UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to.

Priveterra Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware

001-39945

85-3940478

(State or other jurisdiction of

incorporation)

(Commission File Number)

(I.R.S. Employer

Identification Number)

300 SE 2nd Street, Suite 600

Fort Lauderdale, FL

(754) 220-9229

Registrant’s Telephone Number, Including Area Code

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	PMGM	The Nasdaq Stock Market LLC
Redeemable warrants, each warrant exercisable for one share of Class A common stock at an exercise price of $11.50	PMGMW	The Nasdaq Stock Market LLC
Units, each consisting of one share of Class A common stock and one-third of one redeemable warrant	PMGMU	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of August 12, 2021, 31,000,000 shares of Class A common stock, par value $0.0001 per share, and 8,625,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding, respectively.

	Page
PART I. FINANCIAL INFORMATION	3
Item 1. Financial Statements.	3
Condensed Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	3
Condensed Statements of Operations for the three and six months ended June 30, 2021 (unaudited)	4
Condensed Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2021 (unaudited)	5
Condensed Statement of Cash Flows for the six months ended June 30, 2021 (unaudited)	6
Notes to Condensed Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	23
Item 4. Controls and Procedures.	23
PART II - OTHER INFORMATION	25
Item 1. Legal Proceedings.	25
Item 1A. Risk Factors.	25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	25
Item 3. Defaults upon Senior Securities.	25
Item 4. Mine Safety Disclosures.	25
Item 5. Other Information.	25
Item 6. Exhibits.	26


	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Cash	$	988,855	$	—
Deferred offering costs		—		81,000
Prepaid assets		391,533		—
Total Current Assets		1,380,388		81,000

Prepaid assets – non-current		197,951		—
Cash and marketable securities held in Trust Account		276,037,035		—
Total Assets	$	277,615,374	$	81,000

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	102,950	$	21,000
Franchise tax payable		100,000		—
Due to related party		3,495		—
Promissory note – related party		—		38,588
Total current liabilities		206,445		59,588

Warrant liability		14,585,600		—
Deferred underwriters’ discount		9,660,000		—
Total liabilities		24,452,045		59,588

Commitments and Contingencies

Common stock subject to possible redemption, 24,816,332 and 0 shares as of June 30, 2021 and December 31, 2020, at redemption value of $10.00, respectively		248,163,320		—

Stockholders’ Equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 280,000,000 shares authorized; 2,783,668 or 0 shares issued and outstanding (excluding 24,816,332 and 0 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively		278		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,900,000 shares issued and outstanding		690		690
Additional paid-in capital		2,708,613		24,310
Retained earnings (accumulated deficit)		2,290,428		(3,588)
Total stockholders' equity		5,000,009		21,412
Total Liabilities and Stockholders’ Equity	$	277,615,374	$	81,000


	For the		For the
	six months ended		three months ended
	June 30, 2021		June 30, 2021

Formation and operating costs	$	599,306	$	398,443
Loss from operations		(599,306)		(398,443)

Other income/(expense)
Unrealized gain on change in fair value of warrants		3,511,333		(3,655,467)
Offering costs		(655,046)		—
Interest income		37,035		28,716
Total other income/(expense)		2,893,322		(3,626,751)

Net Income/(Loss)	$	2,294,016	$	(4,025,194)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		27,600,000		27,600,000
Basic and diluted net income per share, Class A common stock subject to possible redemption	$	0.00	$	0.00
Basic and diluted weighted average shares outstanding, Class B common stock		6,900,000		6,900,000
Basic and diluted net income/(loss) per share, Class B common stock	$	0.33	$	(0.58)


	Common Stock						Additional				Total
	Class A			Class B			Paid-In				Stockholders’
	Shares	Amount		Shares	Amount		Capital		Retained Earnings		Equity
Balance—December 31, 2020	—	$	—	6,900,000	$	690	$	24,310	$	(3,588)	$	21,412
Sale of 27,600,000 Units on February 11, 2021, net of warrant fair value	27,600,000		2,760	—		—		264,589,241		—		264,592,000
Excess cash over fair value for Private Placement Warrants	—		—	—		—		1,199,067		—		1,199,067
Offering costs	—		—	—		—		(14,975,166)		—		(14,975,166)
Net income	—		—	—		—		—		6,319,210		6,319,210
The maximum number of redeemable shares	(25,215,652)		(2,508)	—		—		(250,837,451)		(1,316,563)		(252,156,522)
Balance as of March 31, 2021(unaudited)	2,384,348	$	252	6,900,000	$	690	$	—	$	4,999,059	$	5,000,001

Net loss	—		—	—		—		—		(4,025,194)		(4,025,194)
Proceeds received in excess of fair value for Working Capital Loan conversion into Private Placement Warrants	—		—	—		—		32,000		—		32,000
Change in the maximum number of redeemable shares	399,320		26					2,676,613		1,316,563		3,993,202
Balance as of June 30, 2021 (unaudited)	2,783,668		278	6,900,000		690		2,708,613		2,290,428		5,000,009



Cash Flows from Operating Activities:
Net income	$	2,294,016
Adjustments to reconcile net loss to net cash used in operating activities:
Interest earned on cash held in Trust Account		(37,035)
Unrealized gain on change in fair value of warrants		(3,511,333)
Offering costs		655,046
Changes in operating assets and liabilities
Prepaid assets		(589,484)
Franchise tax payable		100,000
Accounts payable and accrued expenses		81,950
Net cash used in operating activities		(1,006,840)
Cash flows from investing activities:
Principal invested into Trust account		(276,000,000)
Net cash used in investing activities		(276,000,000)
Cash flows from financing activities:
Due to related party		3,495
Proceeds from sale of Units, net of underwriter fee		270,480,000
Offering costs		(369,212)
Proceeds from issuance of Private Placement Warrants		7,920,000
Borrowing from promissory note		35,192
Repayment of promissory note		(73,780)
Net cash provided by financing activities		277,995,695
Net Change in Cash		988,855
Cash, beginning of the period		—
Cash, end of period	$	988,855
Supplemental Disclosure of Non-cash Financing Activities:
Initial classification of Class A common stock subject to possible redemption	$	245,211,820
Change in Class A common stock subject to possible redemption	$	2,951,500
Deferred underwriters’ discount payable charged to additional paid in capital	$	9,660,000
Conversion of Working Capital Loans to Private Placement Warrants	$	100,000


	Six months ended		Three months ended
	June 30,		June 30,
	2021		2021
Redeemable Class A common stock
Numerator: Earnings allocable to Redeemable Class A common stock Shares
Interest Income	$	37,035	$	28,716
Less: Income available to pay taxes		(37,035)		(28,716)
Net Earnings		—		—
Denominator: Weighted Average Redeemable Class A common stock
Redeemable Class A common stock, Basic and Diluted		27,600,000		27,600,000
Earnings/Basic and Diluted Redeemable Class A common stock	$	0.00	$	0.00

Non-Redeemable Class B common stock
Numerator: Net Income/(Loss) minus Redeemable Net Earnings
Net Income/(Loss)
Non-Redeemable Net Income/(Loss)	$	2,294,016	$	(4,025,194)
Denominator: Weighted Average Non-Redeemable Class B common stock		2,294,016		(4,025,194)
Non-Redeemable Class B common stock, Basic and Diluted		6,900,000	$	6,900,000
Income/(Loss)/Basic and Diluted Non-Redeemable common stock	$	0.33	$	(0.58)


	(Level 1)		(Level 2)		(Level 3)
Assets:
Investments held in Trust Account – U.S. Treasury Bills	$	276,037,035	$	—	$	—
Liabilities:
Private Placement Warrants	$	—	$	—	$	5,385,600
Public Warrants	$	9,200,000	$	—	$	—


Input	June 30, 2021
Risk-free interest rate		0.87	%
Expected term (years)		5.0
Expected volatility		17.75	%
Acquisition probability		80	%
Exercise price	$	11.50


Fair value at issuance February 11, 2021	$	18,028,933
Public Warrants reclassified to level 2⁽¹⁾		(9,200,000)
Issuance of Private Placement Warrants upon conversion of Working Capital Loans		68,000
Change in fair value		(3,511,333)
Fair Value at June 30, 2021		5,385,600

Exhibit Number		Description
31.1*		Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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By:	/s/ Oleg Grodnensky
	Name:	Oleg Grodnensky
	Title:	Chief Financial Officer

SEC Form 10-Q filed by Priveterra Acquisition Corp.