Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Information Required in Proxy Statement

Schedule 14A Information

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 3)

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

Altitude Acquisition Corp.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 


Table of Contents

PRELIMINARY PROXY STATEMENT-SUBJECT TO COMPLETION, DATED NOVEMBER 28, 2023

ALTITUDE ACQUISITION CORP.

400 Perimeter Center Terrace, Suite 151

Atlanta, Georgia 30346

Dear Altitude Stockholders:

We cordially invite you to attend a special meeting of the stockholders (the “special meeting”) of Altitude Acquisition Corp., a Delaware corporation (“Altitude,” “we,” “us,” or “our”), which will be held on [●], 2023 at [●] a.m., Eastern Time online at []. You or your proxyholder will be able to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting [] and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (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 the accompanying proxy statement.

On April 23, 2023, Altitude entered into a business combination agreement (the “Business Combination Agreement”) by and among Altitude, Altitude Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Altitude (“Merger Sub”), Altitude Merger Sub II, LLC a Delaware limited liability company and a direct wholly owned subsidiary of Altitude (“Merger Sub II” and together with Merger Sub, the “Merger Subs”) Picard Medical, Inc., a Delaware corporation (“Picard”) and Hunniwell Picard I, LLC, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders of Picard.

Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Picard (the “First Merger”), with Picard surviving as a wholly-owned subsidiary of Altitude (the “Surviving Corporation”). Immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II surviving as the surviving entity (the “Surviving Entity,” which will be renamed “Picard Medical, LLC,” and such merger, the “Second Merger” and, together with the First Merger, the “Mergers”). Upon the closing of the Mergers (the “Closing” and the date of the Closing, the “Closing Date”), it is anticipated that Altitude will change its name to “Picard Medical Holdings, Inc.” and is referred to herein as “New Picard” as of the time following such change of name.

Prior to the First Merger, each issued and outstanding share of Picard’s preferred stock, par value $0.0001 per share (“Picard Preferred Stock”), will automatically convert into one share of common stock of Picard, par value $0.001 per share (“Picard Common Stock”). Each of Picard’s convertible notes that are outstanding prior to the First Merger, if any, will convert prior to the First Merger into shares of Picard Common Stock in accordance with the terms of such convertible notes. Each share of Picard Common Stock held by a Picard securityholder immediately prior to the time in which the First Merger becomes effective (the “First Effective Time”) (including shares issued upon conversion of Picard Preferred Stock and convertible notes, but not including dissenting shares) will be automatically cancelled and converted into the right to receive a pro rata portion of an aggregate of 48,000,000 shares of common stock of New Picard, par value $0.001 per share (“New Picard Common Stock”), subject to adjustment to take into account certain cash and indebtedness of Picard at the Closing, and an aggregate of 6,500,000 warrants to purchase shares of New Picard Common Stock at an initial exercise price of $11.50 per share (“New Picard Warrants”), plus up to an additional 6,500,000 New Picard Warrants if certain earnout conditions are satisfied (the “Earnout Warrants”). Each of Picard’s options that are outstanding and unexercised prior to the First Merger will be assumed by New Picard and converted into a New Picard option with the same terms and conditions. If Picard issues any warrants prior to the Closing, each of Picard’s warrants that are outstanding and unexercised prior to the First Merger, whether or not then vested or exercisable, will be assumed by New Picard and will be converted into a warrant to acquire shares of New Picard Common Stock and will be subject to the same terms and conditions that applied to the Picard warrant immediately prior to the First Merger.


Table of Contents

All conversions of Picard equity securities to New Picard equity securities will be executed at a number equal to the quotient of (a) $10.00 divided by (b) the number of fully diluted shares of Picard Common Stock. The estimated Exchange Ratio as of November 28, 2023, is approximately 1.978.

The Earnout Warrants will be held in escrow following the Closing and will be released to the Picard securityholders if, at any time during the five (5) year period following the Closing, the dollar volume-weighted average price (“VWAP”) of New Picard Common Stock for any 20 trading days within any 30 trading day period is greater than $12.50.

Additionally, at the Closing, New Picard will issue 100,000 shares of New Picard Common Stock and 30,000 New Picard Warrants to certain service providers of Altitude (the “Service Providers”).

The Business Combination Agreement requires Altitude and Picard to use commercially reasonable efforts to identify additional sources of financing for and negotiate the underlying subscription, financing and similar agreements in connection with the Closing (the “Closing Offering”). Additionally, the Business Combination Agreement requires Altitude and Picard to use commercially reasonable efforts to secure financing for Picard through a private placement of Picard equity securities or other equity, equity-linked or debt financing (including convertible debt) (subject to certain agreed limitations), in each case on commercially reasonable and market-based terms reasonably acceptable to Picard acting in good faith and in consultation with Altitude (each, a “Picard Financing”). On October 22, 2023, SynCardia Systems, LLC, a wholly-owned subsidiary of Picard (“SynCardia”), and Altitude entered into a non-binding letter of intent (the “Picard Financing LOI”) with a potential investor which is not affiliated with Picard, Hunniwell Picard I, LLC, Picard management, or the Sponsor or Altitude’s officers, directors, or their affiliates (the “Investor”) with respect to $30.0 million of financing in the form of a senior secured convertible note (the “Picard Financing Note”), to be issued by SynCardia and funded by the Investor simultaneously with the Closing of the Business Combination. However, there is no assurance that SynCardia, Altitude and the Investor will enter into a definitive agreement for the Picard Financing Note on the current terms of the Picard Financing LOI, or at all, or that the Picard Financing Note would be funded at or prior to Closing. It is not anticipated that the Sponsor, any directors of Altitude, or any officers of Altitude, or any of their respective affiliates, will participate in the Picard Financing LOI or any similar financing.

In connection with the Closing, Altitude and certain record and/or beneficial owners of equity securities of Picard (“Picard Lock-Up Holders”) will enter into a lock-up agreement (the “Lock-Up Agreement”). Pursuant to the Lock-Up Agreement, the Picard Lock-Up Holders will agree, subject to customary exceptions, not to transfer (a) any shares of New Picard Common Stock received by them as consideration in the Mergers (the “Lock-Up Shares”) for the period ending on the earliest of (x) the date this is one year following the Closing Date, (y) the date on which the closing price of shares of New Picard Common Stock on Nasdaq equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for 20 of any 30 consecutive trading days commencing at least 150 days after the Closing, and (z) the date on which New Picard completes a liquidation, merger, capital stock exchange, reorganization or similar transaction that results in all of New Picard’s stockholders having the right to exchange their shares of New Picard Common Stock for cash, securities or other property and (b) any warrants of New Picard received as consideration in the Mergers (including the Earnout Warrants) for a period of 30 days after Closing.

In connection with the execution of the Business Combination Agreement, on April 23, 2023, Altitude Acquisition Holdco LLC (the “Sponsor”) entered into a support agreement with Altitude and Picard (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreed to vote all voting equity securities of Altitude owned by the Sponsor in favor of the Business Combination Agreement, the Mergers and each other proposal presented by Altitude in this proxy statement and not to sell, assign, transfer or redeem any shares (the “Founder Shares”) of Class A common stock of Altitude, par value $0.0001 per share (“Class A common stock”), held by it prior to the Closing. In addition, the Sponsor Support Agreement provides that the Sponsor will, in connection with the Closing (x) forfeit an aggregate amount of up to 4,500,000 shares of Class A common stock held by the Sponsor immediately prior to the Closing, with such number of forfeited shares to be reduced by 20,000 shares for each $1,000,000 by which the proceeds of the Closing Offering plus the funds remaining in the trust account established in connection with Altitude’s initial public offering (“Trust Account”) (after giving effect to redemptions and any financial incentives or discounts given to incentivize non-redemption


Table of Contents

and the repayment of any outstanding debt to the Sponsor) together with the proceeds from any Picard Financing, exceeds $38,000,000, (y) forfeit 6,500,000 private warrants of Altitude, each whole warrant exercisable for one share of Class A common stock at an initial exercise price of $11.50 per share held by Sponsor immediately prior to the Closing, and (z) deposit with Continental Stock Transfer & Trust Company, acting as escrow agent, 1,250,000 shares of Class A common stock (the “Sponsor Earnout Shares”) and 1,000,000 private warrants (the “Sponsor Earnout Warrants” and together with the Sponsor Earnout Shares, the “Sponsor Earnout Securities”). The Sponsor Earnout Securities will be released to the Sponsor upon achievement of the following milestones at any time during the five year period following the Closing: (i) 500,000 Sponsor Earnout Shares will be released if the VWAP of New Picard Common Stock is equal to or greater than $12.50 for any 20 trading days within any 30 trading day period, (ii) 1,000,000 Earnout Warrants will be released upon the closing of the acquisition by Altitude or New Picard, as applicable, of at least 10,000,000 warrants or New Picard Warrants, as applicable, from public investors, and (iii) 750,000 Sponsor Earnout Shares will be released upon the release of the Sponsor Earnout Shares and Sponsor Earnout Warrants pursuant to both (i) and (ii) of this paragraph. Any Sponsor Earnout Securities that have not been released from escrow on the date that is five years after the Closing will be forfeited.

In connection with the execution of the Business Combination Agreement, on April 23, 2023, certain Picard stockholders holding an aggregate of approximately 90% of the outstanding Picard equity, on an as-converted to Picard Common Stock basis, and 100% of the outstanding Picard Preferred Stock (together, the “Picard Supporting Stockholders”) entered into support agreements with Altitude and Picard (the “Picard Support Agreements”). Under the Picard Support Agreements, each Picard Supporting Stockholder agreed to (i) execute and deliver a written consent with respect to the outstanding shares of Picard Common Stock and Picard Preferred Stock held by such Picard Supporting Stockholder (the “Subject Picard Shares”) approving the Business Combination Agreement and the transactions contemplated thereby, (ii) certain transfer restrictions with respect to the Subject Picard Shares, (iii) to certain non-solicitation limitations with respect to certain competing transactions, and (iv) irrevocably waive any dissenters’ or appraisal rights under Delaware law in connection with the Mergers. The Picard Supporting Stockholders delivered such consents approving the Mergers and related matters on April 24, 2023.

In connection with the Closing, Altitude, Picard, and certain of their respective stockholders will enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, New Picard will be required to register for resale securities held by the stockholders party. In addition, the holders will have certain demand and “piggyback” registration rights. New Picard will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Registration Rights Agreement.

Assuming no redemptions from the Trust Account, no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note and that such note is not converted to New Picard Common Stock immediately upon the Closing, and that Picard waives the Minimum Cash Condition (defined below), it is anticipated that, immediately following the Closing, (1) Altitude’s public stockholders will own approximately 2.71% of the outstanding shares of New Picard Common Stock, (2) the Sponsor will own approximately 6.08% of the outstanding shares of New Picard Common Stock following the forfeiture of 4.5 million Founder Shares pursuant to the Sponsor Support Agreement and including 1,250,000 Sponsor Earnout Shares which will be outstanding on the Closing Date and for which the Sponsor will have voting rights, (3) Hunniwell Picard I, LLC will own approximately 73.79% of the outstanding shares of New Picard Common Stock, (4) the existing Picard securityholders other than Hunniwell Picard I, LLC will own approximately 17.22% of the outstanding shares of New Picard Common Stock, and (5) the Service Providers will own approximately 0.20% of the outstanding New Picard Common Stock. Such figures do not include any shares of New Picard Common Stock issuable upon the exercise of New Picard Options or upon the exercise of the New Picard Warrants to be issued to Picard securityholders at the Closing, Earnout Warrants issuable to Picard securityholders, Sponsor Earnout Warrants or New Picard Warrants issuable to the Service Providers. You should note that the Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition, or any other condition to Closing described elsewhere in this proxy statement.


Table of Contents

On November 13, 2023, Altitude filed with the SEC and mailed to its stockholders a proxy statement seeking stockholder approval to amend Altitude’s Amended and Restated Certificate of Incorporation to extend the time in which Altitude must complete an initial business combination, monthly, up to March 11, 2024 (the “Extension”) . Altitude plans to hold a stockholder meeting to approve the Extension only if the Business Combination is not completed before December 11, 2023, which is the current deadline to complete an initial business combination. Such stockholder meeting is currently scheduled to occur on December 6, 2023. Even if the Extension is approved and implemented, Altitude can provide no assurances that the Business Combination will be consummated prior to March 11, 2024 because our ability to consummate the Business Combination is dependent on a variety of factors, which are described throughout this proxy statement, many of which are beyond our control. In connection with the Extension, Altitude is required to provide its stockholders with the opportunity to redeem all or a portion of their Public Shares. This redemption right is additional to the redemption right described elsewhere in this proxy statement with respect to the Business Combination. Accordingly, even if the Extension and the Business Combination are approved by Altitude stockholders, it is possible that redemptions will leave us with insufficient cash or public float to consummate the Business Combination on commercially acceptable terms, or at all. Further, the Extension contravenes Nasdaq rules. Nasdaq rule IM-5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement, which, in the case of Altitude, would be December 8, 2023 (the “Nasdaq Deadline”). The Extension would extend Altitude’s life beyond the Nasdaq Deadline. Altitude may be subject to suspension or delisting by Nasdaq if the Extension is implemented. For more information see “Risk Factors The Extension contravenes Nasdaq rules, and as a result, could lead Nasdaq to suspend trading in Altitude’s securities or lead Altitude to be delisted from Nasdaq.”

You are being asked to vote on the Business Combination and related matters.

The Business Combination Agreement provides that Picard’s obligations to consummate the Business Combination are conditioned on, among other things, on the “Aggregate Parent Closing Cash” (which means the aggregate cash proceeds available for release to Altitude from Altitude’s Trust Account (defined below), after giving effect to redemptions, less payment of up to $2,000,000 of Picard’s transaction expenses and up to $4,500,000 of Altitude’s transaction expenses, plus the aggregate cash proceeds received by Altitude or committed to be invested in respect of the Closing Offering plus the aggregate cash proceeds funded or irrevocably committed to be funded in respect of any Picard Financing), being at least $38,000,000. We refer to this condition as the “Minimum Cash Condition.” The Business Combination is also subject to the satisfaction or waiver of certain other closing conditions described in more detail in the accompanying proxy statement. While Altitude and SynCardia have entered into the Picard Financing LOI, there can be no assurances that Altitude, SynCardia and the Investor will enter into a definitive agreement for the Picard Financing Note on the terms set forth in the Picard Financing LOI or at all, or that the Picard Financing Note would be funded at or prior to Closing, or that Picard or Altitude will be able to obtain any other source of financing. Accordingly, we cannot assure you that the Minimum Cash Condition will be met. If these conditions are not met, and such conditions are not waived, then the Business Combination Agreement could terminate, and the proposed Business Combination may not be consummated. There can be no assurance that the parties to the Business Combination Agreement would waive any provision of the Business Combination Agreement.

At the special meeting, you will be asked to consider and vote upon the following proposals:

 

  1.

Proposal No. 1 — The Business Combination Proposal: A proposal to approve the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and to approve the transactions contemplated by the Business Combination Agreement, including the Mergers (the “Business Combination,” and such proposal, the “Business Combination Proposal”);

 

  2.

Proposal No. 2 — The Binding Charter Proposal: A proposal to approve the proposed second amended and restated certificate of incorporation of Altitude in the form attached as Annex D (the “Proposed Charter”), which will amend and restate Altitude’s amended and restated certificate of incorporation, dated December 8, 2020 (as amended on June 10, 2022, October 6, 2022 and April 7, 2023, the “Current Charter”) and will be in effect upon the Closing of the Business Combination (the “Binding Charter Proposal”);


Table of Contents
  3.

Proposal No. 3 — The Advisory Governance Proposals: Separate proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with U.S. Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as 5 sub-proposals (collectively, the “Advisory Governance Proposals”):

3A (Authorized Share Increase): increase the total number of authorized shares of all classes of capital stock, par value $0.0001 per share, from (x) 301,000,000 shares, consisting of (a) 300,000,000 shares of common stock, including (i) 280,000,000 shares of Class A common stock and (ii) 20,000,000 shares of Class B common stock and (b) 1,000,000 shares of preferred stock to (y) 305,000,000 shares, consisting of 300,000,000 shares of New Picard Common Stock and 5,000,000 shares of preferred stock;

3B (Removal of Directors): allow for the removal of directors at any time, but only for cause and only by the affirmative vote of holders of two thirds (66 and 2/3%) of the voting power of all then outstanding shares of capital stock entitled to vote generally in the election of directors.

3C (Two-Thirds Stockholder Vote Required to Amend Certain Provisions of the Proposed Charter): require the approval by affirmative vote of the holders of at least two-thirds (66 and 2/3%) of the New Picard Common Stock to make any amendment to certain provisions of the Proposed Charter);

3D (Two-Thirds Stockholder Vote Required to Amend the Proposed Bylaws): require an affirmative vote of holders of at least two-thirds (66 and 23%) of the voting power of all of the then outstanding shares of voting stock of New Picard entitled to vote generally in an election of directors for stockholders to be able to adopt, amend, alter or repeal or rescind the Proposed Bylaws; and

3E: (Eliminate Blank Check Company Provisions): eliminate certain provisions specific to Altitude’s status as a blank check company.

 

  4.

Proposal No. 4 — The Stock Issuance Proposal: A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market (“Nasdaq”), (x) the issuance of more than 20% of Altitude’s issued and outstanding common stock in connection with the Business Combination, consisting of the issuance of shares of common stock to Picard securityholders pursuant to the terms of the Business Combination Agreement, including any shares issuable upon the exercise of warrants including the Earnout Warrants, plus any additional shares of common stock pursuant to subscription agreements Altitude may enter into prior to the Closing and (y) the issuance of shares of common stock to Picard securityholders in connection with the Business Combination, including any shares issuable upon the exercise of warrants including the Earnout Warrants, that would result in Picard owning more than 20% of Altitude’s outstanding common stock, or more than 20% of the voting power of Altitude, which could constitute a “change of control” under Nasdaq rules (the “Stock Issuance Proposal”);

 

  5.

Proposal No. 5 — The Incentive Plan Proposal: A proposal to approve and adopt the 2023 Equity Incentive Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex H (the “Incentive Plan Proposal”);

 

  6.

Proposal No. 6 — The Director Election Proposal: A proposal to elect seven directors to serve staggered terms on the Board of Directors of New Picard until the 2024, 2025 and 2026 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal (the “Director Election Proposal”); and

 

  7.

Proposal No. 7 — The Adjournment Proposal: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the proposals described in this proxy statement or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).

Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. Under the Business Combination Agreement, the Closing is conditioned upon the


Table of Contents

approval of the Business Combination Proposal. The Binding Charter Proposal, Advisory Governance Proposals, Stock Issuance Proposal, Incentive Plan Proposal, and Adjournment Proposal, if presented, are not conditioned upon the approval of any other proposal. If Altitude’s stockholders do not approve the Business Combination Proposal, the Business Combination will not be consummated. By contrast, approval of each of the other proposals in the proxy statement (i.e., the Binding Charter Proposal, Advisory Governance Proposals, Stock Issuance Proposal, Incentive Plan Proposal, and, if presented, Adjournment Proposal) is not a condition to the consummation of the Business Combination.

Altitude’s Class A common stock, units and warrants are currently listed on Nasdaq under the symbols “ALTU,” “ALTUU” and “ALTUW,” respectively. Upon consummation of the transactions contemplated by the Business Combination Agreement, Altitude will change its name to “Picard Medical Holdings, Inc.” Altitude has applied to obtain the listing of the New Picard Common Stock and New Picard Warrants on Nasdaq under the symbols “TAH” and “TAHW,” respectively, upon the Closing. It is a condition to the consummation of the Business Combination that the New Picard Common Stock to be issued to the Picard securityholders in the Business Combination be approved for listing on Nasdaq (subject only to official notice of issuance thereof), but there can be no assurance that such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Business Combination Agreement. It is important for you to know that, at the time of the special meeting, Altitude may not have received from Nasdaq either confirmation of the listing of the New Picard Common Stock or that approval will be obtained prior to the consummation of the Business Combination, and it is possible that such condition to the consummation of the Business Combination may be waived by the parties to the Business Combination Agreement. As a result, you may be asked to vote to approve the Business Combination and the other proposals included in the accompanying proxy statement without such confirmation, and, further, it is possible that such confirmation may never be received and the Business Combination could still be consummated if such condition is waived and therefore the New Picard Common Stock would not be listed on any nationally recognized securities exchange.

Only holders of record of shares of our Class A common stock, Altitude’s only outstanding class of common stock, at the close of business on [●], 2023 (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of the stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at Altitude’s principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the special meeting at [●].

Altitude is providing the accompanying proxy statement and proxy card to its stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments or postponements of the special meeting. Whether or not you plan to attend the special meeting, we urge you to read the accompanying proxy statement carefully and submit your proxy to vote on the Business Combination. Please pay particular attention to the section entitledRisk Factorsbeginning on page 44 of the accompanying proxy statement.

After careful consideration, the Altitude Board has unanimously approved the Business Combination Agreement and the transactions contemplated thereby and determined that each of the Business Combination Proposal, the Binding Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal is in the best interests of Altitude and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals and “FOR” each of the director nominees. As of the date of this proxy statement, the Sponsor owns 7,500,000 shares of Class A common stock which is approximately 85% of Altitude’s outstanding common stock. There are no outstanding shares of Class B common stock after the Sponsor’s conversion of its Class B common stock into Class A common stock on April 7, 2023. Accordingly, the Sponsor will be able to approve the Business Combination Proposal, the Binding Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal even if all other outstanding shares are voted against such proposals.


Table of Contents

The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of Altitude and its stockholders and what may be best for a director’s personal interests when determining to recommend that stockholders vote for the proposals. See the sections entitledThe Business Combination Proposal  Interests of Altitude’s Directors, Officers and Others in the Business CombinationandBeneficial Ownership of Securitiesin the accompanying proxy statement for a further discussion.

Pursuant to the Current Charter, a public stockholder may request that we redeem all or a portion of such public stockholder’s public shares for a pro rata portion of the cash held in the Trust Account prior to the Business Combination being consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

 

  (ii)

prior to 5:00 PM, Eastern Time, on [●], 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to Continental Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that we redeem your public shares for cash, and (b) deliver your public shares to the Transfer Agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders of public units must elect to separate the underlying public shares and warrants included in the public units sold by Altitude in the IPO (the “public warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds public units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so.

Public stockholders may elect to redeem all or a portion of their public shares regardless of whether they vote for or against the Business Combination Proposal, or do not vote at all, and even if they do not hold public shares on the record date.

If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the Transfer Agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account not previously released to us to pay our taxes, divided by the number of then-outstanding public shares. For illustrative purposes, as of [●], 2023, this would have amounted to approximately $[●] per public share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its shares and subsequently decides prior to the redemption deadline not to elect to redeem such shares, it may simply request that Altitude instruct our Transfer Agent to return the shares (physically or electronically). The holder can make such request by contacting the Transfer Agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting of Altitude Stockholders  Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 20%


Table of Contents

of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash, without our prior consent.

Approval of the Business Combination Proposal, each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, and, if presented, the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by holders of shares of our Class A common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class. Approval of the Binding Charter Proposal requires the affirmative vote of the holders of a majority of the shares of Class A common stock then outstanding, voting as a single class. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the shares of our Class A common stock cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class. As of the date of this proxy statement, the Sponsor owns 7,500,000 shares of Class A common stock which is approximately 85% of Altitude’s outstanding common stock. There are no outstanding shares of Class B common stock after the Sponsor’s conversion of its Class B common stock into Class A common stock on April 7, 2023. Accordingly, the Sponsor will be able to approve the Business Combination Proposal, the Binding Charter Proposal each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal even if all other outstanding shares are voted against such proposals.

Our Sponsor and our officers and directors entered into a letter agreement with us at the time of the IPO pursuant to which they agreed (i) to vote all shares of common stock held by them in favor of our initial business combination and (ii) not to redeem any shares of common stock held by them in connection with the completion of our initial business combination. Such redemption rights waiver was provided in connection with the IPO and without any separate consideration paid in connection with providing such waiver. Additionally, the Sponsor entered into the Sponsor Support Agreement with Picard pursuant to which it agreed to vote all equity securities held by it in favor of the Business Combination Proposal, among other things. As of the date hereof, our Sponsor owns approximately 85% of our total outstanding shares of common stock.

All of our stockholders are cordially invited to attend the special meeting virtually. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a stockholder of record holding shares of common stock, you may also cast your vote in person (which would include presence at the virtual special meeting). If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting virtually, obtain a proxy from your broker or bank.

If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting virtually, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Binding Charter Proposal, but will have no effect on the outcome of any other proposal in the accompanying proxy statement.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

If your shares are held in “street name” or are in a margin or similar account, you should contact your bank or broker to ensure that your shares are represented and voted at the special meeting.

On behalf of the Altitude Board, we would like to thank you for your support of Altitude Acquisition Corp. and look forward to a successful completion of the Business Combination.


Table of Contents
By Order of the Board of Directors,
                            

Gary Teplis

Chief Executive Officer

If you return your proxy card signed and without an indication of how you wish to vote, your shares will be voted in favor of each of the proposals.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (1) IF YOU HOLD SHARES OF CLASS A COMMON STOCK THROUGH PUBLIC UNITS, ELECT TO SEPARATE YOUR PUBLIC UNITS INTO THE UNDERLYING PUBLIC SHARES AND PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE PUBLIC SHARES, (2) SUBMIT A WRITTEN REQUEST, INCLUDING THE LEGAL NAME, PHONE NUMBER AND ADDRESS OF THE BENEFICIAL OWNER OF THE SHARES FOR WHICH REDEMPTION IS REQUESTED, TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE SCHEDULED VOTE AT THE SPECIAL MEETING, THAT YOUR PUBLIC SHARES BE REDEEMED FOR CASH, AND (3) DELIVER YOUR SHARES OF CLASS A COMMON STOCK TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT/WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE 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. SEE “SPECIAL MEETING OF ALTITUDE STOCKHOLDERS  REDEMPTION RIGHTS” IN THE ACCOMPANYING PROXY STATEMENT FOR MORE SPECIFIC INSTRUCTIONS.

Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement, passed upon the merits or fairness of the Business Combination Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of the accompanying proxy statement. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated [●], 2023 and is first being mailed to our stockholders on or about [●], 2023.


Table of Contents

ALTITUDE ACQUISITION CORP.

400 Perimeter Center Terrace, Suite 151

Atlanta, Georgia 30346

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

OF ALTITUDE ACQUISITION CORP.

To Be Held on [], 2023

TO THE STOCKHOLDERS OF ALTITUDE ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that a special meeting the stockholders (the “special meeting”) of Altitude Acquisition Corp., a Delaware corporation (“Altitude”, “we,” “us,” or “our”), will be held on [●], 2023, at [●] a.m., Eastern Time online at [●]. You are cordially invited to attend the virtual special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit questions during the special meeting by visiting [●] and using a control number assigned by Continental Stock Transfer & Trust Company. To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (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 the accompanying proxy statement.

On April 23, 2023, Altitude entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among Altitude, Altitude Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Altitude (“Merger Sub”), Altitude Merger Sub II, LLC a Delaware limited liability company and a direct wholly owned subsidiary of Altitude (“Merger Sub II” and together with Merger Sub, the “Merger Subs”) Picard Medical, Inc., a Delaware corporation (“Picard”) and Hunniwell Picard I, LLC, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders of Picard.

Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, Merger Sub will merge with and into Picard (the “First Merger”), with Picard surviving as a wholly-owned subsidiary of Altitude (the “Surviving Corporation”). Immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II surviving as the surviving entity (the “Surviving Entity,” which will be renamed “Picard Medical, LLC,” and such merger, the “Second Merger” and, together with the First Merger, the “Mergers”). Upon the closing of the Mergers (the “Closing” and the date of the Closing, the “Closing Date”), it is anticipated that Altitude will change its name to “Picard Medical Holdings, Inc.” and is referred to herein as “New Picard” as of the time following such change of name.

Prior to the First Merger, each issued and outstanding share of Picard’s preferred stock, par value $0.0001 per share (“Picard Preferred Stock”), will automatically convert into one (1) share of common stock of the Picard, par value $0.001 per share (“Picard Common Stock”). Each of Picard’s convertible notes that are outstanding prior to the First Merger, if any, will convert prior to the First Merger into shares of Picard Common Stock in accordance with the terms of such convertible notes. Each share of Picard Common Stock held by a Picard securityholder immediately prior to the time in which the First Merger becomes effective (the “First Effective Time”) (including shares issued upon conversion of Picard Preferred Stock and convertible notes, but not including dissenting shares) will be automatically cancelled and converted into the right to receive a pro rata portion of an aggregate of 48,000,000 shares of common stock of New Picard, par value $0.001 per share (“New Picard Common Stock”), subject to adjustment to take into account certain cash and indebtedness of Picard at the Closing, and an aggregate of 6,500,000 warrants to purchase shares of New Picard Common Stock at an initial exercise price of $11.50 per share (“New Picard Warrants”), plus up to an additional 6,500,000 New Picard Warrants if certain earnout conditions are satisfied (the “Earnout Warrants”). Each of Picard’s options that are outstanding and unexercised prior to the First Merger will be assumed by New Picard and converted into a New Picard option with the same terms and conditions. If Picard issues any warrants prior to the Closing, each of Picard’s warrants that are outstanding and unexercised prior to the First Merger, whether or not then vested or exercisable, will be assumed by New Picard and will be converted into a warrant to acquire shares of New Picard


Table of Contents

Common Stock and will be subject to the same terms and conditions that applied to the Picard warrant immediately prior to the First Merger.

The Earnout Warrants will be held in escrow following the Closing and will be released to the Picard securityholders if, at any time during the five (5) year period following the Closing, the dollar volume-weighted average price (“VWAP”) of New Picard Common Stock for any 20 trading days within any 30 trading day period is greater than $12.50.

On October 22, 2023, SynCardia Systems, LLC, a wholly-owned subsidiary of Picard (“SynCardia”), and Altitude entered into a non-binding letter of intent (the “Picard Financing LOI”) with a potential investor which is not affiliated with Picard, Hunniwell Picard I, LLC, Picard management, or the Sponsor or Altitude’s officers, directors, or their affiliates (the “Investor”) with respect to $30.0 million of financing in the form of a senior secured convertible note (the “Picard Financing Note”), to be issued by SynCardia and funded by the Investor simultaneously with the Closing of the Business Combination. However, there is no assurance that SynCardia, Altitude and the Investor will enter into a definitive agreement on the current terms of the Picard Financing LOI, or at all, or that the Picard Financing Note would be funded at or prior to Closing.

On November 13, 2023, Altitude filed with the SEC and mailed to its stockholders a proxy statement seeking stockholder approval to amend Altitude’s Amended and Restated Certificate of Incorporation to extend the time in which Altitude must complete an initial business combination, monthly, up to March 11, 2024 (the “Extension”). Altitude plans to hold a stockholder meeting to approve the Extension only if the Business Combination is not completed before December 11, 2023, which is the current deadline to complete an initial business combination. Such stockholder meeting is currently scheduled to occur on December 6, 2023. In connection with the Extension, Altitude is required to provide its stockholders with the opportunity to redeem all or a portion of their Public Shares. This redemption right is additional to the redemption right described elsewhere in this proxy statement with respect to the Business Combination. Accordingly, even if the Extension and the Business Combination are approved by Altitude stockholders, it is possible that redemptions will leave us with insufficient cash or public float to consummate the Business Combination on commercially acceptable terms, or at all. Further, the Extension contravenes Nasdaq rules. Nasdaq rule IM-5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement, which, in the case of Altitude, would be December 8, 2023 (the “Nasdaq Deadline”). The Extension would extend Altitude’s life beyond the “Nasdaq Deadline. Altitude may be subject to suspension or delisting by Nasdaq if the Extension is implemented. For more information see “Risk Factors The Extension contravenes Nasdaq rules, and as a result, could lead Nasdaq to suspend trading in Altitude’s securities or lead Altitude to be delisted from Nasdaq.”

At the special meeting, you will be asked to consider and vote upon the following proposals:

 

  1.

Proposal No. 1 — The Business Combination Proposal: A proposal to approve the Business Combination Agreement, a copy of which is attached to the accompanying proxy statement as Annex A, and to approve the transactions contemplated by the Business Combination Agreement, including the Mergers (the “Business Combination,” and such proposal, the “Business Combination Proposal”);

 

  2.

Proposal No. 2 — The Binding Charter Proposal: A proposal to approve the proposed second amended and restated certificate of incorporation of Altitude in the form attached as Annex D (the “Proposed Charter”), which will amend and restate Altitude’s amended and restated certificate of incorporation, dated December 8, 2020 (as amended on June 10, 2022, October 6, 2022 and April 7, 2023, the “Current Charter”) and will be in effect upon the Closing of the Business Combination (the “Binding Charter Proposal”);

 

  3.

Proposal No. 3 — The Advisory Governance Proposals: Separate proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with U.S. Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as 5 sub-proposals (collectively, the “Advisory Governance Proposals”):

3A (Authorized Share Increase): increase the total number of authorized shares of all classes of capital stock, par value $0.0001 per share, from (x) 301,000,000 shares, consisting of (a) 300,000,000 shares of common stock, including (i) 280,000,000 shares of Class A common stock and (ii) 20,000,000


Table of Contents

shares of Class B common stock and (b) 1,000,000 shares of preferred stock to (y) 305,000,000 shares, consisting of 300,000,000 shares of New Picard Common Stock and 5,000,000 shares of preferred stock;

3B (Removal of Directors): allow for the removal of directors at any time, but only for cause and only by the affirmative vote of holders of two-thirds (66 and 2/3%) of the voting power of all then outstanding shares of capital stock entitled to vote generally in the election of directors;

3C (Two-Thirds Stockholder Vote Required to Amend Certain Provisions of the Proposed Charter): require the approval by affirmative vote of the holders of at least two-thirds (66 and 2/3%) of the New Picard Common Stock to make any amendment to certain provisions of the Proposed Charter;

3D (Two-Thirds Stockholder Vote Required to Amend the Proposed Bylaws): require an affirmative vote of holders of at least two-thirds (66 and 23%) of the voting power of all of the then outstanding shares of voting stock of New Picard entitled to vote generally in an election of directors for stockholders to be able to adopt, amend, alter or repeal or rescind the Proposed Bylaws; and

3E: (Eliminate Blank Check Company Provisions): eliminate certain provisions specific to Altitude’s status as a blank check company.

 

  4.

Proposal No. 4 — The Stock Issuance Proposal: A proposal to approve, for purposes of complying with applicable listing rules of the Nasdaq Stock Market (“Nasdaq”), (x) the issuance of more than 20% of Altitude’s issued and outstanding common stock in connection with the Business Combination, consisting of the issuance of shares of common stock to Picard securityholders pursuant to the terms of the Business Combination Agreement, including any shares issuable upon the exercise of warrants including the Earnout Warrants, plus any additional shares of common stock pursuant to subscription agreements Altitude may enter into prior to the Closing and (y) the issuance of shares of common stock to Picard securityholders in connection with the Business Combination, including any shares issuable upon the exercise of warrants including the Earnout Warrants, that would result in Picard owning more than 20% of Altitude’s outstanding common stock, or more than 20% of the voting power of Altitude, which could constitute a “change of control” under Nasdaq rules (the “Stock Issuance Proposal”);

 

  5.

Proposal No. 5 — The Incentive Plan Proposal: A proposal to approve and adopt the 2023 Equity Incentive Plan (the “Incentive Plan”), a copy of which is attached to the accompanying proxy statement as Annex H (the “Incentive Plan Proposal”);

 

  6.

Proposal No. 6 — The Director Election Proposal: A proposal to elect seven directors to serve staggered terms on the Board of Directors of New Picard until the 2024, 2025 and 2026 annual meeting of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal (the “Director Election Proposal”); and

 

  7.

Proposal No. 7 — The Adjournment Proposal: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the proposals described in this proxy statement or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived (the “Adjournment Proposal”).

Each of these proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Business Combination Proposal. The Binding Charter Proposal, Advisory Governance Proposals, Stock Issuance Proposal, Incentive Plan Proposal, and, if presented, Adjournment Proposal are not conditioned upon the approval of any other proposal. If our stockholders do not approve the Business Combination Proposal, the Business Combination will not be consummated. By contrast, approval of each of the other proposals in the proxy statement (i.e., the Binding Charter Proposal, Advisory Governance Proposals, Stock Issuance Proposal, Incentive Plan Proposal, and, if presented, Adjournment Proposal) is not a condition to the consummation of the Business Combination.


Table of Contents

The Business Combination Agreement provides that Picard’s obligations to consummate the Business Combination are conditioned on, among other things, on the “Aggregate Parent Closing Cash” (which means the aggregate cash proceeds available for release to Altitude from the trust account established in connection with Altitude’s initial public offering (“Trust Account”), after giving effect to redemptions, less payment of up to $2,000,000 of Picard’s transaction expenses and up to $4,500,000 of Altitude’s transaction expenses, plus the aggregate cash proceeds received by Altitude or committed to be invested in respect of the Closing Offering plus the aggregate cash proceeds funded or irrevocably committed to be funded in respect of any Picard Financing), being at least $38,000,000. The Business Combination is also subject to the satisfaction or waiver of certain other closing conditions (including, without limitation, certain conditions precedent to the consummation of the Business Combination) as described in the accompanying proxy statement. While Altitude and SynCardia have entered into the Picard Financing LOI, there can be no assurances that Altitude, SynCardia and the Investor will be able to enter into a definitive agreement for the Picard Financing Note on the terms set forth in the Picard Financing LOI or at all, or that the Picard Financing Note would be funded at or prior to Closing, or that Picard or Altitude will be able to obtain any other source of financing. Accordingly, we cannot assure you that the Minimum Cash Condition will be met. If these conditions are not met, and such conditions are not waived, then the Business Combination Agreement could terminate and the proposed Business Combination may not be consummated. There can be no assurance that the parties to the Business Combination Agreement would waive any such provision of the Business Combination Agreement.

Altitude’s Class A common stock, units and warrants are currently listed on Nasdaq under the symbols “ALTU,” “ALTUU” and “ALTUW,” respectively. Altitude has applied to obtain the listing of the New Picard Common Stock and New Picard Warrants on Nasdaq under the symbols “TAH” and “TAHW,” respectively, upon the Closing. It is a condition to the consummation of the Business Combination that the New Picard Common Stock to be issued to the Picard securityholders in the Business Combination be approved for listing on Nasdaq (subject only to official notice of issuance thereof), but there can be no assurance that such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Business Combination Agreement. It is important for you to know that, at the time of the special meeting, Altitude may not have received from Nasdaq either confirmation of the listing of the New Picard Common Stock or that approval will be obtained prior to the consummation of the Business Combination, and it is possible that such condition to the consummation of the Business Combination may be waived by the parties to the Business Combination Agreement. As a result, you may be asked to vote to approve the Business Combination and the other proposals included in the accompanying proxy statement without such confirmation, and, further, it is possible that such confirmation may never be received and the Business Combination could still be consummated if such condition is waived and therefore the New Picard Common Stock would not be listed on any nationally recognized securities exchange.

Only holders of record of shares of our Class A common stock at the close of business on [●], 2023 (the “record date”) are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting. A complete list of our stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting and electronically during the special meeting at [].

Pursuant to the Current Charter, a public stockholder may request that we redeem all or a portion of such public stockholder’s public shares for a pro rata portion of the cash held in the Trust Account prior to the Business Combination being consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares, or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

 

  (ii)

prior to 5:00 PM, Eastern Time, on [●], 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to Continental Stock Transfer &


Table of Contents
  Trust Company, our transfer agent (the “Transfer Agent”), that we redeem your public shares for cash, and (b) deliver your public shares to the Transfer Agent, physically or electronically through The Depository Trust Company (“DTC”).

Holders of public units must elect to separate the underlying public shares and warrants included in the public units sold by Altitude in the IPO (the “public warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds public units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so.

Public stockholders may elect to redeem all or a portion of their public shares regardless of whether they vote for or against the Business Combination Proposal, or do not vote at all, and even if they do not hold public shares on the record date.

If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the Transfer Agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account not previously released to us to pay our taxes, divided by the number of then outstanding public shares. For illustrative purposes, as of [●], 2023, this would have amounted to approximately $[●] per public share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request to redeem public shares, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing. Furthermore, if a holder of a public share delivers its shares and subsequently decides prior to the redemption deadline not to elect to redeem such shares, it may simply request that Altitude instruct our Transfer Agent to return the shares (physically or electronically). The holder can make such request by contacting the Transfer Agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the deadline for exercising redemption requests. See “Special Meeting of Altitude Stockholders  Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash, without our prior consent.

Approval of the Business Combination Proposal, each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, and, if presented, the Adjournment Proposal each require the affirmative vote of a majority of the votes cast by holders of shares of our Class A common stock present in person (which would include presence at the virtual special meeting) or by proxy at the special meeting and entitled to vote thereon, voting as a single class. Approval of the Binding Charter Proposal requires the affirmative vote of holders of the holders of a majority of the then outstanding shares of common stock. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the shares of our Class A common stock cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or by proxy at the virtual special meeting and entitled to vote thereon, voting as a single class. As of the date of this proxy statement, the Sponsor owns 7,500,000 shares of Class A common stock which is approximately 85% of Altitude’s outstanding common stock. There are no outstanding shares of Class B common stock after the Sponsor’s conversion of its Class B common stock into Class A common stock on April 7, 2023. Accordingly, the Sponsor will be able to approve the Business Combination Proposal, the Binding Charter Proposal each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal even if all other outstanding shares are voted against such proposals.


Table of Contents

Our Sponsor and our officers and directors entered into a letter agreement with us at the time of the IPO pursuant to which they agreed (i) to vote all shares of common stock held by them in favor of our initial business combination and (ii) not to redeem any shares of common stock held by them in connection with the completion of our initial business combination. Such redemption rights waiver was provided in connection with the IPO and without any separate consideration paid in connection with providing such waiver. Additionally, the Sponsor entered into the Sponsor Support Agreement with Picard pursuant to which it agreed to vote all equity securities held by it in favor of the Business Combination Proposal, among other things. As of the date hereof, our Sponsor owns approximately 85% of our total outstanding shares of common stock.

All of our stockholders are cordially invited to attend the special meeting virtually. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible.

If you are a stockholder of record holding shares of common stock, you may also cast your vote in person (which would include presence at the virtual special meeting). If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting virtually, obtain a proxy from your broker or bank.

If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the special meeting virtually, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Binding Charter Proposal, but will have no effect on the outcome of any other proposal in the accompanying proxy statement.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

The Altitude Board unanimously recommends that you vote or give instruction to voteFOReach of those proposals andFOReach of the director nominees.

Your attention is directed to the proxy statement accompanying this notice (including the Annexes) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. We urge you to read the accompanying proxy statement carefully. If you have any questions or need assistance voting your shares of common stock, please contact Morrow Sodali (“Morrow”), our proxy solicitor by calling (203) 658-9400, or banks and brokers can call collect at (800) 662-5200, or by emailing ALTU.info@investor.morrowsodali.com. This notice of special meeting and the accompanying proxy statement are available at [].

 

By Order of the Board of Directors,
                

Gary Teplis

Chief Executive Officer

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be held on [●], 2023: This notice of special meeting and the accompanying proxy statement will be available at [].


Table of Contents

TABLE OF CONTENTS

 

TRADEMARKS

     ii  

INDUSTRY AND MARKET DATA

     ii  

CERTAIN DEFINED TERMS

     iii  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     viii  

QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF ALTITUDE

     1  

SUMMARY OF THE PROXY STATEMENT

     21  

MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

     43  

RISK FACTORS

     44  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     94  

SPECIAL MEETING OF ALTITUDE STOCKHOLDERS

     111  

THE BUSINESS COMBINATION PROPOSAL

     120  

THE BINDING CHARTER PROPOSAL

     157  

THE ADVISORY GOVERNANCE PROPOSALS

     159  

THE STOCK ISSUANCE PROPOSAL

     162  

THE INCENTIVE PLAN PROPOSAL

     164  

THE DIRECTOR ELECTION PROPOSAL

     171  

THE ADJOURNMENT PROPOSAL

     173  

INFORMATION ABOUT ALTITUDE

     174  

ALTITUDE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     186  

INFORMATION ABOUT PICARD

     192  

PICARD’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     212  

MANAGEMENT OF NEW PICARD FOLLOWING THE BUSINESS COMBINATION

     223  

EXECUTIVE AND DIRECTOR COMPENSATION

     224  

DESCRIPTION OF SECURITIES

     228  

BENEFICIAL OWNERSHIP OF SECURITIES

     240  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     243  

U.S. FEDERAL INCOME TAX CONSIDERATIONS

     246  

APPRAISAL RIGHTS

     253  

HOUSEHOLDING INFORMATION

     253  

TRANSFER AGENT AND REGISTRAR

     253  

SUBMISSION OF STOCKHOLDER PROPOSALS

     253  

FUTURE STOCKHOLDER PROPOSALS

     253  

WHERE YOU CAN FIND MORE INFORMATION

     254  

INDEX TO THE FINANCIAL STATEMENTS

     F-1  

ANNEX A: BUSINESS COMBINATION AGREEMENT

     A-1  

ANNEX B: SPONSOR SUPPORT AGREEMENT

     B-1  

ANNEX C: PICARD SUPPORT AGREEMENT

     C-1  

ANNEX D: PROPOSED CHARTER

     D-1  

ANNEX E: PROPOSED BYLAWS

     E-1  

ANNEX F: LOCK-UP AGREEMENT

     F-1  

ANNEX G: AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

     G-1  

ANNEX H: 2023 INCENTIVE PLAN

     H-1  

ANNEX I: OPINION OF THE BENCHMARK COMPANY, LLC

     I-1  

 

i


Table of Contents

TRADEMARKS

This proxy statement contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. Altitude does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.

INDUSTRY AND MARKET DATA

We are responsible for the disclosure contained in this proxy statement. In this proxy statement, we present industry data, information and statistics regarding the markets in which SynCardia competes, as well as publicly available information, industry and general publications and research and studies conducted by third parties. This information is supplemented where necessary with SynCardia’s own internal estimates, taking into account publicly available information about other industry participants and the judgment of SynCardia’s management where information is not publicly available. This information appears in “Summary of the Proxy Statement,” “Picard’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Picard’s Business” and other sections of this proxy statement.

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 Picard compiled, extracted and reproduced industry data from these sources, and believes that the information used is reliable, Picard 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 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 due to material changes in market conditions or otherwise. Such statistics are based on market research, which itself is based on sampling and subjective judgements by both the researchers and the respondents, including judgements 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. These and other factors could cause results to differ materially from those expressed in any forecasts or estimates.

None of Altitude, Picard, or New Picard intends or assumes any obligation to update industry or market data set forth in this proxy statement. Because market behavior, preferences and trends are subject to change, prospective investors should be aware that market and industry information in this proxy statement and estimates based on any data therein may not be reliable indicators of future market performance or New Picard’s future results of operations.

 

ii


Table of Contents

CERTAIN DEFINED TERMS

Unless otherwise stated in this proxy statement or the context otherwise requires, references to:

Adjournment Proposal” means the proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the proposals described in this proxy statement or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived;

Advisory Governance Proposals” means proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with the SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions;

Aggregate Parent Closing Cash” means the aggregate cash proceeds available for release to Altitude from Altitude’s Trust Account, after giving effect to redemptions, less payment of up to $2,000,000 of Picard’s transaction expenses and up to $4,500,000 of Altitude’s transaction expenses, plus the aggregate cash proceeds received by Altitude or committed to be invested in respect of the Closing Offering plus the aggregate cash proceeds funded or irrevocably committed to be funded in respect of any Picard Financing;

Altitude” means Altitude Acquisition Corp., a Delaware corporation;

Altitude Board” means the Board of Directors of Altitude;

Ancillary Agreements” means the Registrations Rights Agreement, the Sponsor Support Agreement, the Picard Support Agreement, and the Lock-up Agreement;

Business Combination Agreement” means the Business Combination Agreement, dated as of April 23, 2023, by and between Picard and Altitude, as may be amended and modified from time to time, attached to this proxy statement as Annex A, as may be amended or modified from time to time;

Business Combination” means the transactions contemplated by the Business Combination Agreement;

Business Combination Proposal” means the proposal to approve the Business Combination Agreement and the transactions contemplated by the Business Combination Agreement, including the Mergers;

Binding Charter Proposal” means the proposal to approve and adopt the Proposed Charter, which, if approved, would amend and restate the Current Charter, and which, if approved, would take effect upon the Closing; which is attached to this proxy statement as Annex D;

Class A common stock” means the Class A common stock of Altitude, par value $0.0001 per share;

Class B common stock” means the Class B common stock of Altitude, par value $0.0001 per share;

Closing” means the closing of the Business Combination;

Closing Date” means the date of the Closing;

Code” means the United States Internal Revenue Code of 1986, as amended;

common stock” means prior to the Closing, Class A common stock;

 

iii


Table of Contents

completion window” means the period in which Altitude must complete its initial merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination;

COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemic or disease outbreaks;

Current Charter” means Altitude’s amended and restated certificate of incorporation, dated August 12, 2020, as amended from time to time;

DTC” means the Depository Trust Company;

DGCL” means the General Corporation Law of the State of Delaware;

Director Election Proposal” means the proposal to elect the directors who, upon consummation of the Business Combination, will be the directors of New Picard;

Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

GAAP” means generally accepted accounting principles in the United States as in effect from time to time;

Incentive Plan” means the 2023 Equity Incentive Plan, a copy of which is attached to this proxy statement as Annex H, as may be amended and modified from time to time;

Incentive Plan Proposal” means the proposal to adopt the Incentive Plan;

IPO” means the initial public offering of Altitude;

IRS” means the U.S. Internal Revenue Service;

JOBS Act” means the Jumpstart Our Business Startups Act of 2012;

Lock-Up Agreement” means the agreement in which the Picard Lock-Up Holders will agree, subject to customary exceptions, not to transfer (a) any shares of New Picard Common Stock received by them as consideration in the Mergers for the period ending on the earliest of (x) the date this is one (1) year following the Closing Date, (y) the date on which the closing price of shares of New Picard Common Stock on Nasdaq equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for twenty (20) of any thirty (30) consecutive trading days commencing at least 150 days after the Closing, and (z) the date on which New Picard completes a liquidation, merger, capital stock exchange, reorganization or similar transaction that results in all of New Picard’s stockholders having the right to exchange their shares of New Picard Common Stock for cash, securities or other property and (b) any warrants of received as consideration in the Mergers (including the Earnout Warrants) for a period of 30 days after Closing;

Lock-Up Shares” means any shares of New Picard Common Stock received by the Picard Lock-Up Holders as consideration in the Mergers;

Minimum Cash Condition” means the Aggregate Parent Closing Cash being at least $38,000,000. The Minimum Cash Condition may be waived by Picard in its sole discretion;

Morrow Sodali” means Morrow Sodali, LLC, the proxy solicitor to Altitude;

Nasdaq” means the Nasdaq Capital Market or the Nasdaq Global Market, as applicable;

 

iv


Table of Contents

New Picard” means Altitude (renamed Picard Medical Holdings, Inc.), after completion of the Business Combination;

New Picard Common Stock” means from and after the Closing, shares of common stock of Altitude;

No Additional Redemptions Scenario” means a redemptions scenario that assumes that no public shares are redeemed in connection with the Business Combination;

Picard Financing LOI” means the non-binding letter of intent dated as of October 22, 2023, between Altitude, SynCardia and a potential investor;

Picard Financing Note” means the senior secured convertible note in an aggregate principal amount of $30 million contemplated by the Picard Financing LOI;

Picard Lock-Up Holders” means certain record and/or beneficial owners of equity securities of Picard who will enter into a Lock-Up Agreement at the Closing;

Picard Support Agreement” means the agreement dated as of April 23, 2023, by and between Picard Supporting Shareholders, Picard and Altitude, attached to this proxy statement as Annex C, as may be amended or modified from time to time;

Picard Supporting Shareholders” means certain Picard stockholders holding an aggregate of approximately 90% of the outstanding Picard equity, on an as-converted to Picard Common Stock basis, and 100% of the outstanding Picard Preferred Stock who entered into the Picard Support Agreements;

private warrants” means the warrants to purchase Altitude’s Class A common stock purchased in a private placement in connection with the IPO;

Proposed Bylaws” means the amended and restated bylaws of Altitude, a copy of which is attached to this proxy statement as Annex E;

Proposed Charter” means the second amended and restated certificate of incorporation of Altitude, a copy of which is attached to this proxy statement as Annex D;

public shares” means the shares of Altitude’s Class A common stock included in the public units sold in the IPO (whether they were purchased in such offering or thereafter in the secondary market, and including the shares included as part of the additional public units sold in connection with the underwriters’ partial exercise of their over-allotment option);

public stockholders” means the holders of Altitude’s public shares, whether acquired in Altitude’s IPO or acquired in the secondary market;

public units” means the units sold in the IPO;

public warrants” means the warrants included in the public units sold in the IPO, each of which is exercisable for one share of our Class A common stock, in accordance with its terms;

Registration Rights Agreement” means an amended and restated registration rights agreement to be entered into connection with the Closing by Altitude, Picard, and certain of their respective stockholders;

SEC” means the United States Securities and Exchange Commission;

Securities Act” means the Securities Act of 1933, as amended;

 

v


Table of Contents

Sponsor Earnout Shares” means 1,250,000 shares of common stock owned by the Sponsor immediately prior to Closing that will be subject to the vesting and forfeiture provisions set forth in the Sponsor Support Agreement;

Sponsor Earnout Warrants” means 6,500,000 private warrants owned by the Sponsor immediately prior to Closing that will be subject to the vesting and forfeiture provisions set forth in the Sponsor Support Agreement;

Sponsor Earnout Securities” means the Sponsor Earnout Shares and Sponsor Earnout Warrants together;

Stock Issuance Proposal” means the proposal to issue shares of common stock in connection with the Business Combination;

special meeting” means the meeting to be held on [●], 2023, at [●] a.m., Eastern Time online at [];

Service Providers” means Jonathan Intrater and Allan Liu, to whom, at the Closing, New Picard will issue 100,000 shares of New Picard Common Stock and 30,000 New Picard Warrants;

Sponsor” means Altitude Acquisition Holdco, LLC, a Delaware limited liability company;

Sponsor Support Agreement” means that certain Support Agreement, dated as of April 23, 2023, by and among the Sponsor, Altitude, Picard and certain other parties, attached to this proxy statement as Annex B, as may be amended or modified from time to time;

Subject Picard Shares” means the outstanding shares of Picard Common Stock and Picard Preferred Stock held by Picard Supporting Stockholders;

SynCardia” means a medical technology company focused on developing, manufacturing, and commercializing an implantable Total Artificial Heart;

Transfer Agent” means Continental Stock Transfer & Trust Company;

Trust Account” means the trust account established in connection with Altitude’s IPO;

Warrant Agreement” means the Warrant Agreement, dated as of December 8, 2020, by and between Altitude and Continental Stock Transfer & Trust Company, as warrant agent;

warrants” means the public warrants and the private warrants, as applicable;

25% Redemptions Scenario” means a redemptions scenario that assumes that 333,661 public shares, or approximately 25% of the outstanding public shares, are redeemed for an aggregate payment of approximately $3.3 million from the Trust Account (using an assumed $10.00 per share redemption price), that Picard waives the Minimum Cash Condition, and assuming no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note. The Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition;

50% Redemptions Scenario” means a redemptions scenario that assumes that 667,323 public shares, or approximately 50% of the outstanding public shares, are redeemed for an aggregate payment of approximately $6.7 million from the Trust Account (using an assumed $10.00 per share redemption price), that Picard waives the Minimum Cash Condition, and assuming no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note. The Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition;

 

vi


Table of Contents

75% Redemptions Scenario” means a redemptions scenario that assumes that 1,000,984 public shares, or approximately 75% of the outstanding public shares, are redeemed for an aggregate payment of approximately $10.0 million from the Trust Account (using an assumed $10.00 per share redemption price), that Picard waives the Minimum Cash Condition, and assuming no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note. The Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition; and

100% Redemptions Scenario” means a redemptions scenario that assumes that 1,334,645 public shares, or 100% of the outstanding public shares, are redeemed for an aggregate payment of approximately $13.3 million from the Trust Account (using an assumed $10.00 per share redemption price), that Picard waives the Minimum Cash Condition, and assuming no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note. The Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition.

 

vii


Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of the U.S. federal securities laws, including statements under the headings “Summary of the Proxy Statement,” “Risk Factors,” “Altitude’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Picard’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” are statements of future expectations and other forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “opportunity,” “plan,” “potential,” “predict,” “projected,” “should,” “strategy,” “suggests,” “targets,” “will,” “will be” or “would” or similar expressions or the negatives thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement and include statements regarding the intentions, beliefs or current expectations of Altitude’s or Picard’s management teams concerning, among other things, their respective results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which they operate.

You are cautioned that forward-looking statements are not guarantees of future performance and that Altitude’s and Picard’s actual results of operations, financial condition and liquidity, and the development of the industry in which Picard operates, may differ materially from those made in or suggested by the forward-looking statements contained in this proxy statement. In addition, even if Altitude’s and Picard’s results of operations, financial condition and liquidity, and the development of the industry in which Picard operates are consistent with the forward-looking statements contained in this proxy statement, those results or developments may not be indicative of results or developments in subsequent periods.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and Altitude’s and Picard’s actual financial condition, results of operations and cash flows. The development of the industry in which Picard operates may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this proxy statement.

These statements are based on Altitude’s or Picard’s management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those anticipated by such statements. You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement. As a result of a number of known and unknown risks and uncertainties, Picard’s actual results or performance following the Business Combination may be materially different from those expressed or implied by these forward-looking statements. Factors that could cause such differences in actual results include:

 

   

the occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement;

 

   

the outcome of any legal proceedings that may be instituted against Altitude or Picard following announcement of the execution of the Business Combination Agreement;

 

   

the inability to satisfy the conditions to the Closing in the Business Combination Agreement, or the failure to complete the Business Combination for any reason within the completion window;

 

   

the amount of cash available in Altitude’s Trust Account, after deducting the amount required to satisfy Altitude’s obligations to its stockholders (if any) that exercise their rights to redeem their public shares (but prior to the payment or reimbursement, as applicable, of any (a) deferred underwriting commissions being held in the Altitude’s Trust Account and (b) transaction expenses of Picard and its

 

viii


Table of Contents
 

subsidiaries and Altitude), may not be sufficient to satisfy the Minimum Cash Condition, in which case the Business Combination may not be able to be completed unless such condition is waived by Picard;

 

   

the inability to obtain the listing of the New Picard Common Stock and New Picard Warrants on Nasdaq;

 

   

the risk that the Business Combination disrupts current plans and operations of Picard as a result of the announcement and consummation of the transactions described herein;

 

   

Picard’s ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Picard to grow and manage growth profitably;

 

   

costs related to the Business Combination;

 

   

changes in applicable laws or regulations;

 

   

any regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions

 

   

the impact of the COVID-19 pandemic;

 

   

a financial or liquidity crisis;

 

   

the effects of inflation and changes in interest rates;

 

   

a financial or liquidity crisis; geopolitical factors, including, but not limited to, the Russian invasion of Ukraine;

 

   

the risk of global and regional economic downturns;

 

   

the projected financial information, anticipated growth rate, and market opportunity of Picard;

 

   

foreign currency, interest rate, and exchange rate fluctuations;

 

   

retention or recruitment of executive and senior management and other key employees;

 

   

the risk that the proposed Business Combination disrupts current plans and operations of Picard as a result of the announcement and pendency of the Business Combination;

 

   

the ability of New Picard to maintain an effective system of internal controls over financial reporting;

 

   

the ability of New Picard to manage its growth effectively;

 

   

the ability of New Picard to achieve and maintain profitability in the future;

 

   

the ability of New Picard to access sources of capital to finance operations and growth;

 

   

the success of strategic relationships with third parties;

 

   

dependence on acquisitions for growth in Picard’s business;

 

   

Picard’s ability to develop new products and solutions, bring them to market in a timely manner, and make enhancements to its platform;

 

   

the performance of Picard’s business;

 

   

the development, effects and enforcement of laws and regulations;

 

   

inherent risks related to acquisitions and Picard’s ability to manage its growth and changing business;

 

   

Picard’s need for significant financial resources (including, but not limited to, for growth in its business);

 

   

the need for financing in order to maintain future profitability;

 

   

the lack of any assurance or guarantee that Picard can raise capital or meet its funding needs;

 

ix


Table of Contents
   

Picard’s limited operating history; and

 

   

other risks and uncertainties described in this proxy statement, including those under “Risk Factors.”

Altitude and Picard undertake no obligations to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events, other than as required by law.

The foregoing factors and others described under “Risk Factors” should not be construed as exhaustive. There are other factors that may cause our actual results to differ materially from the forward-looking statements contained in this proxy statement. Moreover, new risks emerge from time to time and it is not possible for Altitude and Picard to predict all such risks. Altitude and Picard cannot assess the impact of all risks on their respective business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results. Altitude and Picard urge you to read the sections of this proxy statement entitled “Summary of the Proxy Statement,” “Risk Factors,” “Altitude’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Picard’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for a more complete discussion of the factors that could affect their respective future performance and the industry in which we operate.

The forward-looking statements are based on plans, estimates and projections as they are currently available to the management of Altitude and Picard, and neither undertakes any obligation, and neither expects, to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to Altitude and Picard or to persons acting on behalf of Altitude and Picard are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this proxy statement.

 

x


Table of Contents

QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF ALTITUDE

The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the Business Combination. The following questions and answers do not include all the information that is important to our stockholders. Stockholders are urged to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the Business Combination and the voting procedures for the special meeting.

Q: Why am I receiving this proxy statement?

A: Altitude is sending this proxy statement to all stockholders of record as of the record date to provide information that will help them decide how to vote their Altitude Class A common stock with respect to the matters to be considered at the special meeting. The Business Combination cannot be completed unless Altitude’s stockholders approve the Business Combination Proposal.

This proxy statement and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the special meeting. You should read this proxy statement and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

Q: Why is Altitude proposing the Business Combination?

A: Altitude was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses. Based on its due diligence investigations of Picard and SynCardia and the markets in which SynCardia operates, including the financial and other information provided by Picard and SynCardia in the course of Altitude’s due diligence investigations, the Altitude Board believes that the Business Combination is in the best interests of Altitude and its stockholders. However, there can be no assurances of this.

Although the Altitude Board believes that the Business Combination is in the best interests of Altitude and its stockholders, the Altitude Board did consider certain potentially material negative factors in arriving at that conclusion. See “The Business Combination Proposal — The Altitude Board’s Reasons for Approval of the Business Combination” for a discussion of the factors considered by the Altitude Board in making its decision.

Q: What is Picard?

A: Picard is the sole owner of SynCardia Systems LLC (“SynCardia”), a medical technology company focused on developing, manufacturing, and commercializing an implantable Total Artificial Heart (“TAH” or “SynCardia TAH”). SynCardia manufactures and sells an FDA approved implantable Total Artificial Heart designed to replace the full function of a human heart in patients suffering from advanced heart failure. SynCardia’s product development roadmap is focused on developing, manufacturing, and commercializing successive generations of the SynCardia TAH to further improve clinical outcomes, usability, and patient Quality of Life (“QOL”).

Picard’s long-term mission is to build a portfolio of medical technology companies active in the cardiovascular space. Picard intends to achieve this goal by acquiring, developing, or by in -licensing of promising technologies or assets with a focus on approved devices, or devices close to being approved.

Q: When and where is the special meeting?

A: The special meeting will be held on [●], 2023, at [●] a.m., Eastern Time online at [●].

 

1


Table of Contents

If you are a stockholder of record on the record date, you will be able to attend the special meeting online, vote, view the list of stockholders entitled to vote at the special meeting and submit your questions during the special meeting by visiting [●]. To participate in the virtual meeting, you will need a 12-digit control number assigned by Continental Stock Transfer & Trust Company. The meeting webcast will begin promptly at [●] a.m., Eastern Time. We encourage you to access the meeting prior to the start time and you should allow ample time for the check-in procedures. Because the special meeting will be a completely virtual meeting, there will be no physical location for stockholders to attend.

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

Q: What are the specific proposals on which I am being asked to vote at the special meeting?

A: At the special meeting, you will be asked to consider and vote upon the following proposals:

(1) Proposal No. 1 — The Business Combination Proposal: A proposal to approve the Business Combination Agreement, a copy of which is attached to this proxy statement as Annex A, and to approve the transactions contemplated by the Business Combination Agreement, including the Mergers;

(2) Proposal No. 2 The Binding Charter Proposal: A proposal to approve the Proposed Charter, a copy of which is attached to this proxy statement as Annex D, which will amend and restate Altitude’s Current Charter and will be in effect upon the Closing of the Business Combination;

(3) Proposal No. 3 The Advisory Governance Proposals: Separate proposals to approve and adopt, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, which are being presented separately in accordance with SEC guidance to give stockholders the opportunity to present their separate views on important corporate governance provisions, as 5 sub-proposals:

3A (Authorized Share Increase): increase the total number of authorized shares of all classes of capital stock, par value $0.0001 per share, from (x) 301,000,000 shares, consisting of (a) 300,000,000 shares of common stock, including (i) 280,000,000 shares of Class A common stock and (ii) 20,000,000 shares of Class B common stock and (b) 1,000,000 shares of preferred stock to (y) 305,000,000 shares, consisting of 300,000,000 shares of New Picard Common Stock and 5,000,000 shares of preferred stock;

3B (Removal of Directors): allow for the removal of directors at any time, but only for cause and only by the affirmative vote of holders of a two-thirds (66 and 2/3%) of the voting power of all then outstanding shares of capital stock entitled to vote generally in the election of directors;

3C (Two-Thirds Stockholder Vote Required to Amend Certain Provisions of the Proposed Charter): require the approval by affirmative vote of the holders of at least two-thirds (66 and 2/3%) of the New Picard Common Stock to make any amendment to certain provisions of the Proposed Charter;

3D (Two-Thirds Stockholder Vote Required to Amend the Proposed Bylaws): require an affirmative vote of holders of at least two-thirds (66 and 2/3%) of the voting power of all of the then outstanding shares of voting stock of New Picard entitled to vote generally in an election of directors for stockholders to be able to adopt, amend, alter or repeal or rescind the Proposed Bylaws;

 

2


Table of Contents

3E: (Eliminate Blank Check Company Provisions): eliminate certain provisions specific to Altitude’s status as a blank check company.

(4) Proposal No. 4 The Stock Issuance Proposal: A proposal to approve, for purposes of complying with applicable listing rules of Nasdaq (x) the issuance of more than 20% of Altitude’s issued and outstanding common stock in connection with the Business Combination, consisting of the issuance of shares of common stock to Picard securityholders pursuant to the terms of the Business Combination Agreement, including any shares issuable upon the exercise of warrants including the Earnout Warrants, plus any additional shares of common stock pursuant to subscription agreements Altitude may enter into prior to the Closing and (y) the issuance of shares of common stock to Picard securityholders in connection with the Business Combination, including any shares issuable upon the exercise of warrants including the Earnout Warrants, that would result in Picard owning more than 20% of Altitude’s outstanding common stock, or more than 20% of the voting power of Altitude, which could constitute a “change of control” under Nasdaq rules;

(5) Proposal No. 5 The Incentive Plan Proposal: A proposal to approve and adopt the Incentive Plan, a copy of which is attached to this proxy statement as Annex H;

(6) Proposal No. 6 The Director Election Proposal: A proposal to elect seven directors to serve staggered terms on the board of directors of New Picard until the 2024, 2025 and 2026 annual meetings of stockholders, respectively, or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal; and

(7) Proposal No. 7 The Adjournment Proposal: A proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the proposals described in this proxy statement or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived.

This proxy statement contains important information about the Business Combination and the other matters to be acted upon at the special meeting. Altitude stockholders should read it carefully.

After careful consideration, the Altitude Board has determined that each of the proposals presented in this proxy statement are in the best interests of Altitude and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of Altitude’s directors may result in a conflict of interest on the part of such director(s) between what they may believe is in the best interests of Altitude and its stockholders and what they may believe is best for themselves in determining to recommend that stockholders vote for the proposals. In addition, Altitude’s officers have interests in the Business Combination that may conflict with your interests as a stockholder. See the section entitled “The Business Combination Proposal — Interests of Altitude’s Directors, Officers and Others in the Business Combination” for a further discussion of these considerations.

Q: Are the proposals conditioned on one another?

A: No. Under the Business Combination Agreement, the Closing is conditioned upon the approval of the Business Combination Proposal. The Binding Charter Proposal, Advisory Governance Proposals, Stock Issuance Proposal, Incentive Plan Proposal, and, if presented, the Adjournment Proposal are not conditioned upon the approval of any other proposal. If Altitude’s stockholders do not approve the Business Combination Proposal, the Business Combination will not be consummated. By contrast, approval of each of the other proposals in the proxy statement (i.e., the Binding Charter Proposal, Advisory Governance Proposals, Stock Issuance Proposal, Incentive Plan Proposal, and, if presented, the Adjournment Proposal) is not a condition to the consummation of the Business Combination.

 

3


Table of Contents

Q: What will happen in the Business Combination?

A: Under the terms of the Business Combination Agreement, at the Closing (i) prior to the First Merger, each issued and outstanding share of Picard Preferred Stock will automatically convert into one share of Picard Common Stock, (ii) each of Picard’s convertible notes that are outstanding prior to the First Merger, if any, will convert prior to the First Merger into shares of Picard Common Stock in accordance with the terms of such convertible notes, (iii) each share of Picard Common Stock held by a Picard securityholder immediately prior to the First Effective Time (including shares issued upon conversion of Picard Preferred Stock and convertible notes, but not including dissenting shares) will be automatically cancelled and converted into the right to receive a pro rata portion of an aggregate of 48,000,000 shares of New Picard Common Stock (subject to adjustment to take into account certain cash and indebtedness of Picard at the Closing), and an aggregate of 6,500,000 New Picard Warrants, plus up to an additional 6,500,000 Earnout Warrants. Each of Picard’s options that are outstanding and unexercised prior to the First Merger will be assumed by New Picard and converted into a New Picard option with the same terms and conditions and (iv) if Picard issues any warrants prior to the Closing, each of Picard’s warrants that are outstanding and unexercised prior to the First Merger, whether or not then vested or exercisable, will be assumed by New Picard and will be converted into a warrant to acquire shares of New Picard Common Stock and will be subject to the same terms and conditions that applied to the Picard warrant immediately prior to the First Merger.

Q: What will be the relative equity stakes of the public stockholders, Sponsor, Picard’s securityholders and others upon completion of the Business Combination?

A: The following table illustrates varying ownership levels in New Picard immediately following the consummation of the Business Combination at various redemption levels, excluding the dilutive effect of Warrants, Earnout Warrants, Sponsor Earnout Warrants, New Picard Options, and the Picard Financing Note (assuming such note is issued at or prior to the Closing on the terms set forth in the Picard Financing LOI).

 

    No Additional
Redemptions Scenario
    25% Redemptions
Scenario
    50% Redemptions
Scenario
    75% Redemptions
Scenario
    100% Redemptions
Scenario
 
    Shares     %     Shares     %     Shares     %     Shares     %     Shares     %  

Hunniwell Picard I, LLC

    36,409,179       73.79%       36,409,179       74.30%       36,409,179       74.80%       36,409,179       75.32%       36,409,179       75.84%  

Other Picard Securityholders

    8,495,959       17.22%       8,495,959       17.34%       8,495,959       17.46%       8,495,959       17.58%       8,495,959       17.70%  

Sponsor (1)

    3,000,000       6.08%       3,000,000       6.12%       3,000,000       6.16%       3,000,000       6.21%       3,000,000       6.25%  

Altitude Public Stockholders

    1,334,645       2.71%       1,000,984       2.04%       667,323       1.37%       333,661       *       0       0.00%  

Service Providers (2)

    100,000       *       100,000       *       100,000       *       100,000       *       100,000       *  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    49,339,783       100.00%       49,006,122       100.00%       48,672,461       100.00%       48,338,799       100.00%       48,005,138       100.00%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Less than 1%.

(1)

Reflects the forfeiture of 4,500,000 Founder Shares, assuming the proceeds of the Trust Account and Picard Financing does not exceed $38 million and accordingly Sponsor does not earn back any of such forfeited shares pursuant to the terms of the Sponsor Support Agreement. Includes 1,250,000 Sponsor Earnout Shares, which will be outstanding on the Closing Date and for which the Sponsor will have voting rights. Excludes shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000 private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants.

(2)

Excludes 30,000 New Picard Warrants issuable to the Service Providers at Closing.

The following table illustrates varying ownership levels in New Picard immediately following the consummation of the Business Combination at various redemption levels, including the dilutive effect of Warrants, Earnout Warrants, Sponsor Earnout Securities, and New Picard Options. Such table also assumes that Picard enters into definitive agreements with respect to, and closes on, an aggregate of $30.0 million of funding through the Picard Financing Note at or prior to the Closing on the terms set forth in the Picard Financing LOI. The public warrants may not be redeemed by the holder in connection with the exercise of redemption rights with

 

4


Table of Contents

respect to public shares and accordingly will remain outstanding in each redemption scenario, although, given the $11.50 exercise price, they are unlikely to be exercised unless the New Picard Common Stock trades above such exercise price.

 

    No Additional
Redemptions Scenario
    25% Redemptions
Scenario
    50% Redemptions
Scenario
    75% Redemptions
Scenario
    100% Redemptions
Scenario
 
    Shares     %     Shares     %     Shares     %     Shares     %     Shares     %  

Hunniwell Picard I, LLC (1)

    46,949,605       55.26     46,949,605       55.48     46,949,605       55.70     46,949,605       55.92     46,949,605       56.14

Other Picard Securityholders (2)

    10,955,529       12.89     10,955,529       12.95     10,955,529       13.00     10,955,529       13.05     10,955,529       13.10

Sponsor (3)

    4,500,000       5.30     4,500,000       5.32     4,500,000       5.34     4,500,000       5.36     4,500,000       5.38

Altitude Public Stockholders

    1,334,645       1.57     1,000,984       1.18     667,323       *       333,661       *       0       0.00

Altitude Public Warrant Holders

    15,000,000       17.65     15,000,000       17.72     15,000,000       17.79     15,000,000       17.86     15,000,000       17.94

Service Providers (4)

    130,000       *       130,000       *       130,000       *       130,000       *       130,000       *  

Holders of New Picard Options

    3,094,862       3.64     3,094,862       3.66     3,094,862       3.67     3,094,862       3.69     3,094,862       3.70

Holders of Picard Financing Note (5)

    3,000,000       3.53     3,000,000       3.54     3,000,000       3.56     3,000,000       3.57     3,000,000       3.59
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    84,964,641       100.00     84,630,980       100.00     84,297,319       100.00     83,963,657       100.00     83,629,996       100.00
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Less than 1%.

(1)

Includes shares issuable upon the exercise of 5,270,214 New Picard Warrants and 5,270,214 Earnout Warrants, reflecting Hunniwell Picard I, LLC’s pro rata portion of the 6,500,000 New Picard Warrants to be issued to Picard securityholders at the Closing and of the 6,500,000 Earnout Warrants, in each case held by Hunniwell Picard I, LLC. The Earnout Warrants will be issued and outstanding on the Closing Date and held in escrow for the benefit of such individual until such Earnout Warrants vest or are forfeited in accordance with the Business Combination Agreement.

(2)

Includes shares issuable upon the exercise of 1,229,786 New Picard Warrants and 1,229,786 Earnout Warrants, reflecting the pro rata portion of the 6,500,000 New Picard Warrants to be issued to Picard securityholders at the Closing and of the 6,500,000 Earnout Warrants, in each case held by Picard securityholders other than Hunniwell Picard I, LLC. The Earnout Warrants will be issued and outstanding on the Closing Date and held in escrow for the benefit of such individual until such Earnout Warrants vest or are forfeited in accordance with the Business Combination Agreement.

(3)

Reflects the forfeiture of 4,500,000 Founder Shares, assuming the proceeds of the Trust Account and Picard Financing does not exceed $38 million and accordingly Sponsor does not earn back any of such forfeited shares pursuant to the terms of the Sponsor Support Agreement. Includes 1,250,000 Sponsor Earnout Shares, and shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000 private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants.

(4)

Includes 30,000 New Picard Warrants issuable to the Service Providers at Closing.

(5)

Assumes an aggregate principal amount of $30.0 million of the Picard Financing Note is funded at or prior to Closing, and that the entire outstanding principal is converted into shares of New Picard Common Stock at an initial conversion price of $10.00 per share (and that no payment-in-kind interest is paid thereon), pursuant to the terms contemplated by the Picard Financing LOI.

 

5


Table of Contents

The following table shows the potential impact of redemptions on the per share equity value of the public shares owned by non-redeeming public stockholders in each redemptions scenario and sets forth the potential dilutive impact from various sources in each redemptions scenario:

 

    No Additional
Redemptions Scenario
    25% Redemptions
Scenario
    50% Redemptions
Scenario
    75% Redemptions
Scenario
    100% Redemptions
Scenario
 
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
 

Base Scenario(1)

    49,339,783     $ 10.00       49,006,122     $ 10.00       48,672,461     $ 10.00       48,338,799     $ 10.00       48,005,138     $ 10.00  

Shares underlying Public Warrants

    15,000,000     $ 7.67       15,000,000     $ 7.66       15,000,000     $ 7.64       15,000,000     $ 7.63       15,000,000     $ 7.62  

Shares underlying Private Warrants(2)

    1,530,000     $ 9.70       1,530,000     $ 9.70       1,530,000     $ 9.70       1,530,000     $ 9.69       1,530,000     $ 9.69  

Shares underlying Warrants issued to Picard Securityholders(3)

    13,000,000     $ 7.91       13,000,000     $ 7.90       13,000,000     $ 7.89       13,000,000     $ 7.88       13,000,000     $ 7.87  

Shares underlying New Picard Options

    3,094,862     $ 9.41       3,094,862     $ 9.41       3,094,862     $ 9.40       3,094,862     $ 9.40       3,094,862     $ 9.39  

Shares underlying Picard Financing Note(4)

    3,000,000     $ 9.43       3,000,000     $ 9.42       3,000,000     $ 9.42       3,000,000     $ 9.42       3,000,000     $ 9.41  

Shares underlying all Warrants, New Picard Options, and Picard Financing Note(5)

    35,624,862     $ 5.81       35,624,862     $ 5.79       35,624,862     $ 5.77       35,624,862     $ 5.76       35,624,862     $ 5.74  

Equity Value

  $ 493,397,830.00       $ 490,061,217.50       $ 486,724,605.00       $ 483,387,992.50       $ 480,051,380.00    

 

(1)

Based on a post-transaction equity value as set forth in the Equity Value row for each redemptions scenario, and assuming an ascribed value per share of $10.00, which is the per share price used in the Business Combination Agreement to determine the number of shares issuable to Picard Securityholders.

(2)

Includes (i) shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000 private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants and (ii) 30,000 New Picard Warrants issuable to the Service Providers at Closing.

(3)

Includes shares issuable upon the exercise of 6,500,000 New Picard Warrants and 6,500,000 Earnout Warrants to be issued to Picard securityholders at the Closing. The Earnout Warrants will be issued and outstanding on the Closing Date and held in escrow for the benefit of such individual until such Earnout Warrants vest or are forfeited in accordance with the Business Combination Agreement.

(4)

Assumes an aggregate principal amount of $30.0 million of the Picard Financing Note is funded at or prior to Closing, and that the entire outstanding principal is converted into shares of New Picard Common Stock at an initial conversion price of $10.00 per share (and that no payment-in-kind interest is paid thereon), pursuant to the terms contemplated by the Picard Financing LOI.

(5)

Includes all dilutive securities and assumptions included in Footnotes 2 through 4.

Q: What underwriting fees are payable in connection with the Business Combination?

A: Pursuant to that certain Underwriting Agreement, dated December 8, 2020, by and between Cantor Fitzgerald & Co. (“Cantor”), acting individually and as representative of the several underwriters listed on Schedule A thereto (the “Underwriting Agreement”), Cantor and Odeon Capital Group LLC (“Odeon”), the underwriters of Altitude’s IPO, were entitled to a deferred underwriting commission of $0.35 per Altitude unit sold in the IPO, totaling $10,505,250, which would be payable upon the consummation of the Business Combination from the amounts held in the Trust Account after redemptions of public shares. In August 2023, Cantor and Odeon entered into fee reduction agreements with Altitude, pursuant to which the aggregate deferred underwriting fee payable by Altitude upon consummation of the Business Combination was reduced from approximately $10.5 million to approximately $1.4 million. Such fees are not contingent upon further services

 

6


Table of Contents

being provided to Altitude or any other party. No additional fees have been or will be paid to Cantor or Odeon in connection with the consummation of the Business Combination. The deferred underwriting fee does not vary based on redemption levels.

The following table illustrates the effective underwriting discount on a percentage basis for public shares at each redemption level identified below, taking into account the reduction of the deferred underwriting discount and that the upfront and deferred fees do not vary based on redemption levels:

 

     No Additional
Redemptions
Scenario
     25% Redemptions
Scenario
     50% Redemptions
Scenario
     75% Redemptions
Scenario
     100% Redemptions
Scenario
 

Unredeemed Public Shares

     1,334,645        1,000,984        667,323        333,661        0  

Trust Proceeds to New Picard (1)

   $ 13,680,111      $ 10,260,086      $ 6,840,061      $ 3,420,025      $ 0.00  

Upfront Underwriting Discount

   $ 6,000,000      $ 6,000,000      $ 6,000,000      $ 6,000,000      $ 6,000,000  

Deferred Underwriting Discount, before fee reduction

   $ 10,500,000      $ 10,500,000      $ 10,500,000      $ 10,500,000      $ 10,500,000  

Deferred Underwriting Discount, after fee reduction

   $ 1,430,000      $ 1,430,000      $ 1,430,000      $ 1,430,000      $ 1,430,000  

Total Underwriting Discount, before fee reduction

   $ 16,500,000      $ 16,500,000      $ 16,500,000      $ 16,500,000      $ 16,500,000  

Total Underwriting Discount, after fee reduction

   $ 7,430,000      $ 7,430,000      $ 7,430,000      $ 7,430,000      $ 7,430,000  

Total Underwriting Discount, before fee reduction, as a percentage of Trust Proceeds to New Picard

     121%        161%        241%        482%        N/A  

Total Underwriting Discount, after fee reduction, as a percentage of Trust Proceeds to New Picard

     54%        72%        109%        217%        N/A  

 

(1)

Uses an illustrative per share price of $10.25, based on the amount in the Trust Account as of September 30, 2023.

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

A: We have applied to obtain listing of the New Picard Common Stock and New Picard Warrants on Nasdaq under the symbols “TAH” and “TAHW,” respectively, upon the Closing. It is a condition to the consummation of the Business Combination that the New Picard Common Stock to be issued to the Picard securityholders in the Business Combination be approved for listing on Nasdaq (subject only to official notice of issuance thereof), but there can be no assurance that such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Business Combination Agreement. It is important for you to know that, at the time of our special meeting, we may not have received from Nasdaq either confirmation of the listing of the New Picard Common Stock or that approval will be obtained prior to the consummation of the Business Combination, and it is possible that such condition to the consummation of the Business Combination may be waived by the parties to the Business Combination Agreement. As a result, you may be asked to vote to approve the Business Combination and the other proposals included in this proxy statement without such confirmation, and, further, it is possible that such confirmation may never be received and the Business Combination could still be consummated if such condition is waived and therefore our New Picard Common Stock would not be listed on any national securities exchange.

Q: How has the announcement of the Business Combination affected the trading price of Altitude’s common stock?

A: On April 21, 2023, the trading date before the public announcement of the Business Combination, Altitude’s public units, Class A common stock, and warrants closed at $10.00, $10.09 and $ 0.05, respectively. On November 24, 2023, the trading date immediately prior to the date of this proxy statement, Altitude’s public units, Class A common stock, and warrants closed at $10.27, $10.28, and $0.03, respectively.

 

7


Table of Contents

Q: Will the management of Altitude change in the Business Combination?

A: We anticipate that all of the executive officers of Picard will become executive officers of New Picard. Additionally, five of the director nominees for election to the board of New Picard (the “New Picard Board”) have been designated by Picard and two of the director nominees have been designated by Altitude in accordance with the terms of the Business Combination Agreement. Please see the sections entitled “Management of New Picard Following the Business Combination” and “The Director Election Proposal” for additional information.

Q: Who will be the controlling shareholder of New Picard?

A: Hunniwell Picard I, LLC will control up to approximately 65.5% of the outstanding New Picard Common Stock assuming no further redemptions from Altitude’s Trust Account, no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note and that such note is not converted to New Picard Common Stock immediately upon the Closing and that Picard waives the Minimum Cash Condition. Such figure does not include the impact of any shares of New Picard Common Stock issuable upon the exercise of New Picard Warrants to be issued to Picard securityholders at the Closing, Earnout Warrants issuable to Picard securityholders, Sponsor Earnout Warrants, or New Picard Warrants issuable to the Service Providers. As such, New Picard will be a “controlled company” within the meaning of the Nasdaq listing rules. For a description of the exemptions from the Nasdaq corporate governance standards that are available to controlled companies, please see the section entitled “Risk Factors —Risks Related to Ownership of New Picard’s Securities — New Picard will be a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, will qualify for exemptions from certain corporate governance requirements. If we rely on these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Q: What happens if the Business Combination is approved, and a substantial number of the Altitude public stockholders exercise their redemption rights?

A: Altitude stockholders who vote in favor of the Business Combination may also nevertheless exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of public stockholders are reduced as a result of redemptions by public stockholders. The consummation of the Business Combination is conditioned upon, among other things, the Aggregate Parent Closing Cash being at least $38,000,000, although this conditioned may be waived by Picard.

For more information, please see the sections entitled “Summary of the Proxy Statement  Ownership of New Picard following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information.

Q: What conditions must be satisfied to complete the Business Combination?

A: There are a number of closing conditions that must be satisfied or waived in the Business Combination Agreement, including, among others, the approval of the Business Combination Proposal by the stockholders of Altitude and the satisfaction of the Minimum Cash Condition. The Minimum Cash Condition may be waived by Picard in its sole discretion. There can be no assurances that Picard will waive the Minimum Cash Condition, or any other condition to Closing described elsewhere in this proxy statement. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “The Business Combination Proposal  The Business Combination Agreement.”

Q: Did the Altitude Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A: Yes. Although the Current Charter does not require the Altitude Board to seek a third-party valuation or fairness opinion in connection with its initial Business Combination unless the target business is affiliated with Altitude’s initial stockholders, officers, directors or their affiliates, the Altitude Board received an opinion from The Benchmark Company, LLC (“Benchmark”) to the effect that, as of the date of such opinion and based upon

 

8


Table of Contents

and subject to the assumptions made, procedures followed, matters considered, and limitations and qualifications set forth therein, the consideration to be paid by Altitude in the Business Combination pursuant to the terms of the Business Combination Agreement is fair, from a financial point of view, to Altitude’s unaffiliated stockholders. Please see the section entitled “The Business Combination Proposal — Opinion of Altitude’s Financial Advisor.” The full text of the written opinion is attached to this proxy statement as Annex I.

Q: Why is Altitude proposing the Binding Charter Proposal?

A: We are proposing the Binding Charter Proposal in order to approve the Proposed Charter, substantially in the form attached to this proxy statement as Annex D. In the judgment of the Altitude Board, the Proposed Charter is necessary to address the needs of New Picard.

Pursuant to Delaware law and the Business Combination Agreement, we are required to submit the Binding Charter Proposal to Altitude’s stockholders for approval. Please see the section entitled “The Binding Charter Proposal” for more information.

Q: Why is Altitude proposing the Advisory Governance Proposals?

A: We are requesting that our stockholders vote upon, on a non-binding advisory basis, a series of proposals to approve certain amendments contained in the Proposed Charter that materially affect stockholder rights, which are those amendments that will be made to the Current Charter as reflected in the Proposed Charter if the Binding Charter Proposal is approved.

This separate vote is not otherwise required by Delaware law separate and apart from the Binding Charter Proposal, but pursuant to SEC guidance, Altitude is required to submit these provisions to our stockholders separately for approval. Please see the section entitled “The Advisory Governance Proposals” for additional information.

Q: Why is Altitude proposing the Stock Issuance Proposal?

A: We are seeking stockholder approval of the Stock Issuance Proposal in order to comply with Nasdaq Listing Rules 5635(a), (b) and (d), which require stockholder approval of certain transactions that result in the issuance of 20% or more of the outstanding voting power or shares of common stock outstanding before the issuance of stock or securities. Under Rule 5635(a), stockholder approval is required prior to the issuance of securities in connection with the acquisition of another company where, due to the present or potential issuance of common stock, including shares issued pursuant to an earn-out provision or similar, or securities convertible into or exercisable for common stock, other than a public offering for cash and (A) the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of common stock (or securities convertible into or exercisable for common stock) or (B) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities. Under Rule 5635(b), stockholder approval is required prior to an issuance that will result in a change of control of the issuer. Under Rule 5635(d), stockholder approval is required for a transaction other than a public offering involving the sale, issuance or potential issuance by any issuer of common stock (or securities convertible into or exercisable for common stock) at a price less than the closing price of the common stock immediately preceding the signing of the binding agreement (or the average of the closing price of the common stock for the five trading days immediately preceding the signing of the binding agreement, if lower) if the number of shares of common stock (or securities convertible into or exercisable for common stock) to be issued is or may be equal to 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance.

At the Closing, 48,000,000 shares of common stock will be issued to Picard securityholders in connection with the Business Combination (subject to adjustment to take into account certain cash and indebtedness of

 

9


Table of Contents

Picard at the Closing) and 6,500,000 New Picard Warrants, plus up to 6,500,000 Earnout Warrants (plus any additional shares of common stock or securities convertible into shares of common stock we may issue pursuant to arrangements that we may enter into prior to the Closing). Accordingly, we may issue 20% or more of our outstanding common stock as consideration in the Business Combination. The Business Combination would also constitute a “change of control” under Nasdaq Listing Rules 5635(b). Also, the deemed $10.00 per share price used in the Business Combination is less than the $10.09 per share closing price on the trading date prior to the announcement of the Business Combination. As a result we are required to obtain stockholder approval under Nasdaq listing rules 5635(a), (b) and (d). For more information, please see the section entitled “The Stock Issuance Proposal.”

Q: Why is Altitude proposing the Incentive Plan Proposal?

A: The purpose of the Incentive Plan is to further align the interests of the eligible participants with those of stockholders by providing long-term incentive compensation opportunities tied to the performance of New Picard. Under Nasdaq rules, we are required to obtain stockholder approval of the Incentive Plan. Please see the section entitled “The Incentive Plan Proposal” for additional information.

Q: Why is Altitude proposing the Director Election Proposal?

A: Our stockholders are being asked to consider and vote upon a proposal to elect seven directors who will serve on the New Picard Board, effective immediately upon the Closing of the Business Combination. Each Class I director will have an initial term that expires at our annual meeting of stockholders in 2024, each Class II director will have an initial term that expires at our annual meeting of stockholders in 2025 and each Class III director will have an initial term that expires at our annual meeting of stockholders in 2026, or, in each case, when his or her respective successor is duly elected and qualified, or upon his or her earlier death, resignation, retirement or removal. Five of the director nominees were designated by Picard and two of the director nominees were designated by Altitude.

Please see the section entitled “The Director Election Proposal” for additional information.

Q: Why is Altitude proposing the Adjournment Proposal?

A: We are proposing the Adjournment Proposal to allow the Altitude Board to adjourn the special meeting to a later date or dates to permit further solicitation of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the proposals or we determine that one or more of the Closing conditions under the Business Combination Agreement is not satisfied or waived. Please see the section entitled “The Adjournment Proposal” for additional information.

Q: Why is Altitude simultaneously pursuing the Business Combination and an Extension? What are the risks associated with the Extension?

Altitude believes its stockholders will benefit from it consummating the Picard Business Combination. The Board currently believes that there will not be sufficient time for the Company to consummate the Picard Business Combination by December 11, 2023, which is the liquidation date under Altitude’s Current Charter. Accordingly, on November 13, 2023, Altitude filed with the SEC and mailed to its stockholders a proxy statement seeking stockholder approval of the Extension. Even if the Extension is approved and implemented, Altitude can provide no assurances that the Business Combination will be consummated prior to March 11, 2024 because our ability to consummate the Business Combination is dependent on a variety of factors, which are described throughout this proxy statement, many of which are beyond our control.

In connection with the Extension, Altitude is required to provide its stockholders with the opportunity to redeem all or a portion of their Public Shares. This redemption right is additional to the redemption right

 

10


Table of Contents

described elsewhere in this proxy statement with respect to the Business Combination. Accordingly, even if the Extension and the Business Combination are approved by Altitude stockholders, it is possible that redemptions will leave us with insufficient cash or public float to consummate the Business Combination on commercially acceptable terms, or at all. The fact that we will have separate redemption periods in connection with the Extension and the Picard Business Combination vote could exacerbate these risks. See “Risk FactorsThe ability of our stockholders to exercise redemption rights with respect to a large number of public shares may make it more difficult for us to complete the Business Combination”.

Further, the Extension contravenes Nasdaq rules. Nasdaq rule IM-5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. The Extension would extend Altitude’s life beyond the Nasdaq Deadline. As a result, the contemplated Extension does not comply with Nasdaq rules. Altitude may be subject to suspension or delisting by Nasdaq if the Extension is implemented. For more information see “Risk FactorsThe Extension contravenes Nasdaq rules, and as a result, could lead Nasdaq to suspend trading in Altitude’s securities or lead Altitude to be delisted from Nasdaq.”

Q: What happens if I sell my shares of Class A common stock before the special meeting?

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

Q: What constitutes a quorum at the special meeting?

A: A majority of the issued and outstanding shares of common stock entitled to vote as of the record date at the special meeting must be present, in person (which would include presence at the virtual special meeting) or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. Abstentions will be counted as present for the purpose of determining a quorum. Shares held by the Sponsor, which currently beneficially owns approximately 85% of our issued and outstanding shares of common stock, will be sufficient for this quorum. In the absence of a quorum, the chairman of the special meeting has the power to adjourn the special meeting.

Q: What vote is required to approve the proposals presented at the special meeting?

A: Approval of the Business Combination Proposal, the Advisory Governance Proposals (each of which is a non-binding vote), the Stock Issuance Proposal, the Incentive Plan Proposal, and, if presented, the Adjournment Proposal each requires the affirmative vote of holders of a majority of the votes cast by our stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon.

Approval of the Binding Charter Proposal requires the affirmative vote of the holders of a majority of the then outstanding shares of common stock.

The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors.

 

11


Table of Contents

A stockholder’s failure to vote by proxy or to vote in person (which would include presence at the virtual special meeting) will not be counted towards the number of shares of common stock required to validly establish a quorum. Abstentions will be counted in connection with the determination of whether a valid quorum is established. Each of the failure to vote by proxy or to vote in person (which would include presence at the virtual special meeting) and an abstention from voting on any of the Business Combination Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal will have no effect on the outcome of any such proposal, but will have the same effect as a vote “AGAINST” the Binding Charter Proposal. As of the date of this proxy statement, the Sponsor owns 7,500,000 shares of Class A common stock which is approximately 85% of Altitude’s outstanding common stock. There are no outstanding shares of Class B common stock after the Sponsor’s conversion of its shares of Class B common stock on April 7, 2023. Accordingly, the Sponsor will be able to approve the Business Combination Proposal, the Binding Charter Proposal each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal even if all other outstanding shares are voted against such proposals.

Q: What happens if the Business Combination is not consummated?

A: If the Business Combination is not consummated, we will continue to seek an initial business combination until the end of the completion window. If the Business Combination Proposal is not approved and we do not consummate an initial business combination during the completion window, Altitude will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including any interest earned on the Trust Account deposits (which interest will be net of taxes payable and up to $100,000 to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Altitude Board, liquidate and dissolve, subject in each case to our obligations under Delaware 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 our warrants, which will expire worthless if we fail to complete our initial business combination during the completion window.

Q: May the Sponsor or Altitude’s directors or officers or their affiliates purchase public shares or public warrants in connection with the Business Combination?

A: At any time prior to the special meeting during a period when they are not then aware of any material nonpublic information regarding Altitude, Picard, their securities, or the Business Combination, our Sponsor, Picard, or our or their initial stockholders, directors, executive officers, advisors or affiliates may purchase public shares in privately negotiated transactions or in the open market, although they are under no obligation to do so. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, the transfer to such investors or holders of shares or warrants owned by the Sponsor for nominal value. Such public shares purchased by the Sponsor, or our directors, executive officers, or their affiliates would be (a) purchased at a price no higher than the redemption price for the public shares, which as of [●], 2023 was estimated to be $[●] per share and (b) would not be (i) voted by the Sponsor, or our directors, executive officers or their respective affiliates or (ii) redeemable by the Sponsor, or our directors, executive officers or their respective affiliates. Any such purchases that are completed after the record date for the special meeting may include an agreement with a selling stockholder that such stockholder, for so long as it remains the record holder of the shares in question, will vote in favor of the Business Combination and/or will not exercise its redemption rights with respect to the shares so purchased. No agreements dealing with the above arrangements or purchases have been entered into as

 

12


Table of Contents

of the date of this proxy statement by such persons or any of their respective affiliates. Altitude will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the satisfaction of any Closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

Q: How many votes do I have at the special meeting?

A: Our stockholders are entitled to one vote on each proposal presented at the special meeting for each share of common stock held of record as of [●], 2023, the record date for the special meeting. As of the close of business on the record date, there were 8,834,645 outstanding shares of our common stock.

Q: What interests do the Sponsor and Altitude’s officers and directors have in the Business Combination?

A: When you consider the recommendation of the Altitude Board that you vote in favor of approval of the Business Combination Proposal and each other proposal presented in this proxy statement, you should be aware that the Sponsor and Altitude’s directors and officers, have interests in the Business Combination that may be different from, or in addition to, the interests of Altitude’s other stockholders. The existence of financial and personal interests of Altitude’s directors may result in a conflict of interest on the part of one or more of the directors between what they may believe is in the best interests of Altitude and its stockholders and what they may believe is best for herself or themselves in determining to recommend that stockholders vote for the Business Combination Proposal. The Altitude Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to our stockholders that they vote in favor of the proposals to be presented at the special meeting, including the Business Combination Proposal. The Altitude Board concluded that the potentially disparate interests would be mitigated because (i) these interests were disclosed in the prospectus for Altitude’s initial public offering or included in this proxy statement, (ii) these disparate interests would exist with respect to a business combination by Altitude with any other target business or businesses and (iii) a significant portion of the securities held by the Sponsor (and indirectly by the directors and officers) was structured to be realized based on future performance of New Picard. Please see the section entitled “The Business Combination Proposal  Interests of Altitude’s Directors, Officers and Others in the Business Combination” for additional information.

Q: What happens if I vote against the Business Combination Proposal?

A: If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the requisite vote at the special meeting, then the Business Combination Proposal will be approved and, assuming the satisfaction or waiver of the other conditions to Closing, the Business Combination will be consummated in accordance with the terms of the Business Combination Agreement. As of the date of this proxy statement, the Sponsor owns 7,500,000 shares of Class A common stock which represents approximately 85% of Altitude’s outstanding common stock. There are no outstanding shares of Class B common stock after the Sponsor’s conversion of its Class B common stock into Class A common stock on April 7, 2023. Accordingly, the Sponsor will be able to approve the Business Combination Proposal even if all other outstanding shares are voted against such proposal.

Q: Do I have redemption rights?

A: Under the Current Charter, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote to approve such business combination. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. If you are a holder of public shares, you may redeem your public shares for cash at the redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account not

 

13


Table of Contents

previously released to us to pay our taxes, by (ii) the total number of then-outstanding public shares, in which case the Business Combination would not be consummated. A public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), 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 20% of the shares of our Class A common stock included in the public units sold in our IPO without the prior consent of Altitude. Holders of our outstanding public warrants do not have redemption rights in connection with the Business Combination. The Sponsor and our directors and officers have agreed to waive their redemption rights with respect to any public shares 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. Such redemption rights waiver was provided in connection with the IPO and without any separate consideration paid in connection with providing such waiver. For illustrative purposes, based on the fair value of the assets held in the Trust Account of approximately $[●] as of [●], 2023, the estimated per share redemption price would have been approximately $[●].

You will be entitled to receive cash for any public shares to be redeemed only if you:

(i) (a) hold public shares or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

(ii) prior to 5:00 PM, Eastern Time, on [●], 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that Altitude redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC.

Holders of public units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.

Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) in connection with the liquidation of the Trust Account, unless we complete an alternative business combination within the completion window.

Holders of Altitude warrants do not have redemption rights with respect to their Altitude warrants.

Holders of public shares who also hold public warrants may elect to redeem their public shares, and still retain their public warrants. The aggregate value of the 15,000,000 public warrants based on the closing price for the public warrants of $0.03 on November 24, 2023 was $450,000. Public stockholders who redeem their public shares may continue to hold any public warrants that they owned prior to redemption, which results in additional dilution to non-redeeming holders upon exercise of such public warrants, if despite such redemptions, the Business Combination was consummated. Assuming the 100% Redemptions Scenario, representing redemptions of 1,334,645 public shares, and assuming each redeeming shareholder holds one-half of one warrant for each public share redeemed, representing the number of warrants initially included in the Altitude Units, up to 667,323 public warrants would be retained by redeeming stockholders (assuming all such holders elected not to exercise their warrants, and assuming the Business Combination occurred despite such redemptions, thereby permitting the exercise of public warrants following the Closing) with an aggregate market value of approximately $20,020, based on the market price of $0.03 per public warrant as of November 24, 2023. We cannot predict the ultimate value of the public warrants following consummation of the Business Combination.

 

14


Table of Contents

As indicated elsewhere in this proxy statement, the outstanding Altitude warrants represent potential additional dilution to Altitude stockholders. See “Summary of the Proxy Statement– Ownership of New Picard following the Business Combination.” The Altitude warrants will become exercisable beginning 30 days after the Closing. For a discussion of the risks relating to warrant dilution, see “Risk Factors – New Picard Warrants will become exercisable for New Picard Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. Such dilution will increase if more shares of Altitude Common Stock are redeemed.”

Q: Can the Sponsor and our officers and directors redeem their Founder Shares in connection with consummation of the Business Combination?

A: No. The Sponsor and our officers and directors have agreed to waive their redemption rights with respect to their Founder Shares and any public shares they may hold in connection with the consummation of our Business Combination. Such redemption rights waiver was provided in connection with the IPO and without any separate consideration paid in connection with providing such waiver.

Q: Is there a limit on the number of shares I may redeem?

A: Yes. A public stockholder, together with any affiliate of the stockholder or any other person with whom the stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in our IPO without the prior consent of Altitude. Accordingly, all shares in excess of 20% owned by a holder will not be redeemed for cash without the prior consent of Altitude. On the other hand, a public stockholder who holds less than 20% of the public shares may redeem all of the public shares held by the stockholder for cash.

Q: Is there a limit on the total number of shares that may be redeemed?

A: No, our Current Charter does not provide a maximum redemption threshold. However, the Business Combination Agreement provides that the obligation of Picard to consummate the Business Combination is conditioned on the satisfaction of the Minimum Cash Condition. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus transaction expenses exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof.

Based on the amount of approximately $13.7 million in our Trust Account as of September 30, 2023, we will need to raise additional financing in order to meet the Minimum Cash Condition. There are currently no commitments for such financing. You should note that the Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition, or any other condition to Closing described elsewhere in this proxy statement.

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

A: No. You may exercise your redemption rights whether you vote your shares of common stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described in this proxy statement, and you may exercise your redemption rights even if you did not hold public shares on the record date.

Q: How do I exercise my redemption rights?

A: In order to exercise your redemption rights, you must: (i) (a) hold public shares or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and (ii) prior to 5:00 PM, Eastern Time, on [●], 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a

 

15


Table of Contents

written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that Altitude redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the Closing.

The Transfer Agent’s address is as follows:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attention: SPAC Redemption Team

Email: spacredemptions@continentalstock.com

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” are required to tender their shares to our Transfer Agent or to deliver their shares to the Transfer Agent electronically using DTC’s Deposit/Withdrawal At Custodian (DWAC) system, at the stockholder’s option, in each case at least two business days prior to the scheduled vote at the special meeting. The requirement for physical or electronic delivery prior to the special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

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 stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when delivery must be effectuated.

Q: What are the U.S. federal income tax consequences of exercising my redemption rights?

A: The U.S. federal income tax consequences of exercising your redemption rights depends on the particular facts and circumstances. Please see the section entitled “U.S. Federal Income Tax Considerations.” The discussion of the U.S. federal income tax consequences contained in this proxy statement 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 you in respect of exercising the redemption rights, nor does it address any tax considerations arising under U.S. state or local or non-U.S. tax laws. We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

Q: Do I have appraisal rights if I object to the Business Combination?

A: No. Appraisal rights are not available to holders of our common stock in connection with the Business Combination.

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

A: If the Business Combination is consummated, the funds held in the Trust Account will be used to: (i) pay our stockholders who properly exercise their redemption rights and (ii) pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by Altitude and Picard in connection with the Business Combination.

 

16


Table of Contents

Q: When is the Business Combination expected to be completed?

A: The Closing is expected to take place in the second half of 2023, subject to the satisfaction or waiver of the conditions described in the section entitled “The Business Combination Proposal  The Business Combination Agreement  Conditions to the Completion of the Business Combination.” The Business Combination Agreement may be terminated by the parties if the Closing has not occurred by October 1, 2023, which date will automatically be extended to December 11, 2023 if the SEC has not finished its review of this proxy statement on or prior to October 1, 2023. For a description of the conditions to the completion of the Business Combination, see the section entitled “ Conditions to the Completion of the Business Combination.”

Q: How do the public warrants differ from the private warrants and what are the related risks for any public warrant holders post-Business Combination?

A: The public warrants are identical to the private warrants in their respective material terms and provisions, except that the private warrants will not be redeemable by Altitude so long as they are held by the Sponsor or any of its permitted transferees. If the private warrants are held by holders other than the Sponsor or any of its permitted transferees, they will be redeemable by Altitude and exercisable by the holders on the same basis as the public warrants. The Sponsor has agreed not to transfer, assign or sell any of the private warrants until 30 days after the consummation of the Business Combination. The aforementioned terms of the private warrants are detailed in the Warrant Agreement and are not modified as a result of the Business Combination.

Following the consummation of the Business Combination, New Picard has the ability to redeem the outstanding Public Warrants for cash at any time after they become exercisable and prior to their expiration, in whole and not in part, at a price of $0.01 per warrant, upon a minimum of 30 days’ prior written notice of redemption to each warrant holder, if, among other things, the closing price of New Picard Common Stock is equal to or exceeds $18.00 per share (as adjusted for sub share sub divisions, share capitalizations, reorganizations, recapitalization and the like) for any 20 trading days within a 30-trading day period ending three business days prior to the date on which New Picard sends the notice of redemption to warrant holders. The value received upon redemption of the warrants (i) may be less than the value the holders would have received if they have exercised their warrants at a later time when the underlying share price is higher and (ii) may not compensate the holders for the value of the warrants.

In the event that New Picard determines to redeem the public warrants pursuant to Section 6.1 of the Warrant Agreement, New Picard will fix a date for the redemption. Notice of redemption will be mailed by first class mail, postage prepaid, by New Picard not less than thirty (30) days prior to the redemption date to the registered holders of the public warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in the manner herein provided will be conclusively presumed to have been duly given whether or not the registered holder received such notice.

Q: What do I need to do now?

A: You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the Business Combination will affect you as a stockholder.

You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q: How do I vote?

A: If you are a holder of record of common stock on the record date for the special meeting, you may vote in person (which would include presence at the virtual special meeting) or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the

 

17


Table of Contents

accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact 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 broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the special meeting and vote in person (which would include presence at the virtual special meeting), obtain a valid proxy from your broker, bank or nominee.

Q: What is the difference between a stockholder of record and astreet nameholder?

A: If your shares are registered directly in your name with the Transfer Agent, you are considered the stockholder of record with respect to those shares, and the proxy materials are being provided directly to you. If your shares are held in a stock brokerage account or by a bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in “street name.” The proxy materials are being provided to you by your broker, bank or other nominee who is considered the stockholder of record with respect to those shares.

Q: If my shares are held instreet name,will my broker, bank or nominee automatically vote my shares for me?

A: No. Under the rules of various national and regional securities exchanges, your broker, bank, or 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 nominee. We believe all of the proposals presented to the stockholders at this special meeting will be considered non-discretionary and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

Q: What will happen if I abstain from voting or fail to vote at the special meeting?

A: At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a failure to vote or an abstention vote at the special meeting will have no effect on any of the Business Combination Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal, and will have the same effect as a vote “AGAINST” the Binding Charter Proposal.

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

A: Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders and “FOR” each of the director nominees. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.

Q: How can I vote my shares without attending the special meeting?

A: If you are a stockholder of record of our common stock as of the close of business on the record date, you can vote by proxy by mail or online at [●] by following the instructions provided in the enclosed proxy card or at the special meeting. Please note that if you are a beneficial owner of our common stock, you may vote by submitting voting instructions to your broker, bank or nominee, or otherwise by following instructions provided by your broker, bank or nominee. Telephone and internet voting may be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or nominee.

 

18


Table of Contents

Q: May I change my vote after I have returned my proxy card or voting instruction form?

A: Yes. If you are a holder of record of our common stock as of the close of business on the record date, you can change or revoke your proxy before it is voted at the special meeting by:

 

   

delivering a signed written notice of revocation to our Secretary at Altitude Acquisition Corp., 400 Perimeter Center Terrace, Suite 151, Atlanta, Georgia 30346, bearing a date later than the date of the proxy, stating that the proxy is revoked;

 

   

signing and delivering a new proxy, relating to the same shares and bearing a later date; or

 

   

virtually attending and voting at the special meeting and voting, although attendance at the special meeting will not, by itself, revoke a proxy.

If you are a beneficial owner of our common stock as of the close of business on the record date, you must follow the instructions of your broker, bank or other nominee to revoke or change your voting instructions.

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 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 shares.

Q: Who will solicit and pay the cost of soliciting proxies for the special meeting?

A: Altitude will pay the cost of soliciting proxies for the special meeting. Altitude has engaged Morrow Sodali to assist in the solicitation of proxies for the special meeting. Altitude has agreed to pay Morrow Sodali a fee of $15,000, plus disbursements, and will reimburse Morrow Sodali for its reasonable out-of-pocket expenses and indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses. Altitude will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of common stock for their expenses in forwarding soliciting materials to beneficial owners of common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q: Who can help answer my questions?

A: If you have questions about the Business Combination or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:

Altitude Acquisition Corp.

400 Perimeter Center Terrace, Suite 151

Atlanta, Georgia 30346

Attn: Gary Teplis

Tel: (212) 739-7860

 

19


Table of Contents

You may also contact our proxy solicitor at:

Morrow Sodali LLC

333 Ludlow Street, 5th Floor, South Tower

Stamford, CT 06902

Tel: (800) 662-5200 (toll-free) or

(203) 658-9400 (banks and brokers can call collect)

Email: ALTU.info@investor.morrowsodali.com

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the special meeting.

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

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, New York 10004

Attn: SPAC Redemption Team

E-mail: spacredemptions@continentalstock.com

 

20


Table of Contents

SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. You should read this entire document and its annexes and the other documents to which we refer before you decide how to vote with respect to the proposals to be considered and voted on at the special meeting.

Information about the Parties to the Business Combination

Altitude Acquisition Corp.

400 Perimeter Center Terrace, Suite 151

Atlanta, Georgia 30346

(800) 508-1531

Altitude Acquisition Corp. is a blank check company incorporated in Delaware for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Picard Medical, Inc.

Picard Medical, Inc.

4 Palo Alto Sq, Ste 200

Palo Alto, CA 94025

(520) 545-1234

Picard is the sole owner of SynCardia, a medical technology company focused on developing, manufacturing, and commercializing an implantable Total Artificial Heart. Picard’s long-term mission is to build a portfolio of medical technology companies active in the cardiovascular space. Picard intends to achieve this goal by acquiring, developing, or by in-licensing of promising technologies or assets with a focus on approved devices, or devices close to being approved. SynCardia manufactures and sells an FDA approved implantable Total Artificial Heart designed to replace the full function of a human heart in patients suffering from advanced heart failure. SynCardia’s product development roadmap is focused on developing, manufacturing, and commercializing successive generations of the SynCardia TAH to further improve clinical outcomes, usability, and patient QOL.

Picard’s Current Operations

Currently, the SynCardia Total Artificial Heart is commercially available in the United States for use as a temporary bridge to transplant indication. This is different from “Long-Term” indication which would allow commercial use of the TAH for a period of 24 months or more. Picard has been in discussions with the FDA to use retrospective INTERMACS data to support a “Long-Term” (24 months or more) label for the SynCardia 70cc TAH. A pre-submission (Q-sub) meeting to discuss these plans with the FDA was expected to occur in early October 2023. Following the receipt of FDA comments ahead of the pre-submission meeting, the Company, together with its advisors, decided to proceed with the submission of the application for the label and to forgo meeting with FDA. While FDA approvals cannot be guaranteed to occur on schedule or at all, the Company anticipates that the necessary approvals for extended “Long-Term” use can be obtained by the second half of 2024. Please see “Risk Factors - The TAH is currently approved in the U.S. for temporary bridge to transplant indication. The Company plans to seek approval for long-term indication. If the Company does not receive that approval within the next year, it may need to undertake additional clinical trials, which could cost significant funds and adversely affect its business” for more information.

 

21


Table of Contents

As of the date of this proxy statement, Picard has had a history of significant operating losses and expects to continue to incur operating losses for the foreseeable future as SynCardia expands its sales, marketing capabilities, increases manufacturing, pursues additional regulatory approvals for its products and continues its research and development activities. Additionally, all of Picard’s revenue is generated from a limited number of products. Any decline in the sales of these products may negatively impact Picard’s business and revenues. Please see “Risk Factors - The Company has a history of significant losses. If it does not achieve and sustain profitability, its financial condition could suffer” and “Risk Factors - All of the Company’s revenue is generated from a limited number of products, and any decline in the sales of these products or failure to gain market acceptance of these products will negatively impact the Company’s business” for more information.

Altitude Merger Sub I

400 Perimeter Center Terrace, Suite 151

Atlanta, Georgia 30346

(800) 508-1531

Altitude Merger Sub I, Inc. is a Delaware corporation and a direct, wholly owned subsidiary of Altitude Acquisition Corp. It was formed for the sole purpose of facilitating the Business Combination.

Altitude Merger Sub II

400 Perimeter Center Terrace, Suite 151

Atlanta, Georgia 30346

(800) 508-1531

Altitude Merger Sub II, LLC is a Delaware limited liability company and a direct, wholly owned subsidiary of Altitude Acquisition Corp. It was formed for the sole purpose of facilitating the Business Combination.

The Business Combination and the Business Combination Agreement

The terms and conditions of the Business Combination are contained in the Business Combination Agreement, which is attached as Annex A to this proxy statement. We encourage you to read the Business Combination Agreement carefully and in its entirety, as it is the legal document that governs the Business Combination.

The following diagrams illustrate in simplified terms the current structure of Altitude and Picard and the expected structure of Altitude upon the Closing.

 

22


Table of Contents

Simplified Pre-Business Combination Structure

The following diagram depicts a simplified version of the current ownership structure of Altitude.

LOGO

Simplified Structure after First Merger

The diagram below depicts a simplified version of Altitude’s organizational structure immediately following the consummation of the First Merger.

LOGO

 

23


Table of Contents

Simplified Structure after Business Combination

The diagram below depicts a simplified version of New Picard’s organizational structure immediately following the consummation of the Mergers.

LOGO

Business Combination Consideration

In accordance with the terms and subject to the conditions of the Business Combination Agreement, Altitude has agreed to pay consideration of 48,000,000 shares of New Picard Common Stock (subject to adjustment to take into account certain cash and indebtedness of Picard at the Closing), plus 6,500,000 New Picard Warrants and up to 6,500,000 Earnout Warrants to Picard in exchange for all of the issued and outstanding equity interests of Picard.

The following table summarizes the sources and uses of funds for the Business Combination assuming no further redemptions and that SynCardia enters into definitive agreements with respect to, and closes on, an aggregate of $30.0 million of funding through the Picard Financing Note at or prior to the Closing, as contemplated by the Picard Financing LOI.

 

Sources ($M)

         

Uses ($M)

      

Picard Equity Rollover

   $ 480.0      Picard Equity Rollover    $ 480.0  

Picard Financing

   $ 30.0      Estimated transaction expenses (2)    $ 6.5  

Closing Offering

   $ 0.0      On-going business needs (3)    $ 7.0  

Altitude cash, in Trust (1)

   $ 13.5      Cash to New Picard balance sheet    $ 30.0  

Total

   $ 523.5      Total    $ 523.5  
  

 

 

       

 

 

 

 

(1)

Assumes no redemptions of Altitude public shares. Uses the $10.00 per share price assumed in the transaction.

 

24


Table of Contents
(2)

Estimated transaction expenses exclude D&O insurance and potential brokerage expense.

(3)

Assumes $1 million of cash used by Picard per month and 7 months between signing and closing the Business Combination.

Ownership of New Picard following the Business Combination

As of the date of this proxy statement, there are 8,834,645 shares of common stock issued and outstanding. As of the date of this proxy statement, there is an aggregate of 23,000,000 warrants issued and outstanding, which includes the 8,000,000 private warrants held by the Sponsor and 15,000,000 public warrants.

Assuming no redemptions from the Trust Account, no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note and that such note is not converted to New Picard Common Stock immediately upon the Closing, and that Picard waives the Minimum Cash Condition (defined below), it is anticipated that, immediately following the Closing, (1) Altitude’s public stockholders will own approximately 2.71% of the outstanding shares of New Picard Common Stock, (2) the Sponsor will own approximately 6.08% of the outstanding shares of New Picard Common Stock following the forfeiture of 4.5 million Founder Shares pursuant to the Sponsor Support Agreement and including 1,250,000 Sponsor Earnout Shares which will be outstanding on the Closing Date and for which the Sponsor will have voting rights, (3) Hunniwell Picard I, LLC will own approximately 73.79% of the outstanding shares of New Picard Common Stock, (4) the existing Picard securityholders other than Hunniwell Picard I, LLC will own approximately 17.22% of the outstanding shares of New Picard Common Stock, and (5) the Service Providers will own approximately 0.20% of the outstanding New Picard Common Stock. Such figures do not include any shares of New Picard Common Stock issuable upon the exercise of New Picard Options or upon the exercise of the New Picard Warrants to be issued to Picard securityholders at the Closing, Earnout Warrants issuable to Picard securityholders, Sponsor Earnout Warrants or New Picard Warrants issuable to the Service Providers. You should note that the Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition, or any other condition to Closing described elsewhere in this proxy statement.

The following table illustrates varying ownership levels in New Picard immediately following the consummation of the Business Combination at various redemption levels, excluding the dilutive effect of Warrants, Earnout Warrants, Sponsor Earnout Warrants, and New Picard Options, and the Picard Financing Note (assuming such note is issued at or prior to the Closing on the terms set forth in the Picard Financing LOI).

 

    No Additional
Redemptions Scenario
    25% Redemptions
Scenario
    50% Redemptions
Scenario
    75% Redemptions
Scenario
    100% Redemptions
Scenario
 
    Shares     %     Shares     %     Shares     %     Shares     %     Shares     %  

Hunniwell Picard I, LLC

    36,409,179       73.79%       36,409,179       74.30%       36,409,179       74.80%       36,409,179       75.32%       36,409,179       75.84%  

Other Picard Securityholders

    8,495,959       17.22%       8,495,959       17.34%       8,495,959       17.46%       8,495,959       17.58%       8,495,959       17.70%  

Sponsor (1)

    3,000,000       6.08%       3,000,000       6.12%       3,000,000       6.16%       3,000,000       6.21%       3,000,000       6.25%  

Altitude Public Stockholders

    1,334,645       2.71%       1,000,984       2.04%       667,323       1.37%       333,661       *       0       0.00%  

Service Providers (2)

    100,000       *       100,000       *       100,000       *       100,000       *       100,000       *  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    49,339,783       100.00%       49,006,122       100.00%       48,672,461       100.00%       48,338,799       100.00%       48,005,138       100.00%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Less than 1%.

(1)

Reflects the forfeiture of 4,500,000 Founder Shares, assuming the proceeds of the Trust Account and Picard Financing does not exceed $38 million and accordingly Sponsor does not earn back any of such forfeited shares pursuant to the terms of the Sponsor Support Agreement. Includes 1,250,000 Sponsor Earnout Shares, which will be outstanding on the Closing Date and for which the Sponsor will have voting rights. Excludes shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000

 

25


Table of Contents
  private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants.
(2)

Excludes 30,000 New Picard Warrants issuable to the Service Providers at Closing.

The following table illustrates varying ownership levels in New Picard immediately following the consummation of the Business Combination at various redemption levels, including the dilutive effect of Warrants, Earnout Warrants, Sponsor Earnout Securities, and New Picard Options. Such table also assumes that Picard enters into definitive agreements with respect to, and closes on, an aggregate of $30.0 million of funding through the Picard Financing Note at or prior to the Closing on the terms set forth in the Picard Financing LOI. The public warrants may not be redeemed by the holder in connection with the exercise of redemption rights with respect to public shares and accordingly will remain outstanding in each redemption scenario, although, given the $11.50 exercise price, they are unlikely to be exercised unless the New Picard Common Stock trades above such exercise price.

 

    No Additional
Redemptions Scenario
    25% Redemptions
Scenario
    50% Redemptions
Scenario
    75% Redemptions
Scenario
    100% Redemptions
Scenario
 
    Shares     %     Shares     %     Shares     %     Shares     %     Shares     %  

Hunniwell Picard I, LLC (1)

    46,949,605       55.26     46,949,605       55.48     46,949,605       55.70     46,949,605       55.92     46,949,605       56.14

Other Picard Securityholders (2)

    10,955,529       12.89     10,955,529       12.95     10,955,529       13.00     10,955,529       13.05     10,955,529       13.10

Sponsor (3)

    4,500,000       5.30     4,500,000       5.32     4,500,000       5.34     4,500,000       5.36     4,500,000       5.38

Altitude Public Stockholders

    1,334,645       1.57     1,000,984       1.18     667,323       *       333,661       *       0       0.00

Altitude Public Warrant Holders

    15,000,000       17.65     15,000,000       17.72     15,000,000       17.79     15,000,000       17.86     15,000,000       17.94

Service Providers (4)

    130,000       *       130,000       *       130,000       *       130,000       *       130,000       *  

Holders of New Picard Options

    3,094,862       3.64     3,094,862       3.66     3,094,862       3.67     3,094,862       3.69     3,094,862       3.70

Holders of Picard Financing Note (5)

    3,000,000       3.53     3,000,000       3.54     3,000,000       3.56     3,000,000       3.57     3,000,000       3.59
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    84,964,641       100.00     84,630,980       100.00     84,297,319       100.00     83,963,657       100.00     83,629,996       100.00
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

Less than 1%.

(1)

Includes shares issuable upon the exercise of 5,270,214 New Picard Warrants and 5,270,214 Earnout Warrants, reflecting Hunniwell Picard I, LLC’s pro rata portion of the 6,500,000 New Picard Warrants to be issued to Picard securityholders at the Closing and of the 6,500,000 Earnout Warrants, in each case held by Hunniwell Picard I, LLC. The Earnout Warrants will be issued and outstanding on the Closing Date and held in escrow for the benefit of such individual until such Earnout Warrants vest or are forfeited in accordance with the Business Combination Agreement.

(2)

Includes shares issuable upon the exercise of 1,229,786 New Picard Warrants and 1,229,786 Earnout Warrants, reflecting the pro rata portion of the 6,500,000 New Picard Warrants to be issued to Picard securityholders at the Closing and of the 6,500,000 Earnout Warrants, in each case held by Picard securityholders other than Hunniwell Picard I, LLC. The Earnout Warrants will be issued and outstanding on the Closing Date and held in escrow for the benefit of such individual until such Earnout Warrants vest or are forfeited in accordance with the Business Combination Agreement.

(3)

Reflects the forfeiture of 4,500,000 Founder Shares, assuming the proceeds of the Trust Account and Picard Financing does not exceed $38 million and accordingly Sponsor does not earn back any of such forfeited shares pursuant to the terms of the Sponsor Support Agreement. Includes 1,250,000 Sponsor Earnout Shares, and shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000 private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants.

 

26


Table of Contents
(4)

Includes 30,000 New Picard Warrants issuable to the Service Providers at Closing.

(5)

Assumes an aggregate principal amount of $30.0 million of the Picard Financing Note is funded at or prior to Closing, and that the entire outstanding principal is converted into shares of New Picard Common Stock at an initial conversion price of $10.00 per share (and that no payment-in-kind interest is paid thereon), pursuant to the terms contemplated by the Picard Financing LOI.

The following table shows the potential impact of redemptions on the per share equity value of the public shares owned by non-redeeming public stockholders in each redemptions scenario and sets forth the potential dilutive impact from various sources in each redemptions scenario:

 

    No Additional
Redemptions Scenario
    25% Redemptions
Scenario
    50% Redemptions
Scenario
    75% Redemptions
Scenario
    100% Redemptions
Scenario
 
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
    Shares     Per
Share
Equity
Value
 

Base Scenario(1)

    49,339,783     $ 10.00       49,006,122     $ 10.00       48,672,461     $ 10.00       48,338,799     $ 10.00       48,005,138     $ 10.00  

Shares underlying Public Warrants

    15,000,000     $ 7.67       15,000,000     $ 7.66       15,000,000     $ 7.64       15,000,000     $ 7.63       15,000,000     $ 7.62  

Shares underlying Private Warrants(2)

    1,530,000     $ 9.70       1,530,000     $ 9.70       1,530,000     $ 9.70       1,530,000     $ 9.69       1,530,000     $ 9.69  

Shares underlying Warrants issued to Picard Securityholders(3)

    13,000,000     $ 7.91       13,000,000     $ 7.90       13,000,000     $ 7.89       13,000,000     $ 7.88       13,000,000     $ 7.87  

Shares underlying New Picard Options

    3,094,862     $ 9.41       3,094,862     $ 9.41       3,094,862     $ 9.40       3,094,862     $ 9.40       3,094,862     $ 9.39  

Shares underlying Picard Financing Note(4)

    3,000,000     $ 9.43       3,000,000     $ 9.42       3,000,000     $ 9.42       3,000,000     $ 9.42       3,000,000     $ 9.41  

Shares underlying all Warrants, New Picard Options, and Picard Financing Note(5)

    35,624,862     $ 5.81       35,624,862     $ 5.79       35,624,862     $ 5.77       35,624,862     $ 5.76       35,624,862     $ 5.74  

Equity Value

  $ 493,397,830.00       $ 490,061,217.50       $ 486,724,605.00       $ 483,387,992.50       $ 480,051,380.00    

 

(1)

Based on a post-transaction equity value as set forth in the Equity Value row for each redemptions scenario, and assuming an ascribed value per share of $10.00, which is the per share price used in the Business Combination Agreement to determine the number of shares issuable to Picard Securityholders.

(2)

Includes (i) shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000 private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants and (ii) 30,000 New Picard Warrants issuable to the Service Providers at Closing.

(3)

Includes shares issuable upon the exercise of 6,500,000 New Picard Warrants and 6,500,000 Earnout Warrants to be issued to Picard securityholders at the Closing. The Earnout Warrants will be issued and outstanding on the Closing Date and held in escrow for the benefit of such individual until such Earnout Warrants vest or are forfeited in accordance with the Business Combination Agreement.

(4)

Assumes an aggregate principal amount of $30.0 million of the Picard Financing Note is funded at or prior to Closing, and that the entire outstanding principal is converted into shares of New Picard Common Stock at an initial conversion price of $10.00 per share (and that no payment-in-kind interest is paid thereon), pursuant to the terms contemplated by the Picard Financing LOI.

(5)

Includes all dilutive securities and assumptions included in Footnotes 2 through 4.

Ancillary Agreements

In connection with the transactions contemplated by the Business Combination Agreement, the parties have also entered into, or will enter into in connection with the Closing, the following ancillary agreements.

 

27


Table of Contents

Sponsor Support Agreement

In connection with the execution of the Business Combination Agreement, on April 23, 2023, the Sponsor entered into the Sponsor Support Agreement. Under the Sponsor Support Agreement, Sponsor agreed to vote, at any meeting of the stockholders of Altitude, and in any action by written consent of the stockholders of Altitude, all of the common stock of Altitude held by the Sponsor in favor of (i) the approval and adoption of the Mergers; (ii) adoption and approval of the proposals set forth in this proxy statement; and (iii) any other matter reasonably necessary to the consummation of the transactions contemplated by the Business Combination Agreement. The Sponsor Support Agreement prohibits the Sponsor from, among other things, selling, assigning or transferring or redeeming any Class A common stock held by it.

In addition, the Sponsor Support Agreement provides that the Sponsor will, in connection with the Closing (x) forfeit an aggregate amount of up to 4,500,000 shares of Class A common stock held by the Sponsor immediately prior to the Closing, with such number of forfeited shares to be reduced by 20,000 shares for each $1,000,000 by which the proceeds of the Closing Offering plus the funds remaining in Altitude’s Trust Account (after giving effect to redemptions and any financial incentives or discounts given to incentivize non-redemption and the repayment of any outstanding debt to the Sponsor) together with the proceeds from any Picard Financing, exceeds $38,000,000, (y) forfeit 6,500,000 private warrants held by Sponsor immediately prior to the Closing, and (z) deposit with Continental Stock Transfer & Trust Company, acting as escrow agent, 1,250,000 Sponsor Earnout Shares and 1,000,000 Sponsor Earnout Warrants. The Sponsor Earnout Securities will be released to the Sponsor upon achievement of the following milestones at any time during the five year period following the Closing: (i) 500,000 Sponsor Earnout Shares will be released if the VWAP of New Picard Common Stock is equal to or greater than $12.50 for any 20 trading days within any 30 trading day period, (ii) 1,000,000 Earnout Warrants will be released upon the closing of the acquisition by Altitude or New Picard, as applicable, of at least 10,000,000 Company Warrants or New Picard Warrants, as applicable, from public investors, and (iii) 750,000 Sponsor Earnout Shares will be released upon the release of the Sponsor Earnout Shares and Sponsor Earnout Warrants pursuant to both (i) and (ii) of this paragraph. Any Sponsor Earnout Securities that have not been released from escrow on the date that is five years after the Closing will be forfeited.

For additional information, see the section entitled “The Business Combination Proposal  Ancillary Agreements  Sponsor Support Agreement.

Picard Support Agreement

In connection with the execution of the Business Combination Agreement, on April 23, 2023, the Picard Supporting Stockholders entered into the Picard Support Agreements. Under the Picard Support Agreements, each Picard Supporting Stockholder agreed that, following the SEC declaring effective the Registration Statement, to execute and deliver a written consent with respect to the outstanding shares of Picard Common Stock and the Subject Picard Shares approving the Business Combination Agreement and the transactions contemplated thereby. In addition to the foregoing, each Picard Supporting Stockholder agreed that at any meeting of the holders of Picard capital stock, each such Picard Supporting Stockholder will appear at the meeting, in person or by proxy, and cause its Subject Picard Shares to be voted (i) to approve and adopt the Business Combination Agreement and the transactions contemplated thereby, including the Mergers; (ii) against any (A) any merger, consolidation, share exchange, business combination or other similar transaction or (B) any sale, lease, exchange, transfer or other disposition of all or a material portion of the assets of Picard (a “Alternative Proposal”); and (iii) against any amendment of the certificate of incorporation, or bylaws of Picard or proposal or transaction that would impede or frustrate the provisions of the Picard Support Agreements, the Business Combination Agreement or the transactions contemplated thereby. In addition, the Picard Support Agreements prohibit the Picard Supporting Stockholders from, among other things, (i) transferring any of the Subject Picard Shares;

 

28


Table of Contents

(ii) entering into (a) any option, warrant, purchase right, or other contact that would require the Picard Support Stockholders to transfer the Subject Picard Shares, or (b) any voting trust, proxy or other contract with respect to the voting or transfer of the Subject Picard Shares; or (iii) or taking any action in furtherance of the forgoing.

The Picard Support Agreement provides that the Picard Supporting Stockholders will not directly or indirectly, (i) solicit, initiate or knowingly encourage or facilitate any inquiry, proposal, or offer which constitutes, or could reasonably be expected to lead to, an Alternative Proposal in their capacity as such, (ii) participate in any discussions or negotiations regarding, or furnish or receive any nonpublic information relating to the Picard or its subsidiaries, in connection with any Alternative Proposal, (iii) approve or recommend, or make any public statement approving or recommending an Alternative Proposal, (iv) enter into any letter of intent, merger agreement or similar agreement providing for an Alternative Proposal, (v) make, or in any manner participate in a “solicitation” (as such term is used in the rules of the SEC) of proxies or powers of attorney or similar rights to vote, or seek to advise or influence with respect to voting of the Picard capital stock intending to facilitate any Alternative Proposal or cause any holder of shares of Picard capital stock not to vote to adopt the Business Combination Agreement and approve the Mergers and the other transactions contemplated thereby, (vi) become a member of a “group” (as such term is defined in Section 13(d) of the Exchange Act) with respect to any voting securities of Picard that takes any action in support of an Alternative Proposal or (vii) otherwise resolve or agree to do any of the foregoing.

Picard’s Supporting Stockholders each also irrevocably waived, and agreed not to exercise or assert, any dissenters’ or appraisal rights under Delaware law in connection with the Mergers and the Business Combination Agreement.

For additional information, see the section entitled “The Business Combination Proposal  Ancillary Agreements — Picard Support Agreement.

Registration Rights Agreement

In connection with the Closing, Altitude, Picard, and certain of their respective stockholders will enter the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, New Picard will be required to register for resale securities held by the stockholders party. In addition, the holders will have certain demand and “piggyback” registration rights. New Picard will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Registration Rights Agreement.

We estimate that an aggregate of approximately 55 million shares of New Picard Common Stock and 14.53 million New Picard Warrants will be subject to registration rights immediately following Closing.

For additional information, see the section entitled “The Business Combination Proposal  Ancillary Agreements   Registration Rights Agreement.

Lock-Up Agreement

In connection with the Closing, Altitude and certain record and/or beneficial owner of equity securities of Picard will enter into the Lock-Up Agreement. Pursuant to the Lock-Up Agreement, the Holders will agree, subject to customary exceptions, not to transfer (a) the Lock-Up Shares for the period ending on the earliest of (x) the date this is one (1) year following the Closing Date, (y) the date on which the closing price of shares of New Picard Common Stock on Nasdaq equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for twenty (20) of any thirty (30) consecutive trading days commencing at least 150 days after the Closing, and (z) the date on which New Picard completes a liquidation, merger, capital stock exchange, reorganization or similar transaction that results in all of New

 

29


Table of Contents

Picard’s stockholders having the right to exchange their shares of New Picard Common Stock for cash, securities or other property and (b) any warrants of received as consideration in the Mergers (including the Earnout Warrants) for a period of 30 days after Closing.

For additional information, see the section entitled “The Business Combination Proposal  Ancillary Agreements   Lock-Up Agreement.

Picard Financing LOI

On October 22, 2023, SynCardia and Altitude entered into the Picard Financing LOI, which is a non-binding letter of intent with the Investor with respect to $30.0 million of financing in the form of a senior secured convertible note. Such financing would be funded simultaneously with the Closing of the Business Combination. The following paragraphs summarize the proposed terms of the Picard Financing Note as set forth in the Picard Financing LOI. However, there is no assurance that SynCardia, Altitude and the Investor will enter into a definitive agreement for the Picard Financing Note on the current terms of the Picard Financing LOI, or at all, or that the Picard Financing Note would be funded at the Closing. None of the directors and officers of SynCardia, Picard or Altitude, or their affiliates, will participate in this financing.

The Picard Financing Note would be secured by a perfected first priority security interest in all of the assets of SynCardia and its subsidiaries and would be senior in right of payment to all of SynCardia’s and its subsidiaries’ existing and future indebtedness. The Picard Financing LOI contemplates that the Picard Financing Note will accrue interest at an interest rate equal to the 6-Month Term Secured Overnight Financing Rate (“SOFR”) (subject to a 4% floor) plus 8.0%, which will be paid quarterly in cash or in kind at SynCardia’s option. The Picard Financing LOI contemplates that the Picard Financing Note would mature 48 months after the closing of the Business Combination and would be convertible, at any time prior to maturity, in-whole or in part, upon the election of the Investor into shares of New Picard Common Stock at an initial conversion price of $10.00 per share. On the 9-month anniversary of Closing, the initial conversion price will be reset downward to the (“Market Price”) which is the greater of (a) 2.50 and (b) a price per share equal to the average of the two lowest daily VWAPs in the 5 trading days immediately preceding such 9-month anniversary date. The Picard Financing LOI also provides that the Picard Financing Note would be redeemable by SynCardia in its sole discretion if the Market Price is less than 85% of the current conversion price. The Picard Financing LOI provides that the Picard Financing Note will be guaranteed as to the payment of principal and interest by an insurance policy. The Picard Financing LOI also provides that the Picard Financing Note would be subject to customary representations, warranties, and covenants, and that the Investor would have customary registration rights.

The Picard Financing LOI includes a 90 day exclusivity period with respect to other capital raising activities by SynCardia. In the event of a breach of the exclusivity provision by SynCardia, the investor would be entitled to a $1.5 million breach fee payable by SynCardia. The Investor also has a right of first offer to purchase at least 50% of any other capital raising transaction consummated by SynCardia within 30 days after the termination of the Picard Financing LOI. If the Picard Financing Note is executed, the Investor would also have a right of participation for no less than 30% of all future offerings of equity securities of SynCardia for a period of three years or until the Picard Financing Note is no longer outstanding. SynCardia agreed to pay $75,000 of the Investor’s legal fees in connection with the proposed Picard Financing Note.

You should note that there is no assurance that SynCardia, Altitude and the Investor will enter into a definitive agreement for the Picard Financing Note on the current terms of the Picard Financing LOI, or at all, or that the Picard Financing Note would be funded at the Closing. All of the terms in the Picard Financing LOI are subject to change in the definitive document.

 

30


Table of Contents

Extension Proxy

On November 13, 2023, Altitude filed with the SEC and mailed to its stockholders a proxy statement seeking stockholder approval to extend the completion window, monthly, up to March 11, 2024. Altitude plans to hold a stockholder meeting to approve the Extension only if the Business Combination is not completed before December 11, 2023, which is the end of the completion window. Such stockholder meeting is currently scheduled to occur on December 6, 2023. Even if the Extension is approved and implemented, Altitude can provide no assurances that the Business Combination will be consummated prior to March 11, 2024 because our ability to consummate the Business Combination is dependent on a variety of factors, which are described throughout this proxy statement, many of which are beyond our control. In connection with the Extension, Altitude is required to provide its stockholders with the opportunity to redeem all or a portion of their Public Shares. This redemption right is additional to the redemption right described elsewhere in this proxy statement with respect to the Business Combination. Accordingly, even if the Extension and the Business Combination are approved by Altitude stockholders, it is possible that redemptions will leave us with insufficient cash or public float to consummate the Business Combination on commercially acceptable terms, or at all. Further, the Extension contravenes Nasdaq rules. Nasdaq rule IM-5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. The Extension would extend Altitude’s life beyond the Nasdaq Deadline. Altitude may be subject to suspension or delisting by Nasdaq if the Extension is implemented. For more information see “Risk Factors  The Extension contravenes Nasdaq rules, and as a result, could lead Nasdaq to suspend trading in Altitude’s securities or lead Altitude to be delisted from Nasdaq.”

Special Meeting of Stockholders and the Proposals

The special meeting will convene on [●], 2023 at [ ] a.m., Eastern Time, exclusively in virtual format. Stockholders may attend, vote and examine the list of Altitude’s stockholders entitled to vote at the special meeting by visiting [] and entering the control number found on their proxy card, voting instruction form or notice they previously received. The purpose of the special meeting is to consider and vote on the Business Combination Proposal, the Binding Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal.

Approval of the Business Combination Proposal is a condition to the obligations of the parties to complete the Business Combination.

Only holders of record of issued and outstanding common stock as of the close of business on [●], 2023, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement of the special meeting. Altitude’s stockholders are entitled to one vote for each share of our common stock that they owned as of the close of business on the record date. If their shares are held in “street name” or are in a margin or similar account, they should contact their broker, bank or other nominee to ensure that votes related to the shares they beneficially own are properly counted.

On the record date, there were 8,834,645 shares of common stock outstanding, of which 1,334,645 are public shares, and 7,500,000 are Founder Shares held by the Sponsor.

A quorum of stockholders is necessary to hold a valid meeting. A quorum will exist at the special meeting with respect to each matter to be considered at the special meeting if the holders of a majority of the outstanding shares of common stock as of the record date present by attending the virtual special meeting or represented by proxy at the special meeting. All shares represented by proxy are counted as present for purposes of establishing a quorum. As of the record date for the special meeting, 4,417,323 shares of common stock would be required to achieve a quorum.

 

31


Table of Contents

Approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Binding Charter Proposal requires the affirmative vote of the holders of a majority of the then outstanding shares of common stock, voting together as a single class. Abstentions and broker non-votes will count as a vote “AGAINST” the proposal.

Approval of each of the Advisory Governance Proposals, each of which is a non-binding vote, requires the affirmative vote of a majority of the votes cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Stock Issuance Proposal requires the affirmative vote of a majority of the votes cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

The election of directors is decided by a plurality of the votes cast by the stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote on the election of directors. This means that each of the director nominees will be elected if they receive more affirmative votes than any other nominee for the same position. Stockholders may not cumulate their votes with respect to the election of directors. Abstentions and broker non-votes have no effect on the outcome of the proposal.

Approval of the Adjournment Proposal, if presented, requires the affirmative vote of a majority of the votes cast by Altitude’s stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy at the special meeting and entitled to vote thereon. Abstentions and broker non-votes have no effect on the outcome of the proposal.

As of the date of this proxy statement, the Sponsor owns 7,500,000 shares of Class A common stock which is approximately 85% of Altitude’s outstanding common stock. There are no outstanding shares of Class B common stock after the Sponsor’s conversion of its Class B common stock into Class A common stock on April 7, 2023. Accordingly, the Sponsor will be able to approve the Business Combination Proposal, the Binding Charter Proposal each of the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal even if all other outstanding shares are voted against such proposals.

With respect to each proposal in this proxy statement, you may vote “FOR,” “AGAINST” or “ABSTAIN.”

Recommendation of the Altitude Board

Altitude was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We sought to do this by

 

32


Table of Contents

utilizing the networks and industry experience of our management team, advisors and the Sponsor to identify and acquire one or more target businesses. The Altitude Board considered and evaluated several factors in evaluating and negotiating the Business Combination and the Business Combination Agreement. After careful consideration, the Altitude Board has unanimously approved the Business Combination Agreement and determined that each of the Business Combination Proposal, the Binding Charter Proposal, the Advisory Governance Proposals, the Stock Issuance Proposal, the Incentive Plan Proposal, the Director Election Proposal and, if presented, the Adjournment Proposal is in the best interests of Altitude and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals and “FOR” each of the director nominees. For additional information relating to the Altitude Board’s evaluation of the Business Combination and the factors it considered in connection therewith, please see the section entitled “The Business Combination Proposal  The Altitude Board’s Reasons for the Approval of the Business Combination.”

Summary of Opinion of Altitude’s Financial Advisor

In connection with the Business Combination, Benchmark delivered a written opinion (the “Benchmark Opinion”), dated April 23, 2023 to the Altitude Board (in its capacity as such), that the consideration to be paid by Altitude in the Business Combination is fair to Altitude’s unaffiliated stockholders from a financial point of view and did not address any other aspect or implication of the Business Combination or any other agreement, arrangement or understanding.

The full text of the written opinion of Benchmark, dated April 23, 2023, which sets forth matters considered, the procedures followed, the assumptions made and various limitations of and qualifications to the review undertaken in connection with the Benchmark Opinion, is attached as Annex I to this proxy statement. Benchmark provided its opinion for the information and assistance of the Altitude Board in connection with its consideration of the Business Combination. The Benchmark Opinion was not intended to be, and does not constitute, a recommendation to the Altitude Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the Business Combination or otherwise.

Regulatory Matters

At any time before or after consummation of the Business Combination the Department of Justice or the FTC, or any state or foreign governmental authority could take such action under applicable antitrust laws as such authority deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of assets, subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. Altitude cannot assure you that the Antitrust Division, the FTC, any state attorney general or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, Altitude cannot assure you as to its result.

Neither Altitude nor Picard are aware of any material regulatory approvals or actions that are required for completion of the Business Combination. It is presently contemplated that if any regulatory approvals or actions are required, those approvals or actions will be sought in due course. There can be no assurance, however, that any additional approvals or actions will be obtained.

 

33


Table of Contents

Conditions to the Completion of the Business Combination

Under the Business Combination Agreement, the obligations of the parties to consummate the Mergers are subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, as summarized below:

General Conditions

The obligations of all of the parties to the Merger Agreement to consummate the Merger are subject to the satisfaction or written waiver (where permissible) by all of such parties of all of the following conditions:

 

   

no provisions of an applicable law or order shall restrain or prohibit or impose any condition on the consummation of the Business Combination Agreement and the transactions contemplated therein and thereby;

 

   

the receipt of consents or approvals from the applicable governmental, regulatory or administrative authorities and each applicable waiting period or consent or approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) shall have expired, been terminated or obtained;

 

   

there has not been any legal action, suit, claim or similar hearing or proceeding brought by any governmental body, agency, authority, court, arbitrator, or any public, private or industry regulatory authority, whether international, national, foreign, federal, state, or local to enjoin or otherwise restrict the consummation of the transactions; and

 

   

the approval and adoption of the Business Combination Agreement and transactions contemplated thereby by requisite vote of Altitude’s stockholders (the “Altitude Stockholder Approval”) and Picard’s stockholders (the “Picard Stockholder Approval”).

Picard’s Conditions to Closing

The obligation of Picard to consummate the Mergers is subject to the satisfaction of the following additional conditions, among others, any one or more of which may be waived in writing by Picard:

 

   

The accuracy of the representations and warranties, and the performance of the covenants and agreements, of Altitude and the Merger Subs;

 

   

Altitude shall have performed or complied with, in all material respects, all of its obligations required to be performed or complied with at or prior to the Closing Date;

 

   

The Proposed Charter shall have been filed with, and declared effective by, the Delaware Secretary of State;

 

   

The aggregate cash proceeds from Altitude’s Trust Account, together with the proceeds from the certain permitted equity financings, equaling no less than $38,000,000 (after deducting any amounts paid to Altitude stockholders that exercise their redemption rights in connection with the Mergers and net of certain transaction expenses of Altitude and Picard), of which not less than $10,000,000 will be from the Closing Offering;

 

   

Altitude’s initial listing application with Nasdaq in connection with the Mergers has been conditionally approved and, immediately following the First Effective Time, Altitude has satisfied any applicable initial and continuing listing requirements of Nasdaq and the New Picard Common Stock has been approved for listing on Nasdaq and Altitude has not received any notice of non-compliance therewith.

 

34


Table of Contents

Altitude’s Conditions to Closing

The obligation of Altitude to consummate the Mergers is subject to the satisfaction of the following additional conditions, among others, any one or more of which may be waived in writing by Altitude:

 

   

The accuracy of the representations and warranties, and the performance of the covenants and agreements of Picard, subject to customary materiality qualifications

 

   

Picard shall have performed or complied with, in all material respects, all of its obligations required to be performed or complied with at or prior to the Closing Date;

 

   

The absence of a Material Adverse Effect (as defined below) with respect to Picard;

 

   

The delivery by Picard of documentation evidencing, to the reasonable satisfaction of Altitude, the termination of the Investors’ Rights Agreement and the release of all of Picard’s obligations thereunder;

 

   

The delivery by Picard of documentation evidencing, to the reasonable satisfaction of Altitude, the release of all outstanding liens against Picard; and

 

   

The Picard Securityholders have duly executed and delivered to Altitude a copy of the Lock-up Agreement and the Registration Rights Agreement.

For additional information, see the section entitled “The Business Combination Proposal  Conditions to the Completion of the Business Combination.

Termination

The Business Combination Agreement may be terminated, and the Mergers abandoned at any time prior to the Closing:

 

   

by Altitude or Picard, if the Closing has not occurred by October 1, 2023, which date will be automatically extended to December 11, 2023 if the SEC has not finished its review of this proxy statement on or prior to October 1, 2023, but only if the party seeking to terminate is not in material breach;

 

   

by Altitude or Picard, in the event an applicable governmental, regulatory or administrative authority has issued a final and non-appealable order having the effect of permanently restraining, enjoining or otherwise prohibiting the Mergers, or in the event any applicable law is in effect making the consummation of the Mergers illegal, in each case only if the failure of the person seeking termination to fulfill any obligation under the Business Combination Agreement was not the primary cause of, or did not primarily result in, such law or order;

 

   

by Altitude or Picard, if the other party has breached any of its respective representations, warranties, agreements or its respective covenants contained in the Business Combination Agreement, such failure or breach would render certain conditions precedents to the Closing incapable of being satisfied, and such breach or failure is not cured by the time allotted;

 

   

by Altitude and Picard, by mutual consent;

 

   

by Altitude if the Picard Stockholder Approval is not obtained within 3 business days after the SEC completes its review of this proxy statement (the Picard Stockholder Approval was obtained on April 24, 2023);

 

   

by Altitude if, in Altitude’s reasonable discretion, Picard’s PCAOB audited financial statements reflect a material deterioration in Picard’s financial condition as compared to the financial statements delivered to Altitude before the Business Combination Agreement was signed; and

 

35


Table of Contents
   

by Altitude, at any time prior to obtaining Altitude Stockholder Approval, in order to enter into a definitive agreement with respect to any business combination that the Altitude Board determines in good faith to be more favorable than the Mergers and reasonable capable of being completed.

In the case of a termination of the Business Combination by Altitude in order to pursue a superior business combination, Altitude must pay Picard a termination fee of $2,800,000 within seven calendar days following such termination.

For additional information, see the section entitled “The Business Combination Proposal  Termination and Effect of Termination.

Redemption Rights

Pursuant to the Current Charter, a holder of public shares may request that Altitude redeem all or a portion of such public stockholder’s public shares for a pro rata portion of the cash held in the Trust Account prior to the Business Combination being consummated. You will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (i)

(a) hold public shares or (b) hold public shares through public units and you elect to separate your public units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; and

 

  (ii)

prior to 5:00 PM, Eastern Time, on [●], 2023 (two business days prior to the scheduled vote at the special meeting), (a) submit a written request, including the legal name, phone number and address of the beneficial owner of the shares for which redemption is requested, to the Transfer Agent that Altitude redeem your public shares for cash and (b) deliver your public shares to the Transfer Agent, physically or electronically through DTC.

Holders of public units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds public units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so.

Public stockholders may elect to redeem all or a portion of their public shares even if they vote for or against the Business Combination Proposal, or do not vote at all, and even if they do not hold public shares on the record date.

If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the Transfer Agent, we will redeem each public share for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account not previously released to us to pay our taxes, divided by the number of then-outstanding public shares. For illustrative purposes, as of [●], 2023, this would have amounted to approximately $[●] per public share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the deadline to submitting redemption requests and thereafter, with Altitude’s consent, until the Closing. If a holder delivers their public shares for redemption to the Transfer Agent and later decides to withdraw such request prior to the deadline for submitting redemption requests, the holder may request that the Transfer Agent return the shares (physically or electronically). We will be required to honor such request only if made prior to the deadline for exercising redemption requests.

 

36


Table of Contents

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 20% of the public shares, without our prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 20% of the public shares, then any such shares in excess of that 20% limit would not be redeemed for cash, without our prior consent.

See the section entitled “Special Meeting of Altitude Stockholders  Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Holders of our warrants will not have redemption rights with respect to the warrants.

No Delaware Appraisal Rights

Neither our stockholders nor warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. Altitude has engaged Morrow Sodali to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares at the special meeting if it revokes its proxy before the special meeting. A stockholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of Altitude Stockholders  Revoking Your Proxy”.

Interests of Altitude’s Directors, Officers and Others in the Business Combination

When you consider the recommendation of the Altitude Board, you should keep in mind that Altitude’s executive officers and directors, and their affiliates and others, have interests that may be different from, or in addition to, your interests as a stockholder. These interests include, among other things:

 

   

If the Business Combination is not completed and Altitude does not consummate an alternate initial business combination before the end of the completion window, in accordance with our Current Charter, the 7,500,000 Founder Shares, which were acquired by the Sponsor directly from Altitude for an aggregate investment of $25,000, or approximately $0.003 per share, will be worthless (as the Sponsor has waived liquidation rights with respect to such shares). The Founder Shares had an aggregate market value of $77.1 million based on the last sale price of $10.28 on Nasdaq on November 24, 2023;

 

   

If the Business Combination is not completed and Altitude does not consummate an alternate initial business combination before the end of the completion window, in accordance with the terms of the warrant agreement governing our warrants, the 8,000,000 private warrants purchased by the Sponsor for an aggregate investment of $8,000,000, or $1.00 per warrant, will be worthless, as they will expire. The private warrants had an aggregate market value of $240,000 based on the last sale price of $0.03 per warrant on Nasdaq on November 24, 2023;

 

   

Although a portion of the Founder Shares and private warrants will be forfeited and a portion will be placed into escrow at the Closing, and only 1,750,000 Founder Shares and 500,000 private warrants will be available to the Sponsor and not subject to escrow, such securities will have an aggregate value of approximately $18.0 million based on the closing price of the Class A common stock and warrants on November 24, 2023. Accordingly, even if the trading price of the Class A common stock were as low as $4.57 per share, the aggregate market value of the Founder Shares alone (without taking into account the value of the private warrants or the Sponsor Earnout Securities) would be approximately equal to the initial

 

37


Table of Contents
 

investment in Altitude by the Sponsor. As a result, if the Business Combination is completed, the Sponsor is likely to be able to make a substantial profit on its investment in us even at a time when the Class A common stock has lost significant value. On the other hand, if the Business Combination is not completed and Altitude liquidates without completing another initial business combination before the end of the completion window, the Sponsor would lose its entire investment in us.

 

   

Altitude’s executive officers and directors have invested funds in the Sponsor and are entitled to their pro rata portion of the Founder Shares and private warrants held by the Sponsor.

 

   

Cantor, one of the underwriters of Altitude’s IPO, assisted Altitude with evaluating Picard as a potential business combination candidate. Cantor is entitled to deferred underwriting fees for its services as underwriter of the IPO which are contingent upon the completion of an initial business combination. If Altitude liquidates without completing an initial business combination, Cantor would not be paid any portion of the deferred underwriting fees.

 

   

Our Sponsor has agreed to indemnify us and hold us harmless against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened) to which Altitude may become subject as a result of any claim by (i) any third party for services rendered or products sold to Altitude or (ii) any prospective target business with which Altitude has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below: (x) $10.00 per public share; or (y) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case, net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended;

 

   

All rights specified in the Current Charter relating to the right of officers and directors to be indemnified by Altitude, and of Altitude’s executive officers and directors to be exculpated from monetary liability with respect to prior acts or omissions, will continue after a business combination. If a business combination is not approved and Altitude liquidates, Altitude will not be able to perform its obligations to its officers and directors under those provisions;

 

   

Dr. Warren Hosseinion, the Chairman of the Altitude Board, and Gary Teplis, Altitude’s President, Chief Executive Officer and a Director, are expected to serve as directors of New Picard following closing, assuming approval of the Director Election Proposal; and

 

   

The Sponsor and Altitude’s executive officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Altitude’s behalf, such as identifying and investigating possible business targets and business combinations. As of the date hereof, Altitude has received a total of approximately $1,174,119 in advances from the Sponsor (the “Sponsor Advances”), and the Sponsor Advances remain outstanding as of the date of this proxy statement. However, if Altitude fails to consummate a business combination, such persons will not have any claim against the Trust Account for reimbursement. Accordingly, Altitude may not be able to reimburse these expenses, including the Sponsor Advances, if a business combination is not completed.

Given the interests described above, the Sponsor and its affiliates may earn a positive rate of return on their investment even if the New Picard Common Stock trades below the price initially paid for the Altitude Units in the IPO and the public stockholders experience a negative rate of return following the completion of the Business Combination. Thus, the Sponsor and its affiliates may have an economic incentive for Altitude to enter into an initial business combination on potentially less favorable terms with a potentially less favorable, riskier, weaker-performing or financially unstable business, or an entity lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price for their Founder Shares.

 

38


Table of Contents

The existence of financial and personal interests of Altitude’s directors and officers may result in a conflict of interest on the part of one or more of the directors between what they may believe is in the best interests of Altitude and its stockholders and what they may believe is best for herself or themselves in determining to recommend that stockholders vote for the Business Combination Proposal. The Altitude Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Business Combination Agreement and in recommending that the Business Combination be approved by the Altitude stockholders. The Altitude Board concluded that the potential conflicts of interest discussed above did not prevent the Altitude Board from exercising its fiduciary duties in approving the Business Combination. See the section entitled “The Business Combination Proposal — Interests of Altitude’s Directors, and Executive Officers and Others in the Business Combination.”

Altitude Board’s Reasons for the Approval of the Business Combination

The Altitude Board considered and evaluated several factors in evaluating and negotiating the Business Combination and the Business Combination Agreement. For additional information relating to the Altitude Board’s evaluation of the transaction and the factors it considered in connection therewith, please see the section entitled “The Business Combination Proposal  The Altitude Board’s Reasons for the Approval of the Business Combination.”

After careful consideration, the Altitude Board unanimously (i) declared the advisability of the Business Combination, (ii) determined that the Business Combination are in the best interests of the stockholders of Altitude and (iii) resolved to recommend that the Altitude stockholders approve the Business Combination and the other proposals set forth in this proxy statement.

Stock Exchange Listing

Altitude’s Class A common stock, units and warrants are currently listed on Nasdaq under the symbols “ALTU,” “ALTUU” and “ALTUW,” respectively. Altitude has applied to obtain the listing of the New Picard Common Stock and New Picard Warrants on Nasdaq under the symbols “TAH” and “TAHW,” respectively, upon the Closing. It is a condition to the consummation of the Business Combination that the New Picard Common Stock to be issued to the Picard securityholders in the Business Combination be approved for listing on Nasdaq (subject only to official notice of issuance thereof), but there can be no assurance that such listing condition will be met. If such listing condition is not met, the Business Combination will not be consummated unless the listing condition is waived by the parties to the Business Combination Agreement. It is important for you to know that, at the time of our special meeting, we may not have received from Nasdaq either confirmation of the listing of the New Picard Common Stock or that approval will be obtained prior to the consummation of the Business Combination, and it is possible that such condition to the consummation of the Business Combination may be waived by the parties to the Business Combination Agreement. As a result, you may be asked to vote to approve the Business Combination and the other proposals included in this proxy statement without such confirmation, and, further, it is possible that such confirmation may never be received and the Business Combination could still be consummated if such condition is waived and therefore our New Picard Common Stock would not be listed on any nationally recognized securities exchange.

Accounting Treatment

Notwithstanding the legal form, the Business Combination will be accounted for as a reverse acquisition in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, Altitude will be treated as the acquired company for financial reporting purposes, whereas Picard will be treated as the accounting acquiror. In accordance with this accounting method, the Business Combination will be treated as the equivalent of Picard issuing stock for the net assets of Altitude, accompanied by a

 

39


Table of Contents

recapitalization. The net assets of Picard 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 Picard. Picard has been determined to be the accounting acquiror for purposes of the Business Combination based on an evaluation of the following facts and circumstances:

 

   

Persons affiliated with Picard will control a majority of the New Picard Board;

 

   

Operations of Picard prior to the Business Combination will comprise the ongoing operations of New Picard; and

 

   

Existing senior management team of Picard will comprise the senior management team of New Picard.

Summary of Risk Factors

You should consider all the information contained in this proxy statement in deciding how to vote for the proposals presented in the proxy statement. 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 harm Altitude’s and Picard’s business, financial condition and operating results. Such risks include, but are not limited to:

Risks Related to Picard’s Business and Industry

 

   

Picard has a history of significant losses, and if it does not achieve and sustain profitability, its financial condition could suffer.

 

   

The manufacturing of the SynCardia TAH requires highly specialized knowledge and operator skills. If SynCardia is unable to manufacture the TAH on a timely basis consistent with its quality standards, the Company’s results of operations will be adversely impacted.

 

   

SynCardia relies on specialized suppliers and service providers for components of the SynCardia TAH and currently does not have second-source suppliers for the majority of components.

 

   

SynCardia has significant customer concentrations and has no long-term exclusive agreements with its customers.

 

   

Picard’s future success depends on SynCardia’s ability to develop, receive regulatory approval (including long term indication) for, and introduce new products or product enhancements that will be accepted by the market in a timely manner. Picard’s future success is also dependent on its ability to acquire, develop, or license complementary medical device technologies and assets.

 

   

If SynCardia is unable to successfully complete the pre-clinical studies or clinical trials that may be necessary to support regulatory approvals of novel products, its ability to obtain government clearance of new products will be limited.

 

   

If third-party payors do not provide adequate coverage and reimbursement for the use of SynCardia’s products, it is unlikely that its products will be widely used.

Risks Related to Regulation of Picard’s Industry

 

   

Picard may need to undertake additional clinical trials in order to secure from the FDA an expansion of the indication for the TAH from Bridge-to-Transplant (BTC) to Long-Term (LT).

 

   

Failure to reinstate Picard’s CE certificate under CE MDR could have a material adverse effect on Picard’s business.

 

   

Prior weaknesses in Picard’s compliance with post-market surveillance requirements under CE MDD may limit Picard’s ability to market or sell products in European markets.

 

40


Table of Contents

Risks Related to Picard’s Intellectual Property

 

   

SynCardia TAH is no longer protected by patents, and Picard may be unable to, in the long term, protect its products from competition through other means.

 

   

Picard could lose license rights that are important to its business.

Risks Related to Ownership of New Picard’s Securities

 

   

Our classification as an “emerging growth company” and a “smaller reporting company” upon consummation of the Business Combination, could make our securities less attractive to investors.

 

   

An active trading market may not develop or be sustained.

 

   

If we rely on certain “controlled company” corporate governance exemptions that will apply to New Picard, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

 

   

Exclusive forum provisions in the Proposed Charter could limit our stockholders’ ability to bring, and increase the costs of, a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or employees.

 

   

The Warrant Agreement contains an exclusive forum clause, which could limit a warrant holder’s ability to bring, and increase the costs of, a claim in a judicial forum that it finds favorable for disputes arising under the Warrant Agreement.

Risks Related to Altitude and the Business Combination

 

   

The exercise of Altitude’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in the best interests of Altitude’s stockholders.

 

   

The unaudited pro forma condensed combined financial information included in this proxy statement may not be indicative of what New Picard’s actual financial position or results of operations will be.

 

   

The requirements of being a public company may strain New Picard’s resources, divert management’s attention and affect our ability to attract and retain qualified board members.

 

   

We may not be able to complete the Business Combination with Picard by the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension).

 

   

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

 

   

The net proceeds of the IPO not being held in the Trust Account may be insufficient to allow us to operate until the end of the completion window, which could limit the amount available to complete the Business Combination.

 

   

The SEC has recently issued proposed rules to regulate special purpose acquisition companies. Certain of the procedures that we, Picard, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete the Business Combination and may constrain the circumstances under which we could complete the Business Combination.

 

41


Table of Contents
   

If Altitude’s due diligence investigation of Picard was inadequate, then Altitude Stockholders following the consummation of the Business Combination could lose some or all of their investment.

 

   

We may be unable to obtain additional financing to complete the Business Combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.

 

   

A new 1% U.S. federal excise tax could be imposed on us in connection with redemptions by us of our shares.

 

   

Subsequent to our completion of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

Emerging Growth Company

Altitude is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Section 102(b)(1) of the JOBS Act. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. Altitude has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Altitude, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Altitude’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Upon completion of the Business Combination, New Picard will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of Altitude’s IPO (that is, December 31, 2025), (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of the shares of New Picard Common Stock that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

U.S. Federal Income Tax Considerations

For a discussion summarizing the material United States material federal income tax considerations for holders of public shares with respect to exercise of their redemption rights, please see “U.S. Federal Income Tax Considerations.

 

42


Table of Contents

MARKET PRICE, TICKER SYMBOL AND DIVIDEND INFORMATION

Altitude

Market Price and Ticker Symbol

Altitude’s public units, common stock, and warrants are currently listed on Nasdaq Capital Market under the symbols “ALTUU,” “ALTU” and “ALTUW,” respectively.

On April 21, 2023, the trading date before the public announcement of the Business Combination, Altitude’s public units, Class A common stock, and warrants closed at $10.00, $10.09 and $ 0.05, respectively. On November 24, 2023, the trading date immediately prior to the date of this proxy statement, Altitude’s public units, Class A common stock, and warrants closed at $10.27, $10.28, and $0.03, respectively.

Holders

As of [●], 2023, there was [●] holder of record of our public units, [●] holder of record of our common stock, and [●] holders of record of our warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose public units, common stock and warrants are held of record by banks, brokers and other financial institutions.

Dividend Policy

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of the Business Combination. The payment of any cash dividends subsequent to the Business Combination will be within the discretion of the New Picard Board at such time. We currently expect that New Picard will retain future earnings to finance operations and grow its business, and we do not expect the New Picard Board to declare or pay cash dividends for the foreseeable future.

Picard

Historical market price, holders, and dividend information regarding Picard is not provided because there is no public market for Picard’s securities.

 

43


Table of Contents

RISK FACTORS

You should carefully consider the following risks. However, the risks set forth below are not the only risks that we face, and we face other risks which have not yet been identified or which are not yet otherwise predictable. If any of the following risks occur or are otherwise realized, our business, financial condition, and results of operations could be materially adversely affected. You should carefully consider the risks described below and all other information in this filing, including our consolidated financial statements and the related notes to consolidated financial statements.

Risks Related to Picard’s Business and Industry

Unless the context otherwise requires, references in this subsection “— Risks Related to Picard’s Business and Industry” to “we”, “us”, “our”, and the “Company” generally refer to Picard in the present tense or New Picard from and after the Business Combination, as applicable.

The Company has a history of significant losses. If it does not achieve and sustain profitability, its financial condition could suffer.

The Company has experienced significant net losses, and it expects to continue to incur losses for the foreseeable future while SynCardia expands its sales and marketing capabilities, increases manufacturing, pursues additional regulatory approvals for its products and continues its research and development activities. The Company incurred a net loss of $11.2 for the year ended December 31, 2022. As of December 31, 2022, the Company’s accumulated deficit was $13.2 million. The Company’s prior losses, combined with expected future losses, have had and will continue to have an adverse effect on its stockholders’ deficit and working capital for the foreseeable future. The Company does not anticipate being profitable in the near future. Even if the Company is successful in marketing existing products and launching additional products into the market, it expects to continue to incur substantial losses for the foreseeable future as it continues to sell and market, research and develop and seek regulatory approvals for existing and future products.

If sales revenue is insufficient, if the Company is unable to develop and commercialize product candidates, or if product development is delayed, the Company may never become profitable. Even if the Company does become profitable, it may be unable to sustain or increase profitability on a quarterly or annual basis.

All of the Company’s revenue is generated from a limited number of products, and any decline in the sales of these products or failure to gain market acceptance of these products will negatively impact the Company’s business.

The Company has focused heavily on the development and commercialization of a limited number of products for the treatment of irreversible biventricular heart failure, also referred to as end-stage heart failure. These products consist of the SynCardia 50cc TAH, SynCardia 70cc TAH, external “drivers” used to power and operate the SynCardia TAH and other ancillary, external hardware. For sales in the United States, the Company also recognizes revenue when it trains and certifies new transplant centers or recertifies dormant centers. From the Company’s inception in 2001 through December 31, 2022, substantially all revenue has been derived from sales of the SynCardia TAH and related services and ancillaries. The Company expects substantially all revenue to be derived from or related to sales of the SynCardia TAH for the immediate future. The Company expects that over time an increasing percentage of revenues will be derived from monthly rentals of its drivers, which is expected to result in longer, consistent revenue streams. If the Company is unable to achieve and maintain significantly greater market acceptance of the total artificial heart in general, and does not achieve sustained positive cash flow, it will be severely constrained in its ability to fund its operations. In addition, if the Company is unable to market its products as a result of a quality problem, shortage of components, failure to maintain or obtain regulatory approvals, unexpected or serious complications or other unforeseen negative effects, the Company would lose its only source of revenue, and its business will be adversely affected.

 

44


Table of Contents

The manufacturing process of the SynCardia TAH requires highly specialized knowledge and operator skills, which could affect SynCardia’s ability to manufacture the TAH on a timely basis. If SynCardia is unable to manufacture the TAH on a timely basis consistent with its quality standards, the Company’s results of operations will be adversely impacted.

Manufacturing total artificial hearts entails a variety of risks, including:

 

   

the inability to meet product specifications and quality requirements consistently;

 

   

a delay or inability to procure or expand sufficient manufacturing capacity to meet additional demand for SynCardia’s products;

 

   

manufacturing and product quality issues related to the scale-up of manufacturing;

 

   

the inability to produce a sufficient supply of products to meet product demands;

 

   

the disruption of SynCardia’s manufacturing facility due to equipment failure, public health emergencies such as COVID-19, natural disaster or failure to retain key personnel;

 

   

an inability to ensure compliance with regulations and standards of the FDA including Quality System Regulation (QSR) and corresponding state and international regulatory authorities.

 

   

concentration of manufacturing activity in a single location, which risks loss of manufacturing capacity and continuity of production in the event of a fire or other disruption;

 

   

the shell and diaphragm portions of the SynCardia TAH are constructed with a proprietary formulation of Segmented Polyurethane Solution (“SPUS”) with raw chemical from qualified suppliers, and SynCardia may not obtain FDA approval for its efforts to source its raw chemicals from different suppliers; and

Any of these events could lead to a reduction in product sales, product launch delays, or failure to obtain regulatory clearance or approval or impact the Company’s ability to successfully sell products and commercialize product candidates. Some of these events could be the basis for adverse actions by regulatory authorities, including injunctions, recalls, seizures, or total or partial suspension of production.

The SynCardia TAH is currently manufactured by hand by highly trained technicians who cannot be quickly or easily replaced. The length of time required to obtain the skill necessary to build the SynCardia TAH is long, and each technician is subject to sickness, accident or life changes. The loss of any such personnel could result in production delays that could adversely affect the Company’s results of operations.

To achieve revenue goals, SynCardia must successfully continue to increase production output to meet projected customer demand and product inventory requirements that are attendant to serving a global market. It is not certain that SynCardia will be able to increase output on anticipated timelines, or at all.

SynCardia relies on specialized suppliers and service providers for components of the SynCardia TAH and does not have second-source suppliers for the majority of components.

SynCardia relies on third party suppliers for materials and components necessary for the manufacture and assembly of its TAH and components thereof. Several of its manufacturers rely on proprietary processes and/or perform customized processes. While the Company aims to have secondary suppliers for its critical suppliers, this may not be feasible for all due to the nature of materials used and/or processes applied. SynCardia has entered into quality agreements with most of its critical suppliers. Issues arising from production stoppages, adverse business conditions, and failure to meet agreed production and quality standards may have an adverse effect on the Company’s performance.

SynCardia has second-source suppliers for some, but not all, of its components. In particular, it does not have second-source suppliers for many of its driver components or for the SynHall Valves, which are a component of

 

45


Table of Contents

the SynCardia TAH. Even if SynCardia engages a second-source supplier for its valve discs, SynCardia would need to obtain regulatory approvals in order to sell SynCardia TAHs with valve discs manufactured by a backup supplier. Additionally, SynCardia has not currently sourced a backup supplier for the housings that are used in the SynHall Valves. The Company’s reliance on third-party suppliers also subjects it to other risks that could harm its business, including:

 

   

suppliers may give the needs of other customers higher priority than SynCardia or discontinue or modify components based on demand from other customers;

 

   

inability to obtain adequate supply in a timely manner or on commercially reasonable terms;

 

   

some components must be manufactured to extremely tight tolerances and specifications with the result that SynCardia’s suppliers, especially new suppliers, may make errors in manufacturing or conduct unauthorized rework that could negatively affect the efficacy or safety of the products or cause components not to be delivered on time or at all or to be delivered outside of SynCardia’s specifications;

 

   

the availability of second-source suppliers may be extremely limited or their implementation as a supplier may be lengthy due to the tight tolerances and specifications in which SynCardia typically operates;

 

   

switching components or changes to components, specifications or designs may require product redesign and submission to the FDA of a post market approval (“PMA”) supplement, which can lead to production interruptions;

 

   

suppliers manufacture products for a range of customers, and fluctuations in demand for the products these suppliers manufacture for others may affect their ability to deliver products to SynCardia in a timely manner; and

 

   

suppliers may encounter financial hardships unrelated to SynCardia’s demand, which could inhibit their ability to fulfill orders and meet requirements.

In the event that any of SynCardia’s suppliers decreases or discontinues production of any components, or in the event SynCardia encounters quality issues or other problems with components provided by suppliers, it may not be able to quickly establish additional or alternative suppliers in part because of the FDA approval process. Furthermore, SynCardia has experienced production delays associated with selecting and engaging alternative suppliers for certain components. Any interruption or delay in obtaining products from third-party suppliers, or an inability to obtain products from qualified alternate sources at acceptable prices in a timely manner, could impair SynCardia’s ability to meet customer demand and cause customers to switch to competing products.

Additionally, SynCardia may experience problems or delays in its own manufacturing and assembly processes, which may be harmful to the Company’s financial status or reputation and, therefore, make it more difficult or expensive for SynCardia to continue with or enter into relationships with specialized suppliers. The Company’s business plan is predicated on maintaining strong relationships and favorable supply arrangements with a series of external parties to manufacture components of the SynCardia TAH and related drivers. If SynCardia is unsuccessful in this regard or is unable to secure or maintain agreements with these manufacturers on favorable terms or at all, then the Company’s ability to commercialize its technology and expand its operations will be dramatically impaired.

The future demand for SynCardia’s current products and future products is unproven. SynCardia’s current products and future products may not be accepted by hospitals, surgeons or patients, and may not become commercially successful.

Physicians and hospitals may not perceive the benefits of SynCardia’s products and may be reluctant or unwilling to adopt using the SynCardia TAH as a treatment option, particularly in light of existing treatment

 

46


Table of Contents

options. For example, left ventricular assist devices, or “LVADs,” are currently the mechanical circulatory support (“MCS”), devices most commonly used by physicians to bridge the time between when a transplant is needed for a heart failure patient and when a donor heart becomes available. While the Company believes that the SynCardia TAH is a complementary treatment alternative to LVADs on the continuum of care, physicians who are accustomed to using LVADs or other ventricular assist devices, or “VADs”, to treat patients with heart failure may be reluctant to adopt broad use of the SynCardia TAH.

Physicians and hospitals may be slow to change their practices because of perceived risks arising from the use of new products or due to specific operational characteristics related to the use of the SynCardia TAH and its related drivers. For example, physicians and hospitals have reported that the noise level generated by the Freedom Portable Driver has impacted their willingness to use the Freedom Portable Driver in the hospital setting. In addition, unlike VADs, implanting the SynCardia TAH involves the removal of the patient’s native heart. While the Company believes that replacement of the native heart with the SynCardia TAH provides many benefits over VADs, the concept of removing a patient’s native heart may cause a negative emotional reaction from certain physicians, patients and their families, and make them reluctant to use SynCardia’s products.

SynCardia must establish markets for its products and build those markets through physician education and awareness programs. Publication in peer-reviewed medical journals of results from studies using the SynCardia TAH will be an important consideration in its adoption by physicians and in reimbursement decisions of third-party payors. The process of publication in leading medical journals is lengthy and subject to a peer review process. Peer reviewers may not consider the results of studies of the SynCardia TAH and any future products sufficiently novel or worthy of publication. Failure to have SynCardia’s studies published in peer reviewed journals may adversely affect adoption of its products.

Educating physicians and hospitals on the safety and benefits of SynCardia’s products requires a significant commitment by its marketing team and sales organization. The Company cannot predict when, if ever, the SynCardia TAH will become widely accepted by physicians and hospitals. If SynCardia is unable to educate physicians and hospitals about the advantages of the SynCardia TAH, do not achieve significantly greater market acceptance of its products, do not gain momentum in its sales activities, or fail to significantly grow its market share, the Company will not be able to grow revenue, and the Company’s business and financial condition will be adversely affected.

If SynCardia is unable to educate physicians on the safe and effective use of the SynCardia TAH and the procedure to implement the SynCardia TAH, the Company may be unable to achieve its expected growth.

It is critical to the success of SynCardia’s commercialization efforts that it educate physicians on proper implantation and aftercare techniques for the SynCardia TAH and provide them with adequate product support during clinical procedures. There is a learning process for physicians to become proficient in the use of the SynCardia TAH, and it typically takes several procedures for a physician to become comfortable implanting the SynCardia TAH. If a physician experiences difficulties during a procedure involving the SynCardia TAH, that physician may be less likely to continue to use SynCardia products or to recommend them to other physicians. It is important for the Company’s growth that these physicians advocate for the benefits of SynCardia’s products in the broader marketplace. If physicians are not properly trained, they may misuse or ineffectively use SynCardia’s products. This may also result in unsatisfactory patient outcomes, patient injuries, negative publicity or lawsuits against SynCardia, any of which could have an adverse effect on the Company’s business.

If SynCardia fails to develop and retain a direct sales force and effective network of international distributors, the Company may be unable to achieve expected growth targets and the Company’s business could suffer.

SynCardia employs one sales specialist, three clinical support specialists and one distributor (SOTA Medical) who together cover the United States and Canadian markets, and SynCardia utilizes a network of independent distributors and agents for sales outside of the United States. The Company works, or plans to work with distributors in Europe, India, China, Saudi Arabia, and Serbia. As SynCardia launches new products, increases its

 

47


Table of Contents

current sales efforts and expands into new geographies and increases its efforts in each geography, it will need to retain, grow and develop its community of direct sales personnel, distributors and agents. There is significant competition for sales personnel experienced in relevant medical device sales. In addition, the training process is lengthy because it requires significant education for new sales representatives to achieve an acceptable level of clinical competency with SynCardia TAH. Upon completion of training, sales representatives typically require lead time in the field to develop or expand their network of accounts and achieve the productivity levels they are expected to reach in any individual territory. If SynCardia is unable to attract, motivate, develop, and retain a sufficient number of qualified sales and clinical support personnel, and if they do not achieve the expected productivity levels, the Company’s revenue will not grow at the rate that it expects, and financial performance will suffer.

In addition, the Company cannot assure investors that SynCardia will succeed in entering into and maintaining productive arrangements with an adequate number of distributors that are sufficiently committed to selling the SynCardia TAH in international markets. The establishment and maintenance of a distribution network is expensive and time consuming. Even if SynCardia engages and maintains suitable relationships with an adequate number of distributors, they may not generate revenue as quickly as expected, commit the necessary resources to effectively market and sell the products, or ultimately succeed in selling the products. Moreover, if SynCardia’s sales force and distributors are unable to recruit new medical centers to become SynCardia Certified Centers, the Company may be unable to achieve expected growth, and its business could suffer.

Reliance on distributors and third parties to market and sell SynCardia’s products could negatively impact SynCardia’s business.

Reliance on distributors and third-parties to market and sell SynCardia’s products could negatively impact SynCardia’s business because SynCardia may not be able to find suitable distributors for its products on satisfactory terms, agreements with distributors may prematurely terminate, SynCardia’s future distributor relationships or contracts may preclude it or limit it from entering into arrangements with other distributors, and SynCardia may not be able to negotiate new or renew existing distributing agreements on acceptable terms, or at all.

SynCardia operates in a market segment that is subject to rapid technological change. If its competitors are able to develop and market technologies or products that are safer, more effective, less costly, easier to use or otherwise more attractive than SynCardia’s products, the Company’s business will be adversely impacted.

The medical device industry is highly competitive and subject to technological change. The Company’s success depends, in part, upon SynCardia’s ability to maintain a competitive position in the development of technologies and products for use in the treatment of advanced heart failure. SynCardia faces significant competition in the United States and internationally, and the Company expects the intensity of competition to increase over time. For example, the Company’s products are likely to compete against future products offered by larger public companies such as Abbott. In addition to these potential competitors, SynCardia may also face competition from smaller companies with active MCS device development programs. Other competitors may emerge in the future. Many of the companies developing or marketing competing products enjoy several advantages relative to SynCardia, including:

 

   

greater financial and human resources for product development, sales and marketing;

 

   

greater name recognition;

 

   

long-established relationships with physicians and hospitals;

 

   

the ability to offer rebates or bundle multiple product offerings to offer greater discounts or incentives;

 

   

more established distribution channels and sales and marketing capabilities; and

 

   

greater experience in and resources for conducting research and development, clinical studies, manufacturing, preparing regulatory submissions, obtaining regulatory clearance or approval for products and marketing approved products.

 

48


Table of Contents

The SynCardia TAH is currently the only total artificial heart that is commercially available in the United States and Canada for use as a bridge to transplantation. The SynCardia TAH is also used under compassionate use / special dispensation regimes in a number of countries outside of North America. Although the Company believes that the SynCardia TAH is a complementary treatment alternative to LVADs on the continuum of care, the Company cannot assure investors that hospitals, physicians and investors will not view SynCardia’s products as competitive with LVADs that are marketed and sold by much larger and more established companies. SynCardia’s competitors may develop and patent processes or products earlier than SynCardia does, obtain regulatory clearance or approvals for competing products more rapidly than SynCardia or develop more effective, more convenient or less expensive products or technologies that render SynCardia’s technology or products obsolete or less competitive. In addition, the Company’s ability to increase gross margins is dependent in part upon product development, including increasing service intervals for drivers. SynCardia also faces competition in recruiting and retaining qualified sales, scientific and management personnel, establishing clinical trial sites and enrolling patients in clinical studies. If the Company’s competitors are more successful than the Company is in these matters, the Company’s business may be harmed.

SynCardia has significant customer concentrations, and economic difficulties or changes in the purchasing policies or patterns of its key customers could have a significant impact on the Company’s business and operating results. SynCardia has no long-term exclusive agreements with its customers and, as a result, generally operate on an invoice and purchase order basis to meet its customers’ needs.

A small number of customers or key surgeons account for a substantial portion of the Company’s revenues. There are also a limited number of hospitals and surgical centers with heart transplant centers and MCS programs. Sales of products to SynCardia’s customers are not based on long-term, committed-volume purchase contracts, and the Company may not continue to receive significant revenues from any customer. Because of this significant customer concentration, the Company’s revenue could fluctuate significantly due to changes in economic conditions, the use of competitive products, or the loss of, reduction of business with, or less favorable terms with its significant customers. A reduction or delay in orders from significant customers, or a delay or default in payment by any significant customer, could materially harm the Company’s business and results of operations.

The Company’s future success depends on SynCardia’s ability to develop, receive regulatory approval (including long term indication) for, and introduce new products or product enhancements that will be accepted by the market in a timely manner.

It is important to the Company’s business that SynCardia continues to build a pipeline of product offerings for the treatment of heart failure in order to remain competitive. As such, the Company’s success will depend in part on SynCardia’s ability to develop and introduce new products. However, SynCardia may not be able to successfully maintain its regulatory approvals for existing products, or develop, obtain and maintain regulatory clearance or approval for product enhancements, or long term indication for its products, or new products, or these products may not be accepted by physicians or the payors who financially support many of the procedures performed with SynCardia’s products.

The success of any new product offering or enhancement to an existing product will depend on several factors, including SynCardia’s ability to:

 

   

identify and anticipate physician and patient needs properly;

 

   

develop and introduce new products or product enhancements in a timely manner;

 

   

avoid infringing the intellectual property rights of third parties;

 

   

demonstrate the safety and efficacy of new products with data from preclinical studies and clinical studies;

 

   

obtain the necessary regulatory approvals for new products or product enhancements;

 

49


Table of Contents
   

comply fully with FDA and applicable foreign government agencies’ regulations on marketing of new devices or modified products;

 

   

provide adequate training to potential users of SynCardia’s products; and

 

   

receive coverage and adequate reimbursement for procedures performed with SynCardia’s products.

If SynCardia does not develop new products or product enhancements in time to meet market demand, if there is insufficient demand for these products or enhancements, or if its competitors introduce new products with enhanced functionalities that are superior to SynCardia’s products, the Company’s results of operations will suffer.

If SynCardia is unable to successfully complete the pre-clinical studies or clinical trials necessary to support premarket approval applications or PMA supplements, its ability to obtain approvals for new products will be limited.

In some cases, where SynCardia develops new products, it may be able to engage in limited use of such products via emergency or compassionate use provisions prior to completion of clinical trials and receipt of regulatory approval. However, before broadly using medical devices in the United States, it must apply for and obtain approval for either a Humanitarian Device Exemption, or HDE, or a premarket approval, or PMA, from the FDA. Before submitting an HDE or PMA application, it must successfully complete pre-clinical studies and clinical trials to demonstrate that the product is safe and either provides probable benefit (for an HDE) or is effective (for a PMA). Product development, including pre-clinical studies and clinical trials, is a long, expensive and uncertain process and is subject to delays, and failure may occur at any stage. Furthermore, the data obtained from the trial may be inadequate to support approval of a PMA application. The commencement or completion of any clinical trials may be delayed or halted, or be inadequate to support approval of a PMA application, for numerous reasons, including, but not limited to, the following:

 

   

the FDA, institutional review boards or other regulatory authorities do not approve a clinical study protocol, require a modification to a previously approved protocol, or place a clinical study on temporary hold;

 

   

sites do not apply to participate in a clinical study, or apply at a lower rate than expected;

 

   

there are difficulties or delays in the process of qualifying sites to participate in a clinical study;

 

   

patients do not enroll in, or enroll at a lower rate than expected, or do not complete a clinical study;

 

   

patients or investigators do not comply with study protocols;

 

   

patients do not return for post-treatment follow-up at the expected rate;

 

   

patients experience serious or unexpected adverse side effects, whether because of the product or because of serious co-morbidities that may exist at the time of treatment, causing a clinical study to be put on hold;

 

   

sites participating in an ongoing clinical study withdraw, requiring SynCardia to engage new sites;

 

   

difficulties or delays associated with establishing additional clinical sites;

 

   

third-party clinical investigators decline to participate in clinical studies, do not perform the clinical studies on the anticipated schedule, or are inconsistent with the investigator agreement, clinical study protocol, good clinical practices, and other FDA and institutional review board requirements;

 

   

third-party organizations do not perform data collection and analysis in a timely or accurate manner;

 

   

regulatory inspections of clinical studies or manufacturing facilities require SynCardia to undertake corrective action or suspend or terminate its clinical studies;

 

   

changes in federal, state, or foreign governmental statutes, regulations or policies;

 

50


Table of Contents
   

interim results are inconclusive or unfavorable as to immediate and long-term safety or efficacy;

 

   

the study design is inadequate to demonstrate safety and efficacy; or

 

   

not meeting the statistical endpoints.

The results of clinical studies do not necessarily predict future clinical trial results, and predecessor clinical trial results may not be repeated in subsequent clinical trials. Additionally, the FDA may disagree with SynCardia’s interpretation of the data from its pre-clinical studies and clinical trials, or may find the clinical trial design, conduct or results inadequate to prove safety or efficacy, and may require SynCardia to pursue additional pre-clinical studies or clinical trials, which could further delay the approval of its products. If SynCardia is unable to demonstrate the safety and efficacy of its products in SynCardia’s clinical trials, it will be unable to obtain regulatory approval to market its products. The data collected from INTERMACS database or SynCardia’s clinical trials may not be sufficient to support FDA approval of product upgrades or indication expansions. Moreover, if the results of any post-market clinical studies are not favorable, SynCardia’s existing clearances or approvals may be impacted.

The risks described above also apply to foreign clinical trials and regulatory approvals. If SynCardia cannot timely conduct foreign trials in its major target markets (to the extent required in order to market its device in such locations), and receive timely approval in those jurisdictions to market its device for a variety of indications, the Company’s business will suffer.

If third-party payors do not provide adequate coverage and reimbursement for the use of SynCardia’s products, it is unlikely that its products will be widely used, and the Company’s revenues will be negatively impacted.

SynCardia’s success in marketing its products depends in large part on whether U.S. and international government health administrative authorities, private health insurers and other organizations will adequately cover and reimburse customers for the cost of the products. The SynCardia 70cc and 50cc TAH are currently reimbursed by Medicare as part of a Diagnosis Related Group (DRG) payment pursuant to CMS’ revised National Coverage Determinations, which are routinely followed by private insurers in the United States. The Company generally understands from its interactions with hospitals that they are reimbursed and this, together with the fact that the Company has been regularly repaid for its TAH implants since 2008, supports the Company’s conclusion that private reimbursement in the United States is provided to substantially all hospitals that have implanted the SynCardia TAHs. In the United States, the commercial success of SynCardia’s existing products and any future products will depend, in part, on the extent to which governmental payors at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for procedures utilizing its products. The existence of coverage and adequate reimbursement for SynCardia’s products and related procedures by government and private payors is critical to market acceptance of its existing and future products. Neither hospitals nor surgeons are likely to use SynCardia’s products if they do not receive adequate reimbursement for the procedures utilizing its products.

Some private payors in the United States may base their reimbursement policies on the coverage decisions determined by the Centers for Medicare and Medicaid Services, or CMS, which administers the Medicare program. Others may adopt different coverage or reimbursement policies for procedures performed using the SynCardia TAH, while some governmental programs, such as Medicaid, have reimbursement policies that vary from state to state, some of which may not pay for the SynCardia TAH in an amount that supports its selling price, if at all. A Medicare national or local coverage decision denying coverage for the SynCardia TAH or any other products could result in private and other third-party payors also denying coverage. For example, in 1986, CMS issued a non-coverage policy regarding the use of artificial hearts under the Medicare program. Most private payors followed this determination and denied coverage for products similar to ours. As a result, hospitals in the United States generally were unable to obtain reimbursement through Medicare or most private insurers for

 

51


Table of Contents

the use of SynCardia’s products until 2008. In that year CMS issued a Coverage Decision Memorandum stating that CMS reimbursements of the SynCardia TAH would only be provided to hospitals enrolled in approved studies with evidence development. Following the issuance of this Coverage Decision Memorandum, private payors began to provide reimbursement coverage for the SynCardia TAH, including for hospitals not enrolled in such studies.

Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis. In many international markets, a product must be approved for reimbursement before it can be approved for sale in that country. Further, many international markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets there are private insurance systems as well as government-managed systems. The Company cannot assure investors that the SynCardia TAH will be considered cost-effective by international third-party payors, that reimbursement will be available or, if available, that the third-party payors’ reimbursement policies will not adversely affect SynCardia’s ability to sell the SynCardia TAH profitably. If sufficient coverage and reimbursement are not available for SynCardia’s current or future products, in either the United States or internationally, the demand for its products and the Company’s revenues will be adversely affected.

The Company’s manufacturing operations, research and development activities, and corporate headquarters are currently based at a single location, which may subject the Company to a variety of risks.

The Company currently conducts all manufacturing, development and management activities at a single location in Tucson, Arizona. The Company has taken precautions to safeguard its facilities, including insurance, secure access and health and safety protocols. However, vandalism, terrorism or a natural or other disaster such as a flood or fire could cause substantial delays in operations, damage or destroy SynCardia’s equipment or inventory, and cause the Company to incur additional expenses. The insurance coverage maintained by the Company may not be adequate to cover losses in any particular case.

Product liability claims could damage SynCardia’s reputation or adversely affect the Company’s business.

The design, manufacture and marketing of human medical devices, particularly implantable life-sustaining medical devices, carries an inherent risk of product liability claims and other damage claims. In addition to the exposure the Company may have for defective products, physicians may misuse SynCardia’s products or use improper techniques, regardless of how well trained, potentially leading to injury and an increased risk of product liability. A product liability or other damages claim, product recall or product misuse could require SynCardia to spend significant time and money in litigation, regardless of the ultimate outcome, or to pay significant damages and could seriously harm the Company’s business. SynCardia maintains limited product liability insurance. The Company cannot be certain that insurance will be sufficient to cover all claims that may be made against SynCardia. The Company’s insurance policies generally must be renewed on an annual basis. The Company may not be able to maintain or increase insurance on acceptable terms or at reasonable costs. A successful claim brought against the Company in excess, or outside of, its insurance coverage could seriously harm the Company’s financial condition or results of operations. Generally, SynCardia’s clinical trials will be conducted in (and its commercial sales will be made to sites in respect of) patients with serious life-threatening diseases for whom conventional treatments have been unsuccessful or for whom no conventional treatment exists. During the course of treatment, these patients could suffer adverse medical effects or die for reasons that may or may not be related to SynCardia’s medical devices. Any of these events could result in a claim of liability.

Product deficiencies could result in field actions, recalls, substantial costs and write-downs; these could also lead to the delay or termination of planned studies or future clinical trials, if any, and harm SynCardia’s reputation and the Company’s business and financial results.

SynCardia’s products are subject to various regulatory guidelines and involve complex technologies. The FDA and similar foreign governmental authorities have the authority to require the recall of commercialized products

 

52


Table of Contents

in the event of material deficiencies or defects in design or manufacture that could affect patient safety. Manufacturers may, under their own initiative, conduct a product notification or recall to inform physicians of changes to instructions for use or if a deficiency in a device is found or suspected.

Identified quality problems, such as failure of critical components including batteries or controllers, or the failure of third parties to supply SynCardia with sufficient conforming quantities of these products or components, could impact the availability of SynCardia’s products in the marketplace or lead to adverse clinical events that could cause SynCardia to amend, repeat or terminate clinical trials. In addition, product improvements, product redundancies or failure to sell a product before its expiration date could result in scrapping or expensive rework of products, and the Company’s business, financial condition or results of operations could suffer. Product complaints, quality issues and necessary corrective and preventative actions could result in communications to customers or patients, field actions, the scrapping, rework, recall or replacement of products, substantial costs and write-offs, and harm to the Company’s business reputation and financial results. Further these activities could adversely affect SynCardia’s relationships with its customers or affect its reputation, which could materially adversely affect the Company’s earnings, results and financial viability.

On February 17, 2023, SynCardia issued an urgent field safety notice (the “Notice”) to health care providers of patients implanted with the SynCardia TAH to alert the providers of the potential for a hole or tear that may occur in the pneumatic cannulae of the TAH and what actions should be taken in the event of occurrence, as part of the FDA Class 2 recall under part 806. The Notice stated that although SynCardia has received 93 complaints regarding cannula tears as of October 24, 2022, there have been zero reported Serious Adverse Events associated with a cannula hole or tear. Corrective action to address this issue is currently undergoing process validation and is expected to be completed by early Q4 2024.

A future field action or recall announcement could harm SynCardia’s reputation with customers, negatively affect sales, and subject SynCardia to FDA enforcement actions. Moreover, depending on the corrective action taken to redress a product’s deficiencies or defects, the FDA may require, or the Company may decide, that SynCardia will need to obtain new approvals or clearances for the device before it may market or distribute the corrected device. Seeking such approvals or clearances may delay SynCardia’s ability to replace the recalled devices in a timely manner. If SynCardia does not adequately address problems associated with its devices, it may face additional regulatory enforcement action, including FDA warning letters, product seizures, injunctions, administrative penalties, or civil or criminal fines.

Any identified quality issue can therefore both harm SynCardia’s business reputation and result in substantial costs and write-offs, which in either case could materially harm the Company’s business and financial results.

Any claims related to improper handling, storage or disposal of hazardous chemicals and biomaterials could be time-consuming and costly to address.

SynCardia’s operations require the use of hazardous materials, including chemicals and biomaterials. The Company cannot eliminate the risk of accidental contamination or discharge and any resultant injury from these materials. The Company could be subject to both criminal liability and civil damages in the event of an improper or unauthorized release of, or exposure of individuals to, hazardous materials. In addition, claimants may sue the Company for injury or contamination that results from the use or the use by third parties of these materials, and the Company’s liability may exceed its total assets. Compliance with environmental laws and regulations is expensive, and current or future environmental regulations may impair SynCardia’s research, development or production efforts or harm the Company’s operating results.

The Company’s international operations subject it to certain operating risks, which could adversely impact its results of operations and financial condition.

Sales of SynCardia’s products outside the United States represented approximately 35% of the Company’s revenue in the year ended December 31, 2022. From SynCardia’s inception through December 31, 2022, it sold

 

53


Table of Contents

products in United States, France, Germany, Canada, Italy, Turkey, United Kingdom, Slovakia, Australia, Slovenia, Sweden, Austria, Macedonia/Yugoslavia, Spain, Kuwait, Croatia, Lithuania, Poland, Saudi Arabia, Serbia, Finland, Greece, Israel, Lebanon, and the Russian Federation. The sale and shipment of products across international borders, as well as the purchase of components from international sources, subjects SynCardia to U.S. and foreign governmental trade, import and export, and customs regulations and laws. Compliance with these regulations and laws is costly and exposes the Company to penalties for non-compliance. Other laws and regulations that can significantly impact the Company include various anti-bribery laws, including the U.S. Foreign Corrupt Practices Act and anti-boycott laws, as well as export controls laws. Any failure to comply with applicable legal and regulatory obligations could impact the Company in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments, restrictions on certain business activities and exclusion or debarment from government contracting. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of shipping and sales activities.

In addition, several of the countries in which SynCardia sells its products are, to some degree, subject to political, economic or social instability, and certain of such countries are or may in the future become the subject of U.S. or international sanctions.

The Company’s international operations expose the Company and its distributors to risks inherent in operating in foreign jurisdictions. These risks include:

 

   

difficulties in enforcing or defending intellectual property rights;

 

   

pricing pressure that SynCardia may experience internationally;

 

   

a shortage of high-quality sales people and distributors;

 

   

third-party reimbursement policies that may require some of the patients who receive SynCardia’s products to directly absorb medical costs or that may necessitate the reduction of the selling prices of such products;

 

   

disadvantage to competition with established business and customer relationships;

 

   

the imposition of additional U.S. and foreign governmental controls or regulations;

 

   

economic or political instability;

 

   

changes in duties and tariffs, license obligations and other non-tariff barriers to trade;

 

   

the imposition of restrictions on the activities of foreign agents, representatives and distributors;

 

   

potentially adverse tax consequences, including in respect of transfer pricing, value added and other tax systems, double taxation, and/or taxation on repatriation of earnings, which could result in significant fines, penalties and additional taxes being imposed on the Company;

 

   

laws and business practices favoring local companies;

 

   

difficulties in maintaining consistency with the Company’s internal guidelines;

 

   

the imposition of costly and lengthy new export licensing requirements;

 

   

the imposition of U.S. or international sanctions against a country, company, person or entity with whom SynCardia does business that would restrict or prohibit continued business with the sanctioned country, company, person or entity;

 

   

negative publicity or public sentiment towards a country, company, person or entity with whom SynCardia does business that would result in continued business with the sanctioned country, company, person or entity to bring unfavorable publicity to SynCardia; and

 

   

the imposition of new trade restrictions.

 

54


Table of Contents

If any of these events or circumstances were to occur, the Company’s sales in foreign countries may be harmed and the Company’s results of operations would suffer.

The Company is subject to credit risk from SynCardia’s accounts receivable related to its product sales, which include sales within foreign countries that have recently experienced economic turmoil.

The Company had receivable balances from foreign customers of approximately $504,000 as of December 31, 2022. The Company’s accounts receivable in the United States are due from both third-party hospitals and private hospitals. In contrast, its accounts receivable outside of the United States are primarily due from third-party distributors, and to a lesser extent, public government-owned and private hospitals, which present a greater risk of uncollectible accounts. The Company’s historical write-offs of accounts receivable have not been significant.

The Company is subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact its results of operations.

A significant portion of the Company’s business is located outside the United States and, as a result, the Company generates revenue and incurs expenses denominated in currencies other than the U.S. dollar, a majority of which is denominated in Euros. For the year ended December 31, 2022, approximately 35% of the Company’s total revenue was denominated in foreign currencies. As a result, changes in the exchange rates between such foreign currencies and the U.S. dollar could materially impact its results of operations and distort period-to-period comparisons. Fluctuations in foreign currency exchange rates also impact the reporting of the Company’s receivables and payables in non-U.S. currencies. As a result of such foreign currency fluctuations, it could be more difficult to detect underlying trends in the Company’s business and results of operations.

Although the Company does not currently hedge its foreign currency exchange rate risks, it may engage in exchange rate hedging activities in the future in an effort to mitigate the impact of exchange rate fluctuations. If the hedging activities are not effective, changes in currency exchange rates may have a more significant impact on the Company’s results of operations.

Changes in U.S. and foreign tax laws could have a material adverse effect on the combined company’s business, cash flow, results of operations or financial conditions.

The tax regimes to which the Company are subject or operate under, including income and non-income tax laws, are constantly under review and may be subject to significant change. Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially affect the combined company’s financial position and results of operations. For example, the 2017 Tax Cuts and Jobs Act, or (“Tax Act”), made broad and complex changes to the U.S. tax code, including changes to U.S. federal tax rates, additional limitations on the deductibility of interest, both positive and adverse changes to the utilization of future NOL carryforwards, allowance for the expensing of certain capital expenditures. In addition, for tax years beginning in 2022 and later, the Tax Act eliminates the currently available option to deduct research and development expenditures and requires taxpayers to amortize them generally over five years (or, in certain cases, fifteen years). The 2020 Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, modified certain provisions of the Tax Act. In addition, on August 16, 2022, the IR Act, among other provisions, imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations and a 1% excise tax on corporate stock repurchases by U.S. publicly traded corporations and certain U.S. subsidiaries of non-U.S. publicly traded corporations. The exact impact of the Tax Act, the CARES Act and the IR Act for future years is difficult to quantify, but these changes could materially affect the Company’s effective tax rate in future periods, in addition to any changes made by new tax legislation.

 

55


Table of Contents

The combined company’s ability to use net operating loss carryforwards and certain other tax attributes may be subject to limitations.

Under current law, unused federal NOLs generated for tax years beginning before January 1, 2018 may be carried forward 20 years, and unused federal NOLs generated for taxable years beginning after December 31, 2017 may be carried forward indefinitely. The deductibility of post-2017 NOL carryforwards generally is limited to 80% of taxable income. In addition, under Sections 382 and 383 of the Code, federal NOL carryforwards and other tax attributes may become subject to an annual limitation in the event a company undergoes an “ownership change”, generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a rolling three-year period. The combined company’s ability to utilize NOL carryforwards and certain other tax attributes to offset future taxable income or tax liabilities may be subject to limitations as a result of previous or future ownership changes. Similar rules may apply under state tax laws. If any of the above-described limitations were applicable, it could result in increased future income tax liability to the combined company and its future cash flows could be adversely affected.

The industry- and market-related estimates included in this proxy statement are based on various assumptions and may prove to be inaccurate.

Industry- and market-related estimates in this proxy statement, including estimates related to market size and industry data, are subject to uncertainty and are based on assumptions which may not prove to be accurate. This may have negative consequences, such as the Company overestimating potential market opportunity. For more information, see the subsection entitled “Cautionary Statement Regarding Forward-Looking Statements.”

The Company’s ability to maintain its competitive position depends on its ability to attract and retain highly qualified personnel.

The Company’s future success depends on its ability to attract and retain its executive officers and other key employees. The Company may not be able to attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among companies in the medical device business and related industries, particularly in the Tucson, Arizona area, where the Company is headquartered. The Company may be required to spend significant time and expend significant financial resources in its employee recruitment and retention efforts. Many of the other medical device companies with whom SynCardia competes for qualified personnel have greater financial and other resources and different risk profiles than SynCardia does. They also may provide more diverse opportunities and better chances for career advancement. Some of these characteristics may be more appealing to high quality candidates than that which SynCardia has to offer. If SynCardia is not able to attract and retain the necessary personnel to accomplish its business objectives, it may experience constraints that will impede significantly its ability to implement its business strategy and achieve its business objectives.

If the Company acquires other companies or businesses, it will be subject to risks that could hurt its business.

The Company may in the future acquire complementary businesses, products or technologies. Any such acquisition may not produce the revenues, earnings or business synergies that the Company anticipates, and any acquired business, product or technology might not perform as the Company expects. The Company’s management could spend a significant amount of time, effort and money in identifying, pursuing and completing acquisitions. If the Company completes an acquisition, it may encounter significant difficulties and incur substantial expenses in integrating the operations and personnel of the acquired company into its operations. In particular, the Company may lose the services of key employees of the acquired company, and it may make changes in management that impair the acquired company’s relationships with employees, vendors and customers. Additionally, it may acquire development-stage companies that are not yet profitable and require continued investment, which could decrease the Company’s future earnings or increase its futures losses.

Any of these outcomes could prevent the Company from realizing the anticipated benefits of an acquisition. To pay for an acquisition, the Company might use stock or cash. Alternatively, it might borrow money from a bank

 

56


Table of Contents

or other lender. If the Company uses stock, its stockholders would experience dilution of their ownership interests. If it uses cash or debt financing, its financial liquidity would be reduced. Any acquisition could result in the Company recording significant amounts of goodwill or other intangible assets, some of which could result in significant quarterly amortization expense. Moreover, if the Company determines during annual reviews or otherwise that an intangible asset has been impaired, it may need to write off some or all of its carrying value, resulting in large charges to expense. Amortization charges and write-downs or write-offs of intangibles would decrease its future earnings or increase its future losses.

Failure to protect the Company’s information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt its operations and adversely affect its business and operating results.

The Company relies on information technology and telephone networks and systems, including the Internet, to process and transmit sensitive electronic information and to manage or support a variety of business processes and activities, including sales, billing, customer service, procurement and supply chain, manufacturing, and distribution. The Company uses enterprise information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. The Company’s information technology systems, some of which are managed by third parties, may be susceptible to damage, disruptions or shutdowns due to computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, user errors or catastrophic events. Despite the precautionary measures the Company has taken to prevent breakdowns in its information technology and telephone systems, if its systems suffer severe damage, disruption or shutdown and the Company is unable to effectively resolve the issues in a timely manner, the Company’s business and operating results, and its reputation, may suffer. Such security incidents may increase the risk of regulatory scrutiny, enforcement and civil litigation, and associated costs, fines and judgements, including increased costs associated with investigating and remediation the Company’s systems. Such costs may not be adequately covered by existing insurance.

Failure to protect the product and patient from cybersecurity risks associated with using the device could endanger patient safety and the Company’s ability to market the product.

Under the Protecting and Transforming Cyber Health Care Act of 2022 (the “PATCH Act”), all new medical device submissions will have to demonstrate that the medical device under review is safe and reliable in the face of cybersecurity threats. There are similar regulations for cybersecurity in the EU and elsewhere, one such example being MDCG 2019-16: Guidance on Cybersecurity for Medical Devices. We anticipate that our new products including expanded indications of our current products and upgrades to our products, will be subject to review in accordance with the PATCH Act. Quality and regulatory affairs at SynCardia routinely monitor the FDA and ISO standard organizations for new rules and guidance. The current Companion 2 and Freedom Driver product design does not rely on the internet, Bluetooth, or other connectivity application to communicate or operate the Companion 2 or Freedom Drivers. The current Companion 2 and Freedom Driver configuration’s cybersecurity risk is managed using the software bill of materials to identify the software and connectivity tools used on the on-market design. The post-market surveillance monitors for issues in the field. The Freedom Driver has been reviewed by the FDA for a recent software update, with no concerns related to the current state of cybersecurity with the TAH system. Moving to future designs with more connectivity tools, like Bluetooth interacting with applications on patient cell phones, would require the manufacturer to demonstrate the risk controls put into place to prevent unauthorized access or control. Security features and design plans will be discussed with both the FDA and the EU Notified Bodies to ensure a robust and compliant cybersecurity plan is put into place, with periodic safety updates and surveillance reporting, before the product is brought to market.

 

57


Table of Contents

The demand for TAHs depends on a variety of factors. In particular, medical advances, that would either provide a better alternative or replace the use of a TAH, which would ultimately result in the demand for TAHs to decrease and would adversely affect our business, prospects, financial condition and operating results.

We believe that the present and projected demand for TAHs depends on a variety of factors. These factors include, but at not limited to (i) a rising trend in heart related disorders and failures, (ii) a market need for both a short-term and long-term alternative to heart transplants, (iii) industry competition within the TAH space, and (iv) medical advances that could provide permanent solutions to the heart related problems currently addressed by TAHs. Any development in the aforementioned factors could positively or adversely affect the demand for TAHs and subsequently our business and operations. In particular, a variety of medical advances (e.g., new medications or new surgical techniques) could result in an alternative, more cost effective or less invasive, manner to address heart failure and heart disorders currently addressed by a total artificial heart. In the event that demand for total artificial hearts decreases, and consequently no market exists for TAHs, our business, prospects, financial condition, and operating results would be severely and adversely affected.

Risks Related to Regulation of Picard’s Industry

Unless the context otherwise requires, references in this subsection “— Risks Related to Regulation of Picard’s Industry” to “we”, “us”, “our”, and the “Company” generally refer to Picard in the present tense or New Picard from and after the Business Combination, as applicable.

The Company’s business is subject to extensive governmental regulation that could make it more expensive and time consuming to introduce new or improved products.

The Company’s products must comply with regulatory requirements imposed by the FDA, the U.S. Department of Health and Human Services and other governmental agencies in the United States, and similar agencies in foreign jurisdictions. These requirements involve lengthy and detailed laboratory and clinical testing procedures, sampling activities, an extensive agency review process, and other costly and time-consuming procedures. It often takes several years to satisfy these requirements, depending on the complexity and novelty of the product. The Company is also subject to numerous additional licensing and regulatory requirements relating to safe working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. Some of the most important requirements include:

 

   

FDA Regulations;

 

   

EU CE mark requirements;

 

   

Health Canada requirements;

 

   

Regulations under the Drug Administration Law of China;

 

   

Medical Device Quality Management System requirements; and

 

   

Occupational Safety and Health Administration requirements.

Government regulation may impede SynCardia’s ability to conduct clinical studies and to manufacture existing and future products. Government regulation also could delay the marketing of new products for a considerable period of time and impose costly procedures on SynCardia’s activities. The FDA and other regulatory agencies may not approve any future products on a timely basis, if at all. Any delay in obtaining, or failure to obtain, such approvals could negatively impact the marketing of any future products and reduce the Company’s product revenues. Regulatory bodies may review SynCardia’s products once they are on the market and determine that they do not satisfy applicable regulatory requirements. Failure to comply with requisite requirements in the future may lead to EEA regulatory bodies ordering the suspension or withdrawal of SynCardia’s products from the EEA market or, as discussed below, notified bodies withdrawing certificates of conformity for devices and/or the underlying quality systems.

Even after receiving pre-market approval, SynCardia’s products remain subject to strict regulatory controls on manufacturing, marketing and use. SynCardia may be forced to modify or recall a product after release in

 

58


Table of Contents

response to regulatory action or unanticipated difficulties encountered in general use. To satisfy U.S. FDA requirements, SynCardia’s facilities and associated quality systems are required to comply with 21 CFR 820 and SynCardia is subject to periodic inspections by FDA or an FDA-accredited third party. To satisfy EU CE mark requirements SynCardia’s facilities and associated quality systems are required to comply with ISO 13485:2016, and it is subject to periodic audits by a third-party notified body. SynCardia’s certificate of compliance with ISO 13485:2016 is subject to a three-year renewal period. Failure to maintain an adequate quality system could lead to interruption of the supply of the Company’s products until its quality system is deemed compliant. Any such action could have a material effect on the reputation of the Company’s products and on its business and financial position.

Further, regulations may change, and any additional regulation could limit or restrict the Company’s ability to use any of its technologies, which could harm the Company’s business. The Company could also be subject to new international, federal, state or local regulations that could affect SynCardia’s research and development programs and harm the Company’s business in unforeseen ways.

The off-label use or misuse of SynCardia’s products may harm its image in the marketplace, result in injuries that lead to product liability suits, which could be costly to the Company’s business, or result in costly investigations and regulatory agency sanctions if SynCardia is deemed to have engaged in such promotion.

The products SynCardia currently markets in the United States have been approved by the FDA for specific indications. For example, the SynCardia 70cc TAH is approved only for patients with a specific cardiac condition, and then only as a bridge to transplantation rather than for destination therapy. The Company’s clinical support staff and marketing and sales force have been trained not to promote the products for uses outside of the approved indications for use, known as “off-label uses.” The Company cannot, however, prevent a physician from using the products in a manner determined by the physician, in the exercise of medical judgment, to be appropriate. There may be increased risk of injury to patients if physicians attempt to use SynCardia’s products off-label. Furthermore, the use of SynCardia’s products for indications other than those approved by the FDA may not effectively treat such conditions, which could harm SynCardia’s reputation in the marketplace among physicians and patients.

If the FDA or other federal, state or foreign enforcement authorities determine that SynCardia has promoted an off-label or other improper use, they could subject the Company to regulatory or enforcement actions, and this could significantly harm the Company’s business and results of operations.

SynCardia is required to comply with medical device reporting, or MDR, requirements and must report certain malfunctions, deaths, and serious injuries associated with its products, which can result in voluntary corrective actions or agency enforcement actions.

Under the FDA MDR regulations (21 CFR 803), medical device manufacturers are required to submit information to the FDA when they receive a report or become aware that a device has or may have caused or contributed to a death or serious injury or has or may have a malfunction that would likely cause or contribute to death or serious injury if the malfunction were to recur. All manufacturers placing medical devices on the market in the EEA are legally bound to report any serious or potentially serious incidents involving devices they produce or sell (MEDDEV 2.12-1) to the regulatory agency in whose jurisdiction the incident occurred.

Malfunction of SynCardia’s products could result in future voluntary corrective actions, such as recalls, including corrections, or customer notifications, or agency action, such as inspection or enforcement actions. If malfunctions do occur, SynCardia may be unable to correct the malfunctions adequately or prevent further malfunctions, in which case it may need to cease manufacture and distribution of the affected products, initiate voluntary recalls, and redesign the products. Regulatory authorities may also take action against the Company, such as ordering recalls, imposing fines, or seizing the affected products. Any corrective action, whether voluntary or involuntary, will require the dedication of the Company’s time and capital, will distract management from operating the Company’s business, and may harm the Company’s reputation and financial results.

 

59


Table of Contents

The Company’s employees, independent contractors, principal investigators, consultants, commercial partners and suppliers may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

The Company is exposed to the risk of employee fraud, misconduct or other improper activities. Misconduct by employees and independent contractors could include failure to comply with FDA regulations, failure to provide accurate information to the FDA, failure to comply with manufacturing standards the Company has established, failure to comply with federal and state healthcare fraud and abuse laws, failure to report financial information or data accurately or disclose unauthorized activities to the Company. In particular, sales, marketing and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws may restrict or prohibit a wide range of business activities, including, but not limited to, research, manufacturing, distribution, pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee and independent contractor misconduct could also involve the improper use of individually identifiable patient information, including, without limitation, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to the Company’s reputation. It is not always possible to identify and deter employee and independent contractor misconduct, and any precautions the Company takes to detect and prevent improper activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting the Company from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against the Company, those actions could have a significant impact on its business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of the Company’s operations, any of which could adversely affect the Company’s ability to operate.

The Company is subject to various federal, state and foreign healthcare laws and regulations, and a finding of failure to comply with such laws and regulations could have a material adverse effect on the Company’s business.

The Company’s operations are, and will continue to be, directly and indirectly affected by various federal, state and foreign healthcare laws, including, but not limited to, those described below.

The Company is subject to the federal Anti-Kickback Statute (42 U.S. Code § 1320a-7b), which prohibits any person or entity from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, in cash or in kind, in return for or to induce the referring, ordering, leasing, purchasing or arranging for or recommending the referring, ordering, purchasing or leasing of any good, facility, item or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as the Medicare and Medicaid programs.

The Company is also subject to the federal “Sunshine” (42 U.S. Code § 1320a-7h) law, which imposes a duty to track and report annually to CMS information related to certain payments and other “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals and to report annually to CMS ownership and investment interests held by physicians, as defined above, and their immediate family members in the Company. The Company is also subject to similar foreign “sunshine” laws or codes of conduct, which vary country by country.

In addition, the Company is subject to the federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, persons or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim to, or the knowing use of false records or statements to obtain payment from, or approval by, the federal government. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals, commonly known as

 

60


Table of Contents

“whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. When an entity is determined to have violated the False Claims Act (31 U.S. Code § 3729–3733), it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim.

The Company is also subject to the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, statute, which, among other things, created federal criminal laws that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statements in connection with the delivery of or payment for health care benefits, items or services. Additionally, HIPAA imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization on entities subject to the law, such as health plans, clearinghouses, and healthcare providers and their business associates. Internationally, substantially every jurisdiction in which the Company operates has established its own data security and privacy legal framework with which the Company must comply, including the General Data Protection Regulation (GDPR) and its national implementation in the member states of the European Union.

Many states have also adopted laws similar to each of the above federal laws, such as anti-kickback and false claims laws, which may be broader in scope and apply to items or services reimbursed by any third-party payor, including commercial insurers, as well as laws that restrict its marketing activities with health care professionals and entities, and require the Company to track and report payments and other transfers of value, including consulting fees, provided to healthcare professionals and entities. The Company is also subject to foreign fraud and abuse laws, which vary by country. The Company can provide no assurance that it is, or will remain in, compliance with the diverse requirements in all jurisdictions in which it does business.

If the Company’s operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to it now or in the future, it may be subject to penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, individual imprisonment, contractual damages, reputational harm, exclusion from governmental health care programs, and the curtailment or restructuring of its operations, any of which could adversely affect the Company’s ability to operate its business and its financial results.

The TAH is currently approved in the U.S. for temporary bridge to transplant indication. The Company plans to seek approval for long-term indication. If the Company does not receive that approval within the next year, it may need to undertake additional clinical trials, which could cost significant funds and adversely affect its business.

The TAH is currently approved in the U.S. for temporary bridge to transplant indication. The Company plans to seek approval for long-term indication, which involves additional time and resources of management and the Company’s employees. If the Company does not receive that approval within the next year, it may need to undertake additional clinical trials to continue pursuing long-term indication, which could cost significant funds and adversely affect its business.

In Europe, the Company voluntarily withdrew its CE certificate under CE MDD in 2022 and terminated its relationship with its CE notifying body to migrate from CE MDD to CE MDR, and failure to reinstate its CE certificate under CE MDR or could have a material adverse effect on the Company’s business.

The European Union Medical Device Directive (“CE MDD”) and the European Union Medical Device Regulation (“CE MDR”) are different regulatory frameworks that govern medical devices in the European Union. The CE MDR was adopted by the EU in 2017 and has a phased implementation process, with the first deadline for compliance occurring on May 26, 2021 and expected full implementation expected by May 2024. The CE MDR replaces the CE MDD and other directives that were previously in place. The CE MDR is a more

 

61


Table of Contents

comprehensive and stringent regulatory framework than the CE MDD. For example, the CE MDR places a greater emphasis on clinical evaluation, requiring more extensive clinical data and evidence to demonstrate the safety and efficacy of a medical device. The CE MDR also requires more stringent oversight and auditing of notified bodies, which are non-governmental organizations responsible for assessing the conformity of medical devices to the applicable regulatory regime.

While SynCardia is in the process of transitioning to the CE MDR, there can be no assurance that it will be able to comply with all of the new requirements in a timely manner or in a manner that will not be an undue burden on the management of the Company. Specifically, due to the change of control of SynCardia in 2021 and the installation of new management, the Company’s managers have identified significant issues with SynCardia’s regulatory compliance regime and are actively working to solve these issues. The Company cannot guarantee that SynCardia will be able to obtain CE MDR certification or that its regulatory compliance regime will meet the standards in the jurisdictions in which SynCardia operates, including the EU.

SynCardia and its predecessors has had clearance under CE MDD since 1998. In September 2022, SynCardia voluntarily withdrew its CE MDD certificate so that it could address post market surveillance reporting requirements, expected as part of compliance with CE MDR. SynCardia is in the advanced phase of working with a notifying body, TUV SUD, to file a CE mark for its 70cc TAH under MDR, and the Company expects SynCardia to file its submission for clearance under CE MDR in 2024. Relevant EU authorities, and authorized representatives will be notified as needed, and in accordance with applicable EU regulations.

Any delay or failure to obtain CE MDR certification, or mistakes made by management in the process of obtaining CE MDR certification, could have a material adverse effect on the Company’s business, financial condition, and results of operations. Investors are encouraged to inquire with officers of the Company for more detailed information about SynCardia’s transition to CE MDR certification and its regulatory compliance regime.

Prior weaknesses in the Company’s CE MDD regulatory regime and compliance with developing European Union medical device regulations, including the CE MDD, may limit the Company’s ability to market or sell products in European markets or to introduce new products into European markets.

Prior weaknesses in the Company’s compliance with its post-market surveillance reporting obligations under CE MDD, may limit the Company’s ability to market or sell products in European markets or to introduce new products into European markets. If the Company is unable to maintain compliance, it could lose potential market share in Europe resulting in adverse effects to the Company’s business and results of operations.

Risks Related to Picard’s Intellectual Property

Unless the context otherwise requires, references in this subsection “— Risks Related to Picard’s Intellectual Property” to “we”, “us”, “our”, and the “Company” generally refer to Picard in the present tense or New Picard from and after the Business Combination, as applicable.

Many aspects of the SynCardia TAH are no longer protected by patents, and Picard may be unable to, in the long term, protect its products from competition through other means.

The Company’s success depends in part on its ability to develop and protect intellectual property rights relating to key aspects of the technology employed in the SynCardia TAH systems, maintain its licenses to use intellectual property owned by third parties, preserve the confidentiality of its trade secrets and operate without infringing the valid and enforceable patents and other proprietary rights of third parties. Although the original inventions underlying the total artificial heart were previously protected by patents, such patents have now expired. Therefore, many aspects of the SynCardia TAH are no longer protected by any patents, and the Company relies primarily on a combination of non-patented proprietary technology, trade secrets, processes and procedures, technical knowledge and know-how accumulated or acquired since its inception. The Company’s

 

62


Table of Contents

intellectual property rights could be challenged, invalidated, circumvented or misappropriated. The Company generally seeks to protect this information by confidentiality, non-disclosure and assignment of invention agreements with its employees, consultants, scientific advisors and third parties. These agreements may be breached, and the Company may not have adequate remedies for any such breach. In addition, its trade secrets may be disclosed to or otherwise become known or be independently developed by competitors. The intellectual property owned by the Company affords only limited protection and may not provide any commercial benefit.

In addition, the laws of some of the countries in which SynCardia’s products are or may be sold may not protect its products and intellectual property to the same extent as U.S. laws, if at all. SynCardia may be unable to protect its rights in trade secrets and unpatented proprietary technology in these countries.

The medical device industry is characterized by extensive patent and other intellectual property litigation, and the Company could become subject to litigation that could be costly, result in the diversion of management’s attention, require the Company to pay significant damages or royalty payments or prevent SynCardia from marketing and selling its existing or future products.

The Company’s success depends in part on not infringing the patents or violating the other proprietary rights of others. Significant litigation regarding patent rights occurs in the medical device industry, including among companies focused on artificial transplants. It is possible that U.S. and foreign patents and pending patent applications controlled by third parties may be alleged to cover the SynCardia TAH and related technologies, including SynCardia’s drivers. The Company’s competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with its ability to make, use and sell its products.

The Company may receive in the future communications from patent holders alleging infringement of patents or other intellectual property rights or misappropriation of trade secrets, or offering licenses to such intellectual property. At any given time, the Company may be involved as either a plaintiff or a defendant in patent infringement actions, the outcomes of which may not be known for prolonged periods of time.

For example, in July 2013, SynCardia and Medtronic plc (“Medtronic”) entered into a ten-year, non-exclusive, worldwide, perpetual, non-revocable licensing agreement (the “License Agreement”) for non-patented intellectual property relating to the design and production of Med-Hall Valves, including as used in the SynCardia TAH. Although the License Agreement expired by its terms in July 2023, SynCardia currently owes Medtronic approximately $444,000 in outstanding royalty payments. Pursuant to the License Agreement, and as security for SynCardia’s obligations thereunder, SynCardia granted Medtronic a security interest of first priority in a non-exclusive license to use, sell, import or distribute TAHs that incorporate the Med-Hall Valves as a component part and to use certain other documentation, among other terms. So long as SynCardia’s balance under the License Agreement remains outstanding, Medtronic could foreclose on such security interest, and SynCardia could potentially face litigation in connection with Medtronic’s recovery of the amounts owed under the License Agreement, which could materially harm the Company’s reputation, business, financial condition and results of operation. See the section entitled “Information About Picard—Our Components” for additional information regarding the License Agreement and the various components composing the TAH.

The large number of patents, the rapid rate of new patent applications and issuances, the complexities of the technologies involved and the uncertainty of litigation significantly increase the risks related to any patent litigation. Any potential intellectual property litigation also could force the Company to do one or more of the following:

 

   

stop selling, making, or using products that use the disputed intellectual property;

 

   

obtain a license from the intellectual property owner to continue selling, making, licensing, or using products, which license may require substantial royalty payments and may not be available on reasonable terms, or at all;

 

63


Table of Contents
   

incur significant legal expenses;

 

   

pay substantial damages or royalties to the party whose intellectual property rights the Company may be found to be infringing;

 

   

pay the attorney fees and costs of litigation to the party whose intellectual property rights the Company may be found to be infringing; or

 

   

redesign those products that contain the allegedly infringing intellectual property, which could be costly, disruptive and/or infeasible.

If any of the foregoing occurs, the Company may have to withdraw existing products from the market or may be unable to commercialize one or more of its products, all of which could have a material adverse effect on its business, results of operations and financial condition. Any litigation or claim against the Company, even those without merit, may cause it to incur substantial costs, and could place a significant strain on its financial resources, divert the attention of management from its core business and harm its reputation. Further, as the number of participants in the artificial heart industry grows, the possibility of intellectual property infringement claims against the Company increases.

In addition, the Company may indemnify its customers and international distributors with respect to infringement by its products of the proprietary rights of third parties. Third parties may assert infringement claims against SynCardia’s customers or distributors. These claims may require the Company to initiate or defend protracted and costly litigation on behalf of its customers or distributors, regardless of the merits of these claims. If any of these claims succeed, the Company may be forced to pay damages on behalf of SynCardia’s customers or distributors or may be required to obtain licenses for the products they use. If the Company cannot obtain all necessary licenses on commercially reasonable terms, SynCardia’s customers may be forced to stop using SynCardia’s products.

If the Company ceases its commercial ties or contractual arrangements with either Bimba or Heitek Automation, the Company will be required to source crucial components for the C2 and Freedom Driver from an alternative supplier, which could have a negative impact on the Company’s business and operations if one is not found.

If Bimba Ltd (“Bimba”), a part of Norgren Ltd (“Norgren”) and the sole source supplier of components for the SynCardia drivers, ceases business operations or terminates commercial ties with its distributor Heitek Automation LLC (“Heitek Automation” or “Heitek”), or with SynCardia, or if Heitek Automation ceases business operations or terminates commercial ties with SynCardia, we might not be able to procure components to produce the C2 and Freedom Drivers.

Bimba owns the drawing of and manufactures the Piston Cylinder Assembly (the “PCA”) used in the assembly of the Freedom Driver. Bimba also manufactures the pneumatic manifold used in the Freedom Driver while Heitek Automation owns the drawings. Heitek Automation distributes the PCA and the pneumatic manifold, and SynCardia purchases both components from Heitek Automation. Bimba and Heitek are thus material for the continued success of the Company, and, if Bimba and/or Heitek Automaton cease business operations or terminate commercial ties with SynCardia, we will have to source the component from alternative suppliers.

SynCardia currently does not have an agreement with either Bimba or Heitek Automation covering the supply of PCA, or access to the drawings of PCA. SynCardia has an ongoing commercial relationship with Bimba and Heitek wherein SynCardia places orders through Heitek, the distributor for Bimba-manufactured parts and assemblies, including the PCA for the Freedom Driver and the Pneumatic Manifold Assembly for the Companion 2 Driver. There are no commercial agreements with Bimba and Heitek beyond the purchase orders that SynCardia places and SynCardia depends on Bimba and Heitek for certain technical drawings. However, if required, SynCardia has the ability to develop its own parts under its own IP to replace these parts. In addition, the Company is developing the Liberty Driver, which will not use the current PCA, and we expect FDA approval of the Liberty Driver by the end of 2025, however, such approval is not guaranteed to be obtained on our expected timeline or at all (see also “New Product Development”).

 

64


Table of Contents

SynCardia entered into a purchase order, dated as of April 11, 2022, with Heitek Automation to purchase the pneumatic manifold drawing for the C2 Driver for a total cost of $200,000. Under such purchase order, Heitek Automation credits $500 for every PCA that SynCardia purchases from Heitek Automation towards the cost of the manifold drawings. In addition, SynCardia has started the development of the C3 Driver, which will not need this pneumatic manifold and is expected to be approved by the end of 2025, however, such approval is not guaranteed to be obtained on our expected timeline or at all (see also “New Product Development”).

The Company may be subject to claims that it or its employees have inadvertently or intentionally used or disclosed trade secrets or other proprietary information of former employers of its employees.

The Company employs individuals who were previously employed at other medical device companies, including competitors or potential competitors. To the extent that the employees are involved in research areas that are similar to those in which they were involved with their former employers, the Company may be subject to claims that such employees have inadvertently or intentionally used or disclosed the alleged trade secrets or other proprietary information of the former employers. Litigation may be necessary to defend against such claims.

Risks Related to Ownership of New Picard’s Securities

Our share price may be volatile, and purchasers of our securities could incur substantial losses.

Our share price is likely to be volatile. The securities markets in general, and the market for biotechnology and medical device companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors, including the following:

 

   

our ability to successfully commercialize, and realize revenues from sales of, the TAH;

 

   

the success of competitive products or technologies;

 

   

results of clinical studies of the TAH or other current or future products or those of our competitors;

 

   

regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products;

 

   

introductions and announcements of new products by us, our commercialization partners, or our competitors, and the timing of these introductions or announcements;

 

   

actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing processes or sales and marketing terms;

 

   

variations in our financial results or those of companies that are perceived to be similar to us;

 

   

the success of our efforts to acquire or in-license additional products or planned products;

 

   

developments concerning our collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners;

 

   

developments concerning our ability to bring our manufacturing processes to scale in a cost-effective manner;

 

   

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

 

   

developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our products;

 

   

our ability or inability to raise additional capital and the terms on which we raise it;

 

   

the recruitment or departure of key personnel;

 

   

changes in the structure of health care payment systems;

 

65


Table of Contents
   

market conditions in the medical device and biotechnology sectors;

 

   

actual or anticipated changes in earnings estimates or changes in securities analyst recommendations regarding New Picard Common Stock, other comparable companies or our industry generally;

 

   

trading volume of New Picard Common Stock;

 

   

guidance or projections, if any, that we provide to the public, any changes in this guidance or projections or our failure to meet this guidance or projections;

 

   

sales of New Picard Common Stock by us or our stockholders;

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, trade wars, pandemics (such as COVID-19), currency fluctuations and acts of war or terrorism;

 

   

the effects of natural disasters, terrorist attacks and the spread and/or abatement of infectious diseases, such as COVID-19, including with respect to potential operational disruptions, labor disruptions, increased costs, and impacts to demand related thereto; and

 

   

the other risks described in this “Risk Factors” section.

These broad market and industry factors may harm the market price of New Picard Common Stock, regardless of our operating performance. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could adversely affect our business, financial condition, results of operations and growth prospects.

We do not intend to pay cash dividends for the foreseeable future.

Following the Business Combination, New Picard currently intends to retain its future earnings, if any, to finance the further development and expansion of its business and does not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of the New Picard Board and will depend on New Picard’s financial condition, results of operations, capital requirements, restrictions contained in future agreements and financing instruments, business prospects and such other factors as the New Picard Board deems relevant.

Future sales of New Picard Common Stock, or the perception that future sales may occur, may cause the market price of New Picard Common Stock to decline, regardless of our operating performance.

Significant additional capital will be needed in the future to continue New Picard’s planned operations. To raise capital, New Picard may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner as determined from time to time. If New Picard sells common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of New Picard Common Stock.

We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, results of operations, and financial condition.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the listing standards of the Nasdaq, and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources. For example, the Exchange Act requires, among other things, that we file annual, quarterly and current

 

66


Table of Contents

reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, results of operations and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this proxy statement and in filings required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, results of operations, and financial condition.

Upon consummation of the Business Combination, we will be an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and we intend to take advantage of certain exemptions from disclosure requirements available to emerging growth companies and/or smaller reporting companies, which could make our securities less attractive to investors and may make it more difficult to compare our performance with that of other public companies.

Upon consummation of the Business Combination, we will be an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but

 

67


Table of Contents

any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparability of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Additionally, we will be a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, which would allow us to take advantage of certain exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in this proxy statement and New Picard’s periodic reports and proxy statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the shares of our New Picard Common Stock held by non-affiliates exceeds $250 million as of the prior June 30, and (ii) our annual revenue exceeded $100 million during such completed fiscal year or the market value of the shares of New Picard Common Stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

We could be subject to securities class action or derivative litigation.

In the past, securities class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Securities litigation brought against us following volatility in the price of New Picard Common Stock, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and results of operations and divert management’s attention and resources from our business. Additionally, securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Business Combination, then that injunction may delay or prevent the Business Combination from being completed, or from being completed within the expected timeframe, which may adversely affect Picard’s businesses, financial condition and results of operation.

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of New Picard Common Stock may decrease.

We are in the process of designing and implementing our internal controls over financial reporting, which will be time-consuming, costly and complicated. We cannot provide assurances that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. If we identify additional material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we are unable to assert that our internal control over financial reporting is effective or, once required, if our independent registered public accounting firm is unable to attest that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of New Picard Common Stock could decrease. We could also become subject to stockholder or other third-party litigation as well as investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources and could result in fines, trading suspensions or other remedies.

 

68


Table of Contents

An active trading market may not develop or be sustained.

The market for our securities may be highly volatile or may decline regardless of our operating performance. An active public market for our securities may not develop or be sustained after the closing of the Business Combination. We cannot predict the extent to which investor interest in New Picard will lead to the development of an active trading market in New Picard Common Stock or how liquid that market might become. If an active market does not develop or is not sustained, or if New Picard fails to satisfy the continued listing standards of Nasdaq for any reason and its securities are delisted, it may be difficult for you to sell your securities at the time you wish to sell them, at a price that is attractive to you, or at all. An inactive trading market may also impair New Picard’s ability to both raise capital by selling shares of capital stock, attract and motivate employees through equity incentive awards and acquire other companies, products or technologies by using shares of capital stock as consideration.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, New Picard Common Stock share price and trading volume could decline.

The trading market for New Picard Common Stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on New Picard. If no securities or industry analysts commence coverage of New Picard, the trading price for New Picard Common Stock would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade New Picard Common Stock or publish inaccurate or unfavorable research about our business, our share price would likely decline. In addition, if our operating results fail to meet the forecast of analysts, our share price would likely decline. If one or more of these analysts cease coverage of New Picard or fail to publish reports on us regularly, demand for New Picard Common Stock could decrease, which might cause our share price and trading volume to decline.

New Picard will be a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, will qualify for exemptions from certain corporate governance requirements. If we rely on these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

After the completion of the Business Combination, Hunniwell Picard I, LLC will control a majority of the voting power of the outstanding New Picard Common Stock, and New Picard will be a “controlled company” within the meaning of applicable rules of Nasdaq upon the Closing. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements:

 

   

that a majority of the board consists of independent directors;

 

   

for an annual performance evaluation of the nominating and corporate governance and compensation committees;

 

   

that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.

While we do not currently intend to rely on these exemptions, we may use these exemptions in the future. As a result, New Picard’s stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

 

69


Table of Contents

The Proposed Charter, as will be in effect following the completion of the Business Combination, will designate specific courts as the exclusive forum for substantially all stockholder litigation matters, which could limit the ability of New Picard’s stockholders to obtain a favorable forum for disputes with New Picard or its directors, officers or employees.

The Proposed Charter, as will be in effect following the completion of the Business Combination, will require, to the fullest extent permitted by law, that derivative actions brought in New Picard’s name, actions against current or former directors, officers or other employees for breach of fiduciary duty, any action asserting a claim arising pursuant to any provision of the DGCL, the Proposed Charter or the Proposed Bylaws, or any action asserting a claim governed by the internal affairs doctrine of the State of Delaware, confer jurisdiction to the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware), unless New Picard consents in writing to the selection of an alternative forum. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The Proposed Charter also provides that, unless New Picard consents in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. However, Section 22 of the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. This provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Picard and New Picard’s directors, officers or other employees and may have the effect of discouraging lawsuits against New Picard’s directors, officers and other employees. Furthermore, stockholders may be subject to increased costs to bring these claims, and the exclusive forum provision could have the effect of discouraging claims or limiting investors’ ability to bring claims in a judicial forum that they find favorable.

In addition, the enforceability of similar exclusive forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could rule that this provision in the Proposed Charter is inapplicable or unenforceable. In March 2020, the Delaware Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi which found that an exclusive forum provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. We intend to enforce this provision, but we do not know whether courts in other jurisdictions will agree with this decision or enforce it. If a court were to find the exclusive forum provision contained in the Proposed Charter to be inapplicable or unenforceable in an action, New Picard may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, prospects, financial condition and operating results.

Risks Related to Altitude and the Business Combination

Unless the context otherwise requires, references in this subsection “— Risks Related to Altitude and the Business Combination” to “we”, “us”, “our”, and the “Company” generally refer to Altitude in the present tense or New Picard from and after the Business Combination.

The consummation of the Business Combination is subject to a number of conditions, including regulatory approvals and the Minimum Cash Condition, and, if those conditions are not satisfied or waived, the Business Combination Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.

The consummation of the Business Combination is subject to a number of conditions, including regulatory approvals and the Minimum Cash Condition, and, if those conditions are not satisfied or waived, the Business

 

70


Table of Contents

Combination agreement may be terminated in accordance with its terms and the Business Combination may not be completed.

Picard will be subject to business uncertainties and contractual restrictions while the Business Combination is pending, and such uncertainty could have a material adverse effect on Altitude’s and the Picard’s business, financial condition, and results of operations.

Picard will be subject to business uncertainties and contractual restrictions while the Business Combination is pending, and such uncertainty could have a material adverse effect on Picard’s business, financial condition and results of operations. For example, the Business Combination Agreement contains various covenants that restrict Picard’s actions prior to the Closing without Altitude’s consent, including restrictions on issuing securities, selling or acquiring assets, taking on debt and hiring or terminating employees.

The exercise of our directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in the best interests of our stockholders.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require us to agree to amend the Business Combination Agreement, to consent to certain actions taken by Picard or to waive rights to which we are entitled under the Business Combination Agreement. Such events could arise because of changes in the course of Picard’s business, a request by Picard to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on Picard’s business and would entitle us to terminate the Business Combination Agreement. In any of such circumstances, it would be at our discretion, acting through the Altitude Board, to grant consent or waive those rights. The existence of the financial and personal interests our officers and directors described in the following risk factors may result in a conflict of interest on the part of one or more of the officers and directors between what they may believe is best for us and what they may believe is best for themselves in determining whether or not to take the requested action. As of the date of this proxy statement, we do not believe there will be any material changes or waivers that our directors and officers would be likely to make after the mailing of this proxy statement. We will circulate a supplemental or amended proxy statement if changes to the terms of the Business Combination Agreement that would have a material impact on our stockholders are required prior to the vote on the Business Combination Proposal.

Altitude and Picard will incur transaction costs in connection with the Business Combination.

Altitude and Picard have incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination. Altitude and Picard will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, proxy printing and mailing fees and other costs associated with the Business Combination. Some of these costs are payable regardless of whether the Business Combination is completed.

The unaudited pro forma condensed combined financial information included in this proxy statement may not be indicative of what New Picard’s actual financial position or results of operations will be.

The unaudited pro forma condensed combined financial information for New Picard following the Business Combination in this proxy statement is presented for illustrative purposes only and is not necessarily indicative of what New Picard’s actual financial position or results of operations would be if the Business Combination is completed on the dates indicated.

 

71


Table of Contents

If the Business Combination’s benefits do not meet the expectations of investors, shareholders or financial analysts, the market price of New Picard’s securities may decline.

If the benefits of the Business Combination do not meet the expectations investors or securities analysts, the market price of New Picard’s securities prior to the Closing may decline. The market values of New Picard’s securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement or the date on which Altitude stockholders vote on the Business Combination.

We will not have any right to make damage claims against Picard or Picard’s securityholders for the breach of any representation, warranty or covenant made by Picard in the Business Combination Agreement.

The Business Combination Agreement provides that all of the representations, warranties and covenants of the parties contained therein will not survive the Closing. Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the Business Combination Agreement after the Closing of the Business Combination. As a result, we will have no remedy available to us if the Business Combination is consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by Picard at the time of the Business Combination.

We may be targeted by securities class action and derivative lawsuits that could result in substantial costs and may delay or prevent the Business Combination from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Business Combination, then that injunction may delay or prevent the Business Combination from being completed, or from being completed within the expected timeframe, which may adversely affect our and Picard’s respective businesses, financial condition and results of operation.

The requirements of being a public company may strain New Picard’s resources, divert management’s attention and affect our ability to attract and retain qualified board members.

After the completion of the Business Combination, New Picard will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and any rules promulgated thereunder, as well as the rules of Nasdaq. The requirements of these rules and regulations will increase New Picard’s legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on its systems and resources. The Sarbanes-Oxley Act requires, among other things, that New Picard maintain effective disclosure controls and procedures and internal controls for financial reporting. In order to maintain and, if required, improve New Picard’s disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight are required, and, as a result, New Picard’s management’s attention may be diverted from other business concerns. These rules and regulations can also make it more difficult for New Picard to attract and retain qualified independent members of the board of directors. Additionally, these rules and regulations make it more difficult and more expensive for New Picard to obtain director and officer liability insurance. New Picard may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. The increased costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements could have a material adverse effect on New Picard’s operations, business, financial condition or results of operations.

 

72


Table of Contents

The Sponsor has agreed to vote in favor of the Business Combination, regardless of how our public stockholders vote.

The Sponsor owns approximately 85% of our outstanding common stock. Our Current Charter provides that, if we seek stockholder approval of an initial business combination, such business combination will be approved if we receive the affirmative vote of a majority of the votes cast at such meeting, including the Founder Shares. As a result, the Sponsor can approve a Business Combination even if all public stockholders vote against it.

The ability of our stockholders to exercise redemption rights with respect to a large number of public shares may make it more difficult for us to complete the Business Combination

While the Business Combination imposes a Minimum Cash Condition, our Current Charter does not provide a specified maximum redemption threshold. As a result, we may be able to complete the Business Combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares. The Closing is, however, subject to the satisfaction of the Minimum Cash Condition. The Minimum Cash Condition may be waived by Picard in its sole discretion.

If the Business Combination is consummated with less than $38.0 million of Aggregate Parent Closing Cash due to the waiver by Picard of the Minimum Cash Condition, the aggregate cash held by New Picard after the Closing may not be sufficient to allow New Picard to operate and pay its bills as they become due. Furthermore, the exercise of redemption rights with respect to a large number of our public shares may prevent New Picard from taking actions as may be desirable in order to optimize the capital structure of New Picard after consummation of the Business Combination and New Picard may not be able to raise additional financing from unaffiliated parties necessary to fund its expenses and liabilities after the Closing. Any such event in the future may negatively impact the analysis regarding New Picard’s ability to continue as a going concern at such time.

Altitude Stockholders may not know prior to the redemption deadline whether we will have satisfied the Minimum Cash Condition.

If we receive valid redemption requests from holders of public shares prior to the redemption deadline, we may, at our sole discretion, following the redemption deadline and until the Closing Date, seek and permit withdrawals by one or more of such holders of their redemption requests. We may select which holders to seek such withdrawals of redemption requests from based on any factors we may deem relevant and the purpose of seeking such withdrawals may be to increase the funds held in the Trust Account, including where we otherwise would not satisfy the Minimum Cash Condition. This process could take a number of days and there may be a period of time after the special meeting and before the Closing when stockholders do not know whether we have satisfied this closing condition. Accordingly, public stockholders may be required to make redemption and voting decisions without knowing whether we will satisfy all of the conditions to closing the Business Combination.

The public stockholders will experience dilution as a consequence of the issuance of Common Stock as consideration in the Business Combination and may experience dilution from several additional sources in connection with and after the Business Combination. Having a minority share position may reduce the influence that the public stockholders have on the management of New Picard.

The issuance of additional shares of common stock in the Business Combination, including the issuance of shares of common stock as consideration to the security holders of Picard, will dilute the equity interests of the public stockholders and may adversely affect prevailing market prices for the common stock and public warrants. The public stockholders who do not redeem their common stock may experience dilution from several additional sources to varying degrees in connection with and after the Business Combination, including in each of the following instances:

 

   

Assuming no further redemptions from Altitude’s Trust Account, no Closing Offering and that the only Picard Financing is in the form of the $30.0 million Picard Financing Note and that such note is not

 

73


Table of Contents
 

converted to New Picard Common Stock immediately upon the Closing and that Picard waives the Minimum Cash Condition, it is anticipated that, immediately following the Closing, the shares of Common Stock to be issued to Picard securityholders will represent approximately 91.54% of the number of shares of Common Stock that will be outstanding following the consummation of the Business Combination.

 

   

An aggregate of 29,500,000 warrants will be outstanding following the Business Combination (including the 6,500,000 warrants issued to Picard in connection with the Business Combination, the 15,000,000 public warrants, and the 1,500,000 private warrants held by the Sponsor after taking into account forfeitures pursuant to the Sponsor Support Agreement, and 6,500,000 Earnout Warrants). The shares of Common Stock underlying such warrants represent approximately 35.99% of the fully-diluted number of shares of New Picard Common Stock immediately following the consummation of the Business Combination, assuming the No Additional Redemptions Scenario.

 

   

New Picard will reserve 10% of the number of outstanding shares of New Picard Common Stock on a fully diluted basis (as of immediately following the Business Combination) pursuant to New Picard’s equity inventive plan. The granted awards, when vested and settled or exercisable, may result in the issuance of additional shares up to the amount of the share reserve under New Picard’s equity incentive plan.

 

   

New Picard may determine, subject to the receipt of any stockholder or stock exchange approvals that may be required, to issue additional shares of Common Stock or other equity securities of equal or senior rank in connection with privately negotiated transactions following the consummation of the Business Combination.

The issuance of additional shares of New Picard Common Stock (or other equity securities of equal or senior rank), including through any of the foregoing, could have the following effects for holders of public shares who elect not to redeem their shares:

 

   

your proportionate ownership interest in New Picard will decrease;

 

   

the relative voting strength of each previously outstanding share of common stock will be diminished; or

 

   

the market price of the New Picard Common Stock and the New Picard Warrants may decline.

We may not be able to complete the Business Combination with Picard by the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024, if Altitude’s stockholders approve the Extension), in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.

We may not be able to complete the Business Combination with Picard combination by December 11, 2023 (as may be extended up to March 11, 2024, if Altitude’s stockholders approve the Extension). Our ability to complete the Business Combination with Picard may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account (which interest will be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (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 our remaining stockholders and the Altitude Board, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

74


Table of Contents

In seeking to satisfy the conditions to Closing the Business Combination, our Sponsor, Picard, our or their initial stockholders, directors, executive officers, advisors and affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.

At any time prior to the special meeting during a period when they are not then aware of any material nonpublic information regarding Altitude, Picard, their securities, or the Business Combination, our Sponsor, Picard, our or their initial stockholders, directors, executive officers, advisors or their affiliates may purchase public shares in privately negotiated transactions or in the open market, although they are under no obligation to do so. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. While the exact nature of any such incentives has not been determined as of the date of this proxy statement, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, the transfer to such investors or holders of shares or warrants owned by the Sponsor for nominal value. Such public shares purchased by the Sponsor, directors, executive officers, advisors or affiliates would be (a) purchased at a price no higher than the redemption price for the public shares, which as of [●], 2023 was estimated to be $[●] per share and (b) would not be (i) voted by the Sponsor, or our directors, executive officers or their respective affiliates or (ii) redeemable by the Sponsor, or our directors, executive officers or their respective affiliates. Any such purchases that are completed after the record date for the special meeting may include an agreement with a selling stockholder that such stockholder, for so long as it remains the record holder of the shares in question, will vote in favor of the Business Combination and/or will not exercise its redemption rights with respect to the shares so purchased.

Any such purchases of our securities may result in the completion of the Business Combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or public warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with the Business Combination or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the proxy rules when conducting redemptions in connection with Business Combination. Despite our compliance with these rules, if a stockholder fails to receive our proxy materials such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials as applicable, that we will furnish to holders of our public shares in connection with the Business Combination will describe the various procedures that must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials as applicable. In the case of proxy materials, this date may be up to two business days prior to the vote on the proposal to approve the Business Combination. In addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is included. In the event that a stockholder fails to comply with these or any other procedures disclosed in the proxy materials its shares may not be redeemed.

 

75


Table of Contents

If you or a “group” of stockholders are deemed to hold in excess of 20% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 20% of our Class A common stock.

Our Current Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in the IPO without our prior consent, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against the Business Combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete the Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. You will not receive redemption distributions with respect to the Excess Shares if we complete the Business Combination. And as a result, you will continue to hold that number of shares exceeding 20% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.

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

Altitude can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the Business Combination. Certain events following the consummation the Business Combination may cause an increase in New Picard’s share price and may result in a lower value realized now than a stockholder of Altitude might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the New Picard Common Stock after the consummation of the Business Combination and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

If the net proceeds of the IPO not being held in the Trust Account are insufficient to allow us to operate to the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension), it could limit the amount available to complete the Business Combination, and we will depend on loans from our Sponsor or management team to complete the Business Combination.

As of September 30, 2023, we had $888 available to us outside of the Trust Account to fund our working capital requirements. The funds available to us outside of the Trust Account may not be sufficient to allow us to operate until the end of the completion window which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension), assuming that the Business Combination is not completed during that time.

If we are unable to complete the Business Combination, our public stockholders may receive only approximately $[●] per share (based on the Trust Account balance as of [●]) on the liquidation of the Trust Account and our warrants will expire worthless.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims

 

76


Table of Contents

challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be in the best interests of the Company under the circumstances. The underwriters of the IPO as well as our registered independent public accounting firm will not execute agreements with us waiving such claims to the monies held in the Trust Account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors.

Our Sponsor has agreed that it will indemnify and hold us harmless against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened) to which Altitude may become subject as a result of any claim by (i) any third party for services rendered or products sold to Altitude or (ii) any prospective target business with which Altitude has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below Trust Account (x) $10.00 per public share and (y) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per public share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of Altitude. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for the Business Combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case less taxes payable, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.

 

77


Table of Contents

While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.00 per share.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of the Altitude Board may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of the Altitude Board and us to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. In addition, the Altitude Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, by paying public stockholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

Our history of recurring losses and anticipated expenditures raise doubts about our ability to continue as a going concern. Our ability to continue as a going concern depends in part on obtaining sufficient funding to finance our operations.

Our audited financial statements for the fiscal year ended December 31, 2022, 2021 and 2020 were prepared assuming that we will continue as a going concern. The going concern basis of the presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and satisfy our liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from our inability to continue as a going concern. Our ability to continue as a going concern is subject, in part, to our ability to raise additional capital through equity offerings or debt financings, including through the Business Combination. However, we may not be able to secure additional financing in a timely manner or on favorable terms, if at all, and may not receive any milestone payments. If we cannot continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our stockholders may lose some or all of their investment in us. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all.

 

78


Table of Contents

The SEC has recently issued proposed rules to regulate special purpose acquisition companies. Certain of the procedures that we, Picard, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete the Business Combination and may constrain the circumstances under which we could complete the Business Combination.

On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating, among other items, to disclosures in SEC filings in connection with business combination transactions between special purpose acquisition companies (“SPACs”) such as us and private operating companies; the financial statement requirements applicable to transactions involving shell companies; the use of projections in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. The SPAC Rule Proposals have not yet been adopted and may be adopted in the proposed form or in a different form that could impose additional regulatory requirements on SPACs.

Certain of the procedures that we, Picard, or others may determine to undertake in connection with the SPAC Rule Proposals, or pursuant to the SEC’s views expressed in the SPAC Rule Proposals, may increase the costs and time of negotiating and completing the Business Combination, and may make it more difficult to complete the Business Combination.

If we are deemed to be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete the Business Combination and instead be required to liquidate the Company. To mitigate the risk of that result, on December 5, 2022, we instructed Continental Stock Transfer & Trust Company to liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in an interest-bearing bank deposit account. As a result, following such change, we will likely receive minimal, if any, interest, on the funds held in the Trust Account, which would reduce the dollar amount that our public stockholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the Trust Account had remained in U.S. government securities or money market funds.

On March 30, 2022, the SEC issued the SPAC Rule Proposals, relating, among other things, to circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of the registration statement for its initial public offering. The Company would then be required to complete its initial business combination no later than 24 months after the effective date of the registration statement for its initial public offering. We understand that the SEC has recently been taking informal positions regarding the Investment Company Act consistent with the SPAC Rule Proposals.

There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial business combination within the proposed time frame set forth in the proposed safe harbor rule. As indicated above, we completed our IPO in December 2020 and have operated as a blank check company searching for a target business with which to consummate an initial business combination since such time. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company if the SPAC Rule Proposals are adopted as proposed. If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to

 

79


Table of Contents

abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. If we are required to liquidate the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation in the value of our shares and warrants or rights following such a transaction, and our warrants or rights would expire worthless.

To mitigate the risk of us being deemed to have been operating as an unregistered investment company under the Investment Company Act, on December 5, 2022, we instructed Continental Stock Transfer and Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in an interest-bearing bank deposit account until the earlier of the consummation of a business combination or our liquidation. Following such liquidation of the assets in our Trust Account, we will likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public stockholders would have otherwise received upon any redemption or liquidation of the Company if the assets in the Trust Account had remained in U.S. government securities or money market funds. This means that the amount available for redemption will not increase in the future.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the Delaware General Corporation Law (“DGCL”), stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension). may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension), in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we do not comply with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension), is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal

 

80


Table of Contents

proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

There are risks to Altitude stockholders who are not affiliates of the Sponsor of becoming stockholders of New Picard through the Business Combination rather than acquiring securities of New Picard directly in an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor.

Because there is no independent third-party underwriter involved in the Business Combination or the issuance of securities in connection therewith, investors will not receive the benefit of an outside independent review of New Picard’s, Picard’s and Altitude’s respective finances and operations typically performed in an initial public securities offering. Underwritten public offerings of securities conducted by a licensed broker-dealer are subjected to a due diligence review by the underwriter or dealer manager to satisfy statutory duties under the Securities Act, the rules of Financial Industry Regulatory Authority, Inc. (FINRA) and the national securities exchange where such securities are listed. Additionally, underwriters or dealer-managers conducting such public offerings are subject to liability for material misstatements or omissions in a registration statement filed with the SEC in connection with the public offering. As no such review has been or will be conducted in connection with the Business Combination, Altitude stockholders must rely on the information in this proxy statement and will not have the benefit of an independent review and investigation of the type normally performed by an underwriter in a public securities offering.

In addition, the Insiders have interests in the Business Combination that may be different from, or in addition to, the interests of Altitude shareholders generally. Such interests may have influenced Altitude’s directors in making their recommendation that you vote in favor of the Business Combination Proposal and the other proposals described in this proxy statement. See “Risk Factors The exercise of our directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in the best interests of our stockholders.

The process of taking a company public by means of a business combination with a special purpose acquisition company (a “SPAC”) is different from taking a company public through an underwritten public offering and may create risks for unaffiliated investors.

An underwritten offering involves a company engaging underwriters to purchase its shares and resell them to the public. An underwritten offering imposes statutory liability on the underwriters for material misstatements or omissions contained in the registration statement unless they are able to sustain the burden of providing that they did not know and could not reasonably have discovered such material misstatements or omissions. This is referred to as a “due diligence” defense and results in the underwriters undertaking a detailed review of the company’s business, financial condition and results of operations. Going public via a business combination with a SPAC does not involve any underwriters and does not generally necessitate the level of review required to establish a “due diligence” defense as would be customary in an underwritten offering.

In addition, going public via a business combination with a SPAC does not involve a book-building process as is the case in an underwritten public offering. In any underwritten public offering, the initial value of a company is set by investors who indicate the price at which they are prepared to purchase shares from the underwriters. In the case of a SPAC transaction, the value of the company is established by means of negotiations between the target company, the SPAC and, in some cases, other investors who agree to purchase shares at the time of the business combination. The process of establishing the value of a company in a SPAC business combination may be less effective than the book-building process in an underwritten public offering and also does not reflect events that may have occurred between the date of the merger agreement and the closing of the transaction. In addition, underwritten public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the underwritten public offering. There is no such book

 

81


Table of Contents

of demand built up in connection with a SPAC transaction and no underwriters with the responsibility of stabilizing the share price which may result in the share price being harder to sustain after the transaction.

If Altitude’s due diligence investigation of Picard was inadequate, then Altitude Stockholders following the consummation of the Business Combination could lose some or all of their investment.

Even though Altitude and its legal advisors conducted a due diligence investigation of Picard, it cannot be sure that this due diligence uncovered all material issues that may be present in Picard and its business and operations, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Picard and its business and operations and outside of its control will not later arise.

We may issue notes or other debt securities, or otherwise incur substantial debt, to complete the Business Combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.

Although we have no commitments as of the date of this proxy statement to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete the Business Combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the per share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

 

   

default and foreclosure on our assets if our operating revenues after the Business Combination are insufficient to repay our debt obligations;

 

   

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 

   

our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

 

   

our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;

 

   

our inability to pay dividends on our Class A common stock;

 

   

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 

   

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 

   

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

 

   

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

We may be unable to obtain additional financing to complete the Business Combination or to fund the operations and growth of Picard, which could compel us to restructure or abandon the Business Combination.

If the amount available from the Trust Account, net of amounts needed to satisfy any redemption by public stockholders plus the aggregate cash proceeds received or committed to be invested in respect of the Closing Offering and Picard Financing, is less than the $38.0 million required to satisfy the Minimum Cash Condition,

 

82


Table of Contents

and if Picard refuses to waive such condition, we may be required to seek additional financing to complete the Business Combination. SynCardia and Altitude entered into the Picard Financing LOI on October 22, 2023. However, there is no assurance that SynCardia, Altitude and the Investor will enter into a definitive agreement for the Picard Financing Note on the current terms of the Picard Financing LOI, or at all, or that the Picard Financing Note would be funded at or prior to Closing. We also cannot assure you that any additional financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete the Business Combination, we would be compelled to either restructure the transaction or abandon the Business Combination and seek an alternative target business candidate. Further, we may be required to obtain additional financing in connection with the Closing of the Business Combination for general corporate purposes, including for maintenance or expansion of operations of New Picard, or to fund the purchase of other companies. If we are unable to complete an initial business combination, our public stockholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public stockholders, and our warrants will expire worthless. In addition, even if we do not need additional financing to complete the Business Combination, New Picard may require such financing to fund the operations or growth of Picard’s business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of Picard. None of our officers, directors or stockholders is required to provide any financing to us in connection with the Business Combination.

A new 1% U.S. federal excise tax could be imposed on us in connection with redemptions by us of our shares.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) became law, which, among other things, imposes a new U.S. federal 1% excise tax on certain repurchases (including certain redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign (i.e., non-U.S.) corporations (each, a “covered corporation”). The excise tax will apply to repurchases occurring in 2023 and beyond. Because we are a Delaware corporation and our securities are trading on Nasdaq, we are a “covered corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the excise tax. On December 27, 2022, the U.S. Department of the Treasury issued a notice that provides interim operating rules for the excise tax, including rules governing the calculation and reporting of the excise tax, on which taxpayers may rely until the forthcoming proposed Treasury regulations addressing the excise tax are published. Although such notice clarifies certain aspects of the excise tax, the interpretation and operation of other aspects of the excise tax remain unclear, and such interim operating rules are subject to change.

Whether and to what extent we would be subject to the excise tax on a redemption of our stock would depend on a number of factors, including (i) whether the redemption is treated as a repurchase of stock for purposes of the excise tax, (ii) the fair market value of the redemption treated as a repurchase of stock in connection with the Business Combination, (iii) the nature and amount of the equity issued, if any, by us (whether in connection with the Business Combination, including the shares of New Picard Common Stock issued in connection with the Business Combination, or otherwise) within the same taxable year of the redemption treated as a repurchase of stock, and (iv) the content of forthcoming regulations and other guidance from the U.S. Department of the Treasury. As noted above, the excise tax is imposed on the repurchasing corporation itself, not the stockholders from which shares are repurchased, and only limited guidance on the mechanics of any required reporting and payment of the excise tax on which taxpayers may rely have been issued to date. The imposition of the excise tax could reduce the amount of cash available on hand to complete the Business Combination or for effecting redemptions, and may affect our ability to complete the Business Combination.

 

83


Table of Contents

Subsequent to our completion of the Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the Business Combination or thereafter. Accordingly, any stockholders or warrant holders who choose to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable, relating to the business combination contained an actionable material misstatement or material omission.

Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete the Business Combination, our public stockholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public stockholders, and our warrants will expire worthless.

The investigation of Picard and the negotiation, drafting and execution of the Business Combination Agreement, Ancillary Agreements, disclosure documents and other instruments required substantial management time and attention and substantial costs for accountants, attorneys and others. If we do not complete the Business Combination, the costs incurred up to that point for the Business Combination likely would not be recoverable. If we are unable to complete the Business Combination, our public stockholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public stockholders, and our warrants will expire worthless.

We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.

We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever. Such waiver was provided in connection with the IPO and without any separate consideration paid in connection with providing such waiver. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate a Business Combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

 

84


Table of Contents

Since our Sponsor, executive officers and directors will lose their entire investment in us if the Business Combination is not completed (other than with respect to public shares they may acquire), a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

Our Sponsor holds an aggregate of 7,500,000 Founder Shares which were purchased for an aggregate purchase price of $25,000, or approximately $0.003 per share, prior to our IPO. Our Sponsor also holds 8,000,000 private warrants which were purchased for an aggregate purchase price of $8,000,000, or $1.00 per warrant, simultaneously with the completion of our IPO. The Founder Shares had an aggregate market value of $77.1 million based on the closing price of our Class A common stock of $10.28 per share on Nasdaq on November 24, 2023. The private warrants had an aggregate market value of $240,000 based on the closing price of our public warrants of $0.03 per warrant on Nasdaq on November 24, 2023. Although a portion of the Founder Shares and private warrants will be forfeited and a portion will be placed into escrow at the Closing, and only 1,750,000 Founder Shares and 500,000 private warrants will be available to the Sponsor and not subject to escrow, such securities will have an aggregate value of approximately $18.0 million based on the closing price of the Class A common stock and public warrants on November 24, 2023. The Founder Shares and private warrants will be worthless if we do not complete an initial business combination.

Altitude’s executive officers and directors have invested funds in the Sponsor and are entitled to their pro rata portion of the Founder Shares and private warrants held by the Sponsor. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. This risk may become more acute as the deadline for our completion of an initial business combination nears.

Our public stockholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

Our public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend Current Charter to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension) or with respect to any other material provisions relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete an initial business combination by the end of the completion window, which is December 11, 2023 (as may be extended March 11, 2024 if Altitude stockholders approve the Extension), subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we are unable to complete an initial business combination during the completion window for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our Trust Account. In that case, public stockholders may be forced to wait beyond the end of the completion window, which is December 11, 2023 (as may be extended up to March 11, 2024 if Altitude stockholders approve the Extension), before they receive funds from our Trust Account. In no other circumstances will a public stockholder have any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to the proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 

85


Table of Contents

Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We cannot assure you that our securities will be, or will continue to be, listed on Nasdaq in the future. In order to continue listing our securities on Nasdaq prior to the Business Combination, we must maintain certain financial, distribution and share price levels. Additionally, in connection with the Business Combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq following the Closing.

If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

   

a determination that our Class A common stock is a “penny stock” which requires brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our units, Class A common stock and warrants are listed on Nasdaq, our units, Class A common stock and warrants qualify as covered securities under the statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.

New Picard Warrants will become exercisable for New Picard Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our shareholders. Such dilution will increase if more Public Shares are redeemed.

Outstanding New Picard Warrants to purchase an aggregate of up to 16,500,000 shares of New Picard Common Stock, including 15,000,000 public warrants and 1,500,000 private warrants, will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. These warrants will become exercisable at any time commencing 30 days after the completion of the Business Combination. The exercise price of these warrants will be $11.50 per share. However, there is no guarantee that the New Picard Warrants will ever be in the money prior to their expiration, and, as such, the warrants may expire worthless. See “— Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.”

To the extent the New Picard Warrants are exercised, additional shares of New Picard Common Stock will be issued, which will result in dilution to the holders of New Picard Common Stock and increase the number of

 

86


Table of Contents

shares eligible for resale in the public market. The dilution, as a percentage of outstanding shares, caused by the exercise of the New Picard Warrants will increase if a large number of Altitude stockholders elect to redeem their shares in connection with the Business Combination. Holders of the public warrants do not have a right to redeem such warrants. Accordingly, the redemption of public shares without any accompanying redemption of public warrants will increase the dilutive effect of the exercise of public warrants. Assuming the 100% Redemptions Scenario, representing redemptions of 1,334,645 public shares, and assuming each redeeming shareholder holds one-half of one warrant for each public share redeemed, representing the number of warrants initially included in the public units, up to 667,323 public warrants would be retained by redeeming stockholders (assuming all such holders elected not to exercise their warrants, and assuming the Business Combination occurred despite such redemptions, thereby permitting the exercise of public warrants following the Closing) with an aggregate market value of approximately $20,020, based on the market price of $0.03 per public warrant as of November 24, 2023. We cannot predict the ultimate value of the public warrants following consummation of the Business Combination. Sales of substantial numbers of shares issued upon the exercise of New Picard Warrants in the public market or the potential that such warrants may be exercised could also adversely affect the market price of New Picard Common Stock.

Even if the Business Combination is consummated, the public warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.

The exercise price for the outstanding public warrants is $11.50 per share. There can be no assurance that the public warrants will be in the money following the time they become exercisable and prior to their expiration and as such, the public warrants may expire worthless. Trading prices of Altitude’s Class A Common Stock during the past two years have not exceeded $11.50 per share.

The public warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Altitude. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, or to provide for the delivery of the Alternative Issuance (as defined in the Warrant Agreement), but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any other change.

Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of New Picard Common Stock purchasable upon exercise of a warrant.

You will not be permitted to exercise your public warrants unless we register and qualify the underlying New Picard Common Stock or certain exemptions are available.

If the issuance of the New Picard Common Stock upon exercise of the public warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable state securities laws, holders of public warrants will not be entitled to exercise such public warrants and such public warrants may have no value and expire worthless. In such event, holders who acquired their public warrants as part of a purchase of units in Altitude’s IPO will have paid the full unit purchase price solely for the Class A common stock included in the units.

We are not registering the New Picard Common Stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, we have agreed that, as soon as practicable, but in no event later than 15 business days, after the Closing, we will

 

87


Table of Contents

use our best efforts to file with the SEC a registration statement covering the registration under the Securities Act of the New Picard Common Stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the New Picard Common Stock issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the Warrant Agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in such registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.

If the shares of New Picard Common Stock issuable upon exercise of the public warrants are not registered under the Securities Act, under the terms of the Warrant Agreement, holders of public warrants who seek to exercise their public warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption.

In no event will public warrants be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their public warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration or qualification is available.

If the shares of New Picard Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of public warrants who seek to exercise their public warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.

In no event will we be required to net cash settle any public warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the public warrants in the event that we are unable to register or qualify the shares underlying the public warrants under the Securities Act or applicable state securities laws.

You may only be able to exercise your public warrants on a “cashless basis” under certain circumstances, and if you do so, you will receive fewer shares of New Picard Common Stock from such exercise than if you were to exercise such public warrants for cash.

The public warrants generally may not be exercised on a “cashless basis,” except as described below. In contrast, the private warrants, for so long as they are held by the Sponsor and certain permitted transferees, may be exercised on a “cashless basis.” The reason that Altitude agreed that the private warrants will be exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees is because it was not known at the time of Altitude’s IPO whether the Sponsor would be affiliated with us following a business combination. If the Sponsor remains affiliated with New Picard, its ability to sell New Picard securities in the open market will be significantly limited. We expect New Picard to have policies in place that prohibit insiders from selling securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell New Picard securities, an insider cannot trade in New Picard securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their public warrants and sell the shares received upon such exercise freely in the open market in order to recoup the cost of such exercise, the Sponsor or its permitted transferees could be significantly restricted from selling such securities.

 

88


Table of Contents

The Warrant Agreement provides that in the following circumstances holders of public warrants who seek to exercise their public warrants will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of New Picard Common Stock issuable upon exercise of the public warrants are not registered under the Securities Act in accordance with the terms of the Warrant Agreement; (ii) if we have so elected and the shares of New Picard Common Stock is at the time of any exercise of a public warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of New Picard Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of New Picard Common Stock underlying the warrants, multiplied by the excess of the “fair market value” of the shares of New Picard Common Stock (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the shares of New Picard Common Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of public warrants, as applicable. As a result, you would receive fewer shares of New Picard Common Stock from such exercise than if you were to exercise such warrants for cash.

We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of New Picard Common Stock purchasable upon exercise of a warrant could be decreased, all without your approval. Even if the Business Combination is consummated the public warrants may never be in the money, and they may expire worthless.

Our warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Altitude. The Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of shares of Class A common stock purchasable upon exercise of a warrant.

The exercise price for the outstanding public warrants is $11.50 per share. There can be no assurance that the public warrants will be in the money following the time they become exercisable and prior to their expiration and as such, the public warrants may expire worthless. Trading prices of Altitude’s Class A common stock during the past two years have not exceeded $11.50 per share.

The future exercise of registration rights may adversely affect the market price of the New Picard Common Stock.

Pursuant to the Registration Rights Agreement, New Picard will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of New Picard Common Stock and other equity securities of New Picard that are held by the registration rights holders from time to time. Pursuant to the Registration Rights Agreement, the registration rights holders will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut back provisions with respect to New Picard Common Stock held by such parties following the consummation of the Mergers. We estimate that an aggregate of approximately 55 million shares of New Picard Common Stock and 14.53 million New Picard Warrants will be subject to registration rights immediately following Closing.

 

89


Table of Contents

The registration of these securities will permit the public resale of such securities, subject to any applicable contractual lock-up obligation. The registration and availability of a significant number of securities for trading in the public market may have an adverse effect on the market price of the New Picard Common Stock post-Closing.

We may redeem your unexpired public warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

We have the ability to redeem outstanding public 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 Picard Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like and for certain issuances of the New Picard Common Stock and equity-linked securities for capital raising purposes in connection with the closing of our initial business combination) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to (i) exercise your public warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your public warrants at the then-current market price when you might otherwise wish to hold your public warrants or (iii) accept the nominal redemption price which, at the time the outstanding public warrants are called for redemption, we expect would be substantially less than the market value of your public warrants. None of the private warrants will be redeemable by us so long as they are held by their initial purchasers or their permitted transferees. Historic trading prices of Altitude’s Class A Common Stock have not exceeded $18.00 per share therefore neither current nor recent share prices meet or exceed the threshold that would allow New Picard to redeem public warrants.

In the event that New Picard determines to redeem the public warrants when the closing price of the shares of New Picard Common Stock equals or exceeds $18.00 per share, pursuant to Section 6.1 of the Warrant Agreement, New Picard will fix a date for the redemption. Notice of redemption will be mailed by first class mail, postage prepaid, by New Picard not less than thirty (30) days prior to the redemption date to the registered holders of the public warrants to be redeemed at their last addresses as they appear on the registration books. Any notice mailed in such manner will be conclusively presumed to have been duly given whether or not the registered holder received such notice.

Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.

In accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), warrants are accounted for as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.

As a result, included on Altitude’s financial statements are derivative liabilities related to our warrants. New Picard will also be required to record derivative liabilities related to the warrants. ASC 815, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, New Picard’s financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock. In addition, potential targets may seek a special purpose acquisition company that does not have warrants that are accounted for as liability, which may make it more difficult for us to consummate an initial business combination with a target business.

 

90


Table of Contents

Our Warrant Agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with New Picard.

Our Warrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants will be deemed to have notice of and to have consented to the forum provisions in our Warrant Agreement. If any action, the subject matter of which is within the scope the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New Picard, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

Any business combination may be subject to U.S. foreign investment regulations, which may impose conditions on or prevent the consummation of our initial business combination. Such conditions or limitations could also potentially make our common stock less attractive to investors or cause our future investments to be subject to U.S. foreign investment regulations.

Investments that involve the acquisition of, or investment in, a U.S. business by a non-U.S. investor may be subject to U.S. laws that regulate foreign investments in U.S. businesses and access by foreign persons to technology developed and produced in the United States. These laws include Section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment Risk Review Modernization Act of 2018, and the regulations at 31 C.F.R. Parts 800 and 802, as amended, administered by the Committee on Foreign Investment in the United States (“CFIUS”).

Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or governance rights involved. For example, investments that result in “control” of a “U.S. business” by a “foreign person” (in each case, as such terms are defined in 31 C.F.R. Part 800) are subject to CFIUS jurisdiction. Significant CFIUS reform legislation, which was fully implemented through regulations that became effective in 2020, expanded the scope of CFIUS’s jurisdiction to investments that do not result in control of a U.S. business by a foreign person, but afford certain foreign investors certain non-passive information or governance rights in a U.S. business that has a nexus to “ critical technologies,” “ covered

 

91


Table of Contents

investment critical infrastructure,” and/or “ sensitive personal data” (in each case, as such terms are defined in 31 C.F.R. Part 800).

Altitude and its Sponsor, officers, and directors are U.S. citizens. Altitude’s Sponsor is thus not controlled by, and does not have substantial ties to, any “foreign person.” However, Chris Hsieh, managing partner of Hunniwell Lake Ventures LLC, is a non-U.S. person as he is a Canadian citizen and resides in Hong Kong. Consequently, the Business Combination may be considered by CFIUS to be a covered transaction that would afford CFIUS authority to review a voluntary filing.

CFIUS or another U.S. governmental agency could choose to review the Business Combination, even if a filing with CFIUS is not required. If we do not make a filing in connection with the Business Combination, there can be no assurances that CFIUS or another U.S. governmental agency will not choose to review the Business Combination. The process of government review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our Business Combination, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate the Business Combination within the applicable time period required, including as a result of extended regulatory review, we will, as promptly as reasonably possible but not more than five business days thereafter, redeem the public shares for a pro rata portion of the funds held in the Trust Account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such event, our stockholders will miss the opportunity to benefit from the Business Combination and the appreciation in value of such investment. Additionally, the warrants will be worthless.

The Extension contravenes Nasdaq rules, and as a result, could lead Nasdaq to suspend trading in Altitude’s securities or lead Altitude to be delisted from Nasdaq.

Altitude is listed on The Nasdaq Capital Market. Nasdaq IM-5101-2 requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. The Extension would extend the completion window beyond the Nasdaq Deadline. As a result, the Extension does not comply with Nasdaq rule IM-5101-2. There is a risk that trading in Altitude’s securities may be suspended and Altitude may be subject to delisting by Nasdaq if the Extension is implemented. Altitude cannot assure you that Nasdaq will not delist Altitude’s securities in the event the Extension is implemented and Altitude does not complete one or more business combinations by the Nasdaq Deadline, that it will be able to obtain a hearing with Nasdaq’s Hearings Panel to appeal the delisting determination, or that its securities will not be suspended pending the Hearing Panel’s decision.

If Nasdaq delists any of Altitude’s securities from trading on its exchange and Altitude is not able to list its securities on another national securities exchange, Altitude expects such securities could be quoted on an

over-the-counter market. If this were to occur, Altitude could face significant material adverse consequences, including:

 

   

inability to meet a condition to closing the Business Combination; there can be no assurance that Picard would waive the Nasdaq listing condition to closing;

 

   

a limited availability of market quotations for its securities;

 

   

reduced liquidity for its securities;

 

   

a determination that its common stock is a “penny stock,” which will require brokers trading in its common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for its securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

 

92


Table of Contents

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because Altitude’s units, common stock, and warrants are currently listed on Nasdaq, its units, common stock, and warrants are covered securities. Although the states are preempted from regulating the sale of its securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While Altitude is not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if Altitude was no longer listed on Nasdaq, its securities would not be covered securities and would be subject to regulation in each state in which Altitude offers its securities.

 

93


Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement.

Introduction

Altitude is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination (“Unaudited Pro Forma Condensed Combined Financial Information”). The Unaudited Pro Forma Condensed Combined Financial Information presents the combination of the financial information of Altitude and Picard adjusted to give effect to the Business Combination and related transactions described below.

The Unaudited Pro Forma Condensed Combined Financial Information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

The unaudited pro forma condensed combined balance sheet as of September 30, 2023 combines the historical unaudited condensed consolidated balance sheet of Altitude as of September 30, 2023 with the historical unaudited condensed balance sheet of Picard as of September 30, 2023 on a pro forma basis, giving effect to the Business Combination and related transactions, summarized below, as if they had been consummated on September 30, 2023.

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2023, combines the historical unaudited condensed consolidated statement of operations of Altitude for the nine months ended September 30, 2023, with the historical unaudited condensed statement of operations of Picard for the nine months ended September 30, 2023. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022, combines the historical audited condensed statement of operations of Altitude for the year ended December 31, 2022, with the historical audited condensed statement of operations of Picard for the year ended December 31, 2022. The unaudited pro forma condensed combined statement of operations gives effect to the Business Combination and related transactions, summarized below, as if they had been consummated on January 1, 2022, the beginning of the earliest period presented.

The Unaudited Pro Forma Condensed Combined Financial Information has been derived from, and should be read in conjunction with the following information appearing elsewhere in this proxy statement:

 

   

the historical unaudited condensed consolidated financial statements and accompanying notes of Altitude as of and for the three and nine months ended September 30, 2023;

 

   

the historical unaudited condensed financial statements and accompanying notes of Picard as of and for the nine months ended September 30, 2023;

 

   

the historical audited financial statements and accompanying notes of Altitude as of and for the year ended December 31, 2022;

 

   

the historical audited financial statements and accompanying notes of Picard as of and for the year ended December 31, 2022;

 

   

the section entitled “Altitude’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

 

   

the section entitled “Picard’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and

 

   

the other financial information included elsewhere in this proxy statement.

The foregoing historical financial statements have been prepared in accordance with GAAP. The unaudited pro forma condensed combined financial information has been prepared based on the aforementioned historical

 

94


Table of Contents

financial statements and the assumptions and adjustments as described in the notes to the unaudited pro forma condensed combined financial information. The pro forma adjustments reflect transaction accounting adjustments related to the Business Combination, which is discussed in further detail below. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not purport to represent the consolidated results of operations or consolidated financial position that would actually have occurred had the Business Combination been consummated on the dates assumed or to project consolidated results of operations or consolidated financial position for any future date or period. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

Description of the Business Combination and Related Transactions

On April 23, 2023, Altitude, Picard, and the Merger Subs entered into the Business Combination Agreement. The Merger Subs are each newly formed, wholly owned, direct subsidiaries of Altitude formed for the sole purpose of the Mergers. Pursuant to the Business Combination Agreement, Merger Sub will merge with and into Picard with Picard as the Surviving Corporation and Merger Sub will cease to exist. Immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and Merger Sub II, with Merger Sub II surviving as the surviving entity.

Prior to the First Merger, each issued and outstanding share of Picard Preferred Stock will automatically convert into one share of Picard Common Stock and each of Picard’s convertible notes that are outstanding prior to the First Merger, if any, will convert into shares of Picard Common Stock in accordance with the terms of such convertible notes. Each share of Picard Common Stock held by a Picard securityholder immediately prior to the First Effective Time (including shares issued upon conversion of Picard Preferred Stock and convertible notes, but not including dissenting shares) will be automatically cancelled and converted into the right to receive a pro rata portion of an aggregate of 48,000,000 shares of New Picard Common Stock, subject to adjustment to take into account certain cash and indebtedness of Picard at the Closing, and an aggregate of 6,500,000 New Picard Warrants, plus up to an additional 6,500,000 Earnout Warrants. Each of Picard’s options that are outstanding and unexercised prior to the First Merger will be assumed by New Picard and converted into a New Picard option with the same terms and conditions. If Picard issues any warrants prior to the Closing, each of Picard’s warrants that are outstanding and unexercised prior to the First Merger, whether or not then vested or exercisable, will be assumed by New Picard and will be converted into a warrant to acquire shares of New Picard Common Stock and will be subject to the same terms and conditions that applied to the Picard warrant immediately prior to the First Merger.

All conversions of Picard equity securities to New Picard equity securities will be executed at a number equal to the quotient of (a) $10.00 divided by (b) the number of fully diluted shares of Picard Common Stock. The estimated Exchange Ratio as of November 28, 2023, is approximately 1.978.

Contemporaneously with the execution of the Business Combination Agreement, Altitude and Picard entered into the Sponsor Support Agreement, pursuant to which the Sponsor will forfeit (i) an aggregate amount of up to 4,500,000 shares of Class A common stock held by the Sponsor immediately prior to the Closing, with such number of forfeited shares to be reduced by 20,000 shares for each $1,000,000 by which the proceeds of the Closing Offering plus the funds remaining in the Trust Account (after giving effect to redemptions and any financial incentives or discounts given to incentivize non-redemption and the repayment of any outstanding debt to the Sponsor) together with the proceeds from any Picard Financing, exceeds $38,000,000 and (ii) 6,500,000 private warrants. Additionally, the Sponsor agreed to deposit into escrow at the Closing an aggregate of 1,250,000 Sponsor Earnout Shares and 1,000,000 Sponsor Earnout Warrants. The Sponsor Earnout Securities will be released to the Sponsor upon achievement of the following milestones at any time during the five year period following the Closing: (i) 500,000 Sponsor Earnout Shares will be released if the VWAP of New Picard Common Stock is equal to or greater than $12.50 for any 20 trading days within any 30 trading day period, (ii) 1,000,000 Earnout Warrants will be released upon the closing of the acquisition by Altitude or New Picard, as

 

95


Table of Contents

applicable, of at least 10,000,000 warrants or New Picard Warrants, as applicable, from public investors, and (iii) 750,000 Sponsor Earnout Shares will be released upon the release of the Sponsor Earnout Shares and Sponsor Earnout Warrants pursuant to both (i) and (ii) of this paragraph. Any Sponsor Earnout Securities that have not been released from escrow on the date that is five years after the Closing will be forfeited.

Pursuant to the Merger Agreement, in connection with the Closing, Altitude and the Picard Lock-Up Holders will enter into the Lock-Up Agreement. Pursuant to the Lock-Up Agreement, the Picard Lock-Up Holders will agree, subject to customary exceptions, not to transfer (a) any shares of New Picard Common Stock received by them as consideration in the Mergers for the period ending on the earliest of (x) the date this is one year following the Closing Date, (y) the date on which the closing price of shares of New Picard Common Stock on Nasdaq equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for 20 of any 30 consecutive trading days commencing at least 150 days after the Closing, and (z) the date on which New Picard completes a liquidation, merger, capital stock exchange, reorganization or similar transaction that results in all of New Picard’s stockholders having the right to exchange their shares of New Picard Common Stock for cash, securities or other property and (b) any warrants of New Picard received as consideration in the Mergers (including the Earnout Warrants) for a period of 30 days after Closing.

Related Transactions

Certain related transactions that have occurred as of the date of this proxy statement or are contemplated to occur prior to and in connection with the Business Combination have been reflected in the unaudited condensed combined pro forma information are summarized below:

 

   

The filing and effectiveness of the Proposed Charter and Proposed Bylaws, each of which will occur immediately prior to the Closing;

 

   

$6.5 million for the payment of Picard and Altitude’s preliminary estimated direct and incremental transaction costs; and

 

   

$30.0 million for the Picard Financing Note, with the assumption that SynCardia, Altitude and the Investor enter into a definitive agreement on the same terms as set forth in the Picard Financing LOI.

Expected Accounting Treatment of the Business Combination

The presentation of pro forma financial statements is dependent upon which entity in the Business Combination is considered the accounting acquirer. The final accounting for the Business Combination is expected to be determined at Closing.

Under each scenario, Altitude currently expects the Business Combination to be accounted for as a common control transaction with respect to Picard along with a reverse recapitalization with Altitude for the reasons summarized below.

Under this method of accounting, Altitude is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the post-combination company will represent a continuation of the financial statements of Picard with the acquisition being treated as the equivalent of Picard issuing stock for the net assets of Altitude, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Subsequent to the Business Combination, the historical financial results presented for New Picard will be those of Picard.

Under each scenario, Hunniwell Picard I, LLC holds a majority of the voting power of Picard before the transaction and is expected to hold a majority of the voting power of Picard after the transaction, after consideration of the Sponsor Earnout Securities which do have voting rights during the Earnout Period. Therefore, as there will be no change in control, the Business Combination will be accounted for as a common control transaction with respect to Picard along with a reverse recapitalization with Altitude.

 

96


Table of Contents

Under each scenario, Altitude currently expects:

 

   

the public warrants and private warrants to retain their respective classifications upon the Closing, where both the public warrants and private warrants are liability-classified on a recurring fair value basis;

 

   

the Sponsor Earnout Shares to be classified as equity due to terms indexed to New Picard’s stock; and

 

   

the conversion of Picard options into New Picard Options exercisable for New Picard Common Stock to not result in the recognition of incremental share-based payment expenses.

Basis of Pro Forma Presentation

The Unaudited Pro Forma Condensed Combined Financial Information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The adjustments in the Unaudited Pro Forma Condensed Combined Financial Information have been identified and presented to provide relevant information necessary for an illustrative understanding of New Picard upon consummation of the Business Combination. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the Unaudited Pro Forma Condensed Combined Financial Information are described in the accompanying notes.

The Unaudited Pro Forma Condensed Combined Financial Information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated, and does not reflect adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Any cash proceeds remaining after the consummation of the Business Combination and the related transactions contemplated by the Merger Agreement are expected to be used for general corporate purposes. The Unaudited Pro Forma Condensed Combined Financial Information does not purport to project the future operating results or financial position of New Picard following the completion of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these Unaudited Pro Forma Condensed Combined Financial Information and are subject to change as additional information becomes available and analyses are performed. Altitude and Picard have not had any historical operational relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

The Unaudited Pro Forma Condensed Combined Financial Information contained herein assumes that the Altitude stockholders approve the Business Combination. Pursuant to the Current Charter, Altitude’s public stockholders may elect to redeem their public shares for cash even if they approve the Business Combination. Altitude cannot predict how many of its stockholders will exercise their right to redeem their public shares for cash.

The Unaudited Pro Forma Condensed Combined Financial Information has been prepared using the assumptions below with respect to the potential redemption of Altitude Common Stock into cash:

 

   

Scenario 1 — Assuming No Additional Redemptions: This scenario assumes that no additional public stockholders exercise their redemption rights with respect to their public shares for a pro rata share of the funds in the Trust Account upon consummation of the Business Combination. This scenario assumes that Picard waives the Minimum Cash Condition.

 

   

Scenario 2 — Assuming 25% Redemptions: This scenario assumes that 333,661 public shares, or approximately 25% of the public shares, are redeemed for an aggregate payment of approximately $3.3 million from the Trust Account, and that Picard waives the Minimum Cash Condition, which is a redemptions scenario that could occur. To determine the 25% Redemptions Scenario, assumed transaction expenses of $6.5 million were considered.

 

97


Table of Contents
   

Scenario 3 — Assuming 50% Redemptions: This scenario assumes that 667,323 public shares, or approximately 50% of the public shares, are redeemed for an aggregate payment of approximately $6.7 million from the Trust Account, and that Picard waives the Minimum Cash Condition, which is a redemptions scenario that could occur. To determine the 50% Redemptions Scenario, assumed transaction expenses of $6.5 million were considered.

 

   

Scenario 4 — Assuming 75% Redemptions: This scenario assumes that 1,000,984 public shares, or approximately 75% of the public shares, are redeemed for an aggregate payment of approximately $10.0 million from the Trust Account, and that Picard waives the Minimum Cash Condition, which is a redemptions scenario that could occur. To determine the 75% Redemptions Scenario, assumed transaction expenses of $6.5 million were considered.

 

   

Scenario 5 — Assuming 100% Redemptions: This scenario assumes that 1,334,645 public shares, or 100% of the public shares, are redeemed for an aggregate payment of approximately $13.3 million from the Trust Account, and that Picard waives the Minimum Cash Condition, which is a redemptions scenario that could occur. To determine the 100% Redemptions Scenario, assumed transaction expenses of $6.5 million were considered.

All redemptions scenarios assume that the Minimum Cash Condition is waived by Picard. The Business Combination Agreement includes as a condition to Closing the Business Combination that, at Closing, the Aggregate Parent Closing Cash is at least $38.0 million. The Business Combination may not be consummated if (i) the funds in the Trust Account after redemptions, if any, plus (ii) the aggregate cash proceeds received by Altitude or committed to be invested in respect of the Closing Offering and the aggregate cash proceeds funded or irrevocably committed to be funded in respect of any Picard Financing, if any, less (iii) payment of up to $2.0 million of Picard’s transaction expenses and up to $4.5 million of Altitude’s transaction expenses, is less than $38.0 million. Assuming that the only financing in connection with the Business Combination is in the form of the $30.0 million Picard Financing Note, Altitude could not satisfy the Minimum Cash Condition in any redemptions scenario. You should note that the Minimum Cash Condition may be waived by Picard in its sole discretion; however, there can be no assurances that Picard will waive the Minimum Cash Condition.

The following table summarizes the number of the public shares outstanding following the consummation of the Business Combination under the five redemptions scenarios. The table includes 1,250,00 Sponsor Earnout Shares, which shares will be outstanding at the Closing and will bear voting rights. The table excludes the potential dilutive effect of the (i) 8,000,000 private warrants, (ii) 15,000,000 public warrants, (iii) 6,500,000 New Picard Warrants and 6,500,000 Earnout Warrants to be issued to the Picard securityholders, (iv) 30,000 New Picard Warrants to be issued to the Service Providers, (v) 3,257,748 New Picard Options, and (vi) the Picard Financing Note (assuming such note is issued at or prior to the Closing on the terms set forth in the Picard Financing LOI):

 

    No Additional
Redemptions
Scenario
    25%
Redemptions
Scenario
    50%
Redemptions
Scenario
    75%
Redemptions
Scenario
    100%
Redemptions
Scenario
 

 

  Shares     %     Shares     %     Shares     %     Shares     %     Shares     %  

Hunniwell Picard I, LLC

    36,409,179       73.79%       36,409,179       74.30%       36,409,179       74.80%       36,409,179       75.32%       36,409,179       75.84%  

Other Picard Securityholders

    8,495,959       17.22%       8,495,959       17.34%       8,495,959       17.46%       8,495,959       17.58%       8,495,959       17.70%  

Sponsor(1)

    3,000,000       6.08%       3,000,000       6.12%       3,000,000       6.16%       3,000,000       6.21%       3,000,000       6.25%  

Altitude Public Stockholders

    1,334,645       2.71%       1,000,984       2.04%       667,323       1.37%       333,661           *       —             *  

Service Providers(2)

    100,000           *       100,000           *       100,000           *       100,000           *       100,000           *  

Total

    49,339,783       100.00%       49,006,122       100.00%       48,672,461       100.00%       48,338,799       100.00%       48,005,138       100.00%  

 

*

Less than 1%.

 

98


Table of Contents
(1)

Reflects the forfeiture of 4,500,000 Founder Shares, assuming the proceeds of the Trust Account and Picard Financing does not exceed $38 million and accordingly Sponsor does not earn back any of such forfeited shares pursuant to the terms of the Sponsor Support Agreement. Includes 1,250,000 Sponsor Earnout Shares, which will be outstanding on the Closing Date and for which the Sponsor will have voting rights. Excludes shares underlying 500,000 private warrants held by Sponsor (after the forfeiture of 6,500,000 private warrants pursuant to the terms of the Sponsor Support Agreement) and 1,000,000 Sponsor Earnout Warrants.

(2)

Excludes 30,000 New Picard Warrants issuable to the Service Providers at Closing.

 

99


Table of Contents

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 30, 2023

(In Thousands)

 

    September 30,
2023
    September 30,
2023
                      September 30,
2023
                September 30,
2023
                September 30,
2023
                September 30,
2023
                September 30,
2023
 
    Altitude
(Historical)
    Picard
(Historical)
    Historical
Combined
    Transaction
Accounting
Adjustments
(Assuming
No Additional
Redemptions)
    Note 2     Pro Forma
Combined
(Assuming
No Additional
Redemptions)
    Transaction
Accounting
Adjustments
(Assuming
25%
Redemptions)
    Note 2     Pro Forma
Combined
(Assuming
25%
Redemptions)
    Transaction
Accounting
Adjustments
(Assuming
50%
Redemptions)
    Note 2     Pro Forma
Combined
(Assuming
50%
Redemptions)
    Transaction
Accounting
Adjustments
(Assuming
75%
Redemptions)
    Note 2     Pro Forma
Combined
(Assuming
75%
Redemptions)
    Transaction
Accounting
Adjustments
(Assuming
100%
Redemptions)
    Note 2     Pro Forma
Combined
(Assuming
100%
Redemptions)
 

ASSETS

                                   

Current assets

                                   

Cash and cash equivalents

  $ 1     $ 457     $ 458     $ —         A     $ 32,176     $ (3,337     A     $ 28,839     $ (6,673     A     $ 25,503       (10,010     A       22,166     $ (13,347     A     $ 18,829  
          13,742       B         13,742       B         13,742       B         13,742       B         13,742       B    
          (1,750     C         (1,750     C         (1,750     C         (1,750     C         (1,750     C    
          (1,429     C         (1,429     C         (1,429     C         (1,429     C         (1,429     C    
          (1,320     C         (1,320     C         (1,320     C         (1,320     C         (1,320     C    
          (2,000     D         (2,000     D         (2,000     D         (2,000     D         (2,000     D    
          (575     J