References to the "Company," "our," "us" or "we" refer to Arbor Rapha Capital Bioholdings Corp. I. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and elsewhere in this Annual Report.

Overview

We were formed on March 4, 2021 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar Business Combination with one or more target businesses. Our efforts to identify a prospective target business will not be limited to any particular industry or geographic region. We intend to utilize cash derived from the proceeds of our IPO in effecting our initial Business Combination.

We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.


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We presently have no revenue. All activities for the period from March 4, 2021 (inception) through December 31, 2021, relate to the formation and the IPO, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. We will have no operations other than the active solicitation of a target business with which to complete a Business Combination, and we will not generate any operating revenue until after our initial Business Combination, at the earliest. We will have non-operating income in the form of interest income from the proceeds derived from the IPO.

On November 2, 2021, we completed our IPO of 17,250,000 Units, including the issuance of 2,250,000 Units as a result of the underwriter's exercise of its option to purchase additional Units in full. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share ("Class A Common Stock"), and one-third of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one share of Class A Common Stock for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $172,500,000.

Substantially concurrently with the closing of the IPO, we completed the private sale of 4,133,33 Private Placement Warrants to our Sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds of $6,200,000.

We also executed a promissory note with the Sponsor, the Sponsor Loan, generating gross proceeds to the Company of $4,312,500. The Sponsor Loan shall be repaid or converted into Sponsor Loan Warrants at a purchase price of $1.50 per warrant, at the Sponsor's direction. The Sponsor Loan Warrants will be identical to the Private Placement Warrants.

A total of $176,812,500, comprised of net proceeds from the IPO, a portion of the proceeds from the sale of the Private Placement Warrants and proceeds from the execution of the Sponsor Loan, was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee.

We cannot assure you that our plans to complete our initial Business Combination will be successful. If we are unable to complete our initial Business Combination within 15 months from the date of the IPO, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem 100% of the outstanding public shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining holders of common stock and our board of directors, liquidate and dissolve. In the event of liquidation, the holders of the Founder Shares and Private Placement Warrants will not participate in any redemption distribution with respect to their Founder Shares or Private Placement Warrants, until all of the claims of any redeeming shareholders and creditors are fully satisfied (and then only from funds held outside the Trust Account).

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities through December 31, 2021 were organizational activities, those necessary to prepare for the IPO, described below, and, after our IPO, day-to-day operations and identifying a target company for an initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the period from March 4, 2021 (inception) through December 31, 2021, we had a net loss of $496,692, consisting primarily of general and administrative expense.

Going Concern and Capital Resources

As of December 31, 2021, we had cash of $1,344,116 and working capital of $1,452,911.

Until the consummation of a Business Combination, the Company has used and will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.

In connection with our assessment of going concern considerations in accordance with FASB's Accounting Standards Update ("ASU") 205-40, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern," management believes that the funds


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which we have available following the completion of the IPO will enable us to sustain operations. However, the Company has until February 2, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. This condition raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

For the period from March 4, 2021 (inception) through December 31, 2021, the net change in cash was $1,344,116. For the period from March 4, 2021 (inception) through December 31, 2021, cash used in operating activities was $933,162. For the period from March 4, 2021 (inception) through December 31, 2021, cash used in investing activities was $176,812,500. For the period from March 4, 2021 (inception) through December 31, 2021, cash provided by financing activities was $179,089,778.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2021.

Contractual Obligations

Our sponsor lent us $4,312,500 as of the closing date of the IPO. The Sponsor Loan will bear no interest. The proceeds of the Sponsor

Loan were deposited into the Trust Account and will be used to fund the redemption of our public shares (subject to the requirements

of applicable law). The Sponsor Loan shall be repaid or converted into Sponsor Loan Warrants at a conversion price of $1.50 per

warrant, at our Sponsor's discretion. The Sponsor Loan Warrants would be identical to the Private Placement Warrants sold. The

Sponsor Loan is being extended in order to ensure that the amount in the Trust Account is $10.25 per public share. If we do not complete

a Business Combination, we will not repay the Sponsor Loan and its proceeds will be distributed to our public stockholders. Our

Sponsor has waived any claims against the Trust Account in connection with the Sponsor Loan. As of December 31, 2021, there was

$4,312,500 outstanding under the Sponsor Loan.

As of December 31, 2021, except for the Sponsor Loan, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

Critical Accounting Estimates

This management's discussion and analysis of financial condition and results of operations is based on our audited financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our audited financial statements. Actual results could differ from these estimates.

A summary of our significant accounting policies is presented in Note 1. Many of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our audited financial statements. Each quarter, we assess these estimates and assumptions based on several factors, including historical experience, which we believe to be reasonable under the circumstances. These estimates are subject to change in the future if any of the underlying assumptions or factors change.

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