (1)

    229,864         178,790         127,715    

Pro forma book value per share (2)

    5.10         4.49         3.69    

Additional Dilution Sources

           

Shares underlying public warrants

    4,251,595       7.7     4,251,595       8.5     4,251,595       9.5

Shares underlying private warrants

    151,699       0.3     151,699       0.3     151,699       0.3

Earnout Shares (5)

    4,000,000       7.3     4,000,000       8.0     4,000,000       8.9

Oculis vested options (6)

    983,079       1.8     983,079       2.0     983,079       2.2

Oculis unvested options (6)

    779,831       1.4     779,831       1.6     779,831       1.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Additional Dilution Sources

    10,166,203       18.4     10,166,203       20.3     10,166,203       22.7
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Shares Outstanding Excluding Additional Dilution Sources

    45,033,579       81.6     39,851,724       79.7     34,588,901       77.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Shares Outstanding Including Additional Dilution Sources

    55,199,782       100.0     50,017,928       100.0     44,755,104       100.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   

Underwriting
fee

   

Underwriting
fee as a % of
the trust
account
following the
redemptions

    Underwriting
fee
   

Underwriting
fee as a % of
the trust
account
following the
redemptions

    Underwriting
fee
   

Underwriting
fee as a % of
the trust
account
following the
redemptions

 

Underwriting fee (7)

    4,377,301       3.5     4,377,301       5.9     4,377,301       18.5

 

(1)

See “Unaudited Pro Forma Condensed Combined Financial Information” for pro forma book value (i.e., total assets minus total liabilities) in the no redemption scenario and the maximum redemption scenario. Pro forma book value for the 50% of maximum redemption scenario is the midpoint between the no redemption and maximum redemption scenarios pro forma book values.

(2)

Pro forma book value per share is a result of pro forma book value divided by total shares outstanding excluding Additional Dilution Sources.

(3)

The Equity % with respect to each Additional Dilution Sources set forth above, including the Total Additional Dilution Sources, includes the full amount of shares issuable with respect to the applicable Additional Dilution Sources in both the numerator and denominator.

 

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(4)

The no redemption scenario assumes that no EBAC Ordinary Shares are redeemed by the Public Shareholders, the maximum redemption scenario assumes that 10,363,709 EBAC Ordinary Shares are redeemed by the Public Shareholders and the 50% of the maximum redemption scenario assumes that 5,181,854 EBAC Ordinary Shares are redeemed by the Public Shareholders. Refer the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information on the no redemption scenario and maximum redemption scenario.

(5)

See “Unaudited Pro Forma Condensed Combined Financial Information” for more information on the Earnout Consideration in the form of New Parent Shares (Earnout Shares).

(6)

Represent the numbers of vested and unvested options that will be outstanding after the Business Combination where Oculis options will convert from options to purchase Oculis stock into options to purchase New Parent stock.

(7)

Reflects the payment of EBAC’s deferred underwriting fee payable as of September 30, 2022 of CHF 4.4 million incurred in connection with the EBAC initial public offering.

 

Q:

What income and profits and losses has Oculis generated in the last two years?

 

A:

For the years ended December 31, 2021 and December 31, 2020, Oculis had grant income of CHF 1.0 million and CHF 1.0 million, and loss from operating activities of CHF 13.2 million and CHF 12.3 million, respectively. For the years ended December 31, 2021 and December 31, 2020, Oculis’ total assets were CHF 58.0 million and CHF 16.4 million, respectively, and its total liabilities, predominantly related to accounting of preferred shares, were CHF 119.0 million and CHF 60.0 million, respectively. For additional information, please see the section entitled “Oculis Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Oculis estimates that it had cash and cash equivalents of approximately $21 million as of December 31, 2022. This estimate was prepared by Oculis’ management in good faith based upon internal reporting, is preliminary and unaudited, and may be revised as a result of Oculis’ management’s further review of Oculis’ results as of and for the year ended December 31, 2022. Oculis has not yet completed its normal audit procedures as of and for the year ended December 31, 2022.

The preliminary financial data above has been prepared by, and is the responsibility of, Oculis’ management. PricewaterhouseCoopers SA has not audited, reviewed, examined, compiled, nor applied agreed-upon procedures with respect to the preliminary financial data. Accordingly, PricewaterhouseCoopers SA does not express an opinion or any other form of assurance with respect thereto.

 

Q:

What is the PIPE Financing?

 

A:

In connection with the Business Combination and concurrently with the execution of the Business Combination Agreement, EBAC entered into Initial Subscription Agreements with the Initial PIPE Investors pursuant to which the Initial PIPE Investors have agreed to purchase from EBAC, severally and not jointly, and EBAC has agreed to issue from treasury and sell to the Initial PIPE Investors, a number of shares of EBAC Class A Common Stock equal to (i) the total subscription amount from the Initial PIPE Investors ($63,303,910) divided by (ii) $10.00. Subsequent to the Initial PIPE Financing, in January 2023, EBAC entered into the Subsequent Subscription Agreements with the Subsequent PIPE Investors, pursuant to which the Subsequent PIPE Investors have agreed to subscribe for, and EBAC has agreed to issue to the Subsequent PIPE Investors, a number of EBAC Class A Common Stock equal to (i) the total subscription amount from the Subsequent PIPE Investors ($7,885,000) divided by (ii) $10.00. The aggregate amount of EBAC Class A Common Stock to be issued pursuant to the PIPE Financing is 7,118,891 for aggregate gross proceeds of $71,188,910. The shares of EBAC Class A Common Stock to be issued from treasury to the PIPE Investors pursuant to the Subscription Agreements have not been registered under the Securities Act, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act. New Parent will grant the PIPE Investors certain customary registration rights in connection with the PIPE Financing, including demand and piggyback rights. The PIPE Financing is contingent upon, among other things, the Acquisition Closing.

 

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Unless waived by the parties, the Business Combination Agreement provides that the parties’ obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the proceeds from the PIPE Financing (or other financing in connection with the EBAC Mergers) (after any payment of any unpaid transaction expenses of Oculis and EBAC) being equal to or greater than $100 million. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties.

 

Q:

What is the Convertible Loan?

 

A:

In connection with the Business Combination and concurrently with the execution of the Business Combination Agreement, Oculis entered into a convertible loan agreement with certain Lenders, pursuant to which, among other things, the Lenders party thereto granted Oculis a convertible loan with certain conversion rights in an aggregate amount of $12,670,000. Subsequent to the execution of the Business Combination Agreement, on January 26, 2023, Oculis and the Lender party thereto entered into an additional convertible loan agreement in substantially the same form as the initial convertible loan agreement, pursuant to which, among other things, the Lender party thereto has granted Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $7,000,000. The aggregate amount raised under the Convertible Loan Agreements is $19,670,000. Following the Second Merger Effective Time, it is the intention of the parties thereto that New Parent will assume the Convertible Loan Agreements, and that immediately after such assumption but before the Oculis Share Contribution, the Lenders will exercise their conversion rights in exchange for New Parent Shares at $10.00 per share, on the same terms as the PIPE Investors. The Convertible Loan Agreements provide that, upon conversion, the Lenders will be granted certain customary registration rights, substantially on the same terms as those offered pursuant to the Subscription Agreements.

 

Q:

Why is EBAC proposing the Adjournment Proposal?

 

A:

EBAC is proposing the Adjournment Proposal to allow it to adjourn the Extraordinary General Meeting to a later date or dates to the extent reasonable (i) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (ii) in order to solicit additional proxies from EBAC Shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (iii) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition would not be satisfied. Please see the sections entitled “Proposal No. 3 — The Adjournment Proposal” and “Risk Factors—Risks if the Adjournment Proposal is Not Approved” for additional information.

 

Q:

What happens if I sell my EBAC Common Stock before the Extraordinary General Meeting?

 

A:

The record date for the Extraordinary General Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your EBAC public shares after the applicable record date but before the Extraordinary General Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Extraordinary General Meeting. However, you will not be able to seek redemption of your EBAC Common Stock because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination. If you transfer your EBAC Common Stock prior to the applicable record date, you will have no right to vote those shares at the Extraordinary General Meeting or redeem those shares for a pro rata portion of the proceeds held in the Trust Account.

 

Q:

What vote is required to approve the proposals presented at the Extraordinary General Meeting?

 

A:

Approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a

 

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  two-thirds majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Adjournment Proposal an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Accordingly, an EBAC shareholder’s failure to vote by proxy or to vote in person (including virtually by visiting www.virtualshareholdermeeting.com/EBAC2023SM) at the Extraordinary General Meeting will not be counted towards the number of shares of EBAC Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on any proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on any proposal.

 

Q:

How will the EBAC Initial Shareholders and EBAC’s other current directors and officers vote?

 

A:

Prior to EBAC’s initial public offering, EBAC entered into certain agreements with the EBAC Initial Shareholders, including the Sponsor, and certain other officers and directors of EBAC, pursuant to which each of the parties agreed to vote any EBAC Common Stock owned by them in favor of an initial business combination. All such persons agreed to vote all of the Founder Shares and such other public shares held by the EBAC Initial Shareholders and such other officers and directors of EBAC in favor of the Business Combination Proposal and the Merger Proposal, and for any other proposal presented to EBAC Shareholders in this proxy statement/prospectus. As of the record date, the EBAC Initial Shareholders and such other current directors and officers of EBAC own 3,188,696 Founder Shares, representing 19.44% of the EBAC Common Stock then outstanding and entitled to vote at the Extraordinary General Meeting.

You should keep in mind that certain EBAC directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. Please see the sections entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” and “Risk Factors—Risks Related to Oculis’ Business—The Sponsor has entered into a letter agreement with EBAC to vote in favor of the Business Combination, regardless of how EBAC public shareholders vote” for additional information.

 

Q:

What interests do the EBAC Initial Shareholders and EBAC’s other current officers and directors have in the Business Combination?

 

A:

The EBAC Initial Shareholders and EBAC’s other current officers and directors have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination Proposal and the Merger Proposal. These interests include, among other things, the following considerations:

 

  1.

EBAC Initial Shareholders and the other officers and directors of EBAC have agreed not to redeem any EBAC Common Stock held by them in connection with a shareholder vote to approve a proposed initial business combination;

 

  2.

the Sponsor paid an aggregate of $25,000 for the Founder Shares. The Founder Shares had an estimated aggregate market value of $32.33 million based upon the closing price of $10.14 per public share on the Nasdaq Capital Market on January 26, 2023, the record date for the Extraordinary General Meeting;

 

  3.

the fact that the Sponsor transferred Founder Shares to two independent directors prior to EBAC’s initial public offering and such securities would be worthless if a business combination is not consummated within the Combination Period;

 

  4.

EBAC Initial Shareholders and the other officers and directors of EBAC have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if EBAC fails to complete an initial business combination within the Combination Period and, in the event EBAC fails to complete an initial business combination within the Combination Period, the Founder Shares would have no value;

 

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  5.

the Registration Rights and Lock-Up Agreement will be entered into with the Sponsor;

 

  6.

the Sponsor paid an aggregate of $4.55 million for its 455,096 Private Placement Units and that such Private Placement Units (and the underlying securities) will expire worthless if a business combination is not consummated within the Combination Period. The Private Placement Units had an estimated aggregate market value of $4.65 million based on the closing price of $10.22 per unit on the Nasdaq Capital Market on January 26, 2023, the record date for the Extraordinary General Meeting;

 

  7.

the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other shareholders experience a negative rate of return in the post-business combination company;

 

  8.

the fact that the Sponsor will own 2,842,618 New Parent Shares, which collectively will represent approximately 6.3% of outstanding New Parent Shares and have a value of approximately $28,426,180 based on an implied value of $10.00 per New Parent Share and assuming that the maximum number of EBAC Class A Common Stock are redeemed while still satisfying the Minimum EBAC Cash Condition;

 

  9.

the anticipated designation by EBAC of Martijn Kleijwegt and Geraldine O’Keeffe as directors of New Parent following the Business Combination;

 

  10.

the continued indemnification of EBAC’s existing directors and officers and the continuation of EBAC’s directors’ and officers’ liability insurance after the Business Combination;

 

  11.

LSP 7 Coöperatief U.A. (“LSP 7”), an affiliate of the Sponsor, previously invested $2,104,007 into Oculis on July 22, 2022 prior to the execution of the Business Combination Agreement. In connection with the Oculis Share Contribution, LSP 7 will receive 233,405 New Parent Shares;

 

  12.

an affiliate of the Sponsor has also entered into a Subscription Agreement in connection with the PIPE Financing, pursuant to which such affiliate has agreed to subscribe for and purchase, and EBAC has agreed to issue from treasury to such affiliate, a certain number of EBAC Class A Common Stock at a price of $10.00 per share for an aggregate purchase price of $37.90 million. Certain of EBAC’s directors also hold a personal financial interest in such affiliate;

 

  13.

the Sponsor and EBAC’s officers and directors will lose their entire investment in EBAC and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated within the Combination Period; and

 

  14.

if the Trust Account is liquidated, including in the event EBAC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify EBAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which EBAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to EBAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

These interests may influence EBAC’s directors in making their recommendation that EBAC Shareholders vote in favor of the approval of the Business Combination. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information.

 

Q:

What happens if the Business Combination Proposal or the Merger Proposal is not approved?

 

A:

In the event that the Business Combination Proposal or the Merger Proposal does not receive the requisite votes for approval, EBAC will not consummate the Business Combination. If EBAC does not consummate the Business Combination and fails to complete an initial business combination within the Combination Period, EBAC will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to its public shareholders. Please see the section entitled “Risk Factors—Risks if the Business Combination is not Consummated” for additional information.

 

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Q:

What constitutes a quorum at the Extraordinary General Meeting?

 

A:

One or more shareholders who together hold a majority of the issued and outstanding EBAC Common Stock entitled to vote at the Extraordinary General Meeting must be present, in person (including virtual presence by visiting www.virtualshareholdermeeting.com/EBAC2023SM) or represented by proxy, at the Extraordinary General Meeting to constitute a quorum and in order to conduct business at the Extraordinary General Meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The EBAC Initial Shareholders and other officers and directors of EBAC, who owned 22.22% of the issued and outstanding EBAC Common Stock as of the record date, will count towards this quorum. In the absence of a quorum, the chairman of the Extraordinary General Meeting has power to adjourn the Extraordinary General Meeting. As of the record date for the Extraordinary General Meeting, 8,199,289 shares of EBAC Common Stock would be required to achieve a quorum.

 

Q:

What happens if I vote against any of the proposals contemplated by this proxy statement/prospectus?

 

A:

If you vote against the Business Combination Proposal or the Merger Proposal but the Business Combination Proposal and the Merger Proposal still obtain the requisite vote of holders of EBAC Common Stock to approve the Business Combination Proposal and the Merger Proposal, then the Business Combination Proposal and the Merger Proposal will be approved and, assuming the satisfaction or waiver of the other conditions to the Acquisition Closing, the Business Combination and the transactions contemplated thereby will be consummated in accordance with the terms of the Business Combination Agreement.

Approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Adjournment Proposal an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Accordingly, an EBAC shareholder’s failure to vote by proxy or to vote in person (including virtually by visiting www.virtualshareholdermeeting.com/EBAC2023SM) at the Extraordinary General Meeting will not be counted towards the number of EBAC Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on any proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on any proposal.

The Acquisition Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that either the Business Combination Proposal or the Merger Proposal does not receive the requisite votes for approval, EBAC will not consummate the Business Combination. If EBAC does not consummate the Business Combination and fails to complete an initial business combination within the Combination Period, EBAC will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to its public shareholders.

 

Q:

Do I have redemption rights?

 

A:

Pursuant to EBAC’s amended and restated memorandum and articles of association, holders of EBAC public shares may elect to have their shares redeemed for the right to receive an amount in cash at the applicable redemption price per share calculated in accordance with EBAC’s amended and restated

 

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  memorandum and articles of association. As of September 30, 2022, this would have amounted to approximately $10.00 per share. If a holder of EBAC public shares exercises its redemption rights, then such holder will, subject to the Acquisition Closing being completed, be exchanging its EBAC Class A Common Stock for the right to receive an amount in cash and will not own shares of New Parent following the closing of the transactions contemplated by the Business Combination Agreement, including the Business Combination. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to the Transfer Agent in accordance with the procedures described herein. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his, her, it or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the outstanding EBAC Class A Common Stock. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. The EBAC Initial Shareholders and certain other officers and directors of EBAC have agreed, for no consideration in return, to waive their redemption rights with respect to any Founder Shares and other EBAC Common Stock they may hold in connection with the consummation of the Business Combination, and the Founder Shares and such other EBAC Common Stock will be excluded from the pro rata calculation used to determine the per-share redemption price.

Additionally, the Sponsor and certain EBAC Shareholders have agreed pursuant to that certain Non-Redemption Agreement to, among other things, not to redeem or exercise any right to redeem any shares, capital stock or any other equity interests, as applicable, of EBAC that the Sponsor or such EBAC shareholder, as applicable, holds of record or beneficially, as of the date of executing such Non-Redemption Agreement, or acquires thereafter.

Notwithstanding the foregoing, a holder of EBAC public shares, together with any affiliate or any other person with whom it is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the outstanding EBAC Class A Common Stock. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash.

EBAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of EBAC Class A Common Stock by EBAC’s public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $128.3 million as of September 30, 2022. The conditions to the Acquisition Closing are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of EBAC Class A Common Stock by EBAC’s public shareholders, the Minimum EBAC Cash Condition is not met or is not waived by the parties to the Business Combination Agreement, then either of the parties thereto may elect not to consummate the Business Combination. In addition, in no event will EBAC redeem its EBAC Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in EBAC’s amended and restated memorandum and articles of association. Under these circumstances, EBAC Shareholders may exercise their redemption rights with respect to a maximum of 10,363,709 shares of redeemable EBAC Class A Common Stock upon consummation of the Business Combination at a redemption price of approximately $10.052 per share. The estimated per share redemption value of $10.052 was calculated by dividing the Trust Account balance of approximately $128.3 million as of September 30, 2022, by 12,754,784 shares of EBAC Class A Common Stock outstanding and subject to redemption. Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information—Redemption Scenarios.” EBAC Shareholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “Extraordinary General Meeting of EBAC Shareholders—Redemption Rights” in order to properly redeem their public shares.

Holders of EBAC Warrants will not have redemption rights with respect to such warrants.

 

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If a holder of EBAC public shares exercises its redemption rights, then such holder will, subject to the Acquisition Closing being completed, be exchanging its EBAC Class A Common Stock for the right to receive an amount in cash and will not own shares of New Parent following the closing of the transactions contemplated by the Business Combination Agreement, including the Business Combination.

 

Q:

Can the EBAC Initial Shareholders redeem their Founder Shares in connection with consummation of the Business Combination?

 

A:

No. The EBAC Initial Shareholders and certain other officers and directors of EBAC have agreed, for no consideration in return, to waive their redemption rights with respect to any Founder Shares held by them in connection with the consummation of an initial business combination. Additionally, the EBAC Initial Shareholders have agreed, for no consideration in return, to waive their redemption rights with respect to their Founder Shares if EBAC fails to consummate an initial business combination within the Combination Period. However, if the EBAC Initial Shareholders and the other current officers and directors of EBAC acquire public shares, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if EBAC fails to consummate an initial business combination within the prescribed time frame.

 

Q:

Is there a limit on the total number of EBAC public shares that may be redeemed?

 

A:

Yes. A holder of EBAC Common Stock, together with any affiliate of his, her, it or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the outstanding EBAC Class A Common Stock. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. In addition, EBAC’s amended and restated memorandum and articles of association provide that in no event will EBAC redeem its EBAC Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001.

Unless waived by either of the parties to the Business Combination Agreement, the Business Combination Agreement provides the parties’ obligation to consummate the Business Combination is conditioned on the amount of cash in the Trust Account (net of the Cash Redemption Amount) together with the proceeds from the PIPE Financing (or other financing in connection with the EBAC Mergers) (after any payment of any unpaid transaction expenses of Oculis and EBAC) being equal to or greater than $100 million. The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. You may exercise your redemption rights whether you vote your EBAC Class A Common Stock for or against, or whether you abstain from voting on, the Business Combination Proposal, the Merger Proposal, the Adjournment Proposal or any other proposal described by this proxy statement/prospectus. As a result, the Business Combination Agreement can be approved by EBAC Shareholders who will redeem their shares and will not be shareholders of New Parent after the consummation of the transactions contemplated by the Business Combination Agreement.

 

Q:

How do I exercise my redemption rights?

 

A:

In order to exercise your redemption rights, you must: (i) if you hold EBAC Units, separate the underlying EBAC Class A Common Stock and EBAC Public Warrants; (ii) prior to 5:00 p.m., Eastern Time, on February 24, 2023 (two business days before the scheduled Extraordinary General Meeting), identify yourself in writing as a beneficial holder and provide your legal name, phone number and address to the Transfer Agent in order to validly redeem your shares and tender your shares physically or electronically and submit a request in writing that EBAC redeem your public shares for cash to Continental at the following address:

 

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  Continental Stock Transfer & Trust Company, 1 State Street, New York, New York 10004, Attention: spacredemptions@continentalstock.com; and (iii) deliver your public shares either physically or electronically through DTC’s DWAC system to the Transfer Agent at least two business days before the initially scheduled Extraordinary General Meeting. Shareholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. Shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, it may take longer than two weeks. Shareholders who hold their shares in “street name” will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically. If you do not submit a written request and deliver your public shares as described above, your shares will not be redeemed.

You do not have to be a shareholder on the record date in order to exercise your redemption rights. Shareholders seeking to exercise their redemption rights, whether they are registered holders or hold their shares in “street name” are required to either tender their certificates to the Transfer Agent prior to the date

set forth in this proxy statement/prospectus, or up to two business days prior to the initially scheduled vote on the Business Combination Proposal and the Merger Proposal at the Extraordinary General Meeting, or to deliver their shares to the Transfer Agent electronically using DTC’s DWAC system, at such shareholder’s option. The requirement for physical or electronic delivery prior to the Extraordinary General Meeting ensures that a redeeming shareholder’s election to redeem is irrevocable once the Business Combination is approved.

If you hold EBAC Units registered in your own name, you must deliver the certificate for such units to the Transfer Agent with written instructions to separate such units into EBAC Class A Common Stock and EBAC Public Warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the EBAC Class A Common Stock from the EBAC Units.

If a broker, dealer, commercial bank, trust company or other nominee holds your EBAC Units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to the Transfer Agent. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of EBAC Class A Common Stock and EBAC Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the EBAC Units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your EBAC Units to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Any demand for redemption, once made, may be withdrawn at any time until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to the Transfer Agent and decide within the required timeframe not to exercise your redemption rights, you may request that the Transfer Agent return the shares (physically or electronically).

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming shareholder. However, this fee would be incurred regardless of whether or not shareholders seeking to exercise redemption rights are required to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

If you exercise your redemption rights, your shares of EBAC Class A Common Stock will be repurchased by EBAC into treasury immediately prior to the First Merger Effective Time and in return you will obtain the right to receive a pro rata share of the aggregate amount then on deposit in the Trust Account, subject to the Acquisition Closing being completed. You will no longer own those shares and you will not receive any New Parent Shares in the Business Combination. You will have no right to participate in, or have any interest in, the future growth of New Parent, if any. You will be entitled to

 

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receive the right for an amount in cash for your EBAC Class A Common Stock only if you properly and timely demand redemption.

 

Q:

What are the U.S. federal income tax consequences of U.S. Holders of EBAC Class A Common Stock exercising their redemption rights?

 

A:

It is expected that a U.S. Holder (as defined in the section entitled “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders”) that exercises its redemption rights to receive an amount in cash from the Trust Account in exchange for its shares of EBAC Class A Common Stock will generally be treated as selling such shares, resulting in the recognition of capital gain or capital loss. There may be certain circumstances, however, in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of shares that such U.S. Holder owns or is deemed to own (including through the ownership of warrants). For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, please see the section entitled “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders—Consequences of the Business Combination to U.S. Holders of EBAC Securities—Redemption of EBAC Class A Common Stock.”

All U.S. Holders considering exercising their redemption rights are urged to consult their tax advisors regarding the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, and local and non-U.S. tax laws.

 

Q:

What are the U.S. federal income tax consequences as a result of the Business Combination to U.S. Holders of EBAC Common Stock and EBAC Warrants?

 

A:

As discussed more fully in the section entitled “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders,” it is intended that the EBAC Mergers qualify as a “reorganization” within the meaning of Section 368(a)(l)(F) of the Code. Assuming that the EBAC Mergers so qualify, U.S. Holders (as defined in the section entitled “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders”) will generally not recognize gain or loss for U.S. federal income tax purposes on the exchange of EBAC Common Stock and EBAC Warrants for New Parent Shares and New Parent Warrants, as applicable, in the EBAC Mergers.

The discussion of the U.S. federal income tax consequences contained in this proxy statement/prospectus is intended to provide only a general discussion and is not a complete analysis or description of all of the U.S. federal income tax considerations that are applicable to a U.S. Holder in respect of the Business Combination, nor does it address any tax considerations arising under U.S. state or local or non-U.S. tax laws. All U.S. Holders are urged to consult their tax advisors regarding the potential tax consequences to them of the Business Combination, including the applicability and effect of U.S. federal, state, and local and non-U.S. tax laws.

 

Q:

If I am an EBAC warrant holder, can I exercise redemption rights with respect to my EBAC Public Warrants?

 

A:

No. There will be no redemption rights or liquidating distributions with respect to EBAC Public Warrants, which will expire worthless if EBAC fails to complete its initial business combination within the Combination Period.

 

Q:

How do the EBAC Public Warrants differ from the EBAC Private Placement Warrants and what are the related risks for any holders of EBAC Public Warrants following the Business Combination?

 

A.

The EBAC Private Placement Warrants are identical to the EBAC Public Warrants in all material respects, except that the EBAC Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination and they will not be redeemable by EBAC (except as described in the notes to EBAC’s financial statements included elsewhere in this proxy statement/

 

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  prospectus) so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the EBAC Private Placement Warrants on a cashless basis. If the EBAC Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the EBAC Private Placement Warrants are redeemable by EBAC in all redemption scenarios and exercisable by the holders on the same basis as the EBAC Public Warrants.

As a result, following the Business Combination, New Parent may redeem your EBAC Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby significantly impairing the value of such warrants. New Parent will have the ability to redeem outstanding New Parent Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the New Parent Shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which a notice of redemption is sent to the warrantholders. New Parent will not redeem the New Parent Warrants as described above unless a registration statement under the Securities Act covering the New Parent Shares issuable upon exercise of such warrants is effective and a current prospectus relating to those New Parent Shares is available throughout the 30-day redemption period. If and when the New Parent Warrants become redeemable by New Parent, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding New Parent Warrants could force you (i) to exercise your New Parent Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your New Parent Warrants at the then-current market price when you might otherwise wish to hold your New Parent Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding New Parent Warrants are called for redemption, is likely to be substantially less than the market value of your New Parent Warrants.

In addition, New Parent will have the ability to redeem the outstanding New Parent Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the closing price of the New Parent Shares equals or exceeds $10.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on the trading day prior to the date on which a notice of redemption is sent to the warrant holders. Recent trading prices for the EBAC Class A Common Stock have generally not exceeded the $10.00 per share threshold at which the New Parent Warrants would become redeemable. In such a case, the holders will be able to exercise their New Parent Warrants prior to redemption for a number of New Parent Shares determined based on the redemption date and the fair market value of the New Parent Shares. Please see the notes to EBAC’s financial statements included elsewhere in this proxy statement/prospectus for more information. The value received upon exercise of the New Parent Warrants (i) may be less than the value the holders would have received if they had exercised their New Parent Warrants at a later time where the underlying share price is higher and (ii) may not compensate the holders for the value of the New Parent Warrants.

In each case, New Parent may only call the New Parent Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each holder, provided that holders will be able to exercise their New Parent Warrants prior to the time of redemption and, at New Parent’s election, any such exercise may be required to be on a cashless basis.

 

Q:

Do I have appraisal rights or dissenters’ rights if I object to the proposed Business Combination?

 

A:

None of the holders of EBAC Warrants have appraisal rights in connection with the Business Combination under the Cayman Companies Act. EBAC Shareholders may be entitled to give notice to EBAC prior to the meeting that they wish to dissent to the Business Combination and to receive payment of fair market value for their EBAC Common Stock if they follow the procedures set forth in the Cayman Companies Act, noting that any such dissention rights may be limited pursuant to Section 239 of the Cayman Companies Act, which states that no such dissention rights shall be available in respect of shares of any class for which an open market exists on a recognized stock exchange at the expiry date of the period allowed for written

 

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  notice of an election to dissent provided that the merger consideration constitutes, inter alia, shares of any company which at the effective date of the merger are listed on a national securities exchange. It is the view of the EBAC Board that such fair market value would equal the amount which EBAC Shareholders would obtain if they exercise their redemption rights as described herein.

Appraisal rights are not available to the Oculis Shareholders in connection with the Business Combination.

 

Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:

The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. The Business Combination Agreement provides that Oculis’ obligation to consummate the Business Combination is conditioned, among other things, on satisfying the Minimum EBAC Cash Condition. If, as a result of redemptions of EBAC Class A Common Stock by EBAC’s public shareholders, the Minimum EBAC Cash Condition is not met or is not waived by EBAC or Oculis, then either party may elect not to consummate the Business Combination. For more information, please see the section entitled “Proposal No. 1—The Business Combination Proposal—Sources and Uses of Funds for the Business Combination.”

 

Q:

What happens if the Business Combination Agreement is terminated or the Business Combination is not consummated?

 

A:

The conditions to closing in the Business Combination Agreement are for the sole benefit of the parties thereto and may be waived by such parties. The Business Combination Agreement is subject to the satisfaction or waiver of certain customary closing conditions including, among others: (i) approval by EBAC Shareholders of the Business Combination Proposal and the Merger Proposal, (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part, and there being no order suspending the effectiveness of the registration statement and no proceeding for that purpose initiated or threatened by the SEC, (iii) receipt of approval for listing on the Nasdaq Global Market of the shares and warrants of New Parent to be issued in connection with the transactions contemplated by the Business Combination Agreement, (iv) absence of any injunctions or adoption of any laws making illegal or otherwise prohibiting the Business Combination Agreement and the transactions contemplated thereby, (v) that the Minimum EBAC Cash Condition is met, (vi) EBAC having net tangible assets of at least $5,000,001, and (vii) satisfaction of customary bringdowns of the representations, warranties and covenants of the parties therein. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement” for information regarding the parties’ specific termination rights.

If EBAC has not completed its initial business combination within the Combination Period, EBAC will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem its public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of EBAC’s remaining shareholders and the EBAC Board, liquidate and dissolve, subject, in each case, to EBAC’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to EBAC Public Warrants, which will expire worthless if EBAC fails to complete its initial business combination within the Combination Period.

The EBAC Initial Shareholders and the other current officers and directors of EBAC have entered into an agreement with EBAC, pursuant to which they have waived their rights to liquidating distributions from the

 

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Trust Account with respect to their Founder Shares if EBAC fails to complete its initial business combination within the Combination Period. However, if the EBAC Initial Shareholders and the other current officers and directors of EBAC acquire public shares, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if EBAC fails to complete its initial business combination within the Combination Period.

 

Q:

What do I need to do now?

 

A:

Your vote is very important. You should read carefully this entire proxy statement/prospectus, including the Annexes and accompanying financial statements of Oculis and EBAC to fully understand the proposed Business Combination before voting on the proposals to be considered at the Extraordinary General Meeting.

Whether or not you plan to attend the Extraordinary General Meeting, please vote as soon as possible by following the instructions in this proxy statement/prospectus to ensure that your shares are represented at the Extraordinary General Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Business Combination Proposal and the Merger Proposal are approved at the Extraordinary General Meeting. The Acquisition Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

 

Q:

How do I vote?

 

A:

If you hold your shares in “street name” and are a EBAC shareholder of record, you may vote by mail or in person at the Extraordinary General Meeting. Each share of EBAC Common Stock that you own in your name entitles you to one vote on each of the proposals for the Extraordinary General Meeting. Your one or more proxy cards show the number of EBAC Common Stock that you own.

Voting by Mail. You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. By signing the proxy card and returning it in the enclosed pre-paid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the Extraordinary General Meeting in the manner you indicate. You are encouraged to sign and return the proxy card even if you plan to attend the Extraordinary General Meeting so that your shares will be voted if you are unable to attend the Extraordinary General Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Extraordinary General Meeting. If you sign and return the proxy card but do not give instructions on how to vote your shares, your EBAC Common Stock will be voted as recommended by the EBAC Board. The EBAC Board recommends voting “FOR” the Business Combination Proposal, “FOR” the Merger Proposal, and “FOR” the Adjournment Proposal. Votes submitted by mail must be received by 9:00 a.m., Eastern Time, on February 24, 2023.

Voting in Person at the Meeting. If you attend the Extraordinary General Meeting and plan to vote in person, you will be provided with a ballot at the Extraordinary General Meeting. If your shares are registered directly in your name, you are considered the shareholder of record and you have the right to vote in person at the Extraordinary General Meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Extraordinary General Meeting and vote in person, you will need to bring to the Extraordinary General Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. That is the only way EBAC can be sure that the broker, bank or nominee has not already voted your EBAC Common Stock.

 

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Voting Virtually at the Meeting. If your shares are registered in your name with Continental and you attend the Extraordinary General Meeting and plan to vote virtually, you must visit www.virtualshareholdermeeting.com/EBAC2023SM, enter the 12-digit control number assigned by Continental included on your proxy card or notice of the Extraordinary General Meeting and click on the “Click here to preregister for the virtual meeting” link at the top of the page. Just prior to the start of the Extraordinary General Meeting you will need to log back into the Extraordinary General Meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

If your shares are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of shares held in “street name” and this proxy statement/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the shareholder of record for purposes of voting at the Extraordinary General Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares in your account by following the instructions that the broker, bank or other nominee provides you along with this proxy statement/prospectus. As a beneficial owner, if you wish to vote at the Extraordinary General Meeting, you will need to bring to the Extraordinary General Meeting a legal proxy from your broker, bank or other nominee authorizing you to vote those shares. Please see the section entitled “—Attending the Extraordinary General Meeting” below for more details.

 

Q:

What will happen if I abstain from voting or fail to vote at the Extraordinary General Meeting?

 

A:

At the Extraordinary General Meeting, a properly executed proxy marked “ABSTAIN” with respect to a particular proposal will be counted as present for purposes of determining whether a quorum is present. For purposes of approval, broker non-votes and abstentions will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal (other than as counted for purposes of determining whether a quorum is present).

If you fail to take any action with respect to the Extraordinary General Meeting and the Business Combination is approved by EBAC Shareholders and the Business Combination is consummated, you will become a shareholder or warrant holder of New Parent. If you fail to take any action with respect to the Extraordinary General Meeting and the Business Combination is not approved, you will remain a shareholder or warrant holder of EBAC. However, even if you fail to vote with respect to the Extraordinary General Meeting, you will nonetheless be able to elect to redeem your EBAC public shares in connection with the Business Combination.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Extraordinary General Meeting.

 

Q:

If I am not going to attend the Extraordinary General Meeting, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the Extraordinary General Meeting or not, please read this proxy statement/prospectus carefully in its entirety, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

EBAC intends to hold the Extraordinary General Meeting in person as well as virtually, via a live webcast at www.virtualshareholdermeeting.com/EBAC2023SM. However, EBAC is sensitive to the public health and travel concerns its shareholders may have and recommendations that public health officials may issue in light of the evolving novel coronavirus disease (“COVID-19”) situation. As a result, EBAC may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location. EBAC plans to announce any such updates on its proxy website at www.lspvc.com/EBAC, and encourages you to check this website prior to the meeting if you plan to attend.

 

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Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or other nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank or other nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee. EBAC believes all the proposals presented to its shareholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker, bank or other nominee on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the Extraordinary General Meeting, and otherwise will have no effect on a particular proposal.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. You may change your vote by (i) sending a later-dated, signed proxy card (ii) sending notice to EBAC’s Secretary in writing before the Extraordinary General Meeting that you have revoked your proxy (in the case of clauses (i) and (ii), so that such card or notice is received prior to the vote at the Extraordinary General Meeting scheduled to take place on February 28, 2023) or (iii) attending the Extraordinary General Meeting, revoking your proxy and voting in person (including by virtual means).

 

Q:

What should I do with my share certificates, warrant certificates or unit certificates?

 

A:

EBAC Shareholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates to Continental prior to the Extraordinary General Meeting.

Holders must complete the procedures for electing to redeem their public shares in the manner described in the section entitled “Extraordinary General Meeting of EBAC—Redemption Rights” prior to 5:00 p.m., Eastern Time, on February 24, 2023 (two business days before the scheduled Extraordinary General Meeting) in order for such shares to be redeemed.

EBAC’s warrant holders should not submit the certificates relating to their EBAC Public Warrants. Public shareholders who do not elect to have their EBAC public shares redeemed for the pro rata share of the Trust Account should not submit the certificates relating to their EBAC public shares.

Upon the Acquisition Closing and the transactions contemplated thereby, holders of EBAC Units, EBAC Common Stock and EBAC Public Warrants will receive New Parent Shares and New Parent Warrants, as the case may be, without needing to take any action and, accordingly, such holders should not submit any certificates relating to their EBAC Units, EBAC Class A Common Stock (unless such holder elects to redeem the either their EBAC Units or EBAC Class A Common Stock in accordance with the procedures set forth below), or EBAC Public Warrants.

 

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Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your EBAC Common Stock.

 

Q:

Who will solicit and pay the cost of soliciting proxies for the Extraordinary General Meeting?

 

A:

EBAC and Oculis will each bear one-half of the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of this proxy statement/prospectus and the related proxy materials. EBAC has engaged D.F. King & Co., Inc. (“D.F. King”), to assist in the solicitation of proxies for the Extraordinary General Meeting. EBAC will pay D.F. King a fee of $25,000 plus disbursements and indemnify D.F. King and its affiliates against certain claims, liabilities, losses, damages and expenses for their services as EBAC’s proxy solicitor. EBAC will reimburse brokerage firms and other custodians for their reasonable out-of-pocket expenses for forwarding this proxy statement/prospectus and the related proxy materials to EBAC Shareholders. Directors, officers and employees of EBAC who solicit proxies will not be paid any additional compensation for soliciting.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the Business Combination or the proposals included in this proxy statement/prospectus or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Individuals (toll-free): (877) 732-3619

Banks and Brokerage Firms, please call collect at (212) 269-5550 or email at EBAC@dfking.com.

To obtain timely delivery, EBAC Shareholders must request the materials no later than February 21, 2023 or five business days prior to the Extraordinary General Meeting.

You may also obtain additional information about EBAC from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you are a holder of EBAC public shares and intend to seek redemption of such shares, you will need to deliver your public shares (either physically or electronically) to the Transfer Agent. Holders must complete the procedures for electing to redeem such shares in the manner described in the section entitled “Redemption Rights” prior to 5:00 p.m., New York City time, on February 24, 2023 (two business days before the scheduled Extraordinary General Meeting) in order for such shares to be redeemed. If you have questions regarding the certification of your position or delivery of your public shares, please contact the Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attention: spacredemptions@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information contained in this proxy statement/prospectus and does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the Annexes and accompanying financial statements of Oculis and EBAC to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the Extraordinary General Meeting (as described below). Please see the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

Oculis

Oculis is a stock corporation (Aktiengesellschaft) that was incorporated under the laws of Switzerland on December 11, 2017.

Oculis is registered with the commercial register of the Canton de Vaud under company registration number CHE-237.826.774. The mailing address of Oculis’ principal executive office prior to and after the Acquisition Closing is Oculis SA, EPFL Innovation Park, Bat D 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland. Neither the Oculis articles of association nor the operation of law limit the duration of Oculis. Oculis’ telephone number is +41-21-711-3970 and its website is www.oculis.com.

New Parent

New Parent is a stock corporation (Aktiengesellschaft) that was incorporated on October 31, 2022. To date, New Parent has not conducted any material activities other than those incident to its formation and the pending Business Combination and only has nominal assets consisting of cash and cash equivalents. Accordingly, no financial statements of New Parent have been included in this proxy statement/prospectus. New Parent has applied to list the New Parent Shares and New Parent Warrants under the Exchange Act and on the Nasdaq Global Market under the symbols “OCS” and “OCSAW,” respectively, upon the Acquisition Closing. All New Parent Shares shall be of the same class of shares and consist only of New Parent Shares.

The mailing address of New Parent’s principal executive office prior to the Acquisition Closing is Oculis Holding AG, Bahnhofstrasse 7, CH-6300 Zug, Switzerland. The mailing address of New Parent’s principal executive office is expected to move within two months after the Acquisition Closing to Oculis Holding AG, EPFL Innovation Park, Bat D 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland. Neither the Proposed Articles of Association nor the operation of law limit the duration of New Parent. New Parent’s telephone number is currently +41-58-810-0182.

EBAC

EBAC is a blank check company incorporated as a Cayman Islands exempted company on January 8, 2021 for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. EBAC consummated its initial public offering on March 18, 2021, generating net proceeds of $127.5 million, which includes the partial exercise of the underwriter’s option to purchase an additional 754,784 units at the initial public offering price to cover over-allotments.

The EBAC Class A Common Stock, EBAC Units and EBAC Public Warrants are traded on the Nasdaq Capital Market under the ticker symbols, “EBAC,” “EBACU,” and “EBACW,” respectively. Upon the Acquisition Closing, EBAC’s securities will be delisted from the Nasdaq Capital Market.

 

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The mailing address of EBAC’s registered office is European Biotech Acquisition Corp., EPFL Innovation Park Building, CH-1015 Lausanne, Switzerland.

Merger Sub 1

Merger Sub 1 is a Cayman Islands exempted company and a direct, wholly owned subsidiary of New Parent that was incorporated on January 3, 2023 to facilitate the consummation of the Business Combination. In the Business Combination, at the First Merger Effective Time, Merger Sub 1 will merge with and into EBAC, with EBAC continuing as the surviving company.

The mailing address of Merger Sub 1 registered office is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

Merger Sub 2

Merger Sub 2 is a Cayman Islands exempted company and a direct, wholly owned subsidiary of New Parent that was incorporated on January 3, 2023 to facilitate the consummation of the Business Combination. In the Business Combination, at the Second Merger Effective Time, EBAC will merge with and into Merger Sub 2, with Merger Sub 2 continuing as the surviving entity.

The mailing address of Merger Sub 2 registered office is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

Merger Sub 3

Merger Sub 3 is a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated and existing under the laws of Switzerland and a direct, wholly owned subsidiary of New Parent that was incorporated on December 30, 2022 to facilitate the consummation of the Business Combination. In the Business Combination, at the Third Merger Effective Time, Oculis will merge with and into Merger Sub 3, with Merger Sub 3 continuing as the surviving entity.

The mailing address of Merger Sub 3 registered office is Bahnhofstrasse 7, 6300 Zug, Switzerland.

The Business Combination Agreement

On October 17, 2022, EBAC entered into the Business Combination Agreement with Oculis. Pursuant to the Business Combination Agreement and the Ancillary Agreements, and subject to the terms and conditions contained therein, the Business Combination will be effected in the following steps:

 

  i.

the PIPE Investors will transfer $71,188,910 to EBAC in exchange for 7,118,891 PIPE Shares;

 

  ii.

EBAC will undergo the First Merger; and as part of the First Merger, (a) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into the Surviving EBAC Shares, (b) each EBAC Warrant outstanding immediately prior to the First Merger Effective time will be automatically converted into Surviving EBAC Warrants and (c) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants on the terms, and subject to the conditions set forth in the Business Combination Agreement and in the Ancillary Agreements;

 

  iii.

on the day before the Acquisition Closing Date and following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent, solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants, will undertake the Exchange Agent Contribution Actions in exchange for receipt of the New Parent Interests Consideration;

 

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  iv.

in connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will undertake to distribute (i) the New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares and (ii) the New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants;

 

  v.

on the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will undergo the Second Merger, pursuant to which, among other things, the separate corporate existence of EBAC will cease, and following the Acquisition Closing, Merger Sub 2 shall be liquidated and its assets distributed to New Parent;

 

  vi.

after the Second Merger Effective Time but before the Oculis Share Contribution, it is the intention of the parties to the Convertible Loan Agreements that New Parent will assume the Convertible Loan Agreements, pursuant to which the Lenders have granted Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $19,670,000, and that immediately after such assumption but before the Oculis Share Contribution, the Lenders will exercise their conversion rights in exchange for New Parent Shares at $10.00 per share, on the same terms as the PIPE Investors;

 

  vii.

at approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing Oculis Shareholders Support Agreements and the exchange notice contemplated by the Business Combination Agreement shall effect the Oculis Share Contribution; and

 

  viii.

approximately 30 days after the closing of the EBAC Mergers, Oculis will undergo the Third Merger.

The terms and conditions of the Business Combination are contained in the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A. You are encouraged to read the Business Combination Agreement carefully, as it is the legal document that governs the Business Combination. For more information on the Business Combination Agreement, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement.”

The First Merger

Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease and EBAC will be the surviving company and a wholly owned subsidiary of New Parent. As part of the First Merger, (i) each share of EBAC Common Stock (including those held by the PIPE Investors) shall be automatically converted into one class of common stock of EBAC, as the surviving company of the First Merger, (ii) each EBAC Warrant outstanding immediately prior to the First Merger Effective time will be automatically converted into warrants of EBAC, as the surviving company of the First Merger and (iii) EBAC shall deposit, or cause to be deposited, with the Exchange Agent (held solely on behalf of the holders of EBAC Common Stock and EBAC Warrants) the Surviving EBAC Shares and Surviving EBAC Warrants on the terms, and subject to the conditions set forth in the Business Combination Agreement and in the Ancillary Agreements.

The Exchange Agent Contribution

On the day before the Acquisition Closing Date and following the First Merger Effective Time but prior to the Second Merger Effective Time, the Exchange Agent will contribute the Surviving EBAC Shares and Surviving EBAC Warrants to New Parent in exchange for (i) New Parent Shares and (ii) New Parent Warrants, in each case of (i) and (ii), to be held by the Exchange Agent solely on behalf of the holders of Surviving EBAC Shares and Surviving EBAC Warrants.

 

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The Exchange Agent Distribution

In connection with the Exchange Agent Contribution, on the day before the Acquisition Closing Date and prior to the Second Merger Effective Time, the Exchange Agent will (i) undertake to distribute the New Parent Shares as part of the New Parent Interests Consideration to the holders of Surviving EBAC Shares (as defined in the Business Combination Agreement) and (ii) distribute the New Parent Warrants as part of the New Parent Interests Consideration to the holders of Surviving EBAC Warrants.

The Second Merger

On the day before the Acquisition Closing Date and following the completion of the Exchange Agent Contribution Actions, at the Second Merger Effective Time, EBAC will merge with and into Merger Sub 2, the separate corporate existence of EBAC will cease and Merger Sub 2 will be the surviving company and remain a wholly owned subsidiary of New Parent.

The Oculis Share Contribution

At approximately 10:00 a.m. Eastern Time on the Acquisition Closing Date, those Oculis Shareholders executing Oculis Shareholders Support Agreements and the exchange notice contemplated by the Business Combination Agreement shall effect the contribution to New Parent of all Company Share Capital held by such Oculis shareholder free and clear of all liens (other than general restrictions on transfer under applicable securities laws or the articles of association of Oculis) in exchange for New Parent Shares on the terms, and subject to the conditions set forth in the Business Combination Agreement and Oculis Shareholders Support Agreements;

The Third Merger

Approximately 30 days after the Acquisition Closing Date, pursuant to a merger agreement to be entered into in accordance with the Business Combination Agreement, Oculis will merge with and into Merger Sub 3, the separate corporate existence of Oculis will cease and Merger Sub 3 will be the surviving company and remain a wholly owned subsidiary of New Parent.

Conditions to Closing

The obligations of the Parties to the Business Combination Agreement to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) at or prior to the Acquisition Closing Date of the following conditions:

 

   

the approval of EBAC Shareholders shall have been obtained;

 

   

EBAC’s net tangible assets shall be at least $5,000,001;

 

   

the registration statement of which this proxy statement/prospectus forms a part shall have become effective under the Securities Act and no stop order suspending the effectiveness of such registration statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn;

 

   

the New Parent Shares to be issued in connection with the transactions contemplated by the Business Combination Agreement shall have been approved for listing on the Nasdaq Global Market;

 

   

(i) The amount of cash or cash equivalents available in the Trust Account following the Extraordinary General Meeting (after deducting the EBAC Share Redemption Amount and payment of any transaction expenses of Oculis and EBAC); plus (ii) (a) the cash actually received by New Parent pursuant to the Convertible Loan Agreements from the respective lender parties thereto and (b) the PIPE Investment Amount actually received by New Parent (or other financing in connection with the Acquisition Transactions) prior to or substantially concurrently with the Acquisition Closing is equal to or greater than $100 million; and

 

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there shall not be in force any governmental order enjoining or prohibiting the consummation of any of the Business Combination or the Acquisition Transactions or any law that makes the consummation of any of the Business Combination or the Acquisition Transactions illegal or otherwise prohibited; provided that the governmental authority issuing such governmental order has jurisdiction over the parties thereto with respect to the Transactions.

The obligations of EBAC to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) of the following additional conditions as of the dates set forth below:

 

   

certain of Oculis’ representations and warranties being true and correct in all respects as of the date of the Business Combination Agreement and the Acquisition Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date;

 

   

the Company Fundamental Representations (as defined in the Business Combination Agreement) shall be true and correct in all material respects as of the date of the Business Combination Agreement and the Acquisition Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date;

 

   

the representations and warranties of Oculis, other than the Company Fundamental Representations, (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect and Company Material Adverse Effect or any similar qualification or exception) shall be true and correct as of the date of the Business Combination Agreement and as of the Acquisition Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct at and as of such date, except for, in each case, inaccuracies or omissions that have not had, and would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect;

 

   

each of the covenants of Oculis to be performed as of or prior to the Acquisition Closing shall have been performed in all material respects; and

 

   

there shall not have occurred a Company Material Adverse Effect after the date of the Business Combination Agreement.

The obligations of Oculis to consummate the Business Combination are subject to the satisfaction or waiver (where permissible) of the following additional conditions as of the dates set forth below:

 

   

certain of EBAC’s representations and warranties being true and correct in all respects as of the Acquisition Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all respects at and as of such date;

 

   

the EBAC Fundamental Representations (as defined below) shall be true and correct in all material respects as of the date of the Business Combination Agreement and the Acquisition Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all material respects at and as of such date;

 

   

the representations and warranties of EBAC, New Parent, Merger Sub 1, Merger Sub 2 and Merger Sub 3 in Article 5 and Article 6 of the Business Combination Agreement (other than the EBAC Fundamental Representations and the representations and warranties set forth in the first sentence of each of Section 5.03(a) and Section 6.13(a) of the Business Combination Agreement) (disregarding any qualifications and exceptions contained therein relating to materiality, material adverse effect or any similar qualification or exception) shall be true and correct as of the date of the Business Combination

 

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Agreement and as of the Acquisition Closing Date, except with respect to such representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct as of such date, except for, in each case, inaccuracies or omissions that have not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of EBAC to consummate the Transactions;

 

   

each of the covenants of EBAC, New Parent, Merger Sub 1, Merger Sub 2 and Merger Sub 3 to be performed as of or prior to the Acquisition Closing shall have been performed in all material respects; and

 

   

there shall not have occurred a material adverse effect with respect to EBAC after the date of the Business Combination Agreement.

Termination

Mutual termination rights. The Business Combination Agreement may be terminated and the transactions contemplated thereby abandoned:

 

   

by the mutual written consent of Oculis and EBAC;

 

   

by Oculis or EBAC if the Acquisition Closing Date has not occurred by March 18, 2023 (the “Agreement End Date”); provided, that if an Extension Proposal (as defined in the Business Combination Agreement) shall be approved at an Extension Shareholders’ Meeting (as defined in the Business Combination Agreement) then to the last day of the extended time period for EBAC to consummate a business combination; provided, further, however, that a party shall not be entitled to terminate the Business Combination Agreement pursuant to Section 11.01(b) of the Business Combination Agreement if such party’s breach of the Business Combination Agreement has prevented the consummation of the Acquisition Closing Date at or prior to such time;

 

   

by Oculis or EBAC if any governmental order which has become final and non-appealable has the effect of making consummation of any of the Acquisition Transactions illegal or otherwise preventing or prohibiting consummation of any of the Acquisition Transactions or if there shall be adopted any law that permanently makes consummation of any of the Acquisition Transactions illegal or otherwise prohibited; and

 

   

by Oculis or EBAC if the approval of EBAC Shareholders has not been obtained due to the failure to obtain the required vote at the Extraordinary General Meeting.

Oculis termination rights. The Business Combination Agreement may be terminated and the transactions contemplated thereby abandoned:

 

   

by Oculis if there has been a Modification in Recommendation (as defined below); and

 

   

by written notice to EBAC upon the occurrence of a Terminating EBAC Breach (as defined below) which is not cured within the time period beginning on the date of such Terminating EBAC Breach and ending on the earlier of (a) 45 days after EBAC’s receipt of Oculis’ notice of such breach or (b) the Agreement End Date, provided that Oculis is not then in material breach of the Business Combination Agreement.

EBAC termination rights. The Business Combination Agreement may be terminated and the transactions contemplated thereby abandoned:

 

   

by written notice to Oculis upon the occurrence of a Terminating Company Breach (as defined below) which is not cured within the time period beginning on the date of such Terminating Company Breach

 

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and ending on the earlier of (i) 45 days after Oculis’ receipt of EBAC’s notice of such breach or (ii) the Agreement End Date; provided that EBAC is not then in material breach of the Business Combination Agreement.

For more information about the Business Combination Agreement and the Business Combination and other transactions contemplated thereby, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement.”

Ancillary Documents

The Subscription Agreements

Concurrently with the execution of the Business Combination Agreement, EBAC entered into Initial Subscription Agreements with the Initial PIPE Investors, including LSP 7, certain existing Oculis Shareholders as well as certain other investors, pursuant to which the Initial PIPE Investors have agreed to subscribe for and purchase, and EBAC has agreed to issue from treasury to such PIPE Investors, an aggregate of 6,330,391 shares of EBAC Class A Common Stock at a price of $10.00 per share, for the aggregate purchase price of $63,303,910. Subsequent to the Initial PIPE Financing, in January 2023, EBAC entered into the Subsequent Subscription Agreements with the Subsequent PIPE Investors, pursuant to which the Subsequent PIPE Investors have agreed to subscribe for, and EBAC has agreed to issue to the Subsequent PIPE Investors, an aggregate of 788,500 shares of EBAC Class A Common Stock at a price of $10.00 per share, for the aggregate purchase price of $7,885,000. The aggregate amount of EBAC Class A Common Stock to be issued pursuant to the PIPE Financing is 7,118,891 for aggregate gross proceeds of $71,188,910. Pursuant to the transactions contemplated in the Business Combination Agreement, EBAC Class A Common Stock will ultimately convert into New Parent Shares. The Subscription Agreements contain substantially the same terms.

The closing of the PIPE Financing is subject to, among other customary closing conditions, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that EBAC will cause New Parent to grant the PIPE Investors certain customary registration rights in connection with the PIPE Financing, including demand and piggyback rights.

The Convertible Loan Agreements

Concurrently with the execution of the Business Combination Agreement, Oculis and the Lenders party thereto entered into a convertible loan agreement, pursuant to which, among other things, the Lenders party thereto have granted Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $12,670,000. Subsequent to the execution of the Business Combination Agreement, on January 26, 2023, Oculis and an additional Lender entered into a convertible loan agreement in substantially the same form as the initial convertible loan agreement, pursuant to which, among other things, the Lender party thereto has granted Oculis a right to receive a convertible loan with certain conversion rights in an aggregate amount of $7,000,000. The aggregate amount raised under the Convertible Loan Agreements is $19,670,000. Following the Second Merger Effective Time, it is the intention of the parties thereto that New Parent will assume the Convertible Loan Agreements, and that immediately after such assumption but before the Oculis Share Contribution, the Lenders will exercise their conversion rights in exchange for New Parent Shares at $10.00 per share, on substantially the same terms as the PIPE Investors. The Convertible Loan Agreements provide that, upon conversion, the Lenders will be granted certain customary registration rights, substantially on the same terms as those offered pursuant to the Subscription Agreements.

The Oculis Shareholders Support Agreements

Concurrently with the execution of the Business Combination Agreement, Oculis, EBAC, and certain Oculis Shareholders entered into the Oculis Shareholders Support Agreements, pursuant to which such Oculis

 

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Shareholders agreed to, among other things, (i) adopt the Business Combination Agreement and approve and consent to the Mergers and the consummation of the transactions contemplated therein, (ii) execute and deliver the exchange notice agreeing to transfer to the Exchange Agent all Company Share Capital held by such Shareholder and (iii) provide a release of claims against Oculis and its subsidiaries.

The Sponsor Support Agreement

Concurrently with the execution of the Business Combination Agreement, Sponsor, EBAC and Oculis entered into the Sponsor Support Agreement, pursuant to which Sponsor agreed to, among other things, (i) vote to adopt and approve the Business Combination Agreement and the other documents contemplated thereby and the transactions contemplated thereby, (ii) not transfer its shares of EBAC Common Stock and EBAC Warrants, in each case, until the consummation of the Acquisition Closing (subject to certain customary exceptions), (iii) waive certain anti-dilution adjustments, and (iv) waive certain redemption rights.

The Registration Rights and Lock-Up Agreement

In connection with the consummation of the Business Combination, New Parent will enter into the Registration Rights and Lock-Up Agreement with Sponsor and certain Oculis Shareholders. Pursuant to the Registration Rights and Lock-Up Agreement, Sponsor and such Oculis Shareholders may not transfer New Parent Shares (subject to certain exceptions) until: (i) with respect to the New Parent Shares held by the Oculis Shareholders party thereto upon the Acquisition Closing, 180 days from the Acquisition Closing, and (ii) with respect to the New Parent Shares held by Sponsor upon the Acquisition Closing, 270 days after the Acquisition Closing, in each case subject to earlier release if the New Parent Shares trade at or above a volume weighted average price of $15.00 for 20 trading days during any 30 trading day period commencing at least 150 days following the Acquisition Closing.

The Registration Rights and Lock-Up Agreement provides Sponsor and the Oculis Shareholders party thereto certain customary registration rights, including demand and piggyback registration rights, subject to customary requirements and conditions.

The Non-Redemption Agreements

Concurrently with the execution of the Business Combination Agreement, EBAC, Sponsor and certain EBAC Shareholders have entered into Non-Redemption Agreements, pursuant to which, among other things, such EBAC Shareholder has agreed to (i) vote in favor of the transactions contemplated in the Business Combination Agreement, for which the approval of such EBAC Shareholder is required, (ii) not to redeem, or exercise any right to redeem, any EBAC equity securities held by such EBAC Shareholder as of the date of the Non-Redemption Agreement, or acquired thereafter and (iii) not to transfer any EBAC equity securities until 90 days after the Acquisition Closing. In consideration of such EBAC Shareholder’s performance of its obligations under the Non-Redemption Agreements, Sponsor has agreed to transfer to such EBAC Shareholder one New Parent Share for every 10 shares of EBAC Class A Common Stock held by such EBAC Shareholder. As of the record date, 740,789 shares of EBAC Class A Common Stock are subject to Non-Redemption Agreements.

For additional information about the ancillary agreements related to the Business Combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination.”

The EBAC Board’s Reasons for the Business Combination

EBAC was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The EBAC Board sought to do this by utilizing the networks and industry experience of both the Sponsor and the EBAC Board to identify, acquire and operate one or more businesses.

 

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In particular, the EBAC Board considered the following factors (although not weighted or in any order of significance) in deciding to approve the proposed Business Combination:

 

   

Experienced management team and New Parent Board. The EBAC Board believes that Oculis’ management team has extensive experience in the biopharma industry in general and the ophthalmology market in particular. The EBAC Board is confident in the management team’s deep industry knowledge and strategic vision and believes that the EBAC and Oculis teams (together with the new incoming directors of the New Parent Board who have extensive executive experience working in the biopharma industry) will form a collaborative and effective long-term partnership that is positioned to create and enhance shareholder value going forward. For additional information regarding Oculis’ executive officers, please see the section entitled “Management of New Parent After the Business Combination.”

 

   

Advanced and diversified pipeline. The EBAC Board considered that the current pipeline of Oculis provides multiple product candidates that may be developed in several indications where the existing unmet medical need could provide significant market opportunities and long-term shareholder value. For additional information regarding Oculis’ pipeline, please see the section entitled “Business of Oculis and Certain Information about Oculis.”

 

   

Upcoming milestones. The EBAC Board considered that with the funds that Oculis is expected to receive with the proposed transaction, it may be able to reach significant clinical and regulatory milestones for all three of its product candidates, OCS-01, OCS-02 and OCS-05, in a total of five different indications. These milestones could provide opportunity for potential uplifts in valuation.

 

   

Benefit for Oculis of being U.S. listed. As a result of the proposed transaction, Oculis will become a public company listed on the Nasdaq Global Market (via New Parent). By having access to the largest biotech capital market, Oculis will be better positioned to have the capacity to raise additional funds in the future if and when needed.

 

   

Investment by Third Parties. The EBAC Board considered that certain sophisticated investors (i) subscribed for the PIPE Financing in the aggregate amount of approximately $71.2 million and (ii) agreed to grant Oculis a right to receive a convertible loan with certain conversion rights in the aggregate amount of approximately $19.7 million.

 

   

Terms of the Business Combination Agreement and the Ancillary Agreements. The EBAC Board considered the terms and conditions of the Business Combination Agreement and the Ancillary Agreements, including the transactions contemplated thereby, each party’s representations, warranties and covenants, the conditions to each party’s obligation to close and the termination provisions, as well as EBAC’s and Oculis’ strong commitment to complete the Business Combination. The EBAC Board determined that such terms and conditions are reasonable and were the product of extensive arm’s-length negotiations between EBAC and Oculis.

 

   

Continued Ownership of Oculis Shareholders. The EBAC Board considered that the Oculis Shareholders would be receiving a significant amount of New Parent Shares in the proposed Business Combination. Oculis Shareholders have demonstrated confidence in the long-term prospects of New Parent by agreeing not to transfer their New Parent Shares for 180 days following the Acquisition Closing.

 

   

The Role of the Independent Directors. In connection with the Business Combination, EBAC’s Independent Directors evaluated the proposed terms of the Business Combination, including the Business Combination Agreement and the related agreements, and unanimously approved, as members of the EBAC Board, the Business Combination Agreement, the Ancillary Agreements, and the transactions contemplated thereby.

 

   

Other Alternatives. The EBAC Board believes, after a thorough review of other business combination opportunities reasonably available to or explored by EBAC, that the proposed Business Combination

 

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represents the optimal potential business combination for EBAC and its shareholders based upon the process utilized to evaluate and assess other potential acquisition targets, and the EBAC Board’s belief that such processes had not presented a better alternative.

For a more complete description of the EBAC Board’s reasons for approving the Business Combination, including other factors and risks considered by the EBAC Board, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Business Combination Agreement—The EBAC Board’s Reasons for the Business Combination.

This explanation of EBAC’s reasons for the EBAC Board’s approval of the Business Combination, and all other information presented in this summary is not intended to be exhaustive, but includes material factors considered by the EBAC Board and is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

The Extraordinary General Meeting

Date, Time and Place of Extraordinary General Meeting

The Extraordinary General Meeting will be held on February 28, 2023 at 9:00 a.m., Eastern Time, at EBAC’s corporate address, located at EPFL Innovation Park, Bat D, 3e Route J-D. Colladon, CH-1015 Lausanne, Switzerland, and via a live webcast at www.virtualshareholdermeeting.com/EBAC2023SM, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

EBAC intends to hold the Extraordinary General Meeting in person as well as virtually, via a live webcast at www.virtualshareholdermeeting.com/EBAC2023SM. However, EBAC is sensitive to the public health and travel concerns our shareholders may have and recommendations that public health officials may issue in light of the evolving COVID-19 situation. As a result, EBAC may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location. EBAC plans to announce any such updates on its proxy website at www.lspvc.com/EBAC, and EBAC encourages you to check this website prior to the meeting if you plan to attend.

To attend the meeting virtually please visit www.virtualshareholdermeeting.com/EBAC2023SM and use a 12-digit control number assigned by Continental included on your proxy card or notice of the Extraordinary General Meeting. To register and receive access to the virtual meeting, registered shareholders and beneficial shareholders (i.e., those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in this proxy statement/prospectus.

Proposals of the Extraordinary General Meeting

At the Extraordinary General Meeting, EBAC Shareholders will be asked to consider and vote on the following proposals:

 

  1.

Business Combination Proposal — a proposal to approve and adopt the Business Combination Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and the transactions contemplated thereby, including the Business Combination;

 

  2.

Merger Proposal — a proposal to approve and authorize, by special resolution, the Plan of Merger, a copy of which is attached to this proxy statement/prospectus as Annex C, pursuant to which Merger Sub 1 will be merged with and into EBAC, the separate entity existence of Merger Sub 1 will cease, and EBAC will be the surviving company and wholly owned subsidiary of New Parent; and

 

  3.

Adjournment Proposal — a proposal to adjourn the Extraordinary General Meeting to a later date or dates to the extent reasonable (i) to ensure that any supplement or amendment to this proxy statement/prospectus is provided to EBAC Shareholders, (ii) in order to solicit additional proxies from EBAC’s

 

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  shareholders in favor of the Business Combination Proposal and the Merger Proposal or for any other reason in connection with the transactions contemplated by the Business Combination Agreement or (iii) if EBAC Shareholders redeem an amount of EBAC Class A Common Stock such that the Minimum EBAC Cash Condition would not be satisfied.

For more information, please see the sections entitled “Proposal No. 1—The Business Combination Proposal”, “Proposal No. 2—The Merger Proposal” and “Proposal No. 3—The Adjournment Proposal.”

Registering for the Extraordinary General Meeting

Any shareholder wishing to attend the Extraordinary General Meeting virtually should register for the Extraordinary General Meeting by February 24, 2023 at 9:00 a.m., Eastern Time. To register for the Extraordinary General Meeting, please follow these instructions as applicable to the nature of your ownership of EBAC shares:

 

  1.

If your shares are registered in your name with Continental and you attend the Extraordinary General Meeting and plan to vote virtually, go to www.virtualshareholdermeeting.com/EBAC2023SM, enter the 12-digit control number included on your proxy card or notice of the Extraordinary General Meeting and click on the “Click here to preregister for the virtual meeting” link at the top of the page. Just prior to the start of the Extraordinary General Meeting you will need to log back into the Extraordinary General Meeting site using your control number. Pre-registration is recommended but is not required in order to attend.

 

  2.

Beneficial shareholders (i.e., those holding shares through a stock brokerage account or by a bank or other holder of record) who wish to attend the virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker or other nominee that holds their shares and email a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial shareholders who email a valid legal proxy will be issued a 12-digit control number that will allow them to register to attend and participate in the Extraordinary General Meeting. After contacting Continental, a beneficial holder will receive an email prior to the Extraordinary General Meeting with a link and instructions for entering the virtual meeting. Beneficial shareholders should contact Continental at least five business days prior to the Extraordinary General Meeting date in order to ensure access.

Voting Power; Record Date

As a shareholder of EBAC, you have a right to vote on certain matters affecting EBAC. The proposals that will be presented at the Extraordinary General Meeting and upon which you are being asked to vote are summarized above and fully set forth in this proxy statement/prospectus. If you are a shareholder that holds your shares in “street name,” you will be entitled to vote or direct votes to be cast at the Extraordinary General Meeting if you owned EBAC Common Stock at the close of business on January 26, 2023, which is the record date for the Extraordinary General Meeting. You are entitled to one vote for each share of EBAC Common Stock that you owned as of the close of business on the record date. If your shares are held in “street name” through a broker, bank or other nominee, or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 16,398,576 shares of EBAC Common Stock outstanding, of which 13,209,880 are shares of EBAC Class A Common Stock and 3,188,696 are shares of EBAC Class B Common Stock held by the EBAC Initial Shareholders (including Founder Shares transferred by the Sponsor in the amount of 25,000 Founder Shares to certain of the Independent Directors, for a total of 50,000 Founder Shares transferred). For the avoidance of doubt, the record date does not apply to EBAC Shareholders that hold their shares in registered form and are registered as shareholders in EBAC’s register of members. EBAC Shareholders that hold their shares in registered form are entitled to one vote on each proposal presented at the Extraordinary General Meeting for each share of EBAC Common Stock held on the record date of the Extraordinary General Meeting.

 

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Vote of EBAC Initial Shareholders and the Other Directors and Officers of EBAC

Prior to EBAC’s initial public offering, EBAC entered into certain agreements with the EBAC Initial Shareholders and other officers and directors of EBAC, pursuant to which each of the parties agreed to vote any EBAC Common Stock owned by them in favor of an initial business combination. These agreements apply to the EBAC Initial Shareholders and other officers and directors of EBAC, including the Sponsor, as it relates to the Founder Shares and any other public shares held by the EBAC Initial Shareholders and other officers and directors of EBAC. As of the record date, the EBAC Initial Shareholders and the other current directors and officers of EBAC owned 3,188,696 Founder Shares, representing 19.44% of the EBAC Common Stock then outstanding and entitled to vote at the Extraordinary General Meeting.

EBAC Initial Shareholders and the other current officers and directors of EBAC have entered into a letter agreement with EBAC, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if EBAC fails to complete its initial business combination within the Combination Period. However, if EBAC Initial Shareholders and the other current officers and directors of EBAC acquire public shares, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if EBAC fails to complete its initial business combination within the Combination Period.

Quorum and Required Vote for Proposals at the Extraordinary General Meeting

Approval of the Business Combination Proposal requires an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Merger Proposal requires a special resolution under Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Approval of the Adjournment Proposal an ordinary resolution under Cayman Islands law, being, where a quorum is present, the affirmative vote of the holders of at least a majority of the issued shares of EBAC Common Stock who are present in person or represented by proxy and entitled to vote thereon and who vote at the Extraordinary General Meeting. Accordingly, an EBAC shareholder’s failure to vote by proxy or to vote in person (including virtually by visiting www.virtualshareholdermeeting.com/EBAC2023SM) at the Extraordinary General Meeting will not be counted towards the number of EBAC Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote will have no effect on the outcome of any vote on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal. Broker non-votes and abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the Business Combination Proposal, the Merger Proposal or the Adjournment Proposal. The Sponsor and each member of EBAC’s management team have agreed to vote any EBAC Common Stock (including Founder Shares and any other public shares of EBAC as of the record date) owned by them in favor of the Business Combination and the transactions contemplated thereby (including by voting in favor of the Business Combination Proposal, the Merger Proposal and for any other proposal presented to EBAC Shareholders in this proxy statement/prospectus).

Aside from the votes cast by the EBAC Initial Shareholders, at least 4,555,497 votes will be required to approve the Business Combination Proposal, and at least 7,288,598 votes will be required to approve the Merger Proposal.

One or more shareholders who together hold a majority of the issued and outstanding EBAC Common Stock entitled to vote at the Extraordinary General Meeting must be present, in person or represented by proxy, at the Extraordinary General Meeting to constitute a quorum and in order to conduct business at the Extraordinary General Meeting. Broker non-votes and abstentions will be counted as present for the purpose of determining a quorum. The EBAC Initial Shareholders and other officers and directors of EBAC, who owned 22.22% of the

 

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issued and outstanding EBAC Common Stock as of the record date, will count towards this quorum. In the

absence of a quorum, the chairman of the Extraordinary General Meeting has power to adjourn the Extraordinary General Meeting. As of the record date for the Extraordinary General Meeting, 8,199,289 shares of EBAC Common Stock would be required to achieve a quorum.

The Acquisition Closing is conditioned upon the approval of the Business Combination Proposal and the Merger Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

It is important for you to note that, in the event that the Business Combination Proposal or the Merger Proposal do not receive the requisite votes for approval, EBAC will not consummate the Business Combination. If EBAC does not consummate the Business Combination and fails to complete an initial business combination within the Combination Period, EBAC will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to the public shareholders.

Recommendation to EBAC Shareholders

The EBAC Board believes that each of the Business Combination Proposal, the Merger Proposal and the Adjournment Proposal to be presented at the Extraordinary General Meeting is in the best interests of EBAC and its shareholders and recommends that its shareholders vote “FOR” each of the proposals.

Interests of Certain Persons in the Business Combination

When considering the EBAC Board’s recommendation that EBAC Shareholders vote in favor of the approval of the Business Combination Proposal and the Merger Proposal, EBAC Shareholders should be aware that aside from their interests as shareholders, the EBAC Initial Shareholders and EBAC’s other current officers and directors have interests in the Business Combination that are different from, or in addition to, those of other EBAC Shareholders generally. For example, such interests may incentivize the Sponsor to complete the Business Combination with Oculis, or an alternative initial business combination with a less favorable company or on terms less favorable to EBAC Shareholders, rather than to liquidate, in which case the Sponsor would lose its entire investment. The EBAC Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to EBAC Shareholders that they approve the Business Combination Proposal and the Merger Proposal. EBAC Shareholders should take these interests into account in deciding whether to approve the Business Combination Proposal and the Merger Proposal.

These interests include, among other things:

 

1.

EBAC Initial Shareholders and the other officers and directors of EBAC have agreed not to redeem any EBAC Common Stock held by them in connection with a shareholder vote to approve a proposed initial business combination;

 

2.

the Sponsor paid an aggregate of $25,000 for the Founder Shares. The Founder Shares had an estimated aggregate market value of $32.33 million based upon the closing price of $10.14 per public share on the Nasdaq Capital Market on January 26, 2023, the record date for the Extraordinary General Meeting;

 

3.

the fact that the Sponsor transferred Founder Shares to two independent directors prior to EBAC’s initial public offering and such securities would be worthless if a business combination is not consummated within the Combination Period;

 

4.

EBAC Initial Shareholders and the other officers and directors of EBAC have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if EBAC fails to complete an initial business combination within the Combination Period and, in the event EBAC fails to complete an initial business combination within the Combination Period, the Founder Shares would have no value;

 

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5.

the Registration Rights and Lock-Up Agreement will be entered into by the Sponsor;

 

6.

the Sponsor paid an aggregate of $4.55 million for its 455,096 Private Placement Units and that such Private Placement Units (and the underlying securities) will expire worthless if a business combination is not consummated within the Combination Period. The Private Placement Units had an estimated aggregate market value of $4.65 million based on the closing price of $10.22 per unit on the Nasdaq Capital Market on January 26, 2023, the record date for the Extraordinary General Meeting;

 

7.

the Sponsor paid an aggregate of $227,548.50 for its 151,699 EBAC Private Placement Warrants and that such EBAC Private Placement Warrants will expire worthless if a business combination is not consummated within the Combination Period. The EBAC Private Placement Warrants had an estimated aggregate value of $54,612 based on the closing price of $0.36 per warrant on the Nasdaq Capital Market on January 26, 2023, the record date for the Extraordinary General Meeting;

 

8.

the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other shareholders experience a negative rate of return in the post-business combination company;

 

9.

the fact that the Sponsor will own 2,842,618 New Parent Shares, which collectively will represent approximately 6.3% of outstanding New Parent Shares and have a value of approximately $28,426,180 based on an implied value of $10.00 per New Parent Share and assuming that the maximum number of EBAC Class A Common Stock are redeemed while still satisfying the Minimum EBAC Cash Condition;

 

10.

the right of EBAC Initial Shareholders and the other directors and officers of EBAC to receive New Parent Shares, subject to certain lock-up periods (it being understood that no contractual selling restrictions apply to any shares issued in connection with the PIPE Financing);

 

11.

the anticipated designation by EBAC of Martijn Kleijwegt and Geraldine O’Keeffe as directors of New Parent following the Business Combination;

 

12.

the continued indemnification of EBAC’s existing directors and officers and the continuation of EBAC’s directors’ and officers’ liability insurance after the Business Combination;

 

13.

LSP 7, an affiliate of the Sponsor, previously invested $2,104,007 into Oculis on July 22, 2022 prior to the execution of the Business Combination Agreement. In connection with the Oculis Share Contribution, LSP 7 will receive 233,405 New Parent Shares;

 

14.

an affiliate of the Sponsor has also entered into a Subscription Agreement in connection with the PIPE Financing, pursuant to which such affiliate has agreed to subscribe for and purchase, and EBAC has agreed to issue from treasury to such affiliate, a certain number of EBAC Class A Common Stock at a price of $10.00 per share for an aggregate purchase price of $37.896 million. Certain of EBAC’s directors also hold a personal financial interest in such affiliate;

 

15.

the Sponsor and EBAC’s officers and directors will lose their entire investment in EBAC and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated within the Combination Period. If the Business Combination is consummated within the Combination Period, pursuant to the Business Combination Agreement, the reimbursement of out-of-pocket expenses incurred by the Sponsor and its affiliates and EBAC’s officers and directors in connection with activities on EBAC’s behalf. The aggregate value of all out-of-pocket expenses for which the Sponsor and EBAC’s officers and directors are entitled to reimbursement as of January 26, 2023, the record date for the Extraordinary General Meeting, is approximately $8,481;

 

16.

if the Trust Account is liquidated, including in the event EBAC is unable to complete an initial business combination within the Combination Period, the Sponsor has agreed to indemnify EBAC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which EBAC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to EBAC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account; and

 

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17.

in connection with the consummation of the transactions contemplated hereby, each of the Founder Shares held by the Sponsor and by certain other directors of EBAC will ultimately be exchanged and converted into a number of New Parent Shares on a one-to-one basis.

These interests may influence EBAC’s directors in making their recommendation that EBAC Shareholders vote in favor of the approval of the Business Combination. Please see the section entitled “Proposal No. 1— The Business Combination Proposal— Interests of Certain Persons in the Business Combination” for additional information.

Redemption Rights

Pursuant to EBAC’s amended and restated memorandum and articles of association, holders of EBAC public shares may elect to have their shares redeemed for the right to receive an amount in cash at the applicable redemption price per share calculated in accordance with EBAC’s amended and restated memorandum and articles of association. As of September 30, 2022, this would have amounted to approximately $10.00 per share. If a holder of EBAC public shares exercises its redemption rights, then such holder will, subject to the Acquisition Closing being completed, be exchanging its EBAC Class A Common Stock for the right to receive an amount in cash and will not own shares of New Parent following the closing of the transactions contemplated by the Business Combination Agreement, including the Business Combination. Such a holder will be entitled to receive the right for an amount in cash for its public shares subject to the Acquisition Closing being completed and only if it properly demands redemption and delivers its shares (either physically or electronically) to the Transfer Agent in accordance with the procedures described herein. The EBAC Share Redemption Amount will be distributed, subject to all conditions to the Acquisition Closing being met, by New Parent. The redemption rights include the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his, her, it or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the outstanding EBAC Class A Common Stock. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public shareholder or group will not be redeemed for cash. The EBAC Initial Shareholders and certain other officers and directors of EBAC have agreed, for no consideration in return, to waive their redemption rights with respect to any Founder Shares and other EBAC Common Stock they may hold in connection with the consummation of the Business Combination, and the Founder Shares and such other EBAC Common Stock will be excluded from the pro rata calculation used to determine the per-share redemption price.

EBAC has no specified maximum redemption threshold under its amended and restated memorandum and articles of association, other than the aforementioned 15% threshold. Each redemption of EBAC Class A Common Stock by EBAC’s public shareholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $128.3 million as of September 30, 2022. The conditions to the Acquisition Closing are for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of EBAC Class A Common Stock by EBAC’s public shareholders, the Minimum EBAC Cash Condition is not met or is not waived by the parties to the Business Combination Agreement, then either of the parties thereto may elect not to consummate the Business Combination. In addition, in no event will EBAC redeem its EBAC Class A Common Stock in an amount that would cause its net tangible assets to be less than $5,000,001, as provided in EBAC’s amended and restated memorandum and articles of association. Under these circumstances, EBAC Shareholders may exercise their redemption rights with respect to a maximum of 10,363,709 shares of redeemable EBAC Class A Common Stock upon consummation of the Business Combination at a redemption price of approximately $10.052 per share. The estimated per share redemption value of $10.052 was calculated by dividing the Trust Account balance of approximately $128.3 million as of September 30, 2022, by 12,754,784 EBAC Class A Common Stock outstanding and subject to redemption. Please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information—Redemption

 

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Scenarios.” EBAC Shareholders who wish to redeem their public shares for cash must refer to and follow the procedures set forth in the section entitled “Extraordinary General Meeting of EBAC—Redemption Rights” in order to properly redeem their public shares.

Holders of EBAC Public Warrants will not have redemption rights with respect to such warrants.

Material United States Federal Income Tax Considerations of the Business Combination

For a description of certain material U.S. federal income tax consequences of (i) the Business Combination generally applicable to U.S. Holders of EBAC Common Stock and EBAC Warrants, (ii) the exercise of redemption rights by U.S. Holders of EBAC Class A Common Stock and (iii) the subsequent ownership and disposition of New Parent Shares and New Parent Warrants following the Business Combination, please see the section entitled “Material Tax Considerations—United States Federal Income Tax Considerations to U.S. Holders.”

Material Swiss Tax and certain Dutch Withholding Tax Considerations of the Business Combination

For a description of certain material Swiss tax and certain Dutch withholding tax consequences of the ownership and disposition of New Parent Shares and/or New Parent Warrants, please see the sections entitled “Material Tax Considerations—Material Swiss Tax Considerations” and “Material Tax Considerations—Dutch Withholding Tax.”

Anticipated Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a capital reorganization. Under this method of accounting, EBAC will be treated as the acquired company for financial reporting purposes, whereas Oculis will be treated as the accounting acquiror. In accordance with this accounting method, the Business Combination will be treated as the equivalent of Oculis issuing stock for the net assets of EBAC, accompanied by a recapitalization. The net assets of Oculis will be stated at historical cost, with no goodwill or other intangible assets recorded, and operations prior to the Business Combination will be those of Oculis. Oculis has been determined to be the accounting acquiror for purposes of the Business Combination based on an evaluation of the following facts and circumstances:

 

   

After the Acquisition Closing, persons affiliated with Oculis are expected to control a majority of the New Parent Board;

 

   

Oculis Shareholders have the largest voting interest under both redemption scenarios;

 

   

Oculis is the largest entity based on the entity’s operations and number of employees;

 

   

Oculis’ operations prior to the Business Combination will comprise the ongoing operations of New Parent; and

 

   

Oculis’ existing executive officers and senior management team will comprise the executive officers and senior management team of New Parent.

The Business Combination, which is not within the scope of IFRS 3 since EBAC does not meet the definition of a business in accordance with IFRS 3, is accounted for within the scope of IFRS 2. Any excess of fair value of New Parent Shares issued over the fair value of EBAC’s identifiable net assets acquired represents compensation for the service of a stock exchange listing for its shares and is expensed as incurred.

Regulatory Matters

The Business Combination and the transactions contemplated by the Business Combination Agreement are not subject to any regulatory requirement or approval, except for (i) filings with the Cayman Registrar of Companies,

 

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the Commercial Register of the Canton of Zug, Switzerland and the Commercial Register of the Canton of Vaud, Switzerland to effect the Mergers and New Parent Share Capital Increase and (ii) filings required with the SEC pursuant to the reporting requirements applicable to EBAC, and the requirements of the Securities Act and the Exchange Act, including the requirement to file the registration statement of which this proxy statement/prospectus forms a part and to disseminate this proxy statement/prospectus to EBAC Shareholders. EBAC must comply with applicable United States federal and state securities laws in connection with the PIPE Financing, and with the Nasdaq continued listing requirements.

Appraisal Rights

None of the holders of EBAC Warrants have appraisal rights in connection with the Business Combination under the Companies Act. EBAC Shareholders may be entitled to give notice to EBAC prior to the meeting that they wish to dissent to the Business Combination and to receive payment of fair market value for his, her or its EBAC Common Stock if they follow the procedures set forth in the Cayman Companies Act, noting that any such dissention rights may be limited pursuant to Section 239 of the Cayman Companies Act, which states that no such dissention rights shall be available in respect of shares of any class for which an open market exists on a recognized stock exchange at the expiry date of the period allowed for written notice of an election to dissent provided that the merger consideration constitutes inter alia shares of any company which at the effective date of the merger are listed on a national securities exchange. It is the view of the EBAC Board that such fair market value would equal the amount which EBAC Shareholders would obtain if they exercise their redemption rights as described herein. For more information, please see the section entitled “Proposal No. 1The Business Combination ProposalAppraisal Rights.”

Appraisal rights are not available to Oculis Shareholders in connection with the Business Combination.

Proxy Solicitation

Proxies may be solicited by mail, via telephone or via email or other electronic correspondence. EBAC has engaged D.F. King to assist in the solicitation of proxies.

If an EBAC shareholder grants a proxy, such shareholder may still vote its shares in person if it revokes its proxy before the Extraordinary General Meeting. An EBAC shareholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Extraordinary General Meeting of EBAC—Revoking Your Proxy.”

Summary of Risk Factors

In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the Annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” The occurrence of one or more of the events or circumstances described in the section entitled “Risk Factors,” alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of EBAC and Oculis to complete the Business Combination, (ii) the business, financial condition and operating results of Oculis prior to the Acquisition Closing and (iii) the business, financial condition and operating results of New Parent following the Acquisition Closing. The risks of Oculis listed below will apply to New Parent after the Acquisition Closing. Some of the more significant challenges and risks related to Oculis, EBAC, the Business Combination and the New Parent Shares are summarized below:

 

   

Oculis has a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate its current business and predict its future success and viability.

 

   

Oculis has incurred significant net losses in each period since its inception and anticipates that it will continue to incur significant and increasing net losses for the foreseeable future.

 

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Drug development is a highly uncertain undertaking and involves a substantial degree of risk. Oculis has never generated any revenue from product sales and may never generate revenue or be profitable.

 

   

If Oculis fails to obtain additional financing, it may be unable to complete the development and, if approved, commercialization of its product candidates.

 

   

Oculis has identified material weaknesses in its internal control over financial reporting and may identify additional material weaknesses in the future or fail to maintain effective internal control over financial reporting. If Oculis is unable to maintain an effective system of internal controls in the future, its ability to accurately or timely report its financial condition or results of operations may be adversely affected, which could hurt Oculis’ business, lessen investor confidence and depress the market price of its securities.

 

   

Oculis has not yet successfully completed any Phase 3 clinical trials, received any marketing approvals or commercialized any pharmaceutical products, which may make it difficult to evaluate Oculis’ future prospects.

 

   

Oculis depends significantly on its product candidates, OCS-01, OCS-02, and OCS-05, which it is developing for treatment of multiple diseases. If Oculis is unable to complete the clinical development of any of these product candidates, if is unable to obtain marketing approvals for any of these product candidates, or if any of these product candidates are approved and Oculis fails to successfully commercialize the product candidate or experience significant delays in doing so, its business will be materially harmed.

 

   

Oculis’ product candidates may cause undesirable side effects, such as an increase in intraocular pressure caused by OCS-01, or have other unexpected properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in post-approval regulatory action. OCS-05 was placed on a clinical hold with the FDA in 2016. If Oculis is unable to establish a NOAEL, or if its studies otherwise do not satisfy the FDA’s requirements, OCS-05 may not receive clearance from the FDA to proceed with human clinical trials, may never receive regulatory approval from the FDA, and Oculis may not be able to market and commercialize OCS-05 in the United States, which could materially adversely affect its business, financial condition, results of operations and growth prospects.

 

   

The manufacture of OCS-02, a biologic, is highly complex, costly and requires substantial lead time to produce.

 

   

Even if a product candidate obtains regulatory approval, it may fail to achieve the broad degree of physician and patient adoption and use necessary for commercial success.

 

   

Even if Oculis receives marketing approval for OCS-01, OCS-02, OCS-05, or any future product candidate, Oculis may not be able to successfully commercialize its product candidates due to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could make it difficult for Oculis to sell its product candidates profitably.

 

   

Oculis faces substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than Oculis does.

 

   

Oculis relies completely on third-party contractors to supply, manufacture and distribute clinical drug supplies for its product candidates, which may include sole-source suppliers and manufacturers; Oculis intends to rely on third parties for commercial supply, manufacturing and distribution if any of its product candidates receives regulatory approval and for any future product candidates.

 

   

Oculis’ rights to develop and commercialize its technology are subject, in part, to the terms and conditions of licenses granted to Oculis by others. In particular, Oculis depends on licenses for

 

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development and commercialization rights to OCS-02 and OCS-05. If these rights are terminated or Oculis fails to comply with its obligations under these agreements or any other license, collaboration or other agreement, Oculis may be required to pay damages and it could lose intellectual property rights that are necessary for the development and protection of its product candidates.

 

   

If Oculis is unable to obtain, maintain, protect and enforce patent or other intellectual property protection for its current and future technology and products, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, Oculis may not be able to compete effectively in its markets.

 

   

The regulatory approval processes of the FDA and non-U.S. regulatory authorities are highly complex, lengthy, and inherently unpredictable. If Oculis is unable to obtain regulatory approval for its product candidates, or to do so in a timely manner, Oculis will be unable to generate product revenue and its business will be substantially harmed.

 

   

If the FDA does not conclude that OCS-01 satisfies the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements under Section 505(b)(2) are not as Oculis expects, the approval pathway for OCS-01 will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

 

   

New Parent is a Swiss stock corporation. The rights of its shareholders may be different from the rights of shareholders in companies governed by the laws of U.S. jurisdictions.

 

   

U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against New Parent or its executive officers or members of the New Parent Board.

 

   

Since the Sponsor and EBAC’s directors and executive officers have interests that are different from, or in addition to (and which may conflict with), the interests of EBAC Shareholders, a conflict of interest may have existed in determining whether the Business Combination with Oculis is appropriate as EBAC’s initial business combination.

 

   

There is no assurance that the due diligence undertaken in relation to the Business Combination would uncover all material issues in relation to the business or financial condition of Oculis.

 

   

EBAC has not obtained a fairness opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the Business Combination is fair to its shareholders from a financial point of view.

 

   

There is no guarantee that a public shareholder’s decision whether to redeem is shares for a pro rata portion of the Trust Account will put the public shareholder in a better future economic position

 

   

If EBAC is not able to complete the Business Combination with Oculis within the Combination Period, EBAC would cease all operations except for the purpose of winding up and EBAC would redeem its EBAC Class A Common Stock and liquidate the Trust Account, in which case EBAC’s public shareholders may only receive approximately $10.00 per share and EBAC Public Warrants will expire worthless.

Sources and Uses of Funds for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination. All of the sources and uses below are for illustrative purposes only. Where actual amounts are not known or knowable, the figures below represent EBAC’s good faith estimate of such amounts. The maximum redemption scenario represents the maximum amount of shares of EBAC Class A Common Stock that can be redeemed such that the Minimum EBAC Cash Condition can still be satisfied.

 

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No Redemption Scenario(1)

 

Sources    (in millions)  

Existing cash held in Trust Account(2)

   $ 128  

PIPE Financing(3)(5)

     91  

Rollover equity(4)(5)

     203  

Total Sources

   $ 422  

Uses

  

Rollover equity(4)(5)

   $ 203  

Cash to Balance Sheet

     204  

Estimated Transaction Expenses(6)

     15  

Total Uses

   $ 422  

 

(1)

Totals might be affected by rounding.

(2)

Assumes that none of EBAC’s outstanding public shares are redeemed in connection with the Business Combination. Excludes interest earned in the Trust Account. The actual amount of cash in the Trust Account is subject to change depending on actual interest earned. Approximately $7.4 million in Non-Redemption Agreements has been committed from existing EBAC investors as of the announcement of the Business Combination.

(3)

Approximately $19.7 million of the PIPE Financing is in the form of convertible loan agreements at zero percent interest and convertible at the Acquisition Closing.

(4)

Based on Company Equity Value under the terms of the Business Combination Agreement, with a pro-forma number of approximately 20.3 million New Parent Shares to be issued to Oculis Shareholders as rollover equity.

(5)

New Parent Shares issued to Oculis Shareholders and PIPE Investors are at a deemed value of $10.00 per share.

(6)

Represents an estimate of transaction expenses. Actual amounts may vary and may include expenses unknown at this time.

Maximum Redemption Scenario(1)

 

Sources    (in millions)  

Existing cash held in Trust Account(2)

   $ 24  

PIPE Financing(3)(5)

     91  

Rollover equity(4)(5)

     203  

Total Sources

   $ 318  

Uses

  

Rollover equity(4)(5)

   $  203  

Cash to Balance Sheet

     100  

Estimated Transaction Expenses(6)

     15  

Total Uses

   $ 318  

 

(1)

Totals might be affected by rounding.

(2)

Assumes that EBAC’s public shareholders exercise redemption rights with respect to 10,363,709 of EBAC’s public shares, which represents redemptions of approximately 81% of EBAC’s public shares and which is the maximum number of redemptions which may occur such that the Minimum EBAC Cash Condition would still be satisfied at a redemption price of approximately $10.052 per share and excluding EBAC public shares subject to Non-Redemption Agreements.

 

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(3)

Approximately $19.7 million of the PIPE Financing is in the form of convertible loan agreements at zero percent interest and convertible at the Acquisition Closing.

(4)

Based on Company Equity Value under the terms of the Business Combination Agreement, with a pro-forma number of approximately 20.3 million New Parent Shares to be issued to Oculis Shareholders as rollover equity.

(5)

New Parent Shares issued to Oculis Shareholders and PIPE Investors are at a deemed value of $10.00 per share.

(6)

Represents an estimate of transaction expenses. Actual amounts may vary and may include expenses unknown at this time.

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined financial data is derived from and should be read in conjunction with the unaudited pro forma condensed combined statement of financial position and unaudited pro forma condensed combined statements of operations included elsewhere in this proxy statement/prospectus and is provided to aid you in your analysis of the financial aspects of the Business Combination, the consummation of the PIPE Financing and Convertible Loan Agreements, which are collectively referred to as the “Pro Forma Transactions.”

The unaudited pro forma condensed combined financial statements are based on the EBAC historical financial statements and the Oculis historical consolidated financial statements as adjusted to give effect to the Pro Forma Transactions. The unaudited pro forma condensed combined statement of financial position gives pro forma effect to the Pro Forma Transactions as if they had been consummated on September 30, 2022. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2022 and the year ended December 31, 2021 gives effect to the Pro Forma Transactions as if they had occurred on January 1, 2021.

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X. The adjustments presented in the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for an understanding of New Parent reflecting the Pro Forma Transactions.

The unaudited pro forma condensed combined financial statements have been derived from and should be read in conjunction with:

 

   

the historical unaudited condensed financial statements of EBAC as of September 30, 2022, for the three and nine months ended September 30, 2022, and for the period from January 8, 2021 (inception) through September 30, 2021 included elsewhere in this proxy statement/prospectus;

 

   

the historical audited financial statements of EBAC as of December 31, 2021 and for the period from January 8, 2021 (inception) through December 31, 2021 included elsewhere in this proxy statement/prospectus;

 

   

the historical unaudited condensed interim consolidated financial statements of Oculis as of September 30, 2022 and December 31, 2021 and for each of the three- and nine-month periods ended September 30, 2022 and 2021 included elsewhere in this proxy statement/prospectus;

 

   

the historical audited consolidated financial statements of Oculis as of and for the years ended December 31, 2021 and 2020 included elsewhere in this proxy statement/prospectus; and

 

   

the sections entitled “EBAC Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Oculis Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other financial information relating to EBAC and Oculis included elsewhere in this proxy statement/prospectus.

The historical consolidated financial statements of Oculis have been prepared in accordance with IFRS as issued by the IASB and in its presentation currency of CHF. The historical financial statements of EBAC have been prepared in accordance with US GAAP in its presentation currency of US dollars. The historical financial information of EBAC has been adjusted to give effect to the differences between US GAAP and IFRS for the purposes of the combined pro forma financial information, which included the only adjustment to reclassify the carrying value of EBAC’s Class A Common Stock subject to possible redemption to non-current liabilities under

 

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IFRS. The adjustments presented in the pro forma combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of New Parent after giving effect to the Pro Forma Transactions. The historical financial statements of EBAC have been translated into CHF for the purposes of presentation in the unaudited pro forma condensed combined financial statements (As Converted) using the following exchange rates:

 

   

at the period end exchange rate as of September 30, 2022 of $1.00 to CHF 0.98054 for the unaudited pro forma condensed combined statement of financial position;

 

   

the average exchange rate for the period from January 1, 2022 through September 30, 2022 of $1.00 to CHF 0.95162 for the unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2022; and

 

   

the average exchange rate for the period from January 8, 2021 through December 31, 2021 of $1.00 to CHF 0.91416 for the unaudited pro forma condensed combined pro forma statement of operations for the period from January 8, 2021 through December 31, 2021.

The selected unaudited pro forma condensed combined financial data below presents two redemption scenarios as follows:

 

   

Assuming No Redemptions (Scenario 1): This presentation assumes that no EBAC public shareholders exercise their right to redeem their shares of EBAC Class A Common Stock for their pro rata share of the Trust Account, and thus, the full amount held in the Trust Account as of the Acquisition Closing is available for the Pro Forma Transactions. This redemption scenario also reflects the Sponsor’s forfeiture of 727,096 shares of EBAC Class B Common Stock pursuant to the terms of the Business Combination Agreement and 74,078 shares of EBAC Class B Common Stock transferred to EBAC public shareholders in connection with executing a Non-Redemption Agreement. Up to an additional 1,594,348 shares of EBAC Class B Common Stock are subject to forfeiture if the Sponsor fails to ensure $25.5 million in combined cash through (i) additional PIPE Investment Amount from specified investors and (ii) the amount of cash available in the Trust Account following the Extraordinary General Meeting (after deducting the EBAC Share Redemption Amount) but before payment of any transaction expenses of Oculis or EBAC as described elsewhere in the accompanying proxy statement/prospectus. As of January 27, 2023, none of these additional shares would be forfeited in the no redemption scenario; and

 

   

Assuming Maximum Redemptions (Scenario 2): This presentation assumes that 10,363,709 shares of EBAC Class A Common Stock are redeemed at a per share redemption price of CHF 9.86 or $10.052, which represents the maximum amount of redemptions of CHF 102.1 million or $104.2 million that would allow consummation of the Pro Forma Transactions that would still satisfy the Minimum EBAC Cash Condition in the Business Combination Agreement of CHF 98.1 million or $100.0 million available for use as primary capital net of any redemptions by the EBAC public shareholders and payment of any transaction expenses. The maximum redemption scenario includes all adjustments contained in the no redemption scenario and presents additional adjustments to reflect the effect of maximum redemptions. This redemption scenario also reflects the Sponsor’s forfeiture of 727,096 shares of EBAC Class B Common Stock pursuant to the terms of the Business Combination Agreement and 74,078 shares of EBAC Class B Common Stock transferred to EBAC public shareholders in connection with executing Non-Redemption Agreements. Up to an additional 1,594,348 shares of EBAC Class B Common Stock are subject to forfeiture if the Sponsor fails to obtain an additional $25.5 million in combined cash through (i) additional PIPE Investment Amount from specified investors and (ii) the amount of cash available in the Trust Account following the Extraordinary General Meeting (after deducting the EBAC Share Redemption Amount) but before payment of any transaction expenses of Oculis or EBAC. 80,969 of these additional shares would be forfeited in the maximum redemption scenario as of January 27, 2023 as described elsewhere in the

 

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accompanying proxy statement/prospectus. As of January 27, 2023, 740,789 shares of EBAC Class A Common Stock held by the EBAC public shareholders are subject to non-redemption agreements contingent upon the Acquisition Closing.

The unaudited pro forma condensed combined financial information is for illustrative purposes only and is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of New Parent. The actual level of redemptions by EBAC’s public shareholders is unknowable prior to the shareholder vote with respect to the Business Combination.

The following table sets out summary data derived from the unaudited pro forma condensed combined statements of financial position as of September 30, 2022 and the unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2022 and year ended December 31, 2021 under the two redemption scenarios.

 

     Unaudited Pro Forma     Unaudited Pro Forma  
     Nine Months Ended
September 30, 2022
    Year Ended
December 31, 2021
 
     Scenario 1
(Assuming No
Redemptions)
    Scenario 2
(Assuming
Maximum
Redemptions)
    Scenario 1
(Assuming No
Redemptions)
    Scenario 2
(Assuming
Maximum
Redemptions)
 
     (in CHF thousands)     (in CHF thousands)  

Combined Statements of Operations Data:

        

Operating income

     698       698       960       960  

Operating loss

     (22,663     (22,663     (47,048     (52,277

Net loss before tax

     (19,577     (19,577     (45,729     (50,958

Net loss

     (19,646     (19,646     (45,756     (50,985

Basic and diluted net loss per share, Class A common stock

     (0.44     (0.57     (1.02     (1.47

 

     Unaudited Pro Forma  
     As of
September 30, 2022
 
     Scenario 1
(Assuming No
Redemptions)
     Scenario 2
(Assuming
Maximum
Redemptions)
 
     (in CHF thousands)  

Combined Statements of Financial Position:

     

Total assets

     238,670        136,521  

Total liabilities

     8,806        8,806  

Total equity

     229,864        127,715  

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

our ability to consummate the Business Combination;

 

   

the benefits of the Business Combination;

 

   

New Parent’s financial performance following the Business Combination;

 

   

the ability to obtain or maintain the listing of New Parent Shares or New Parent Warrants on the Nasdaq Global Market, following the Business Combination;

 

   

timing and expected outcomes of clinical trials, preclinical studies, regulatory submissions and approvals, as well as commercial outcomes;

 

   

expected benefits of Oculis’ business and scientific approach and technology;

 

   

the potential safety and efficacy of Oculis’ product candidates;

 

   

Oculis’ ability to successfully develop, advance and commercialize its pipeline of product candidates;

 

   

the effectiveness and profitability of Oculis’ collaborations and partnerships, is ability to maintain current collaborations and partnerships and enter into new collaborations and partnerships;

 

   

expectations related to future milestone and royalty payments and other economic terms under Oculis’ collaborations and partnerships;

 

   

estimates regarding future revenue, expenses, capital requirements and need for additional financing;

 

   

estimates of market opportunity for Oculis’ product candidates;

 

   

the effects of increased competition as well as innovations by new and existing competitors in our industry;

 

   

Oculis’ strategic advantages and the impact those advantages may have on future financial and operational results;

 

   

Oculis’ expansion plans and opportunities;

 

   

Oculis’ ability to grow its business in a cost-effective manner;

 

   

Oculis’ expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

 

   

the impact of the COVID-19 pandemic, macroeconomic factors and other global events, such as the Russia-Ukraine conflict, on Oculis’ business;

 

   

changes in applicable laws or regulations;

 

   

the outcome of any known and unknown litigation and regulatory proceedings; and

 

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other risks and uncertainties, including those listed in this proxy statement/prospectus in the section entitled “Risk Factors.”

By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and are based on potentially inaccurate assumptions. Forward-looking statements are not guarantees of future performance. The risks outlined above and others described in the section entitled “Risk Factors” are not exhaustive. Other sections of this proxy statement/prospectus describe additional factors that could adversely affect the results of operations, financial condition, liquidity and the development of EBAC, Oculis and New Parent, the industry Oculis operates in and risks relating to the Business Combination. New risks can emerge from time to time, and it is not possible to predict all such risks, nor can it be assessed the impact of all such risks on Oculis’ business or to the extent which any such risks or combinations of risks and other factors may cause actual results to differ materially from those contained in any forward-looking statements. Given these results and uncertainties, you should not rely on forward-looking statements as a prediction of actual results.

Accordingly, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus. Neither EBAC, Oculis nor New Parent undertakes any obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks described in the reports filed by EBAC (prior to the Acquisition Closing) or New Parent (after the Acquisition Closing) from time to time with the SEC after the date of this proxy statement/prospectus.

 

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RISK FACTORS

In addition to the other information contained in (or incorporated by reference into) this proxy statement/prospectus, including the matters addressed under the heading “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, reputation, revenue, financial condition, results of operations and future prospects of Oculis (which will be the business of New Parent after the Acquisition Closing), in which event the market price of the New Parent Shares could decline, and you could lose part or all of your investment. Unless otherwise indicated, reference in this section and elsewhere in this proxy statement/prospectus to the Oculis business being adversely affected, negatively impacted or harmed will include an adverse effect on, or a negative impact or harm to, the business, reputation, financial condition, results of operations, revenue and future prospects of New Parent, and references to “we”, “our” or “us” refer to Oculis or New Parent, as the case may be.

Risks related to our business, financial condition, capital requirements, or financial operations

We have a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability.

We are a clinical stage biopharmaceutical company specializing in novel therapeutics to treat ophthalmic diseases. We commenced operations in December 2017, have no products approved for commercial sale and have not generated any revenue from product sales. Drug development is a highly uncertain undertaking and involves a substantial degree of risk. To date, we have not completed a pivotal clinical trial, obtained marketing approval for any product candidates, manufactured a commercial scale product, or conducted sales and marketing activities necessary for successful product commercialization.

Our limited operating history as a company and early stage of drug development make any assessment of our future success and viability subject to significant uncertainty. We will encounter risks and difficulties frequently experienced by clinical-stage biopharmaceutical companies in rapidly evolving fields, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties. If we do not address these risks and difficulties successfully, our business, financial condition, results of operations and growth prospects may be impaired.

We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur significant and increasing net losses for the foreseeable future.

We have incurred net losses in each reporting period since our inception, including net losses of CHF 29.5 million and CHF 13.0 million for the nine months ended September 30, 2022 and 2021, respectively, and CHF 18.6 million and CHF 14.9 million for the fiscal years ended December 31, 2021 and 2020, respectively. As of September 30, 2022, we had an accumulated deficit of CHF 101.8 million.

We have invested significant financial resources in research and development activities, including for our product candidates. We do not expect to generate revenue from product sales in the foreseeable future, if at all. The amount of our future net losses will depend, in part, on the level of our future expenditures and our ability to generate revenue. Moreover, our net losses may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance quarter to quarter or year to year due to factors including the timing of clinical trials, any litigation that we may file or that may be filed against us, the execution of collaboration, licensing or other agreements and the timing of any payments we make or receive thereunder.

We expect to continue to incur significant and increasingly higher expenses and operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we:

 

   

progress our current and any future product candidates through preclinical and clinical development;

 

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work with our contract manufacturers to scale up the manufacturing processes for our product candidates, if approved, or, in the future, establish and operate a manufacturing facility;

 

   

continue our research and discovery activities;

 

   

initiate and conduct additional preclinical, clinical or other studies for our product candidates;

 

   

change or add contract manufacturers or suppliers;

 

   

seek regulatory approvals and marketing authorizations for our product candidates;

 

   

establish sales, marketing and distribution infrastructure to commercialize any products for which we obtain approval;

 

   

acquire or in-license product candidates, intellectual property and technologies;

 

   

make milestone, royalty or other payments due under any current or future collaboration or license agreements;

 

   

obtain, maintain, expand, protect and enforce our intellectual property portfolio;

 

   

attract, hire and retain qualified personnel;

 

   

experience any delays or encounter other issues related to our operations;

 

   

incur costs associated with becoming a public company if the Business Combination is consummated;

 

   

meet the requirements and demands of being a public company; and

 

   

defend against any product liability claims or other lawsuits related to our products.

Our prior losses and expected future losses have had and will continue to have an adverse effect on our shareholders’ deficit and working capital. In any particular quarter or quarters, our operating results could be below the expectations of securities analysts or investors, which could cause the share price of New Parent Shares to decline.

As of September 30, 2022, we had cash and cash equivalents of CHF 28.5 million. We believe that these cash and cash equivalents will be sufficient to enable us to fund our current operations for at least the next twelve months period.

Drug development is a highly uncertain undertaking and involves a substantial degree of risk. We have never generated any revenue from product sales, and we may never generate revenue or be profitable.

We have no products approved for commercial sale and have not generated any revenue from product sales. We do not anticipate generating any revenue from product sales until after we have successfully completed clinical development and received regulatory approval for the commercial sale of a product candidate, if ever.

Our ability to generate revenue, alone or with strategic collaboration, and achieve profitability depends significantly on many factors, including:

 

   

successfully completing research, preclinical and clinical development of our product candidates;

 

   

obtaining regulatory approvals and marketing authorizations for product candidates for which we successfully complete clinical development and clinical trials;

 

   

developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and any commercial demand for our product candidates;

 

   

identifying, assessing, acquiring and/or developing new product candidates;

 

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negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

 

   

launching and successfully commercializing product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure;

 

   

obtaining and maintaining an adequate price for our product candidates, both in the United States and in other countries where our products are commercialized;

 

   

obtaining adequate reimbursement for our product candidates from third-party payors;

 

   

obtaining market acceptance of our product candidates as viable treatment options;

 

   

addressing any competing technological and market developments;

 

   

maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

 

   

attracting, hiring and retaining qualified personnel.

Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the timing or amount of our expenses, or when we will be able to generate any meaningful revenue or achieve or maintain profitability, if ever. In addition, our expenses could increase beyond our current expectations if we are required by the FDA or non-U.S. regulatory agencies to perform studies in addition to those that we currently anticipate, or if there are any delays in any of our or our future collaborators’ clinical trials or the development of any of our product candidates. Even if one or more of our product candidates is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product candidate and ongoing compliance efforts.

Even if we are able to generate revenue from the sale of any approved products, we may not become profitable, and we will need to obtain additional funding through one or more debt or equity financings in order to continue operations. Revenue from the sale of any product candidate for which regulatory approval is obtained will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to get reimbursement at any price and whether we own the commercial rights for that territory. If the number of addressable patients is not as significant as we anticipate, the indication approved by regulatory authorities is narrower than we expect, or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

Our failure to become and remain profitable could decrease the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of product candidates or continue our operations and cause a decline in the value of the New Parent Shares, all or any of which may adversely affect our viability.

Our operating and financial results are subject to concentration risk.

Our operational and financial results are subject to concentration risk. Our success will depend significantly on the development of OCS-01, OCS-02 and OCS-05, their regulatory approval in a limited number of jurisdictions and their commercialization by a limited number of commercial partners. Even if we are successful in developing and commercializing all of these products, our revenue will be dependent on a limited number of products that would account for a significant majority of our revenues. This concentration risk would increase to the extent we are successful in developing and commercializing fewer products as we would be dependent on a lower number of products for the significant majority of our revenues. Unfavorable changes or the non-occurrence of certain anticipated events with respect to any of these limited number of products, jurisdictions or commercial partners may disproportionally affect our global results.

 

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If we fail to obtain additional financing, we may be unable to complete the development and, if approved, commercialization of our product candidates.

Our operations have required substantial amounts of cash since inception. To date, we have financed our operations primarily through the sale of equity securities. Developing our product candidates is expensive, and we expect to substantially increase our spending as we advance our product candidates in clinical trials. Even if we are successful in developing our product candidates, obtaining regulatory approvals and launching and commercializing any product candidate will require substantial additional funding beyond the net proceeds from the Business Combination.

As of September 30, 2022, we had CHF 28.5 million in cash and cash equivalents. On a pro forma basis as of September 30, 2022, assuming the consummation of the Business Combination, the PIPE Investment and Convertible Loan Agreements, we estimate that the future company would have CHF 223.1 million in cash assuming no redemptions by EBAC’s Shareholders and CHF 121.0 million in cash assuming maximum redemption by EBAC’s Shareholders such that the Minimum EBAC Cash Condition would still be satisfied. Although we believe that our existing cash and cash equivalents will be sufficient to fund our projected operations through at least the next 12 months, our estimate as to how long we expect our existing cash and cash equivalents to be available to fund our operations is based on assumptions that may prove inaccurate, and we could use our available capital resources sooner than we currently expect. In addition, changing circumstances may cause us to increase our spending significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may need to raise additional funds sooner than we anticipate if we choose to expand more rapidly than we presently anticipate.

We will require additional capital for the further development and, if approved, commercialization of our product candidates. Additional capital may not be available when we need it, on terms acceptable to us or at all. We have no committed source of additional capital. If adequate capital is not available to us on a timely basis, we may be required to significantly delay, scale back or discontinue our research and development programs or the commercialization of any product candidates, if approved, or be unable to continue or expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations and cause the price of the New Parent Shares to decline.

Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the research and development, clinical and business development expertise of our chief executive officer as well as other principal members of our management, scientific and clinical team. Although we have entered into employment agreements with our executive officers, each of them may terminate their employment with us at any time.

Laws and regulations on executive compensation, including legislation in our home country, Switzerland, may restrict our ability to attract, motivate and retain the required level of qualified personnel. In Switzerland, legislation affecting public companies is in force that, among other things, (i) imposes an annual binding shareholders’ “say on pay” vote with respect to the compensation of our executive committee and board of directors, (ii) generally prohibits severance, advances, transaction premiums and similar payments to members of our executive committee and board of directors, and (iii) requires companies to specify certain compensation-related matters in their articles of association, thus requiring them to be approved by a shareholders’ vote.

Recruiting and retaining qualified scientific, clinical, manufacturing and sales and marketing personnel will also be critical to our success. The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and

 

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commercialize products. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

We will incur significant expenses and devote other significant resources and management time as a result of being a public company, which may negatively impact our financial performance and could cause our results of operations and financial condition to suffer.

We will incur significant legal, accounting, insurance and other expenses as a result of being a public company. The rules implemented by the SEC, and by the Nasdaq and Swiss corporate law require changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations and the move from a private to a public company will substantially increase our expenses, including our legal, accounting and information technology costs and expenses, and make some activities more time consuming and costly, and these new obligations will require attention from our executive officers and senior management and could divert their attention away from the day-to-day management of our business. We also expect these laws, rules and regulations and the move from a private to a public company to make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. Due to increased risks and exposure it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as officers. As a result of the foregoing, we expect a substantial increase in legal, accounting, insurance and certain other expenses in the future, which will negatively impact our financial performance and could cause our results of operations and financial condition to suffer. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of the New Parent Shares, fines, sanctions and other regulatory action and potentially civil litigation, which could adversely impact our business, results of operation, financial condition and the price of the New Parent Shares.

We have been and will need to continue to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations.

As of September 30, 2022, we had 32 employees. Additionally, we may rely on a number of temporary workers and contractors from time-to-time as needed. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources. Our management may need to divert a disproportionate amount of our attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. In addition, our success depends on our ability to attract and retain a talented workforce with a specialized set of skills. Our expected growth could also require significant capital expenditures and may divert financial resources from other projects, such as the development of our current and potential future product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.

 

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We have identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future or fail to maintain effective internal control over financial reporting. If we are unable to maintain an effective system of internal controls in the future, our ability to accurately or timely report our financial condition or results of operations may be adversely affected, which could hurt our business, lessen investor confidence and depress the market price of our securities.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, a company’s principal executive and principal financial officers, or persons performing similar functions, and effected by a company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

We have limited internal accounting personnel to address our internal controls and procedures. As of December 31, 2021, we had two designated finance and accounting employees and rely primarily on third-party accounting professional service firms to provide accounting, bookkeeping and administrative services. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in connection with the preparation of our consolidated financial statements for the years ended December 31, 2020 and 2021, we identified material weaknesses in our internal control over financial reporting.

The material weaknesses identified are related to (i) a lack of sufficient internal accounting personnel to support an efficient and structured financial statement close process and allow for the appropriate monitoring of financial reporting matters; and (ii) the maintenance of effective controls over information technology general controls for IT accounting and financial reporting systems. Specifically, IT systems and related operations are outsourced to third parties and therefore, we were not in a position to maintain user access controls, program change management controls, and testing and approval controls.

The identified control deficiencies did not result in a material misstatement to the Company’s financial statements. However, each of these control deficiencies could result in a misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim financial statements that would not be prevented or detected, and accordingly, we determined that these control deficiencies constitute material weaknesses.

We are presently a private company with limited accounting personnel to adequately execute our accounting processes and other supervisory resources with which to address our internal control over financial reporting. We are progressing with the activities necessary to implement the appropriate accounting policies, processes and controls required to comply with Section 404 of the Sarbanes-Oxley Act. We intend and have taken steps to remediate the material weaknesses described above through hiring additional qualified accounting and financial reporting personnel, and further enhance our accounting policies, procedures, and controls. In particular, in 2021 and 2022, we have hired additional staff for the finance and legal functions. Also, we are in the process of implementing an ERP system along with related IT general controls, which we believe will enhance our internal control over financial reporting. While we will not be able to fully remediate these material weaknesses until these steps have been completed, we have been operating effectively for a sufficient period of time.

We cannot provide assurance that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to these material weaknesses in our internal control over financial reporting nor that they will prevent or avoid potential future material weaknesses. In addition, we cannot provide assurance that all of our existing material weaknesses have been identified, or that we will not in the future identify additional material weaknesses.

 

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Delays or the failure to implement our ERP system may result in a material adverse effect on our ability to report our financial results on a timely basis and in an accurate manner.

We are in the process of implementing a global ERP system that will upgrade and standardize our information system. The ERP implementation started in 2021 and is expected to continue to occur in phases. Any delays or the failure to achieve our implementation goals may adversely impact our financial results. In addition, the failure to either complete or deliver the application on time or anticipate the necessary readiness and training needs could lead to business disruption and loss of business. Failure or abandonment of any part of the ERP system could result in a write-off of part or all of the costs that have been capitalized on the project, which could adversely affect our results of operations and financial condition.

Economic, financial, geopolitical, epidemiological, or other conditions could result in business disruptions which could seriously harm our future revenue and financial condition and increase our costs and expenses.

Concerns over inflation, geopolitical issues, the U.S. financial markets, foreign exchange rates, capital and exchange controls, unstable global credit markets and financial conditions, COVID-19 pandemic, supply chain disruptions and economic issues, have led to periods of significant economic instability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, and increased unemployment rates. Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions. If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly and more dilutive. In addition, there is a risk that one or more of our current or future service providers, manufacturers, suppliers and other partners could be negatively affected by difficult economic times, which could adversely affect our ability to attain our operating goals on schedule and on budget or meet our business and financial objectives.

Our operations, and those of our contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”), suppliers, and other third-party contractors and consultants upon which we rely, could be subject to wildfires, earthquakes, tsunamis, power shortages or outages, floods or monsoons, public health crises, such as pandemics and epidemics, political crises, such as terrorism, war (including trade wars), political instability or other conflicts, and other natural or man-made disasters or other events outside of our control that could disrupt our business. In February 2022, armed conflict escalated between Russia and Ukraine. The sanctions announced by the United States and other countries, following Russia’s invasion of Ukraine, against Russia to date include restrictions on selling or importing goods, services or technology in or from affected regions and travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia. The United States and other countries could impose wider sanctions and take other actions should the conflict further escalate. It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets, all of which could impact our business, financial condition and results of operations.

The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. For example, we rely on third-party manufacturers to produce our product candidates. Our ability to obtain supplies of our product candidates, or other necessary supplies, could be disrupted if the operations of our suppliers are affected by a man-made or natural disaster or other business interruption. Damage or extended periods of interruption to our corporate, development or research facilities due to fire, natural disaster, power loss, communications failure, unauthorized entry or other events could cause us to cease or delay the marketing or development of some or all of our product candidates. Although we maintain property damage and business interruption insurance coverage, our business, financial condition, and results of operations may be seriously harmed should the losses we suffer as a result of such property damage and/or business interruption substantially exceed our insurance coverage and we are required to make up for this shortfall.

 

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Our business, financial condition and results of operations would suffer in the event of computer system failures, security breaches or other disruptions to our information technology systems.

In the ordinary course of our business, we collect, store and transmit sensitive data, including protected health information (“PHI”), intellectual property, proprietary business information and other personal information. We rely on information technology systems, networks and services, some of which are managed, hosted or provided by third parties, to assist in conducting our business. While we have not previously experienced a security breach or computer failure resulting in destruction, theft, or other loss of this information, and we and our service providers have implemented a number of security measures designed to protect against security breaches, these measures could fail or may be insufficient, resulting in the unauthorized disclosure, modification, misuse, unavailability, destruction, or loss of confidential information or personal information we collect, store and transmit. Despite the implementation of security measures, our internal computer systems, and those of our contract research organizations, or CROs, and other third parties on which we rely, are vulnerable to attack, damage or interruption from computer viruses, unauthorized access, cyberattacks, employee theft or misuse, human error, hacking, fraud, natural disasters, fire, terrorism, war and telecommunication and electrical failures.

Cyberattacks are increasing in their frequency, sophistication and intensity. Cyberattacks could include the deployment of harmful malware, “phishing attacks”, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information. The use of cloud-based computing also creates opportunities for the unintentional dissemination or intentional destruction of confidential information stored in our or our third-party providers’ systems, portable media or storage devices. Furthermore, as a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

Significant disruptions of our information technology systems or security breaches could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information and personal information), and could result in financial, legal, business and reputational harm to us. If such disruptions were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of clinical trial data from completed, ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. Despite our efforts to ensure the security, privacy, integrity, confidentiality, availability, and authenticity of our information technology networks and systems, processing and information, we may not be able to anticipate or to implement effective preventive and remedial measures against all data security and privacy threats. We cannot guarantee that the recovery systems, security protocols, network protection mechanisms and other security measures that we or our third-party providers have integrated into our or their systems, networks and physical facilities, which are designed to protect against, detect and minimize security breaches will be adequate to prevent or detect service interruption, system failures, data loss or theft, or other material adverse consequences. No security solution, strategy, or measures can address all possible security threats or block all methods of penetrating a network or otherwise perpetrating a security incident. The risk of unauthorized circumvention of our security measures has been heightened by advances in computer and software capabilities and the increasing sophistication of hackers who employ complex techniques, including without limitation, the theft or misuse of personal and financial information, counterfeiting, “phishing” or social engineering, ransomware, extortion, publicly announcing security breaches, account takeover attacks, denial or degradation of service attacks, malware, fraudulent payment and identity theft. Furthermore, because the techniques used to sabotage, disrupt or to obtain unauthorized access to our systems, networks, or physical facilities in which data is stored or through which data is transmitted change frequently and often are not recognized until launched against a target, we or our third-party providers may be unable to implement adequate preventative measures or stop security breaches while they are occurring. We or our third-party providers may also experience security breaches that may remain undetected for an extended period. Even if identified, we or our third-party providers may be unable to adequately

 

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investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence, or we or our third-party providers may be unable to repair our or their systems in an efficient and timely manner. In addition, laws, regulations, government guidance, and industry standards and practices are rapidly evolving to combat these threats. We may face increased compliance burdens regarding such requirements from regulators and incur additional costs for oversight and monitoring of security risks relating to our own supply chain.

If we or our third-party providers were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could be material. Unauthorized access to our systems, networks, or physical facilities could result in litigation with our customers or other relevant stakeholders, which may adversely affect our business. These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business, or adversely affect our reputation.

Further, we may not have adequate insurance coverage for security incidents or breaches, including fines, judgments, settlements, penalties, costs, attorney fees and other impacts that arise out of incidents or breaches. Depending on the facts and circumstances of such an incident, the damages, penalties and costs could be significant and may not be covered by insurance or could exceed our applicable insurance coverage limits. If the impacts of a security incident or breach, or the successful assertion of one or more large claims against us, exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), it could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms, or at all, or that our insurers will not deny coverage as to all or part of any future claim or loss.

Further, the COVID-19 pandemic has resulted in a significant number of our employees and partners working remotely, which increases the risk of a data breach or issues with data and cybersecurity. To the extent that any disruption or security breach results in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our future product candidates could be delayed.

We are subject to numerous laws, regulations, standards and other requirements related to personal information, privacy and data protection. Our actual or perceived failure to comply with such laws, regulations, standards and other requirements could negatively affect our business, financial condition or results of operations.

The global data protection landscape is rapidly evolving, and we are subject to numerous federal, state and foreign laws, regulations, standards and other requirements governing the collection, use, disclosure, retention and security of personal information, such as information that we may collect in connection with clinical trials in the United States and abroad. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards or requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer, use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal or external policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations, enforcement actions, claims by third parties or damage to our reputation, any of which could have a material adverse effect on our business, results of operations and financial condition.

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processing, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. For example, in the United States, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) imposes among other things, certain standards relating to the privacy, security, transmission and breach reporting of individually identifiable health information. Entities that are found to be in violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about privacy practices, or an audit by the U.S. Department of Health and Human Services, or HHS, may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Depending on the facts and circumstances, we could be subject to penalties if we violate HIPAA.

Even when HIPAA does not apply, according to the Federal Trade Commission (the “FTC”) failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Individually identifiable health information is considered sensitive data that merits stronger safeguards.

In addition, certain state laws govern the privacy and security of health-related and other personal information in certain circumstances, some of which may be more stringent, broader in scope or offer greater individual rights with respect to protected health information than HIPAA, many of which may differ from each other, thus, complicating compliance efforts. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. For example, California enacted the California Consumer Privacy Act, (“CCPA”), which creates individual privacy rights for California consumers, including the right to opt out of certain disclosures of their information, and places increased privacy and security obligations on entities handling certain personal data of consumers or households and may apply to us in the future. The CCPA provides for civil penalties for violations and also creates a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach. Further, the California Privacy Rights Act, or CPRA, significantly amends the CCPA and will impose additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required. The CCPA and CPRA could mark the beginning of a trend toward more stringent privacy legislation in the U.S., as other states or the federal government may follow California’s lead and increase protections for U.S. residents, which creates the potential for a patchwork of overlapping but different state laws and could increase our potential liability and adversely affect our business, financial condition and results of operations. For example, the Virginia Consumer Data Protection Act, a comprehensive privacy statute that shares similarities with the CCPA, CPRA and legislation proposed in other states, will take effect on January 1, 2023. Colorado enacted a similar law, the Colorado Privacy Act, which becomes effective on July 1, 2023. Similar laws have been passed and proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could add layers of complexity to compliance in the U.S. market, increase our compliance costs and adversely affect our business, financial condition and results of operations.

Further, we are subject to international data protection laws and regulations, including the European Union General Data Protection Regulation and applicable national supplementing laws, or GDPR, which may apply to health-related and other personal information obtained outside of the United States. The GDPR imposes strict

 

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requirements for collection, control, sharing, disclosure, transfer, use and other processing of the personal data of individuals located in the European Economic Area (the “EEA”), including clinical trial data, as well as potential fines for noncompliant companies. The GDPR also imposes strict requirements relating to obtaining consent, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, taking certain measures when engaging third-party processors. Compliance with the GDPR may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our activities carried out in the context of our EEA operations.

Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the European Economic Area, or EEA, to the United States. On July 16, 2020, in a case known as Schrems II, the Court of Justice of the European Union, or CJEU, invalidated the EU-US Privacy Shield Framework under which personal data could be transferred from the EEA to U.S. entities who had self-certified under the Privacy Shield scheme. While the CJEU upheld the adequacy of the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place. Additionally, new Standard Contractual Clauses that repealed the Standard Contractual Clauses adopted under the Data Protection Directive have been adopted on June 4, 2021 by the European Commission. As supervisory authorities issue further guidance on personal data export mechanisms, including on the new Standard Contractual Clauses, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we conduct clinical trials, it could affect our business. U.S. President Joseph Biden and the President of the European Commission announced on March 25, 2022 that they had reached an agreement in principle for a Trans-Atlantic Data Privacy Framework, which would allow personal data to flow freely and safely between the EU and participating U.S. companies. To that end, U.S. President Joseph Biden signed the Executive Order on Enhancing Safeguard for United States Signals Intelligence Activities, or EO, on October 7, 2022. The EO answers to certain shortcomings identified by the EU but it does not yet allow for the free transfers of personal data to the United States. Organizations must continue to implement a valid compliance mechanism for cross-border data transfers, such as the Standard Contractual Clauses, and conduct an assessment of the U.S. laws prior to transferring personal data to the United States. As the EO introduces safeguards for U.S. intelligence services’ access to European personal information, certain supplementary measures that have been implemented and are linked to these practices could be softened and the overall risk associated to the data transfer could be lowered. It is expected that a new EU-US data transfer framework will not be ready before Spring 2023.

Relatedly, following the United Kingdom’s withdrawal from the EEA and the EU, we are required to comply with both the GDPR and, separately, the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law. The UK GDPR sets out the UK-specific requirements related to data protection, including with respect to transfer of personal data outside of the UK, which increases our regulatory compliance burden. Further, in July 2022, the UK government published a Data Reform Bill that will amend the UK GPDR. This creates uncertainty with regard to the data protection regulatory regime in the United Kingdom and could result in the introduction of data privacy laws that materially deviate from the EU GDPR. This would expose us to two parallel regimes. Further, the entry into force of the US-UK Data Access Agreement on 3 October 2022 may put at risk the European Commission’s adequacy decision granted to the UK. If such adequacy decision were to be withdrawn, personal data would not flow freely between the UK and the EU and additional safeguards would need to be adopted, which could result in additional costs for us.

 

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Any failure or perceived failure by us to comply with our legal obligations concerning privacy, data protection or information security could result in claims by data subjects, governmental investigations and enforcement action against us, including fines, enforcement orders, imprisonment of company officials and public censure, (individual and collective) claims for damages by affected individuals and damage to our reputation, any of which could have a material adverse effect on our business, financial condition, and operating results. Companies that must comply with the GDPR and UK GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, litigation (including private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests), regulatory investigations, enforcement actions that require us to change the way we use personal data, and/or prohibitions on the use of personal data. Such penalties may be in addition to any civil litigation claims by data subjects. We may not be successful in avoiding potential liability or disruption of business resulting from the failure to comply with these laws and, even if we comply with laws, we may be subject to liability because of a security incident. Further, complying with the applicable notification requirements in the event of a security breach could result in significant costs. Furthermore, future interpretations of existing data protection laws or regulations could be inconsistent with our current interpretations, increase our compliance burden, make it more difficult to comply, and/or increase our risk of regulatory investigations and fines.

EU data protection laws also require opt-in consent to send marketing emails or use cookies and similar technologies for advertising, analytics and other purposes – activities on which our marketing strategies may rely. Enforcement of these requirements has increased and a new regulation that has been proposed in the EU, known as the Privacy Regulation, may make these requirements more stringent and increase the penalties for violating them. Such restrictions could increase our exposure to regulatory enforcement action, increase our compliance costs, and adversely affect our business. The relationship between the UK and the EU in relation to certain aspects of data protection law remains unclear, and it is unclear how UK data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the UK will be regulated in the long term. These changes will lead to additional costs and increase our overall risk exposure. On June 28, 2021, the European Commission adopted an adequacy decision permitting flows of personal data between the EU and the UK to continue without additional requirements. However, the UK adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews or extends that decision and remains under review by the European Commission during this period.

Additionally, we contract with, and are accountable for, third-party service providers we engage to process personal data on our behalf, including our CROs. We cannot assure you that our service providers with access to our or our customers’, suppliers’, trial patients’ and employees’ personal information, including health data and other sensitive or confidential information, will not breach contractual obligations imposed by us, or that they will not experience data security breaches or attempts thereof. If they were to breach their contractual obligations or experience a security incident, such event could have an adverse effect on our business, including putting us in breach of our obligations under privacy laws and regulations, which could in turn adversely affect our business, financial conditions and results of operations. We cannot assure you that our contractual measures and our own privacy and security-related safeguards will protect us from the risks associated with the third-party processing, storage and transmission of such information.

The Swiss Federal Act on Data Protection, or DPA, also applies to the collection and processing of personal data by companies located in Switzerland, or in certain circumstances, by companies located outside of Switzerland. The DPA has been revised and adopted by the Swiss Parliament, and the revised version and its revised ordinances will enter into force on September 1, 2023. This revised law may lead to an increase in our costs of compliance, risk of noncompliance and penalties for noncompliance.

In addition to data privacy and security laws, we may be contractually subject to industry standards adopted by industry groups and may become subject to such obligations in the future. We may also be bound by other

 

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contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.

We may publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security. If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

Compliance with applicable United States and foreign data protection, privacy and security laws, regulations and standards could require us to take on more onerous obligations in our contracts, require us to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our ability, or our that of our partners or suppliers, to operate in certain jurisdictions. Each of these constantly evolving laws can also be subject to varying interpretations. Any failure or perceived failure to comply could result in government investigations and enforcement actions (which could include civil or criminal penalties), fines, private litigation, and/or adverse publicity, and could negatively affect our operating results and business. Moreover, patients about whom we or our partners obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

We may not realize the benefits of acquired assets or other strategic transactions.

We evaluate various strategic transactions on an ongoing basis. We may acquire other businesses, products or product candidates, intellectual property, or technologies as well as pursue joint ventures or investments in complementary businesses. The success of any future strategic transaction depends on various risks and uncertainties, including:

 

   

unanticipated liabilities related to investee companies or joint ventures;

 

   

conflicts in economic or business interests with our joint ventures or investee companies;

 

   

difficulties integrating acquired personnel, technologies, and operations into our existing business;

 

   

retention of key employees;

 

   

diversion of management’s time and focus from operating our business to management of strategic alliances or joint ventures or acquisition integration challenges;

 

   

increases in our expenses and reductions in our cash available for operations and other uses;

 

   

disruption in or termination of our relationships with collaborators or suppliers as a result of such a transaction; and

 

   

possible write-offs or impairment charges relating to investee companies or joint ventures.

Foreign acquisitions and joint ventures are subject to additional risks, including those related to regulatory or compliance issues, integration of operations across different cultures and languages, currency risks, potentially adverse tax consequences of overseas operations, and the particular economic, political, and regulatory risks associated with specific countries.

Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses or write-offs of goodwill, any of which could harm our financial condition. We could also incur losses resulting from undiscovered liabilities that are not covered by the indemnification we may obtain from the seller.

 

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If we in-license product candidates or products or acquire businesses, we may not be able to realize the benefit of those transactions if we are unable to successfully integrate them with our existing operations and company culture. We cannot be certain that, following a strategic transaction or license, we will achieve the results, revenue, or specific net income that justifies the transaction. Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses or write-offs of goodwill, any of which could harm our financial condition.

The COVID-19 pandemic, which began in late 2019, may continue to affect our ability to initiate and complete preclinical studies and clinical trials, disrupt regulatory activities, disrupt our manufacturing and supply chain or have other adverse effects on our business and operations. In addition, this pandemic has caused substantial disruption in the financial markets and may adversely impact economies worldwide, both of which could result in adverse effects on our business and operations.

The COVID-19 pandemic, which began in December 2019, caused many governments to implement measures to slow the spread of the outbreak through quarantines, travel restrictions, heightened border scrutiny and other measures. The outbreak and government measures taken in response have also had a significant impact, both directly and indirectly, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, facilities and production have been suspended, and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. The future progression of the outbreak and its effects on our business and operations are uncertain.

Our business, operations and clinical development timelines and plans had been and could in the future be adversely affected by COVID-19, and could be adversely impacted by other health epidemics in regions where we have concentrations of clinical trial sites or other business operations, and could cause significant disruption in the operations of CROs upon whom we rely. The COVID-19 pandemic has affected multiple countries worldwide, including those where we have planned and ongoing preclinical studies and clinical trials. In addition, in response to the COVID-19 pandemic, many state, local and foreign governments put in place quarantines, executive orders, shelter-in-place orders and similar government orders and restrictions in order to control the spread of the disease. Such orders or restrictions, and the perception that such orders or restrictions could continue or, after being lifted, be reinstated for a period of time, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions and cancellation of events, among other effects that could negatively impact productivity and disrupt our business and operations. While some of the orders and restrictions have been lifted, we cannot be certain that such orders and restrictions will not be reinstated in the future, particularly with the emergence of new variant strains of the COVID-19 virus. We may take further actions that alter our operations as may be required by federal, state or local authorities, or which we determine are in the best interests of our employees.

Moreover, our clinical development timelines and plans could be affected by the COVID-19 pandemic as we and the third-party manufacturers and clinical research organizations that we engage may face disruptions. Site initiation and patient enrollment could be delayed or suspended due to prioritization of hospital resources toward the COVID-19 pandemic or patients not having a desire to enroll in clinical trials due to concerns regarding COVID-19. We cannot be certain that we will not experience future delays in enrollment. In addition, some patients may not be able to comply with clinical trial protocols and the ability to conduct follow up visits with treated patients may be limited if patients do not want to participate in follow up visits due to concerns regarding COVID-19 or if quarantines impede patient movement or interrupt healthcare services. There may be shortages in the raw materials used in the manufacturing of our product candidates or laboratory supplies for our preclinical studies and clinical trials, in each case, because of ongoing efforts to address the outbreak.

We cannot assure that the inability to collect such clinical data would not have an adverse impact on our clinical trial results. Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 could be adversely impacted.

 

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We may experience disruptions that could severely impact our business, preclinical studies, and clinical trials, including:

 

   

delays in receiving approval from local regulatory authorities to initiate our planned clinical trials, including receiving any required IND or similar approval to initiate clinical trials from regulatory bodies in other jurisdictions;

 

   

delays or difficulties in enrolling and retaining patients in our clinical trials;

 

   

delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

 

   

manufacturing disruptions;

 

   

delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;

 

   

delays in the transport of clinical trial materials;

 

   

changes in local regulations as part of a response to the COVID-19 pandemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;

 

   

diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

 

   

difficulties recruiting or retaining patients for our planned clinical trials if patients are affected by the virus or are fearful of visiting or traveling to clinical trial sites because of the outbreak;

 

   

interruption of or changes in key clinical trial activities, such as clinical trial site monitoring, implementation of virtual monitoring, use of local testing labs, or home delivery of study drugs, due to limitations on travel imposed or recommended by federal or state governments, employers and others, use of new digital technologies for subject visits or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data;

 

   

risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;

 

   

delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees;

 

   

limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;

 

   

interruption or delays in the operations of the FDA or non-U.S. regulators which may impact review and approval timelines;

 

   

delays in regulatory approvals for our product candidates due to the FDA or non-U.S. regulators focusing on clinical trials related to therapies and vaccines targeting COVID-19;

 

   

refusal of the FDA or non-U.S. regulators to accept data, including from clinical trials in affected geographies or failure to comply with updated guidance and expectations of the FDA or non-U.S. regulators related to the conduct of clinical trials during the COVID-19 pandemic; and

 

   

interruption or delays to our sourced discovery and clinical activities.

The response to the COVID-19 pandemic may redirect resources with respect to regulatory matters in a way that would adversely impact our ability to pursue marketing approvals. In addition, we may face impediments to regulatory meetings and potential approvals due to measures intended to limit in-person interactions.

 

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Furthermore, third parties, including manufacturers, medical institutions, clinical investigators, CROs and consultants with whom we conduct business, are similarly adjusting their operations and assessing their capacity in light of the COVID-19 pandemic. If these third parties continue to experience shutdowns or business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted.

The extent to which the COVID-19 pandemic impacts our business, clinical trials, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration of the pandemic, its severity, the actions to contain the virus or address its impact, and how quickly and to what extent government orders and mandates are lifted and normal economic and operating activities can resume. Further, while the potential economic impact brought by and the duration of COVID-19 may be difficult to assess or predict, the COVID-19 pandemic has resulted in significant disruptions of global financial markets, which could reduce our ability to access capital, which could in the future negatively affect our liquidity. To the extent the COVID-19 pandemic adversely affects our business, clinical trials, results of operations and financial condition, it may also have the effect of heightening many of the other risks described herein.

The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

We could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because biopharmaceutical companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

Risks related to development and regulatory approval of our investigational therapies

The success of our product candidates, and our ability to generate revenue in the future, will depend upon a number of factors, many of which are beyond our control.

The success of our business, including our ability to finance and generate revenue in the future, primarily depends on the successful development, regulatory approval and commercialization of OCS-01, OCS-02, and OCS-05. The clinical and commercial success of our product candidates depend on a number of factors, including the following:

 

   

We are a clinical-stage biopharmaceutical company with no approved products. We have not yet successfully completed any Phase 3 clinical trials nor commercialized any pharmaceutical products, which may make it difficult to evaluate our future prospects.

 

   

Our innovations to the treatments of retinal diseases, dry eye and glaucoma are unproven, and we do not know whether we will be able to successfully develop these products.

 

   

Drug development is a lengthy, highly uncertain undertaking and involves a substantial degree of risk. The outcome of preclinical testing and earlier clinical trials may not be predictive of the success of later clinical trials. In addition, the regulatory approval processes of the Food and Drug Administration (“FDA”), and non-U.S. regulatory authorities are highly complex, lengthy, and inherently unpredictable, and the results of our clinical trials may not satisfy the requirements of the FDA or other regulatory authorities.

 

   

Our business depends on the successful development and commercialization of OCS-01, OCS-02, OCS-05 and our other product candidates. To the extent the pipeline products are not commercially successful, our business, financial condition, and results of operations may be adversely affected.

 

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Our products may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, and the market opportunity for these products may be smaller than we estimated.

 

   

We have no experience manufacturing any of our product candidates at a commercial scale. We, or our CMOs, may be unable to successfully scale up manufacturing of our product candidates in sufficient quality and quantity, which would delay or prevent us from developing our product candidates and commercializing approved products, if any.

 

   

The manufacturing of OCS-02, a biologic, and certain of our other product candidates are complex and highly regulated, and there are particular risks associated with manufacturing the products to commercial scale, including our reliance on third parties and the risk that we will not have sufficient quantities of our products or product candidates or such quantities at an acceptable cost, which could delay, prevent or impair the commercialization or development efforts.

 

   

If our patent position does not adequately protect our product candidates, others could compete against us more directly, which would harm our business.

 

   

If we fail to comply with our obligations under any license, collaboration or other agreements, including our license agreements with Novartis Technology LLC (“Novartis”) and Accure Therapeutics SL (“Accure”), such agreements may be terminated, we may be required to pay damages and we could lose intellectual property rights that are necessary for the development and protection of our product candidates.

 

   

We will need substantial additional funding to support our operations and pursue our growth strategy. If we are unable to raise capital when needed, or on acceptable terms, we may be forced to delay, reduce or eliminate future commercialization efforts or one or more of our research and development programs. In addition, raising additional capital may cause dilution to New Parent’s shareholders or restrict our operations.

 

   

We have a limited operating history and have incurred significant losses and negative cash flows from operations since our formation, and we anticipate that we will continue to incur losses for the foreseeable future, which may make it difficult for investors to evaluate our current business and predict our future success and viability.

 

   

Following the Business Combination, New Parent will qualify as an “emerging growth company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make New Parent Shares less attractive to investors.

 

   

We may from time to time report the results of clinical trials and some of those results may not meet our or market expectations. For instance, we expect to receive readouts from OCS-01 trials as soon as in mid-2023. Any results that we report that do not meet our or market expectations may negatively affect the trading price of New Parent Shares.

The sizes of the market opportunities for our product candidates have not been established with precision and may be smaller than we estimate, possibly materially. If our estimates of the sizes overestimate these markets, our sales growth may be adversely affected. We may also not be able to grow the markets for our product candidates as intended or at all.

Our assessment of the potential market opportunity the product candidates that we develop is based on industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties and our own internal epidemiology and market research studies. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data. Similarly, although the studies we have conducted are based on information that we believe to

 

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be complete and reliable, we cannot guarantee that such information is accurate or complete. The potential market opportunities of our product candidates are difficult to precisely estimate. Therefore, our estimates of the potential market opportunities for our product candidates include several key assumptions based on our industry knowledge, industry publications, third-party research and our own epidemiology studies and market research, which may be based on a small sample size and fail to accurately reflect market opportunities. While we believe that our internal assumptions and the bases of the studies and research we have conducted are reasonable, no independent source has verified such assumptions or bases. If any of our assumptions or estimates, or these publications, research, surveys or studies prove to be inaccurate, then the actual market for our product candidates may be smaller than we expect, and as a result our product revenue may be limited and it may be more difficult for us to achieve or maintain profitability.

Our future growth may depend, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability may depend, in part, on our ability to commercialize our product candidates in foreign markets where we lack familiarity with local regulations, environment and procedures and for which we may rely on collaboration with third parties. We are evaluating the opportunities for the development and commercialization of our product candidates in other foreign markets. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the applicable regulatory authority in that foreign market, and we may never receive such regulatory approval for any of our product candidates. To obtain separate regulatory approvals in other countries we may be required to comply with numerous and varying regulatory requirements of such countries regarding the safety and efficacy of our product candidates and governing, among other things, clinical trials and commercial sales, pricing and distribution of our product candidates, and we cannot predict success in these jurisdictions. If we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to additional risks and uncertainties, including:

 

   

our customers’ ability to obtain reimbursement for our product candidates in foreign markets;

 

   

our inability to directly control commercial activities if we are relying on third parties;

 

   

the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements;

 

   

different medical practices and customs in foreign countries affecting acceptance in the marketplace;

 

   

import or export licensing requirements;

 

   

longer accounts receivable collection times;

 

   

longer lead times for shipping;

 

   

language barriers for technical training and the need for language translations;

 

   

reduced protection of intellectual property rights in some foreign countries;

 

   

the existence of additional potentially relevant third-party intellectual property rights;

 

   

foreign currency exchange rate fluctuations;

 

   

the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute;

 

   

imposition of restrictions on currency conversion or the transfer of funds;

 

   

anti-competitive policies or anti-competitive practices which are condoned and the imposition of restrictions on investments and other measures that may be taken to protect the local industry in these foreign markets; and

 

   

actions by non-U.S. regulators, governments, companies, or other entities which prevent us from entering into or benefiting from licensing agreements or other collaborations with non-U.S. companies, universities, research institutes, or other entities.

 

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Our approach to the treatment of retinal disease with OCS-01 is unproven, and we do not know whether we will be able to successfully develop OCS-01.

OCS-01 is designed to deliver therapeutic drug levels to the retinal tissue by a topical route of administration as an eye drop formulation. There are currently no FDA-approved therapies that treat retinal diseases by a topical route of administration. Our future success partially depends on the successful development of OCS-01 which is based on this novel therapeutic approach. We have not yet demonstrated efficacy and safety for OCS-01 or any other product candidates in a pivotal trial or obtained marketing approval of any product candidate. OCS-01 may not demonstrate in patients any or all of the pharmacological benefits we believe it may possess. If we are unsuccessful in our development efforts, we may not be able to advance the development and commercialization of OCS-01.

Our potential approach to use OCS-02 for the treatment of dry eye disease in patients identified with a biomarker is unproven, and we do not know whether we will be able to successfully confirm the role of the biomarker and successfully develop OCS-02.

OCS-02 is in development for treating ophthalmic diseases including dry eye disease. One of our potential strategies for OCS-02 is also to develop it for patients identified with a biomarker to predict patients that may respond well to OCS-02 treatment. There are currently no FDA-approved therapies that treat dry eye disease in this “precision medicine” way. If we choose to utilize this biomarker strategy, then our future success partially depends on the successful development of both OCS-02 and a companion diagnostic for the biomarker and our ability to demonstrate that patients with that biomarker are likely to respond well to OCS-02 treatment. We have not yet demonstrated efficacy and safety for OCS-02 or any other product candidates in patients with or without a biomarker in a pivotal trial or obtained marketing approval of any of our product candidates. OCS-02 may not demonstrate in patients with or without the biomarker any or all of the pharmacological benefits we believe it may possess. If we are unsuccessful in our development efforts, we may not be able to advance the development and commercialization of OCS-02.

Our approach to the treatment of ophthalmic disease with OCS-05 is unproven, and we do not know whether we will be able to successfully develop OCS-05.

OCS-05 is intended to prevent or reverse nerve damage (“neuroprotection”) in ophthalmic diseases in which patients lose vision due to nerve damage. There are currently no FDA-approved therapies that treat ophthalmic diseases in this “neuroprotective” way. Our future success partially depends on the successful development of OCS-05 which is based on this novel therapeutic approach. We have not yet demonstrated efficacy and safety for OCS-05 or any other product candidates in a pivotal trial or obtained marketing approval of any product candidate. OCS-05 may not demonstrate in patients any or all of the pharmacological benefits we believe it may possess. If we are unsuccessful in our development efforts, we may not be able to advance the development and commercialization of OCS-05.

We in-licensed OCS-05 from Accure in 2022. Accure was previously unable to establish a no-observed-adverse-effect-level (“NOAEL”) for the product candidate. We have engaged Toxicodynamix International LLC to manage toxicology studies relating to OCS-05. If our studies do not satisfy the FDA’s requirements, OCS-05 may not receive clearance from the FDA to proceed with human clinical trials, may never receive clearance from the FDA to proceed with human clinical trials and may never receive regulatory approval from the FDA, and we may be unable to market and commercialize OCS-05 in the United States.

We have not yet successfully completed any Phase 3 clinical trials, received any marketing approvals or commercialized any pharmaceutical products, which may make it difficult to evaluate our future prospects.

Our operations to date have been limited to financing and staffing our company, developing our technology and conducting preclinical research as well as Phase 1 and Phase 2 clinical trials for our product candidates. We have

 

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not yet demonstrated an ability to successfully complete Phase 3 clinical trials, obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by clinical-stage biopharmaceutical companies such as ours. Any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. We will eventually need to transition from a company with a development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We depend significantly on our product candidates, OCS-01, OCS-02, and OCS-05, which we are developing for treatment of multiple diseases. If we are unable to complete the clinical development of any of these product candidates, if we are unable to obtain marketing approvals for any of these product candidates, or if any of these product candidates are approved and we fail to successfully commercialize the product candidate or experience significant delays in doing so, our business will be materially harmed.

We depend significantly on the success of our lead product candidate, OCS-01, which we are developing for the treatment of patients with diabetic macular edema, and also for the treatment of patients with pain or inflammation following ocular surgery. In addition, we also depend on the success of OCS-02, which we are developing for the treatment of dry eye disease and non-infectious anterior uveitis and on the success of OCS-05, which we are initially developing for the treatment of Acute Optic Neuropathy.

We have invested a significant portion of our efforts and financial resources in the development of OCS-01 for the treatment of patients with diabetic macular edema as well as for the treatment of patients with pain or inflammation following ocular surgery. There remains a significant risk that we will fail to successfully develop OCS-01 in one or both of these indications. The results of our Phase 2 clinical trials in each indication may not be predictive of the results of our Phase 3 clinical programs due, in part, to the fact that (i) we have no clinical data on OCS-01 therapy in diabetic macular edema in any clinical trial with treatment longer than 12 weeks, (ii) we have modified the methodology used to determine a patient’s eligibility under certain of the inclusion and exclusion criteria for our Phase 3 clinical trial as compared to our Phase 2 clinical trial, (iii) we have no clinical data from a trial of similar size to that anticipated for our Phase 3 clinical trial, and (iv) we plan to conduct our Phase 3 clinical trials at many clinical centers that were not included in our Phase 2 clinical trial. The results of our Phase 2 clinical trials for inflammation and pain following ocular surgery may not be predictive of the results of the planned Phase 3 clinical study, due, in part, to the fact that we plan to conduct our Phase 3 clinical trial at clinical centers that were not included in our Phase 2 clinical trial. Furthermore, despite consultation with regulatory authorities, no assurance can be provided that the FDA or non-U.S. regulatory authorities would consider the planned Phase 3 clinical trials to be sufficient to serve as the basis for approval in either indication, or that the Phase 2 study for inflammation and pain following ocular surgery may be considered as one of the two required adequate and well-controlled trials to support a New Drug Application (NDA) submission, with such a final determination only made by the FDA or non-U.S. regulatory authorities following review of the NDA.

We cannot accurately predict when or if any of our product candidates will prove effective or safe in humans or whether these product candidates will receive marketing approval. Our ability to generate product revenues sufficient to achieve profitability will depend heavily on our obtaining marketing approval for and commercializing OCS-01, OCS-02, or OCS-05.

The success of OCS-01, OCS-02, OCS-05 and other product candidates will depend on many factors, including:

 

   

successfully and timely completing preclinical studies and clinical trials that demonstrate to the satisfaction of the FDA, the European Medicines Agency, or EMA, or comparable non-U.S. regulatory authorities that our product candidates are safe and effective for any of their proposed indications;

 

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the scope of the label that may be approved by applicable regulatory authorities, including the specific indication for which the product may be approved;

 

   

whether we are required by the FDA or similar non-U.S. regulatory agency to conduct additional studies beyond those planned to support the approval and commercialization of OCS-01, OCS-02 and OCS-05;

 

   

acceptance of our products, if and when approved, by patients, the medical community and third-party payors, including relative to alternative and competing treatments;

 

   

effectively competing with other therapies;

 

   

maintaining a continued acceptable safety profile of our products both prior to and following any marketing approval of our product candidates;

 

   

demonstrating consistent therapeutic efficacy of our products following approval;

 

   

obtaining and maintaining coverage and adequate reimbursement from third-party payors;

 

   

applying for and receiving marketing approvals from applicable regulatory authorities for our product candidates;

 

   

achieving and maintaining, and, where applicable, ensuring that our third-party contractors achieve and maintain compliance with their contractual obligations and with all regulatory requirements applicable to our product candidates;

 

   

scaling up our manufacturing processes and capabilities to support additional or larger clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain marketing approval;

 

   

developing, validating and maintaining a commercially viable manufacturing process that is compliant with current good manufacturing practices;

 

   

developing and expanding our sales, marketing and distribution capabilities and launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others;

 

   

minimizing and managing any delay or disruption to our ongoing or planned clinical trials, and any adverse impacts to the U.S. and global market for pharmaceutical products, as a result of the ongoing COVID-19 pandemic;

 

   

obtaining and maintaining patent, trade secret and other intellectual property protection and regulatory exclusivity; and

 

   

protecting and enforcing our rights in our intellectual property portfolio.

If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business, financial condition, results of operations and growth prospects.

The results of previous clinical trials may not be predictive of future results, and the results of our current and planned clinical trials may not satisfy the requirements of the FDA or non-U.S. regulatory authorities.

The results from the prior preclinical studies and clinical trials for OCS-01, OCS-02, and OCS-05 may not necessarily be predictive of the results of future preclinical studies or clinical trials. Even if we are able to complete our planned clinical trials of our product candidates according to our current development timelines, the results from our prior clinical trials of our product candidates may not be replicated in these future trials. Many companies in the pharmaceutical and biotechnology industries (including those with greater resources and experience than us) have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development, and we cannot be certain that we will not face similar setbacks. These setbacks have

 

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been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical trials, including previously unreported adverse events. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless have failed to obtain FDA or non-U.S.-regulatory authority approval. If we fail to produce positive results in our clinical trials of any of our product candidates, the development timelines, regulatory approvals and commercialization prospects for our product candidates, as well as our business and financial prospects, would be adversely affected. Further, our product candidates may not be approved even if they achieve their respective primary endpoints in Phase 3 registration trials. The FDA or non-U.S. regulatory authorities may disagree with our trial designs or our interpretation of data from preclinical studies and clinical trials. In addition, any of these regulatory authorities may change requirements for the approval of a product candidate even after reviewing and providing comments or advice on a protocol for a pivotal clinical trial that has the potential to result in approval by the FDA or another regulatory authority. Furthermore, any of these regulatory authorities may also approve our product candidates for fewer or more limited indications than it requests or may grant approval contingent on the performance of costly post-marketing clinical trials.

Some of our clinical data results come from previous trials of less than 100 patients each, including a Phase 2a clinical trial of OCS-02 for the treatment of dry eye disease, a Phase 2a clinical trial of OCS-02 for the treatment of non-infectious anterior uveitis, and a Phase 1 dose-ranging study of OCS-05 in healthy volunteers, making it difficult to predict whether the favorable results from such trials will be repeatable in larger, more advanced clinical trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

We cannot assure you that the FDA or non-U.S. regulatory authorities would consider our completed and planned clinical trials used for an NDA submission to be sufficient to serve as the basis for approval of our product candidates for any indication. Even if the results of future Phase 3 clinical trials are positive, the FDA and non-U.S. regulatory authorities retain broad discretion in evaluating the results of our clinical trials and in determining whether the results demonstrate that our product candidates are safe and effective. If we are required to conduct clinical trials of our product candidates in addition to those we have planned prior to approval, we will need substantial additional funds, and cannot assure you that the results of any such outcomes trial or other clinical trials will be sufficient for approval.

If we experience any of a number of possible unforeseen events in connection with our clinical trials, potential marketing approval or commercialization of our product candidates could be delayed or prevented.

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize any product candidate that we may develop, including:

 

   

clinical trials of our product candidates may not produce statistically significant, conclusive, or anticipated results, and we may decide, or regulators may require us, to conduct additional clinical trials or amend product development programs, or abandon product development programs entirely;

 

   

the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate;

 

   

our contractors may fail to comply with regulatory requirements or meet their obligations to us in a timely manner, or at all;

 

   

Regulators, institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

 

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we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

 

   

we may decide, or regulators, IRBs, or ethics committees may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;

 

   

the cost of clinical trials of our product candidates may be greater than we anticipate; and

 

   

the supply or quality of our clinical trial material or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate.

If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials or other testing of our product candidates, if the results of these trials or other tests are not favorable or are only modestly favorable or if there are safety concerns, we may:

 

   

be delayed in obtaining or unable to obtain marketing approval for our product candidates;

 

   

obtain approval for indications or patient populations that are not as broad as intended or desired;

 

   

obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;

 

   

be subject to additional post-marketing testing requirements; or

 

   

have the product removed from the market after obtaining marketing approval.

Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.

We may be required, or choose, to suspend, repeat or terminate our clinical trials if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive, the trials are not well-designed, or research participants experience adverse safety outcomes.

Regulatory agencies, IRBs, or data safety monitoring boards may at any time recommend the temporary or permanent discontinuation of our clinical trials or request that we cease using investigators in the clinical trials if they believe that the clinical trials are not being conducted in accordance with applicable regulatory requirements, or that they present an unacceptable safety risk to participants. Clinical trials must be conducted in accordance with GCPs and other applicable non-U.S. regulatory authority guidelines. Clinical trials are subject to oversight by the FDA, non-U.S. regulatory authorities and IRBs at the study sites where the clinical trials are conducted. In addition, clinical trials must be conducted with product candidates produced in accordance with applicable current good manufacturing practices. Clinical trials may be placed on a full or partial clinical hold by the FDA, non-U.S. regulatory authorities, or us for various reasons, including, but not limited to: deficiencies in the conduct of the clinical trials, including failure to conduct the clinical trial in accordance with regulatory requirements or clinical protocols; deficiencies in the clinical trial operations or trial sites; deficiencies in the trial designs necessary to demonstrate efficacy; fatalities or other adverse effects arising during a clinical trial due to medical problems that may or may not be related to clinical trial treatments; the product candidates may not appear to be more effective than current therapies; or the quality or stability of the product candidates may fall below acceptable standards.

If we elect or are forced to suspend or terminate a clinical trial of any of our current or future product candidates, the commercial prospects for that product may be harmed and our ability to generate product revenue from that

 

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product may be delayed or eliminated. Furthermore, any of these events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing our product candidates and impair our ability to generate revenue from the commercialization of these products either by us or by our collaboration partners.

Any additional SAEs could result in the FDA delaying our clinical trials or denying or delaying clearance or approval of a product. Even though an adverse effect may not be the result of the failure of our drug candidate, the FDA or an IRB could delay or halt a clinical trial for an indefinite period of time while an adverse effect is reviewed, and likely would do so in the event of multiple such events. Any delay or termination of our current or future clinical trials as a result of the risks summarized above, including delays in obtaining or maintaining required approvals from IRBs, delays in patient enrollment, the failure of patients to continue to participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications or adverse effects during the trials, may cause an increase in costs and delays in the submission of any New Drug Applications, or NDAs, to the FDA, delay the approval and commercialization of our products or result in the failure of the clinical trial, which could adversely affect our business, financial condition, results of operations and growth prospects. Lengthy delays in the completion of clinical trials of our products would adversely affect our business and prospects and could cause us to cease operations.

If preliminary data demonstrate that any of our product candidates has an unfavorable safety profile and is unlikely to receive regulatory approval or be successfully commercialized, we may voluntarily suspend or terminate future development of such product candidate. Any one or a combination of these events could prevent us from obtaining approval and achieving or maintaining market acceptance of the affected product or could substantially increase the costs and expenses of commercializing the product candidate, which in turn could delay or prevent us from generating significant revenues from the sale of the product.

Our product candidates may cause undesirable side effects, such as an increase in intraocular pressure caused by OCS-01, or have other unexpected properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in post-approval regulatory action. OCS-05 was placed on a clinical hold with the FDA in 2016. If we are unable to establish a NOAEL, or if our studies otherwise do not satisfy the FDA’s requirements, OCS-05 may not receive clearance from the FDA to proceed with human clinical trials, may never receive regulatory approval from the FDA, and we may not be able to market and commercialize OCS-05 in the United States, which could materially adversely affect our business, financial condition, results of operations and growth prospects.

Unforeseen side effects varying in severity (from minor reactions to death) and frequency (infrequent or prevalent) from OCS-01, OCS-02, or OCS-05 could arise either during clinical development or, if approved, after marketing. Undesirable side effects could cause us, any partners with which we may collaborate, or regulatory authorities to interrupt, extend, modify, delay or halt clinical trials and could result in a more restrictive or narrower label or the delay or denial of regulatory approval by the FDA or comparable foreign authorities.

During the conduct of clinical trials, subjects report changes in their health, including illnesses, injuries, and discomforts, to their study doctor. Often, it is not possible to determine whether or not the product candidate being studied caused these conditions. It is possible that as we test our product candidates in larger, longer and more extensive clinical trials, or as use of these product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects. Many times, side effects are only detectable after investigational products are tested in large-scale, Phase 3 clinical trials or, in some cases, after they are made available to subjects on a commercial scale after approval.

If OCS-01, OCS-02 or OCS-05 or any of our other product candidates are associated with serious adverse events, or SAEs, or other undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow uses or subpopulations in which the

 

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SAEs, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.

In addition, OCS-05 was placed on a clinical hold by the FDA in 2016. We licensed OCS-05 from Accure in 2022. Accure had conducted a limited set of animal regulatory toxicology studies in 2016 and submitted them to the FDA in an IND requesting the initiation of human testing. Upon review, the FDA found the data insufficient and asked for more animal toxicology data to be generated prior to human studies, thereby placing OCS-05 on the regulatory status of “clinical hold” pending the availability of the requested data. In response, Accure chose to withdraw the IND in 2017 rather than invest in further toxicology studies to address the FDA’s request. Upon our license of OCS-05 from Accure in 2022, we reactivated the IND and plan to meet with the FDA in the first half of 2023 to agree on a comprehensive toxicology plan to satisfy the FDA’s request. Other health authorities where clinical studies have been proposed, including the UK and France, have authorized us to commence clinical studies of selected doses and reinforced safety measures as in our European Phase 1 trial in AON. We have engaged Toxicodynamix International LLC to manage toxicology studies relating to OCS-05. If our studies do not satisfy the FDA’s requirements, OCS-05 may not receive clearance from the FDA to proceed with human clinical trials, may never receive regulatory approval from the FDA, and we may be unable to market and commercialize OCS-05 in the United States, and our business, financial condition, results of operations and growth prospects could be materially adversely affected.

Results of clinical trials could reveal a high and unacceptable severity and prevalence of side effects. In such an event, trials could be suspended or terminated, and the FDA or comparable non-U.S. regulatory authorities could order us to cease further development of or deny approval of a product candidate for any or all targeted indications. Such adverse event findings also could require us or our collaboration partners to perform additional studies or halt development or sale of these product candidates or expose us to product liability lawsuits which would harm our business, financial condition, results of operations and growth prospects. In such an event, we could be required by the FDA or other comparable regulatory authorities to conduct additional animal or human studies regarding the safety and efficacy of our product candidates which we have not planned or anticipated or our studies could be suspended or terminated, and the FDA or comparable regulatory authorities could order us to cease further development of or deny, vary, or withdraw approval of our product candidates for any and all intended indications. The drug-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial. There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any comparable regulatory agency in a timely manner, if ever, and any of these occurrences may harm our business, financial condition, results of operations and prospects.

Additionally, if we or others identify undesirable side effects, or other previously unknown problems, caused by a product after obtaining U.S. or non-U.S. regulatory approval, a number of potentially negative consequences could result, including but not limited to, regulatory authorities suspending, withdrawing or varying approvals of such product, regulatory authorities requiring additional warnings on the label or otherwise requiring labeling to be updated or narrowed, us becoming liable for harm caused to patients and the diminution of our reputation, which could prevent us or our potential partners from achieving or maintaining market acceptance of the product candidate, if approved, and could substantially increase the costs of commercializing such product, which would have a material adverse effect on our business, results of operation, financial condition and prospects.

If any of our product candidates receives approval, regulatory agencies including the FDA and other non-U.S. regulatory agencies will require that we regularly report certain information, including information about adverse events that may have caused or contributed by those products. The timing of adverse event reporting obligations would be triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events we become aware of within the prescribed timeframe especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the FDA or other regulatory agencies could take action that may include criminal prosecution, the imposition of civil monetary penalties, seizure of our products, or suspension of market approval, and delay in approval or clearance of future products.

 

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Interim, topline and preliminary data from our clinical trials may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary, interim or topline data from our clinical trials. These interim updates are based on a preliminary analysis of then-available data, and the results and related findings and conclusions may be subject to change following a more comprehensive review of the data. We also may use assumptions and estimates as part of our preliminary analyses of the data, and we may not have received or had the opportunity to fully and carefully evaluate all data. Topline data also remain subject to audit and verification procedures before they can be finalized. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is typically selected from a more extensive amount of available information. For example, we may report interim analyses of only certain of the endpoints of the clinical trial, rather than all of the endpoints. Additional disclosure of interim data by us or by our competitors in the future could result in volatility in the price of the New Parent Shares. Further, investors may not agree with what we determine is the material or otherwise appropriate information to include in our public disclosures, and any information we determine not to disclose may ultimately be deemed significant by us or, if subsequently disclosed, by investors, with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate or our business. Further, others, including regulatory agencies and investors may not accept our conclusions regarding such preliminary or interim analyses, which could impact the value of a particular program or the approvability or commercialization of the particular product candidate, or result in volatility in the price of the New Parent Shares.

The topline results that we report may differ significantly from the final results of the same studies, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. As a result, topline and interim data from clinical trials are subject to the risk that one or more of the reported clinical outcomes may materially change, and should be viewed with caution until the final data are available. If the preliminary or topline data that we report differ from the final results, or if others, including regulatory authorities, disagree with our conclusions, then our ability to obtain approval for, and to successfully commercialize our product candidates may be harmed, which could materially affect our business, financial condition, results of operations and growth prospects.

We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

Clinical testing is expensive, time consuming, and subject to uncertainty. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. We cannot be sure that submission of an investigational new drug application, or IND, or a clinical trial application, or CTA, will result in the FDA or comparable non-U.S. regulatory authorities, or any other regulatory authority as applicable, allowing clinical trials to begin in a timely manner, if at all. Moreover, even if these trials begin, issues may arise that could suspend or terminate such clinical trials. A failure of one or more clinical trials can occur at any stage of testing, and our future clinical trials may not be successful.

Any difficulties we experience relating to the initiation or completion of patient visits in clinical trials, including as a result of the SARS-CoV-2 virus, could delay regulatory approval for our product candidates. Identifying and qualifying subjects to participate in clinical trials of our product candidates is critical to our success. The timing of clinical trials depends on our ability to recruit subjects to participate, as well as the completion of required follow-up periods. Patients may be unwilling to participate in clinical trials because of negative publicity from adverse events related to the biotechnology or pharmaceutical fields, competitive clinical trials for similar patient populations, the existence of current treatments or for other reasons. The timeline for recruiting patients, conducting studies and obtaining regulatory approval of our product candidates may be delayed, which could result in increased costs, delays in advancing our product candidates, delays in testing the effectiveness of our product candidates or termination of the clinical trials altogether. Patient enrollment for any of our future clinical trials may be affected by other factors, including:

 

   

inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;

 

   

delays in reaching a consensus with regulatory agencies on study design;

 

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the determination by the reviewing regulatory authority to require more costly or lengthy clinical trials than we currently anticipate;

 

   

delays in reaching agreement on acceptable terms with prospective contract research organizations and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

 

   

delays in identifying, recruiting and training suitable clinical investigators;

 

   

delays in obtaining required IRB, or ethics committee approval at each clinical trial site;

 

   

imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, CTA or amendment, or equivalent application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; a negative finding from an inspection of our clinical trial operations or study sites; developments on trials conducted by competitors for related technology that raises FDA, or comparable non-U.S. regulatory authorities, or any other regulatory authority concerns about risk to patients of the technology broadly; or if the FDA, EMA, National Medical Products Administration, or NMPA, or any other regulatory authority finds that the investigational protocol or plan is clearly deficient to meet its stated objectives;

 

   

delays in identifying, recruiting and enrolling suitable patients to participate in our clinical trials, and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up;

 

   

difficulty collaborating with patient groups and investigators;

 

   

perceived risks and benefits of the product candidate under study;

 

   

failure by our CROs, other third parties, or us to adhere to clinical trial requirements;

 

   

failure to perform in accordance with the FDA’s or any other regulatory authority’s current good clinical practices, or cGCPs, requirements, or applicable regulatory guidelines in other countries;

 

   

occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

 

   

availability of competing treatments and clinical trials;

 

   

changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

 

   

changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

 

   

the cost of clinical trials of our product candidates being greater than we anticipate, including as a result of volatility in currency exchange rates;

 

   

clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon development of such product candidates;

 

   

transfer of manufacturing processes to larger-scale facilities operated by a CMO or by us, and delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; and

 

   

delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing.

Any inability to successfully initiate or complete clinical trials could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product

 

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candidates, we may be required to or we may elect to conduct additional studies to bridge our modified product candidates to earlier versions. Clinical trial delays could also shorten any periods during which our products have patent protection and may allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the data safety monitoring board for such trial or by the FDA, or comparable non-U.S. regulatory authorities, or any other regulatory authority, or if the IRBs or ethics committees of the institutions in which such trials are being conducted suspend or terminate the participation of their clinical investigators and sites subject to their review. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, or comparable non-U.S. regulatory authorities, or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Delays in the commencement or completion of any clinical trial of our product candidates will increase our costs, slow down our product candidate development and approval process and delay or potentially jeopardize our ability to commence product sales and generate revenue. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

We do, and may in the future, conduct clinical trials for our product candidates outside the United States, and the FDA and applicable non-U.S. regulatory authorities may not accept data from such trials.

We and investigator sponsors have conducted clinical trials, are conducting clinical trials, and may in the future choose to conduct one or more clinical trials outside of the United States. Although the FDA or applicable non-U.S. regulatory authority may accept data from clinical trials conducted outside the United States or the applicable jurisdiction, acceptance of such study data by the FDA or applicable non-U.S. regulatory authority may be subject to certain conditions or exclusions. Where data from foreign clinical trials are intended to serve as the basis for marketing approval in the United States, the FDA will not approve the application on the basis of foreign data alone unless such data are applicable to the U.S. population and U.S. medical practice; the studies were performed by clinical investigators of recognized competence; and the data are considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. Many non-U.S. regulatory bodies have similar requirements. In addition, such non-U.S. studies would be subject to the applicable local laws of the jurisdictions where the studies are conducted. There can be no assurance the FDA or applicable non-U.S. regulatory authority will accept data from trials conducted outside of the United States or the applicable home country. If the FDA or applicable non-U.S. regulatory authority does not accept such data, it would likely result in the need for additional trials, which would be costly and time-consuming and delay aspects of our business plan.

We rely on and expect to continue to rely on third-party CROs and other third parties to conduct and oversee our clinical trials. If these third parties do not meet our requirements or otherwise conduct the trials as required, we may not be able to satisfy our contractual obligations or obtain regulatory approval for, or commercialize, our product candidates.

We rely on, and expect to continue to rely on, third-party CROs to conduct and oversee our clinical trials and other aspects of product development. We also expect to rely on various medical institutions, clinical investigators and contract laboratories to conduct our trials in accordance with our clinical protocols and applicable regulatory requirements, including the FDA’s regulations and good clinical practice, or GCP

 

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requirements, and equivalent non-U.S. and international standards, which are international standards meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors, and national, supranational, and state regulations governing the handling, storage, security and recordkeeping for drug and biologic products. These CROs and other third parties are expected to play a significant role in the conduct of these trials and the subsequent collection and analysis of data from the clinical trials. We expect to rely heavily on these parties for the execution of our clinical trials and preclinical studies and will control only certain aspects of their activities. We and our CROs and other third-party contractors will be required to comply with GCP and good laboratory practice, or GLP, requirements, which are regulations and guidelines enforced by the FDA and comparable non-U.S. regulatory authorities. Regulatory authorities enforce these GCP and GLP requirements through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable GCP and GLP requirements, or reveal noncompliance from an audit or inspection, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or other comparable non-U.S. regulatory authorities may require us to perform additional clinical trials before approving our or our partners’ marketing applications. We cannot provide assurance that upon inspection by a given regulatory authority, such regulatory authority will determine whether or not any of our clinical or preclinical trials comply with applicable GCP and GLP requirements. In addition, our clinical trials generally must be conducted with product produced under current good manufacturing practices, or cGMP, regulations. Our failure to comply with these regulations and policies may require us to repeat clinical trials, which would delay the regulatory approval process, and adversely affect our operations.

If any of our CROs or clinical trial sites terminate their involvement in one of our clinical trials for any reason, we may not be able to enter into arrangements with alternative CROs or clinical trial sites or do so on commercially reasonable terms. In addition, if our relationship with clinical trial sites is terminated, we may experience the loss of follow-up information on patients enrolled in our ongoing clinical trials unless we are able to transfer the care of those patients to another qualified clinical trial site. In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to it from time to time and could receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, the integrity of the data generated at the applicable clinical trial site may be questioned by the FDA and comparable non-U.S. regulatory authorities, which could delay the regulatory approval process and adversely affect our operations.

Even if we obtain regulatory approval for a product candidate, our products will remain subject to continuous subsequent regulatory obligations and scrutiny.

If our product candidates are approved, they will be subject to ongoing regulatory requirements for pharmacovigilance, manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies (if any) and submission of other post-market information, including both federal and state requirements in the United States and equivalent requirements of comparable regulatory authorities.

Manufacturers and manufacturers’ facilities are required to comply with extensive FDA, and comparable regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP regulations and adherence to commitments made in any marketing authorization application, or MAA. Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

Any regulatory approvals that we or our collaboration partners receive for our product candidates may be subject to limitations on the approved conditions of use for which the product may be marketed or to the conditions of approval or may contain requirements for potentially costly additional data generation, including clinical trials. We will be required to report certain adverse reactions and production problems, if any, to the FDA and

 

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comparable regulatory authorities, and to conduct surveillance to monitor the safety and efficacy of the product candidate. Any new legislation addressing drug safety or biologics issues could result in delays in product development or commercialization or increased costs to assure compliance.

We will have to comply with requirements concerning advertising and promotion for our product candidates, if approved. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions that vary throughout the world and must be consistent with the information in the product’s approved label. As such, we may promote our products in ways that are not consistent with FDA-approved labeling, e.g., for indications or uses for which they do not have approval.

If a regulatory authority discovers previously unknown problems with one of our products such as adverse events of unanticipated severity or frequency, or if there are problems with the facility where the product is manufactured or the regulatory authority disagrees with the advertising, promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us. If we fail to comply with applicable regulatory requirements, a regulatory authority such as FDA may, among other things:

 

   

issue warning or untitled letters;

 

   

refer a case to the U.S. Department of Justice to impose civil or criminal penalties;

 

   

begin proceedings to suspend or withdraw regulatory approval;

 

   

issue an import alert;

 

   

suspend our ongoing clinical studies;

 

   

refuse to approve pending applications (including supplements to approved applications) submitted by us;

 

   

ask us to initiate a product recall; or

 

   

refer a case to the U.S. Department of Justice to seize and forfeit products or obtain an injunction imposing restrictions on our operations.

Any government investigation of alleged violations of law or regulations could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of us and our operating results will be adversely affected.

If we are not successful in discovering, developing, and commercializing additional product candidates beyond our current portfolio, our ability to expand our business and achieve our strategic objectives would be impaired.

A key element of our strategy is to discover, develop, and potentially commercialize additional product candidates beyond our current portfolio to treat various conditions in a variety of therapeutic areas. We intend to do so by investing in our own drug discovery efforts, exploring potential strategic alliances for the development of new products, and in-licensing technologies. Identifying new product candidates requires substantial technical, financial, and human resources. We may fail to identify promising product candidates and, even if we do identify such product candidates, we may fail to successfully develop and commercialize such product candidates for many reasons, including:

 

   

competitors may develop alternatives that render our product candidates obsolete;

 

   

product candidates we develop may be covered by third parties’ patents or other intellectual property and proprietary rights;

 

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a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

 

   

we may be incapable of producing a product candidate in commercial quantities at an acceptable cost, or at all; and

 

   

an approved product may not be accepted as safe and effective by patients, the medical community or third-party payors.

We have several early-stage programs in preclinical development as we seek to expand our pipeline. Preclinical development programs in the biotechnology industry carry high risk of failure. If any of these programs fails due to, among others, adverse formulation, pharmacokinetic, pharmacodynamics, or safety, we may need to terminate the program. If we are unsuccessful in identifying and developing additional product candidates and progressing those into clinical development, our potential for growth may be impaired.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. As a result of the foregoing, our business, operations and prospects could be materially adversely affected.

We may choose to discontinue developing or commercializing any of our product candidates, or may choose to not commercialize product candidates in approved indications, at any time during development or after approval, which would reduce or eliminate our potential return on investment for those product candidates.

At any time, we may decide to discontinue the development of any of our product candidates for a variety of reasons, including the appearance of new technologies that make our product candidates obsolete, competition from a competing product, cost concerns, manufacturing challenges, analysis of preclinical and clinical trial results or changes in or failure to comply with applicable regulatory requirements. If we terminate a program in which we have invested significant resources, we will not receive any return on our investment and we will have missed the opportunity to have allocated those resources to potentially more productive uses. As a result, our business, financial condition, results of operations and growth prospects may be adversely affected.

Risks related to our manufacturing activities

We have no experience manufacturing any of our product candidates at a commercial scale. If we or any of our third-party manufacturers encounter difficulties in production, or fail to meet rigorously enforced regulatory standards, our ability to provide supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or stopped, or we may be unable to establish a commercially viable cost structure.

In order to conduct clinical trials of our product candidates, or supply commercial products, if approved, we need to manufacture them in small and large quantities. The manufacturing processes for OCS-02 and OCS-05 have

 

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never been tested at commercial scale, and the process validation requirement (the requirement to consistently produce the active pharmaceutical ingredient used in these drug candidates in commercial quantities and of specified quality on a repeated basis and document our ability to do so) for each of OCS-01, OCS-02, and OCS-05 has not yet been satisfied. Our manufacturing partners may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during scale-up activities. If our manufacturing partners are unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing and clinical trials of our product candidates may be delayed or become infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business. The same risks would apply to any internal manufacturing facilities, should we in the future decide to build internal manufacturing capacity.

In addition, the manufacturing process for any products that we may develop is subject to FDA, European Commission, NMPA and other non-U.S. regulatory authority approval processes and continuous oversight. We will need to contract with manufacturers who can meet all applicable FDA, European Commission, EMA, NMPA and other non-U.S. regulatory authority requirements, including complying with current good manufacturing practices, or cGMPs, regulations on an ongoing basis. If we or our third-party manufacturers are unable to reliably produce products to specifications acceptable to the FDA, European Commission, EMA, NMPA or other regulatory authorities, we may not obtain or maintain the approvals we need to commercialize such products. Even if we obtain regulatory approval for any of our product candidates, there is no assurance that either we or our CMOs will be able to manufacture the approved product to specifications acceptable to the FDA, EMA, NMPA or other regulatory authorities, to produce it in sufficient quantities to meet the requirements for the potential launch of the product, or to meet potential future demand. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate, impair commercialization efforts, increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and growth prospects.

The manufacture of OCS-02, a biologic, is highly complex, costly and requires substantial lead time to produce.

Manufacturing OCS-02, a biologic, involves complex processes, including developing cells or cell systems to produce the biologic, growing large quantities of such cells, and harvesting and purifying the biologic produced by them. These processes require specialized facilities, highly specific raw materials and other production constraints. As a result, the cost to manufacture a biologic is generally far higher than traditional small molecule chemical compounds, and the biologics manufacturing process is less reliable and is difficult to reproduce. Because of the complex nature of this product candidate, we need to oversee manufacture of multiple components that require a diverse knowledge base and specialized personnel.

Moreover, unlike chemical pharmaceuticals, the physical and chemical properties of a biologic such as OCS-02 generally cannot be adequately characterized prior to manufacturing the final product. As a result, an assay of the finished product is not sufficient to ensure that the product will perform in the intended manner. Accordingly, we expect to employ multiple steps to attempt to control our manufacturing process to assure that the process works and the product or product candidate is made strictly and consistently in compliance with the process.

Manufacturing biologics is highly susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment, vendor or operator error, improper storage or transfer, inconsistency in yields and variability in product characteristics. Even minor deviations from normal manufacturing, distribution or storage processes could result in reduced production yields, product defects and other supply disruptions. Some of the raw materials required in our manufacturing process are derived from biological sources. Such raw materials are difficult to procure and may also be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of our

 

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product candidates could adversely impact or disrupt commercialization. Production of additional drug substance and drug product for OCS-02 may require substantial lead time. In the event of significant product loss and materials shortages, we may be unable to produce adequate amounts of our product candidates or products for our operational needs, which would materially adversely affect our business, financial condition and results of operations.

Further, as product candidates are developed through preclinical studies to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods, are altered along the way in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials. We and our third-party manufacturing partner are engaged in efforts to reduce the expected costs for OCS-02. In the future, if the proposed manufacturing plans to reduce OCS-02 costs does not succeed when producing OCS-02 at commercial scale, we may not be able to proceed with OCS-02 commercialization, if approved.

Any of the foregoing could potentially materially adversely affect our business, financial condition, results of operations and growth prospects.

Risks related to our future commercialization activities

Even if a product candidate obtains regulatory approval, it may fail to achieve the broad degree of physician and patient adoption and use necessary for commercial success.

The commercial successes of OCS-01, OCS-02, or OCS-05, if approved, will depend significantly on attaining broad adoption and use of the products by physicians and patients for approved indications, and any of these product candidates may not be commercially successful even if shown to be effective in clinical trials. The degree and rate of physician and patient adoption of a product, if approved, will depend on a number of factors, including but not limited to:

 

   

patient demand for approved products that treat the indication for which they are approved;

 

   

efficacy and potential advantages compared to alternative treatments, including the existing standard of care;

 

   

the availability of coverage and adequate reimbursement from managed care plans and other healthcare payors;

 

   

the cost of treatment in relation to alternative treatments and willingness to pay on the part of patients;

 

   

insurers’ willingness to see the applicable indication as a disease worth treating;

 

   

proper administration by physicians or patients;

 

   

patient satisfaction with the results, administration and overall treatment experience;

 

   

limitations or contraindications, warnings, precautions or approved indications for use different than those sought by us that are contained in the final FDA-approved, or comparable non-U.S. regulatory authorities-approved labeling for the applicable product;

 

   

any FDA or comparable non-U.S. regulatory authority’s requirement to undertake a risk evaluation and mitigation strategy;

 

   

the effectiveness of our sales, marketing, pricing, reimbursement and access, government affairs, and distribution efforts;

 

   

adverse publicity about a product or favorable publicity about competitive products;

 

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new government regulations and programs, including price controls and/or limits or prohibitions on ways to commercialize drugs, such as increased scrutiny on direct-to-consumer advertising of pharmaceuticals; and

 

   

potential product liability claims or other product-related litigation.

Even if we receive marketing approval for OCS-01, OCS-02, OCS-05, or any future product candidate, we may not be able to successfully commercialize our product candidates due to unfavorable pricing regulations or third-party coverage and reimbursement policies, which could make it difficult for us to sell our product candidates profitably.

Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and cost effectiveness data to the payor. There may be significant delays in obtaining such coverage and reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA or comparable non-U.S. regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers costs, including research, development, intellectual property, manufacture, sale and distribution expenses. Interim reimbursement levels for new products, if applicable, may also not be sufficient to cover costs and may not be made permanent. Reimbursement rates may vary according to the use of the product and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost products and may be incorporated into existing payments for other services. Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors, by any future laws limiting drug prices and by any future relaxation of laws that presently restrict imports of product from countries where they may be sold at lower prices than in the United States.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. Third-party payors in the United States often rely upon Medicare coverage policy and payment limitations in setting reimbursement policies, but also have their own methods and approval process apart from Medicare coverage and reimbursement determinations. Pricing and reimbursement outside of the United States vary widely and are constantly evolving, with requirements and limitations becoming increasingly strict.

Coverage and reimbursement by a third-party payor or competent foreign authority may depend upon a number of factors, including the third-party payor’s or competent foreign authority’s determination that use of a product is:

 

   

a covered benefit under its health plan;

 

   

safe, effective and medically necessary;

 

   

appropriate for the specific patient;

 

   

cost-effective; and

 

   

neither experimental nor investigational.

We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if coverage and reimbursement are available, what the level of reimbursement will be. Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

Reimbursement may impact the demand for, and the price of, any product for which we obtain marketing approval. Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients

 

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who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payors or competent foreign authorities to reimburse all or part of the costs associated with those medications. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products. Therefore, coverage and adequate reimbursement is critical to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new products when more established or lower cost therapeutic alternatives are already available or subsequently become available. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription medicines, medical devices and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the successful commercialization of new products. Further, the adoption and implementation of any future governmental cost containment or other health reform initiative may result in additional downward pressure on the price that we may receive for any approved product.

Outside of the United States, many countries require approval of the sale price of a product before it can be marketed and the pricing review period only begins after marketing approval is granted. To obtain reimbursement or pricing approval in some of these countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product candidate in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues, if any, we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if such product candidates obtain marketing approval.

If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved.

We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of pharmaceutical products. To achieve commercial success for any approved product for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to third parties. In the future, we may choose to build a focused sales, marketing and commercial support infrastructure to sell, or participate in sales activities with our collaborators for, some of our product candidates if and when they are approved.

There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a sales force or reimbursement specialists is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing and other commercialization capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our commercialization personnel.

Factors that may inhibit our efforts to commercialize any approved product on our own include:

 

   

our inability to recruit and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs and other support personnel;

 

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the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any future approved products;

 

   

the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement, and other acceptance by payors;

 

   

the inability to price our products at a sufficient price point to ensure an adequate and attractive level of profitability;

 

   

restricted or closed distribution channels that make it difficult to distribute our products to segments of the patient population;

 

   

the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

 

   

unforeseen costs and expenses associated with creating an independent commercialization organization.

If we enter into arrangements with third parties to perform sales, marketing, commercial support and distribution services, our product revenue or the profitability of product revenue may be lower than if we were to market and sell any products we may develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to commercialize our product candidates or may be unable to do so on terms that are favorable to us. We may have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates if approved, which would materially adversely affect our business, results of operations, financial condition and growth prospects.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The development and commercialization of new drug products are highly competitive. We face competition with respect to our product candidates that we may seek to develop or commercialize, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Potential competitors may also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

The diabetic macular edema market is already served by multiple approved products, such as ranimizumab, aflibercept, brolucizumab, faricimab VEGF inhibitors as well as dexamethasone and fluocinolone acetonide intravitreal implants. These drugs are well established therapies and are widely accepted by physicians, patients and third-party payors, which may make it difficult to convince these parties to switch to OCS-01. Companies that we are aware are developing therapeutics for diabetic macular edema include large companies with significant financial resources, such as Roche (Genentech), Novartis, Bayer, Regeneron, Abbvie (Allergan), and Alimera Sciences. In addition, OCS-01 will compete with the current status quo practice of treating diabetic macular edema, which is often observing and not treating milder patients before they often progress to invasive treatments.

The post-operative inflammation and pain market is already served by multiple approved steroid products, such as difluprednate ophthalmic emulsion, loteprednol etabonate ophthalmic gel and suspension, prednisolone acetate ophthalmic suspension, among others. These drugs are well established therapies and are widely accepted by physicians, patients and third-party payors, which may make it difficult to convince these parties to switch to OCS-01. Companies that we are aware are developing therapeutics for post-operative inflammation and pain include large companies with significant financial resources, such as Bausch and Lomb, Kala Pharmaceuticals, Alcon Laboratories, Abbvie (Allergan), TEVA, Novartis.

 

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The dry eye disease market is already served by multiple approved products, such as Cyclosporine ophthalmic emulsion and solution, lifitegrast ophthalmic solution, loteprednol etabonate ophthalmic suspension, varenicline solution. These drugs are well established therapies and are widely accepted by physicians, patients and third-party payors, which may make it difficult to convince these parties to switch to OCS-02. Companies that we are aware are developing therapeutics for dry eye disease include large companies with significant financial resources, such as Abbvie (Allergan), Sun Pharmaceuticals, Novartis, Kala Pharmaceuticals and Oyster points. In addition, over the counter products are currently available for the treatment of dry eye disease which may impact sales of our products.

The non-infectious anterior uveitis market is already served by multiple approved steroid products indicated to treat inflammation of the eyes, such as prednisolone acetate suspension, loteprednol etabonate ophthalmic formulations, dexamethasone sodium phosphate formulations, fluorometholone ophthalmic suspension, among others. These drugs are well established therapies and are widely accepted by physicians, patients and third-party payors, which may make it difficult to convince these parties to switch to OCS-02. Companies that we are aware are developing therapeutics for non-infectious anterior uveitis include large companies with significant financial resources, such as Abbvie (Allergan), Bausch and Lomb, Novartis, among others.

The glaucoma market is already served by multiple approved drug classes to reduce elevated intraocular pressure, such as Alpha Agonists, Beta Blockers Carbonic Anhydrase Inhibitors, Cholinergic (Myotic), Prostaglandin Analogs, Rho Kinase Inhibitors and combination products. These drugs are well established therapies and are widely accepted by physicians, patients and third-party payors, which may make it difficult to convince these parties to switch to OCS-05. Companies that we are aware are developing therapeutics for glaucoma include large companies with significant financial resources, such as Novartis, Abbvie (Allergan), Bausch and Lomb, Akorn, Teva Pharmaceuticals, Pfizer, Merck, Sun Ophthalmics, Pharmaceuticals, among others.

In addition to competition from other companies targeting the diseases which we target, any products we may develop may also face competition from other types of therapies, such as gene-editing therapies or drug delivery devices. Our commercial opportunity for any of our product candidates could also be reduced or eliminated if our competitors develop and commercialize new products that are safer, more effective, are more convenient, or are less expensive than our products. The competitors also may obtain FDA or other non-U.S. regulatory approval for their products more rapidly than we may obtain approval for our candidates, which could result in competitors establishing a strong market position before we are able to enter the market for a new product candidate. If our product candidates are not perceived as more effective, safe, cost-effective, or otherwise medically beneficial than current practices or products in their respective target market segments, then our commercial opportunities will be negatively impacted. If we are unable to demonstrate the value of our product candidates based on our clinical data, patient experience, or real-world evidence, future successful commercialization of such product candidates could be adversely affected.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payors, including Medicare and equivalent foreign health insurance programs, seeking to encourage the use of generic products. For example, a generic version of Restasis® to treat dry eye disease received FDA approval in February 2022. Generic products are generally offered at lower prices than branded products, and consequently, after the introduction of a generic competitor, a significant percentage of the sales of any branded product may be lost to the generic product. Accordingly, competition from generic products could have a material adverse impact on our ability to successfully commercialize OCS-02 for dry eye disease or any other product candidate or indication, if approved, or negatively impact sales or pricing of our products or our ability to gain market acceptance or market share.

Many of our current and future competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and

 

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biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, including through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we develop.

We face an inherent risk of product liability exposure related to the use of our product candidates that we develop in clinical trials. We face an even greater risk for any products we develop and sell commercially. Off-label use or misuse of our products if and when commercialized may harm our reputation in the marketplace, result in injuries that lead to costly product liability suits, or subject us to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with any product. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

 

   

decreased demand for any product candidates that we develop;

 

   

injury to our reputation and significant negative media attention;

 

   

withdrawal or delay of recruitment or decreased enrollment rates of clinical trial participants;

 

   

termination or increased government regulation of clinical trial sites or entire trial programs;

 

   

product recall or withdrawal from the market or labeling, marketing or promotional restrictions;

 

   

significant costs to defend the related litigation;

 

   

significant delays in product launch;

 

   

substantial monetary awards to trial participants or patients;

 

   

loss of revenue;

 

   

reduced time and attention of our management to pursue our business strategy; and

 

   

the inability to commercialize any products that we develop.

We may need to purchase insurance coverage as we expand our clinical trials and should we eventually realize sales of any product candidate for which we obtain marketing approval. Insurance coverage is increasingly expensive, restrictive and narrow. We may not be able to maintain insurance coverage at a reasonable cost, upon adequate terms or in a sufficient amount necessary to protect us against losses due to product liability or other similar legal actions that may arise. A successful product liability claim or series of claims brought against us which substantially exceeds our insurance coverage will require us to make up the shortfall, which may in turn require us to drawdown on our cash reserve, and harm our business, financial condition, results of operations and growth prospects.

Risks related to our reliance on third parties

We may enter into collaborations with third parties for the development and commercialization of our product candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.

We may enter into a combination of exclusive and non-exclusive collaboration arrangements with third parties to develop or commercialize some or all of our product candidates. We also may enter into arrangements with third parties to perform these services in the United States and other jurisdictions if we do not establish our own sales,

 

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marketing and distribution capabilities in the United States and other jurisdictions for our product candidates or if we determine that such arrangements are otherwise beneficial. We also may seek collaborators for development and commercialization of other product candidates. Our likely collaborators for any sales, marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies. While we are not currently party to any such arrangement, our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in the future in these arrangements.

Collaborations that we enter into may pose a number of risks, including the following:

 

   

collaborators may have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations;

 

   

collaborators may not perform their obligations as expected;

 

   

collaborators may not pursue development and commercialization of our product candidates that receive marketing approval or may elect not to continue or renew development or commercialization programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

 

   

collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

 

   

collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

 

   

product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates;

 

   

a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;

 

   

disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation or the preferred course of development, might cause delays or termination of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would divert management attention and resources and be time-consuming and expensive;

 

   

collaborators may not properly maintain or defend our intellectual property or proprietary rights or may use our intellectual property or proprietary rights in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary rights or expose us to potential litigation and liability;

 

   

collaborators may infringe, misappropriate or otherwise violate the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

 

   

collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

 

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Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all. If any collaborations that we enter into do not result in the successful development and commercialization of products or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments, or be able to recover any costs and expenses incurred by us under the collaboration arrangement. If we do not receive the funding we expect, or recover any costs and expenses incurred under these agreements, our development of our product candidates could be delayed and we may need additional resources to develop our product candidates. All of the risks relating to product development, regulatory approval and commercialization described herein also apply to the activities of our collaborators.

Additionally, subject to its contractual obligations to us, if a collaborator of ours were to be involved in a business combination, it might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us. If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be harmed.

We rely completely on third-party contractors to supply, manufacture and distribute clinical drug supplies for our product candidates, which may include sole-source suppliers and manufacturers; we intend to rely on third parties for commercial supply, manufacturing and distribution if any of our product candidates receives regulatory approval and for any future product candidates.

We do not currently have, nor do we plan to acquire, the infrastructure or capability to supply, store, manufacture or distribute preclinical, clinical or commercial quantities of drug substances or products. Additionally, we have not entered into a long-term commercial supply agreement to provide us with such drug substances or products. As a result, our ability to develop our product candidates is dependent, and our ability to supply our products commercially will depend, in part, on our ability to obtain the active pharmaceutical ingredients, or APIs, and other substances and materials used in our product candidates successfully from third parties and to have finished products manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for preclinical and clinical testing and commercialization. If we fail to develop and maintain supply and other technical relationships with these third parties, and if we are unable to seek suitable replacements in a timely manner or at all, we may face delays or be unable to continue to develop or commercialize our products and product candidates.

We do not have direct control over whether or not our contract suppliers and manufacturers will maintain current pricing terms, be willing to continue supplying us with APIs and finished products or maintain adequate capacity and capabilities to serve our needs, including quality control, quality assurance and qualified personnel. We are dependent on our contract suppliers and manufacturers for day-to-day compliance with applicable laws and cGMP regulations for production of both APIs and finished products. If the safety or quality of any product or product candidate or component is compromised due to a failure to adhere to applicable laws or for other reasons, we may not be able to commercialize or obtain regulatory approval for the affected product or product candidate successfully, and we may be held liable for injuries sustained as a result.

We may be unable to establish any further agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

 

   

the possible breach of the manufacturing agreement by the third party or us;

 

   

the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us;

 

   

the possible early termination of the agreement by us at a time that requires us to pay a cancellation fee;

 

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reliance on the third party for regulatory compliance, quality assurance, safety and pharmacovigilance and related reporting; and

 

   

the inability to produce required volume in a timely manner and to quality standards.

Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in clinical holds on our trials, sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of our products and harm our business, financial condition, results of operations, and prospects.

Any products that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing our products or product candidates.

Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval. We do not currently have arrangements in place for redundant supply for any of our product candidates. If any one of our current contract manufacturers cannot perform as agreed, we may be required to replace that manufacturer and may incur added costs and delays in identifying and qualifying any such replacement. Furthermore, securing and reserving production capacity with contract manufacturers may result in significant costs.

By relying on third-party manufacturers for outsourced, custom manufacturing, we may encounter difficulties in production, particularly with respect to formulation, process development or scaling up of manufacturing capabilities. If we, or our CMOs, encounter such difficulties, our ability to provide supply of our product candidates for preclinical studies, clinical trials or our products for patients, if approved, could be delayed or halted, or we may be unable to maintain a commercially viable cost structure, which would materially adversely affect our business, results of operations and financial condition.

If third-party suppliers on which we rely fail to successfully scale up their production of our product candidates, we may face delays and lost opportunities with our development or future commercialization efforts.

In order to conduct larger or late-stage clinical trials for a product candidate and supply sufficient commercial quantities of the resulting drug product and its components, if that product candidate is approved for sale, our contract manufacturers and suppliers will need to produce our drug substances and product candidates in larger quantities more cost-effectively and, in certain cases, at higher yields than they currently achieve. If our third-party contractors are unable to scale up the manufacture of any of our product candidates successfully in sufficient quality and quantity and at commercially reasonable prices, or are shut down or put on clinical hold by government regulators, and we are unable to find one or more replacement suppliers or manufacturers capable of production at a substantially equivalent cost in substantially equivalent volumes and quality, and we are unable to transfer the processes successfully on a timely basis, the development of that product candidate and regulatory approval or commercial launch for any resulting products may be delayed, or there may be a shortage in supply, either of which could significantly harm our business, financial condition, operating results and prospects.

We expect to continue to depend on third-party contract suppliers and manufacturers for the foreseeable future. Our supply and manufacturing agreements do not guarantee that a contract supplier or manufacturer will provide services adequate for our needs. Additionally, any damage to or destruction of our third-party manufacturer’s or suppliers’ facilities or equipment, may significantly impair our ability to have our products and product candidates manufactured on a timely basis. Our reliance on contract manufacturers and suppliers further exposes

 

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us to the possibility that they, or third parties with access to their facilities, will have access to and may misappropriate our trade secrets or other proprietary information. In addition, the manufacturing facilities of certain of our suppliers may be located outside of the United States. This may give rise to difficulties in importing our products or product candidates or their components into the United States or other countries.

We rely on third-party suppliers for key raw materials used in our manufacturing processes, and the loss of these third-party suppliers or their inability to supply us with adequate raw materials could harm our business.

We rely on third-party suppliers for the raw materials required for the production of our product candidates. Our reliance on these third-party suppliers and the challenges we may face in obtaining adequate supplies of raw materials involve several risks, including limited control over pricing, availability, quality and delivery schedules. As a small company, our negotiation leverage is limited and we are likely to get lower priority than our competitors who are larger than we are. We cannot be certain that our suppliers will continue to provide us with the quantities of these raw materials that we require or satisfy our anticipated specifications and quality requirements. Any supply interruption in limited or sole sourced raw materials could materially harm our ability to manufacture our product candidates until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the development and potential commercialization of our product candidates, including limiting supplies necessary for clinical trials and regulatory approvals, which would have a material adverse effect on our business.

Our rights to develop and commercialize our technology are subject, in part, to the terms and conditions of licenses granted to us by others. In particular, we depend on licenses for development and commercialization rights to OCS-02 and OCS-05. If these rights are terminated or we fail to comply with our obligations under these agreements or any other license, collaboration or other agreement, we may be required to pay damages and we could lose intellectual property rights that are necessary for the development and protection of our product candidates.

We currently and may in the future license from third parties certain intellectual property relating to current and future product candidates. For example, we are party to various license agreements, including with Novartis and Accure, that we depend on for rights to OCS-02 and OCS-05, respectively. These agreements impose, and other potential agreements we may enter into with third parties may impose, diligence, development and commercialization timelines and milestone payment, royalty, insurance and other obligations on us. Under the Novartis Agreement (as defined below) and Accure Agreement (as defined below), for example, we are obligated to make payments to the counterparty upon us achieving certain development or commercialization milestones and to make royalty payments to Novartis and Accure on net product sales of OCS-02 and OCS-05, respectively.

We also have diligence and development obligations under the Novartis Agreement and Accure Agreement. Generally, these diligence obligations require us to use commercially reasonable efforts to develop, manufacture, seek regulatory approval for and commercialize the licensed products. If we fail to comply with our obligations under current or future license agreements, use the licensed intellectual property in an unauthorized manner or otherwise breach a license agreement, our counterparties may have the right to terminate these agreements, in which event we might not have the rights or the financial resources to develop, manufacture or market any licensed product that is covered by these agreements. Future counterparties also may have the right to convert an exclusive license to non-exclusive in the territory in which we fail to satisfy our diligence obligations, which could materially adversely affect the value of the product candidate being developed under any such agreement. Termination of these agreements or reduction or elimination of our rights under these agreements may result in our having to negotiate new or reinstated agreements with less favorable terms, seek alternative sources of financing or cause us to lose our rights under these agreements, including our rights to OCS-02, OCS-05 or other important intellectual property or technology. Any of the foregoing could prevent us from commercializing OCS-02 or OCS-05 or cause a competitor to gain access to the licensed technology, which could have a material adverse effect on our operating results and overall financial condition.

 

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Our license agreements are, and future license agreements are likely to be, complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Disputes may arise between us and our licensors or future licensors, including:

 

   

the scope of rights granted under the license agreement and other interpretation-related issues;

 

   

our financial or other obligations under the license agreement;

 

   

whether and the extent to which our technology and processes infringe, misappropriate or otherwise violate intellectual property of the licensor that is not subject to the licensing agreement;

 

   

our right to transfer or assign the license, or to sublicense patents and other intellectual property rights to third parties;

 

   

our diligence obligations and what activities satisfy those diligence obligations;

 

   

the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by any of our licensors and us and our partners; and

 

   

the priority of invention of patented technology.

If disputes over intellectual property that we have licensed from third parties prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize our product candidates.

The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. If we are unable to license such technology, or if we are forced to license such technology on unfavorable terms, our business could be harmed. If we are unable to obtain a necessary license, we may be unable to develop or commercialize the affected product candidates, which could harm our business, and the third parties owning such intellectual property rights could seek either an injunction prohibiting sales or an obligation on our part to pay royalties and/or other forms of compensation. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

Additionally, our licensors may have relied on third-party consultants or collaborators or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed. Some of our in-licensed patent rights are sublicensed to us pursuant to parent license agreements we are not a party to. If any such parent licenses terminate, whether due to our licensor’s breach of the parent license agreement or for other reasons outside of our control, we could lose our rights to such sublicensed patent rights. Furthermore, if other third parties have ownership rights to our in-licensed patents, the license granted to us in jurisdictions where the consent of a co-owner is necessary to grant such a license may not be valid, in any case, and such co-owners may be able to license such patents to our competitors, and our competitors could market competing products and technology. In addition, certain of our in-licensed patent rights are dependent, in part, on inter-institutional or other operating agreements between the joint owners of such in-licensed patent rights. If one or more of such joint owners breaches such inter-institutional or operating agreements, our rights to such in-licensed patent rights may be adversely affected. Any of these events could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Our current and future licenses may not provide us with exclusive rights to use the licensed intellectual property and technology, or may not provide us with exclusive rights to use such intellectual property and technology in

 

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all relevant fields of use and in all territories in which we may wish to develop or commercialize our technology. Patents licensed to us could be put at risk of being invalidated or interpreted narrowly in litigation filed by or against our licensors or another licensee or in administrative proceedings brought by or against our licensors or another licensee in response to such litigation or for other reasons. As a result, we may not be able to prevent competitors or other third parties from developing and commercializing competitive products, including in territories covered by our licenses. Some of our in-licensed patent rights are subject to pre-existing rights granted by the licensor to third parties and our acquired technologies and current or future licensed technology may also be subject to retained rights. Our predecessors or licensors may retain certain rights under their agreements with us, including the right to use the underlying technology for noncommercial academic and research use, to publish general scientific findings from research related to the technology, and to make customary scientific and scholarly disclosures of information relating to the technology. It is difficult to monitor whether our predecessors or future licensors limit their use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.

In addition, certain of our current or future agreements with third parties may limit or delay our ability to consummate certain transactions, may impact the value of those transactions, or may limit our ability to pursue certain activities. If we are limited in our ability to utilize acquired technologies or current or future licensed technologies, or if we lose our rights to critical acquired or in-licensed technology, we may be unable to successfully develop, out-license, market and sell our products, which could prevent or delay new product introductions. Our business strategy depends on the successful development of acquired technologies, and current or future licensed technology, into commercial products. Therefore, any limitations on our ability to utilize these technologies may impair our ability to develop, out-license or market and sell our product candidates.

For more information on our license agreements with third parties, please see the section entitled “Business of Oculis—Material Licenses, Partnerships and Collaborations.”

Risks related to our intellectual property

If we are unable to obtain, maintain, protect and enforce patent or other intellectual property protection for our current and future technology and products, or if the scope of the patent or other intellectual property protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.

We rely upon a combination of patents, trademarks, trade secrets and confidentiality agreements to protect the intellectual property related to our development programs and product candidates. These legal measures afford only limited protection, and competitors or others may gain access to our intellectual property and proprietary information. Our success depends in part on our ability to obtain, maintain, expand, enforce and defend the scope of our intellectual property protection in the United States and other countries with respect to our product candidates.

We have sought and will continue to seek to protect our proprietary position by filing patent applications in the United States and abroad related to our development programs and product candidates. However, the patent prosecution process is expensive and time-consuming, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patents or patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or we may not be able to protect our proprietary rights at all. Additionally, in some instances, we have submitted and expect to submit provisional patent applications. Corresponding non-provisional patent applications must be filed not later than 12 months after the provisional application filing date. While we intend to timely file non-provisional patent applications relating to our provisional patent applications, we cannot predict whether any such patent applications will result in the issuance of patents that provide us with competitive advantage. Any failure to obtain or maintain patent and other intellectual property protection with respect to our product candidates could harm our business, financial condition and results of operations. Additionally, although we seek to enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research

 

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and development output, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

As of October 31, 2022, our owned and exclusively in-licensed patent portfolio included 10 issued U.S. patents, five issued European patents validated in multiple jurisdictions, and 42 issued patents in other foreign jurisdictions, as well as five pending non-provisional U.S. patent applications, 66 foreign pending patent applications, including four pending European patent applications, and one pending PCT application related to our different product candidates, namely, OCS-01, OCS-02, OCS-03, OCS-04 and OCS-05. Please see the section entitled “Business of Oculis and Certain Information about Oculis – Intellectual Property” for further details on our intellectual property portfolio. The patents and patent applications that we own or in-license may fail to result in issued patents with claims that protect our product candidates in the United States or in other foreign countries. There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can prevent a patent from issuing from a pending patent application, or be used to invalidate a patent. Even if patents do successfully issue and even if such patents cover our product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patents being narrowed, invalidated or held unenforceable. Any successful opposition to these patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our licensors will be successful in protecting our product candidates by obtaining, maintaining, enforcing and defending patents. These risks and uncertainties include the following:

 

   

the U.S. Patent and Trademark office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;

 

   

patent applications may not result in any patents being issued;

 

   

patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;

 

   

our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or block our ability to make, use and sell our products and product candidates;

 

   

there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

 

   

countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing products.

We may also choose not to seek patent protection for certain innovations and may choose not to pursue patent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable or limited in scope. For example, we currently do not own or in-license any issued patents or pending patent applications relating to OCS-03, other than a pending PCT application. PCT applications do not issue directly as patents, and national phases of such PCT application must be filed within 30 months after the earliest priority date of such PCT application. There can be no assurance that any national phases of such PCT application will result in an issued patent, or that the claims in national phases of such PCT application will not be narrowed during prosecution or, even if issued, be broad enough to adequately cover

 

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OCS-03. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. If we fail to timely file for patent protection in any jurisdiction, we may be precluded from doing so at a later date.

Moreover, we are, and could become in the future, a licensee of a third party’s patents or patent applications and we may not have the right to control the preparation, filing or prosecution of such patent applications, or to maintain, enforce or protect the patents in-licensed from those third parties. We may also require the cooperation of our licensors in order to enforce the licensed patent rights, and such cooperation may not be provided. Therefore, any licensed patents or patent applications may not be prosecuted, maintained, enforced or protected in a manner consistent with the best interests of our business. We also cannot be certain that patent prosecution and maintenance activities by any of our licensors will be conducted in compliance with applicable laws and regulations, which may affect the validity and enforceability of such patents or any patents that may issue from such applications. If any of our licensors fail to do so, this could cause us to lose rights in any applicable intellectual property, and as a result our ability to develop and commercialize products or product candidates may be adversely affected and we may be unable to prevent competitors from making, using and selling competing products. In addition, even where we have the right to control the prosecution of patents and patent applications under a license from third parties, we may still be adversely affected or prejudiced by actions or inactions of our predecessors or licensors and their counsel that took place prior to us assuming control over patent prosecution. If our current or future licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised. If disputes over intellectual property that we license prevents or impairs our ability to maintain our licensing arrangements on acceptable terms, we may not be able to successfully develop and commercialize the affected product candidates. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

If the patent applications we own, license, or may own or license in the future with respect to our development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our product candidates, it could dissuade other companies from collaborating with us to develop product candidates, and threaten our ability to commercialize our product candidates, if approved. Any such outcome could have a materially adverse effect on our business.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has been and will continue to be the subject of litigation and new legislation. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. For example, many countries restrict the patentability of methods of treatment of the human body. Publications in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, there is a risk that we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in our owned or in-licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions. As a result of these and other factors, the issuance, scope, validity, enforceability, and commercial value of our owned and in-licensed patent rights are highly uncertain. Our owned and in-licensed pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our owned and in-licensed patents or narrow the scope of patent protection for our product candidates.

Moreover, we or our licensors may be subject to a third-party pre-issuance submission of prior art to the USPTO or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our owned or in-licensed patent rights or the patent rights of others. In particular, the costs of defending patents or enforcing our proprietary rights in post-issuance administrative proceedings and litigation can be substantial and the outcome can be uncertain. An adverse determination in any

 

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such submission, proceeding or litigation could reduce the scope of, or invalidate, our owned or in-licensed patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our owned or in-licensed patents and patent applications is threatened, it could dissuade companies from collaborating to license, develop or commercialize current or future product candidates. We may not be aware of all third-party intellectual property rights potentially relating to our products, product candidates or their intended uses, and as a result the impact of such third-party intellectual property rights upon the patentability of our owned and in-licensed patents and patent applications, as well as the impact of such third-party intellectual property upon our freedom to operate, is highly uncertain. We cannot ensure that we do not infringe, misappropriate or otherwise violate any patents or other intellectual property or proprietary rights held by others or that we will not infringe, misappropriate or otherwise violate intellectual property or proprietary rights held by others in the future. If our products were found to infringe, misappropriate or otherwise violate any proprietary intellectual property or right of another party, we could be required to pay significant damages or license fees to such party and/or cease production, marketing and distribution of those products. Litigation may also be necessary to defend infringement, misappropriation or other violation claims of third parties or to enforce patent or other intellectual property rights we hold or protect trade secrets or techniques or other intellectual property we own. Further, third parties may seek approval to market their own products similar to or otherwise competitive with our products. In these circumstances, we may need to defend and/or assert our patents or other intellectual property, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or agency with jurisdiction may find our owned or in-licensed patents invalid, unenforceable, or not infringed; competitors may then be able to market products and use manufacturing and analytical processes that are substantially similar. Even if we own or in-license valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and patents in which we or our licensors have an interest may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Generally, issued patents are granted a term of 20 years from the earliest claimed non-provisional filing date. In certain instances, patent terms can be adjusted to recapture a portion of delay incurred by the USPTO in examining the patent application (patent term adjustment). The scope of patent protection may also be limited. In addition, the laws of foreign jurisdictions may not protect our rights to the same extent as the laws of the U.S. For example, certain countries outside of the U.S. do not allow patents for methods of treating the human body. This may preclude us from obtaining method patents outside of the U.S. having similar scope to those we have obtained or may obtain in the future in the U.S.

It is possible that defects of form in the preparation or filing of our owned or in-licensed patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments. The acquisition or licensing of third-party intellectual property rights is a competitive area, and our competitors may pursue strategies to acquire or license third-party intellectual property rights that we may consider attractive or necessary, and our competitors could market competing products and technology. Our competitors may have a competitive advantage due to their size, capital resources and greater development and commercialization capabilities. In addition, companies may be unwilling to assign or license rights to us. We also may be unable to acquire or license third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant product, and our customers may be forced to stop using the relevant products. If we or our current or future licensors fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated. If there are material defects in the form, preparation, prosecution, or enforcement of our patents or

 

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patent applications, such patents may be invalid and/or unenforceable, and such applications may never result in valid, enforceable patents. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business.

Without patent protection for our current or future product candidates, we may be open to competition from generic versions of such products. Given the amount of time required for the development, testing, and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to our own.

Depending upon the timing, duration and specifics of FDA marketing approval of future product candidates, one or more of our U.S. patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years beyond the normal expiration of the patent as compensation for patent term lost during drug development and the FDA regulatory review process, which is limited to the approved indication (or any additional indications approved during the period of extension). A patent term extension cannot extend the remaining term of a patent beyond 14 years from the date of product approval. This extension is based on the first approved use of a product and is limited to only one patent that covers the approved product, the approved use of the product, or a method of manufacturing the product. However, the applicable authorities, including the FDA and the USPTO in the U.S., and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. We may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time-period or the scope of patent protection afforded could be less than we request. If we are unable to extend the expiration date of our existing patents or obtain new patents with longer expiry dates, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to obtain approval of competing products following our patent expiration and launch our product earlier than might otherwise be the case.

Obtaining and maintaining intellectual property, including patent protection, depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental agencies, and our intellectual property, including patent protection, could be reduced or eliminated for noncompliance with these requirements.

The patent prosecution process is expensive, time-consuming and complex. Periodic maintenance, renewal, annuity and various other fees on any issued patent are due to be paid to the USPTO and other foreign governmental agencies in several stages over the lifetime of the intellectual property. The USPTO and various national or international agencies require compliance with a number of procedural, documentary, fee payment, and other similar provisions during the application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the intellectual property, resulting in partial or complete loss of rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of rights include, but are not limited to, failure to timely file national and regional stage patent applications based on our international application, failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents. If we or any of our licensors fail to maintain the intellectual property covering our product candidates, our competitors may be able to enter the market, which would have an adverse effect on our business, financial condition and results of operations.

 

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We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products.

We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our current and future product candidates in any jurisdiction. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our product candidates, if approved. We may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, and our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products. Also, because the claims of published patent applications can change between publication and patent grant, there may be published patent applications that may ultimately issue with claims that we infringe. As the number of competitors in the market grows and the number of patents issued in this area increases, the possibility of patent infringement claims escalates. Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements. From time to time, we may receive threatening letters, notices or “invitations to license,” or may be the subject of claims that our products and business operations infringe, misappropriate or otherwise violate the intellectual property rights of others. The defense of these matters can be time consuming, costly to defend in litigation, divert management’s attention and resources, damage our reputation and brand and cause us to incur significant expenses or make substantial payments.

We may become subject to third-party claims or litigation alleging infringement, misappropriation or other violation of such third party’s patents or other intellectual property or proprietary rights, or seeking to invalidate our patents or other intellectual property or proprietary rights, which could be costly, time consuming, and, if successfully asserted against us, may delay or prevent the development and commercialization of any of our product candidates.

Our commercial success depends in part on us and our licensors avoiding infringement, misappropriation and other violations of the patents and other intellectual property or proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the U.S., involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, derivation, and administrative law proceedings, inter partes review, and post-grant review before the USPTO, as well as oppositions and similar processes in foreign jurisdictions. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical products and techniques without payment, or limit the duration of the patent protection of our technology. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we and our collaborators are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our product candidates or other business activities may be subject to claims of infringement of the patent and other proprietary rights of third parties. Third parties may assert that we are infringing, misappropriating or otherwise violating their patents or other intellectual property or proprietary rights or employing their proprietary technology without authorization.

Also, there may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods of treatment related to the use or manufacture of our current and future product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our current or future product candidates may infringe.

 

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In addition, third parties may obtain patent rights in the future and claim that use of our technologies infringes upon their rights. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates, any molecules formed during the manufacturing process, methods of treating certain diseases or conditions that we are pursuing with our product candidates, our formulations including combination therapies, or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. Such a license may not be available on commercially reasonable terms or at all. In addition, we may be subject to claims that we are infringing, misappropriating or otherwise violating other intellectual property rights, such as trademarks or copyrights, or misappropriating the trade secrets of others, and to the extent that our employees, consultants or contractors use intellectual property or proprietary information owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our current and future product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful infringement or other intellectual property claim against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our affected products, which may be impossible or require substantial time and monetary expenditure. We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done so from time to time. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize one or more of our product candidates, which could harm our business significantly. We cannot provide any assurances that third-party patents or other intellectual property or proprietary rights do not exist which might be enforced against our product candidates, resulting in either an injunction prohibiting sales, or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation to third parties.

During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation. If securities analysts or investors regard these announcements as negative, the perceived value of our existing product candidates, programs or intellectual property could be diminished. Accordingly, the market price of New Parent Shares may decline. Such announcements could also harm our reputation or the market for future products, which could have a material adverse effect on our business.

Lawsuits or other proceedings to protect or enforce our patents, the patents of any licensors or our other intellectual property rights could be expensive, time consuming, and unsuccessful.

Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorized use or misappropriations, we may be required to file legal claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that one or more patents of us or any of our current or future licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. The initiation of a claim against a third party may also cause the third party to bring counterclaims against us, such as claims asserting that our patents are invalid or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or lack of statutory subject matter. Grounds for an unenforceability

 

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assertion could be an allegation that someone connected with prosecution of the patent withheld relevant material information from the USPTO, or made a materially misleading statement, during prosecution. Third parties may also raise similar validity claims before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, post-grant review or oppositions or similar proceedings outside the U.S., in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. We cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. Additionally, for any patents and patent applications that we license from third parties, we may have limited or no right to participate in the defense of such licensed patents against challenge by a third-party. If a defendant were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our current or future product candidates. Such a loss of patent protection could harm our business.

Furthermore, even if our patents or other intellectual property or proprietary rights are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead award us monetary damages or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market. Because of the expense and uncertainty of litigation, we may conclude that even if a third party is infringing our current or future owned or in-licensed patents, any patents that may be issued as a result of our current or future owned or in-licensed patent applications, or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of us or our shareholders. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution. Moreover, even if we are successful in any litigation, we may incur significant expense in connection with such proceedings, and the amount of any monetary damages may be inadequate to compensate us for damage as a result of the infringement and the proceedings.

In addition, third parties may assert infringement claims against our customers. These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers or indemnify our customers for any costs associated with their own initiation or defense of infringement claims, regardless of the merits of these claims. If any of these claims succeed or settle, we may be forced to pay damages or settlement payments on behalf of our customers or may be required to obtain licenses for the products they use. If we cannot obtain all necessary licenses on commercially reasonable terms or at all, our customers may be forced to stop using our products.

We may not be able to prevent, alone or with our licensors, infringement, misappropriation or other violation of our intellectual property or other proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the United States. Our business could be harmed if in litigation the prevailing party does not offer us a license on commercially reasonable terms or at all. Any litigation or other proceedings to enforce our intellectual property or proprietary rights may fail, and even if successful, may result in substantial costs and distract the management and other employees.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of the New Parent Shares.

Changes in U.S. or foreign patent laws or their interpretations could diminish the value of patents in general, thereby impairing our ability to protect our products.

The United States government has enacted and implemented wide-ranging patent reform legislation. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to

 

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increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on actions by Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have licensed or that we might obtain in the future. Similarly, changes in patent law and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we have licensed or that we may obtain in the future.

In 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted and also affect patent litigation. These also include provisions that switched the U.S. from a “first-to-invent” system to a “first-to-file” system, allow third-party submission of prior art to the USPTO during patent prosecution and set forth additional procedures to attack the validity of a patent by the USPTO administered post grant proceedings. Under a first-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had made the invention earlier. The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. A third-party that files a patent application in the USPTO after March 2013, but before the Company could therefore be awarded a patent covering an invention even if the Company had made the invention before it was made by such third-party. This will require the Company to be cognizant of the time from invention to filing of a patent application. Since patent applications in the U.S. and most other countries are confidential for a period of time after filing or until issuance, the Company cannot be certain that it was the first to file any patent application related to its products or invent any of the inventions claimed in its patents or patent applications.

The Leahy-Smith Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a